Power of association Annual Report
Leadership and representation Power of association Financial Report Statement of Comprehensive Income for the year ended 0 June Revenue 9,6,798 0,0,0 Less: expenses Membership services Regulation (direct costs) Governance and representation Finance and internal support Capitation fees Other expenses from ordinary activities Profit before income tax expense Income tax (expense) / benefit Note (8,780,68) (,88,77) (,78,0) (,90,) (,0,08) (89,987) (8,,9) (,,6) (,86,7) (,9,0) (98,9) (778,00) (8,7,960) (9,99,79) 77,88 (88,86) 7,7 6,09 Profit from continuing operations 9, 60,6 and savings Support functions Council and Committees Financial report Other comprehensive income Revaluation of building Tax effect of capital allowance on building 689,00,0 Other comprehensive income for the year 7,80 Total comprehensive income 9,,6,09 Statement of Financial Position as at 0 June Current assets Cash and cash equivalents Trade and other receivables Inventories Other financial assets Other current assets Note 6 7 8 9 0,68,80 89,7 8,99,,6 69,87 0,6,6,0,06 9,6 89,9 6,89 Total current assets,,,79,89 Non-current assets Other financial assets Intangible assets Property, plant and equipment 89,86 68, 0,0,076,,86,88 0,6, Total non-current assets,6,9,8,9 Total assets 6,976,67,9,088 Current liabilities Trade and other payables Provisions Other current liabilities,66,8,,0,68,898,680,79,07,66,997,8 Total current liabilities 7,8,86 6,78,68 Non current liabilities Provisions Deferred tax liabilities 6,9 8,6 9,88 96,079 Total non current liabilities 9,6,897 Total liabilities 7,967,7 7,, Net assets 9,008,88 8,9, 8 Law Institute of Victoria
Power of association Statement of Financial Position continued as at 0 June Equity Reserves Retained earnings Note 6 7,09,7,9,8,09,7,6,96 Total equity 9,008,88 8,9, Statement of Changes in Equity for the year ended 0 June Consolidated Balance as at July 008 Profit for the year Revaluation of building Tax effect of capital allowance on building Contributed equity Reserves,6,07 689,00,0 Retained earnings,76,9 60,6 Total equity 7,, 60,6 689,00,0 Total comprehensive income for the year 7,80 60,6,6,09 Balance as at 0 June Balance as at July Profit for the year,09,7,09,7,6,96,6,96 9, 8,9, 8,9, 9, Total comprehensive income for the year 9, 9, Balance as at 0 June,09,7,9,8 9,008,88 Statement of Cash Flows for the year ended 0 June Cash flow from operating activities Subscriptions Receipts from Legal Service Board / Legal Service Commissioner Payments to suppliers and employees Interest received Capitation fees Bookshop sales, administration fees and other member activities Note,6,6 7,0, (7,,0) 60,70 (,0,08) 8,6,60,67,97 8,9, (0,98,7) 9,99 (98,9) 0,, Net cash provided by operating activities 8(b),6,76,88,6 Cash flow from investing activities Proceeds from sale of investments Payment for property, plant and equipment Payment for investments Payment for intangible assets 7,000 (8,0) (07,0) 707,000 (7,) (8,000) (,88) Net cash used in investing activities (7,9) (7,69) Reconciliation of cash Cash at beginning of the financial year Net increase in cash held 0,6,6,08,7 9,,7,,9 Cash at end of financial year 8(a),68,80 0,6,6 Leadership and representation and savings Support functions Council and Committees Financial report Annual Report 9
Leadership and representation Power of association and savings Support functions Council and Committees Financial report Financial Report Note : Statement of Significant Accounting Policies The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporation Act 00. The financial report was approved by the directors as at the date of the directors report. The financial report covers Law Institute of Victoria Ltd and its controlled entity as an economic entity. Law Institute of Victoria Ltd is a company limited by guarantee, incorporated and domiciled in Australia. The following is a summary of the material accounting policies adopted by the Law Institute of Victoria Ltd in the preparation and presentation of the financial report. The accounting policies have been consistently applied, unless otherwise stated. (a) Basis of preparation of the financial report Compliance with IFRS Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards. Compliance with Australian equivalents to International Financial Reporting Standards ensures compliance with International Financial Reporting Standards (IFRSs). Historical Cost Convention The financial report has been prepared under the historical cost convention, as modified by revaluations to fair value for certain classes of assets as described in the accounting policies. (b) Principles of consolidation The consolidated financial statements are those of the consolidated entity, comprising the financial statements of the Law Institute of Victoria Ltd and a dormant subsidiary entity (Lawyers Network Pty Ltd). (c) Income tax In assessing its income tax liability, Law Institute of Victoria Ltd applies the principles of mutuality to its revenues and expenses. Revenue in the form of member receipts represents mutual income and is not subject to income tax. Expenses associated with such mutual activities are not tax deductible for income tax purposes. All other receipts and payments of Law Institute of Victoria Ltd are classified for income tax purposes in accordance with income tax legislation. Current income tax expense or revenue is the tax payable on the current period s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax base of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses. A balance sheet approach is adopted under which deferred tax assets and liabilities are recognised for temporary differences at the applicable tax rates when the assets are recovered or liabilities are settled. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity. (d) Borrowing costs Borrowing costs can include interest and ancillary costs incurred in connection with arrangement of borrowings. Borrowing costs are expensed as incurred. (e) Impairment Assets with an indefinite useful life are not amortised but are tested annually for impairment in accordance with AASB 6. Assets subject to annual depreciation or amortisation are reviewed for impairment whenever events or circumstances arise that indicate that the carrying amount of the asset may be impaired. An impairment loss is recognised where the carrying amount of the asset exceeds its recoverable amount. The recoverable amount of an asset is defined as the higher of its fair value less costs to sell and value in use. (f) Comparatives Where necessary, comparative information has been reclassified and repositioned for consistency with current year disclosures. (g) Revenue Revenue is recognised, where it can be reliably measured, in the period to which it relates or is invoiced. However, where there is not an established pattern of income flow, revenue is recognised on a cash receipts basis. Income generated from advertising in the Law Institute Legal Directory and Diary is recognised in the year received to more appropriately reflect the period in which it was earned. Interest revenue is recognised when it becomes receivable on a proportional basis taking in to account the interest rates applicable to the financial assets. Revenue from trust distributions is recognised when the right to receive a distribution has been established. Other revenue is recognised when the right to receive the revenue has been established. All revenue is stated net of the amount of goods and services tax (GST). 0 Law Institute of Victoria
Power of association Membership fees and Subscriptions The subscription year is July to 0 June. Subscriptions are payable annually in advance. Only those membership fees and subscription receipts, which are attributable to the current financial year, are recognised as revenue. Fees and subscription receipts relating to periods beyond the current financial year are shown in the Balance Sheet as deferred income under the heading Other Current Liabilities. (h) Inventories Inventories are measured at the lower of cost and net realisable value. (i) Property, plant and equipment Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and any accumulated impairment losses. Property Freehold land and buildings are measured at fair value. At each balance date the carrying value of each asset is reviewed to ensure that it does not differ materially from the asset s fair value at reporting date. Where necessary, the asset is revalued to reflect its fair value. Increases in the carrying amounts arising on revaluation of land and buildings are credited to other reserves in shareholders equity. To the extent that the increase reverses a decrease previously recognised in statement of comprehensive income, the increase is first recognised in statement of comprehensive income. Decreases that reverse previous increases of the same asset are first charged against revaluation reserves directly in equity to the extent of the remaining reserve attributable to the asset; all other decreases are charged to the statement of comprehensive income. Plant and equipment Plant and equipment is measured on the cost basis. Depreciation The depreciable amount of all fixed assets are depreciated over their estimated useful lives commencing from the time the asset is held ready for use. Class of fixed asset Buildings at valuation Furniture, fixtures and fittings at cost Depreciation rates Depreciation basis 0 years Straight line 7 years Straight line/ Diminishing Value (j) Intangibles Other intangibles Other intangible assets are initially recorded at the purchase price. Other intangible assets are amortised on a straight line basis over their estimated useful lives. The balances are reviewed annually and any balance representing future benefits the realisation of which is considered to be no longer probable are written off. (k) Employee benefits Liabilities arising in respect of wages and salaries, annual leave, accumulated sick leave and any other employee benefits expected to be settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. All other employee benefit liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date. Contributions made by the company to an employee superannuation fund are recognised as an expense as they become payable. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payment is available. (l) Financial instruments Classification The Law Institute of Victoria Ltd classifies its financial assets into the following categories: financial assets at fair value through profit and loss, loans and receivables, held to maturity investments, and available for sale financial assets. The classification depends on the purpose for which the instruments were acquired. Management determines the classification of its financial instruments at initial recognition and re-evaluates this designation at each reporting date. Financial assets at fair value through profit or loss Financial instruments, including investments in listed securities and derivatives (except for derivatives designated as hedges at inception) are carried at fair value through profit and loss. They are measured at their fair value at each reporting date. Any increment or decrement in fair value from the prior period is recognised in the profit and loss of the current period, and is also included in deferred income tax calculations. Non listed investments for which the fair value cannot be reliably measured, are carried at cost and tested for impairment. Held to maturity investments Fixed term investments intended to be held to maturity are classified as held to maturity investments. They are measured at amortised cost using the effective interest rate method. Loans and receivables Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are measured at fair value at inception and subsequently at amortised cost using the effective interest rate method. Non interest bearing loans and receivables are designated as receivable at call and are therefore carried at face value. Financial liabilities Financial liabilities include trade payables, other creditors and loans from third parties including inter company balances and loans from or other amounts due to director related entities. Non derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation. Non interest bearing loans and payables are payable on demand and are therefore carried at face value. Note : New Accounting Standards and Interpretations A number of accounting standards and interpretations have been issued at the reporting date but are not yet effective. The directors have not yet assessed the impact of these standards or interpretations. Leadership and representation and savings Support functions Council and Committees Financial report Annual Report
Leadership and representation Power of association and savings Support functions Financial Report Note : Revenue Operating activities Interest/Net investment income Membership subscriptions Legal Service Board/Legal Service Commissioner contributions and reimbursements Membership activities Bookshop sales and commissions Administration fees Other revenue Note : Income Tax (a) Components of tax expense Current tax Deferred tax (b) Prima facie tax payable The prima facie tax payable on profit before income tax is reconciled to the income tax expense as follows: 60,70,6,06 6,88,896,6,77,6,,60,608 77,86 9,99,88, 7,70,99,79,,08,770,69,6 88,777 9,6,798 0,0,0 88,86 (6,09) 88,86 (6,09) Prima facie income tax payable on profit before income tax at 0% (: 0%), 6, Add tax effect of: Accounting depreciation Non taxable capital losses Non deductible mutual expenditure Other non allowable items Less tax effect of: Non assessable mutual income Statutory deductions Tax depreciation Web cost Non assessable distribution received Investments Other non assessable items Adjustment to carried forward tax losses from prior year 70,97,70,69 6,979 7,69 8,00,6,9 0,8,8,80,79,0,6,09 66,77,79 77 706, 7,9,76,, 66,07,0 96,6,8,670,969,6 Income tax expense attributable to profit 88,86 (6,09) Council and Committees Financial report (c) Deferred tax Deferred tax relates to the following: Deferred tax assets The balance comprises: Tax losses carried forward Employee benefits Prepaid LSB legal fees Stock writedowns Unrealised losses on investments Accrued expenses 0, 9,9 0,66 9,0,8,77 6,0 7,7 09,00 660, 8,0 Law Institute of Victoria
Power of association Note : Income Tax continued Deferred tax liabilities The balance comprises: Accrued income Accrued royalty Revaluation of property, plant & equipment Provision for doubtful debts 6,,07 99,96,,89 99,96,77,0,00,00,8 Net deferred tax liabilities 8,6 96,079 The deferred tax asset that has been recognised as an asset as the Directors believe: (i) the Law Institute of Victoria shall derive future assessable income of a nature and an amount suffice to enable the benefit to be realised; (ii) the Law Institute of Victoria Ltd continues to comply with the conditions of deductibility imposed by the law; and (iii) at this time, there are no changes in tax legislation that appear to adversely effect the Law Institute of Victoria Ltd in realising the benefit. The Directors note that the tax losses recognised must meet the relevant tax legislation requirements in order to be utilised in the future. At 0 June, of the losses available for utilisation totalled $,99, of which $680,0 are subject to the Continuity of Ownership Test, and the remaining $98,7 are subject to the Same Business Test. The classification of the losses between the two tests continually changes dependent upon the changes in membership each year. Only losses subject to the Continuity of Ownership Test have been brought to account as a deferred tax asset. In addition to the revenue losses the Law Institute of Victoria has carried forward capital losses subject to the Continuity of Ownership Test of $7,96. (d) Deferred income tax (revenue)/expense included in income tax expense comprises Decrease/(increase) in deferred tax assets Increase in deferred tax liabilities (e) Deferred income tax related to items charged or credited directly to equity Aggregate current and deferred tax arising in the reporting period and not recognised in net profit or loss but directly debited or credited to equity: Revaluation of property, plant and equipment Current period adjustment to tax base for revalued property Note : Operating Profit Profit before income tax has been determined after: Expenses: Cost of sales Depreciation buildings furniture and fittings Amortisation Bad debts trade debtors Remuneration of auditors for: Audit services Other services Rental expense on operating leases Unrealised losses on investments Employee benefits Amount set aside/reversed for provisions: Employee provision Inventory writedown Doubtful debts,08,8 (6,8) 9,7 88,86 (6,09) 77,0 0,8,0 9,00,0 8,80 68,69,00,,9 66,0 90,769 7, 0,87 6,0,97 9,0,90 66,7 70,99 6,8,08,96,0 (,66) 6, 7,98,87,,0 (,70) 9, 7,6 6,96 Annual Report Leadership and representation and savings Support functions Council and Committees Financial report
Leadership and representation Power of association Financial Report Note 6: Cash and Cash Equivalents Cash on hand Cash at bank Cash on deposit Short term bills Note 7: Receivables Current Trade debtors Impairment loss,0,6,80,0,0,0,06, 7,000,000,99,870,68,80 0,6,6 6,066 (,07) 8,77 (,07),89,68 and savings Support functions Council and Committees Financial report Accrued income Other receivables Amounts receivables from: Legal Service Board Note 8: Inventories Current Stock on hand Writedowns Note 9: Other Financial Assets Current Financial assets at fair value through profit and loss Property fund Bond fund Share fund Other financial assets Shares in related corporations Held to maturity financial assets Mortgage loan Non Current Financial assets at fair value through profit and loss Shares in unlisted entities Held to maturity financial assets Mortgage loan 68,09,80 68,076 67,90,7 89,7,0,06 8,99,70 (,66) 8,99 9,6,7 9,,6 9,8 8,80 7, 88,9 89,8 8,999,,6 89,9 7,86 7,000 99,000 89,86,,86 8 7,86 Law Institute of Victoria
Power of association Note 0: Other Current Assets Current Prepayments 69,87 6,89 Note : Property, Plant and Equipment Land and buildings Freehold land and building at fair value Accumulated depreciation 9,7,060 (0,8) 9,00,000 Total land and building 9,,777 9,00,000 Plant and equipment Furniture, fixtures and fittings at cost Accumulated depreciation,0, (,9,),868,9 (,7,0),089,99,6, Total property, plant and equipment 0,0,076 0,6, (a) Valuations The economic entity s land and buildings were revalued at 0 June by independent valuers. Valuations are made on an open market value basis. The revaluation surplus net of applicable deferred income taxes was credited to an asset revaluation reserve in shareholders equity. (b) Movement in Carrying Amounts Reconciliation of the carrying amounts of property, plant and equipment at the beginning and end of the current financial year Land and buildings Opening carrying amount Additions Depreciation expense Revaluations 9,00,000 7,060 (0,8) 8,7,00 (,00) 98,000 Closing carrying amount 9,,777 9,00,000 Furniture, fixtures and fittings Opening carrying amount Additions Depreciation expense,6, 6,99 (,0) 8,606 7, (,) Closing carrying amount,089,99,6, (c) Carrying amount of assets measured at fair value if the cost method had been applied Freehold land and buildings Cost Accumulated depreciation 6,,86 (,,0) 6,,86 (,0,89) Carrying amount,08,8,0,767 Note : Intangible Assets Web site at cost Accumulated amortisation 9, (90,769),88 68,,88 Leadership and representation and savings Support functions Council and Committees Financial report Annual Report
Leadership and representation Power of association and savings Support functions Financial Report Note : Payables Current Unsecured liabilities Trade creditors and accruals Sundry creditors Note : Provisions Current Employee benefits Non Current Employee benefits (a) Aggregate employee benefits liability (b) Number of employees at year end Note : Other Liabilities Notes (a) (a),0, 6,7,, 8,68,66,8,680,79,,0 6,9,99,69 8,07,66 9,88,7, Current Deferred income,68,898,997,8 Note 6: Reserves Asset revaluation reserve Other reserves (a) Asset revaluation reserve Movements during the financial year: Opening balance Revaluation of building Tax effect of capital allowance on building Notes 6(a),089,87,00,089,87,00,09,7,09,7,089,87,7,007 689,00,0 Closing balance,089,87,089,87 The asset revaluation reserve records revaluations of land and buildings. Council and Committees Note 7: Retained Earnings Retained earnings at beginning of year Net profit attributable to members of the entity,6,96 9,,76,9 60,6 Retained earnings at the end of the financial year,9,8,6,96 Financial report 6 Law Institute of Victoria
Power of association Note 8: Cash Flow (a) Reconciliation of cash For the purposes of the statement of cash flows, cash includes cash on hand and at call deposits with banks or financial institutions, investments in money market instruments maturing within less than two months and net of bank overdrafts. Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the statement of financial position is as follows: Cash on hand Cash at bank At call deposits with financial institutions Other short term facilities (b) Reconciliation of cash flow from operations with profit from ordinary activities after income tax Profit from ordinary activities after income tax Adjustments and non cash items Amortisation Depreciation Net loss on disposal of investment Unrealised (gain) / loss on investments Provision for obsolete inventory Doubtful debt expense Changes in assets and liabilities (Increase) / decrease in receivables Decrease in amount owing from Legal Service Board Decrease in inventories Increase in sundry debtors Increase / (decrease) in payables Increase in deferred income Increase / (decrease) in prepaid expenses (Increase) / decrease in deferred taxes Increase in provisions,0,6,80,0,0,0,06, 7,000,000,99,870,68,80 0,6,6 9, 90,769,9 (,96) (,66),709,7 7,79 (6,88) (6,) 6,6,70 88,86,0 60,6 66,0 8,000 7,98 (,70),9 (6,6) 0,0 0,70 (8,00) 9,09 7,8, (6,09),0,907, 68,99 Cash flows from operating activities,6,76,88,6 Note 9: Key Managment Personnel Compensation Compensation received by key management personnel of the Law Institute of Victoria Ltd short term employee benefits post employment benefits 0, 0,908 9,0 0,800 0,6 6,00 Leadership and representation and savings Support functions Council and Committees Financial report Annual Report 7
Leadership and representation Power of association and savings Support functions Council and Committees Financial report Financial Report The names of directors who have held office during the year are: Name Anita Aarons Danny Barlow Geoff Bowyer Anthony Burke Caroline Counsel Catherine Gale Iresha Herath Michael Holcroft Brigid Jenkins Aurora Kostezky Erwin Loh Anthony (Tom) May Conor O Brien John O Callaghan Bruce Pippett Dominique Saunders Steven Sapountsis Steven Stevens Reynah Tang Lucy Terracall Stuart Webb Mark Woods Note 0: Events Subsequent to Reporting Date On the 7th July the LIV and the LSB entered into a formal arrangement for the LIV to provide services as delegated by the LSB under the Legal Profession Act 00. That agreement which is for a term of years commenced on the st July. Other than the above there has been no matter or circumstance, which has arisen since 0 June that has significantly affected or may significantly affect: (a) the operations, in financial years subsequent to 0 June, of the Law Institute of Victoria Ltd, or (b) the results of those operations, or (c) the state of affairs, in financial years subsequent to 0 June, of the Law Institute of Victoria Ltd. Appointment / resignation details 8 September to December since April since January 00 since January since 7 June 00 to August since 6 February 006 since 6 August 00 since January 008 since 6 May 008 since January since 6 April 00 to December since April since 6 April 00 since January 008 since May to 0 February since January 006 since January 00 to 0 February since January since January 00 since January 008 since January since January 007 since December 996 Note : Economic Dependence A significant portion of the revenue is derived under the Legal Profession Act 00, through the Law Institute of Victoria Ltd delegated regulatory role. Under this Act the Legal Services Board and the Legal Services Commissioner have the power to investigate and prosecute lawyers and mediate disputes between lawyers and clients and have agreed to delegate investigations, complaints and external interventions as and when required to the Law Institute of Victoria Ltd. Recently the LSB and the LIV entered into a formal agreement which gives both the LIV and the LSB certainty in providing these services for a period of years commencing July. Note : Financial Risk Management The Law Institute of Victoria Ltd is exposed to a variety of financial risks comprising: (a) Market price risk (b) Interest rate risk (c) Credit risk (d) Liquidity risk (e) Fair values. The board of directors have overall responsibility for identifying and managing operational and financial risks. (a) Market price risk Market price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk). The Law Institute of Victoria Ltd does not have a material exposure to market price risk. (b) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of changes in market interest rates. The majority of financial assets are term deposits with fixed interest rates and terms not exceeding 0 days which are held to maturity. Other interest bearing investments are held in mortgage securities, at a fixed interest rate for the term of years. The Law Institute of Victoria Ltd s exposure to interest rate risk in relation to future cashflows and the effective weighted average interest rates on classes of financial assets and financial liabilities, is as follows: 8 Law Institute of Victoria
Power of association (b) Interest rate risk continued Financial instruments Financial assets Cash Trade and other receivables Unlisted shares Bond fund units Property fund units Share fund units Mortgage loans Interest bearing,67,0 977,999 Non interest bearing,0 869,98 7,86 9,,7,6 Total carrying amount,68,80 869,98 7,86 9,,7,6 977,999,6,9,90,79,6,708 Weighted average effective interest rate.% 7.% Leadership and representation Financial instruments Financial liabilities Trade creditors Other payables Deferred income Financial instruments Financial assets Cash Trade and other receivables Receivables other related parties Unlisted shares Bond fund units Property fund units Share fund units Mortgage loans Financial instruments Financial liabilities Trade creditors Other payables Deferred income Interest bearing Interest bearing 0,6, 99,000 Non interest bearing,0, 6,7,68,898 Total carrying amount,0, 6,7,68,898 6,8,8 6,8,8 Non interest bearing,0,080,9,7 7,868 8,80 9,8 7, Total carrying amount 0,6,6,080,9,7 7,868 8,80 9,8 7, 99,000,9,,80,707,09,80 Interest bearing Non interest bearing,, 8,68,997,8 Total carrying amount,, 8,68,997,8,678,0,678,0 Weighted average effective interest rate Weighted average effective interest rate.% 7.% Weighted average effective interest rate Sensitivity If interest rates were to increase/decrease by 0.% from rates used to determine fair values as at the reporting date, assuming all other variables that might impact on fair value remain constant, then the impact on profit for the year and equity is as follows: +/ 0.% interest rate Impact on profit after tax Impact on equity,,,7,7 and savings Support functions Council and Committees Financial report Annual Report 9
Leadership and representation Power of association and savings Financial Report (c) Credit risk The credit risk on financial assets of the company, which have been recognised in the Balance Sheet, is the carrying amount, net of any provision for impairment. The LIV does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. The LIV financial instruments consist mainly of bank bills and cash. The main purpose of these financial instruments is to invest surplus member funds in order to maximise returns while not exposing the organisation to a high level of risk. Other financial assets and liabilities are trade receivables and trade payables which arise directly from the LIV s operations. (d) Liquidity risk Ultimate responsibility for liquidity risk management rests with the Board of Directors, who have built an appropriate liquidity risk management framework for the management of the LIV short, medium and long term funding and liquidity management. The LIV manages the liquidity risk by maintaining adequate cash reserves, and by continuously monitoring forecast and actual cash flows while matching the maturity profiles of financial assets and liabilities. Given the current surplus cash assets, liquidity risk is minimal. (e) Fair values The fair value of financial assets and financial liabilities approximates their carrying amounts as disclosed in statement of financial position and notes to financial statements. Note : Members Guarantee The economic entity is limited by guarantee. If the economic entity is wound up, the constitution states that each member is required to contribute a maximum of $0 each towards meeting any outstanding obligations of the economic entity. At 0 June the number of members was 6,8 (:,60). Note : Entity Details The registered office of the Law Institute of Victoria Ltd is: Law Institute of Victoria Ltd 70 Bourke Street Melbourne Vic 000 Directors Declaration The directors of the company declare that:. The financial statements and notes, as set out on pages 80, are in accordance with the Corporations Act 00: (a) comply with Accounting Standards in Australia and the Corporations Regulations 00; and (b) as stated in Note, the consolidated financial statements also comply with International Financial Reporting Standards; and (c) give a true and fair view of the financial position of the consolidated entity as at 0 June and its performance for the year ended on that date.. In the directors opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors. Director: Steven Stevens Director: Michael Holcroft Dated this 8th day of September Financial report Council and Committees Support functions 0 Law Institute of Victoria
Independent Auditors Report An independent Victorian Partnership ABN 7 97 96 Power of association We have audited the accompanying financial report of Law Institute of Victoria Ltd and controlled entity. The financial report comprises the statement of financial position as at 0 June, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors declaration of the consolidated entity comprising the company and the entity it controlled at the year s end or from time to time during the financial year. Directors responsibility for the financial report The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 00. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note, the directors also state, in accordance with Accounting Standard AASB 0 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards. Auditor s responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement in the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 00. Auditor s opinion In our opinion:. the financial report of Law Institute of Victoria Ltd is in accordance with the Corporations Act 00, including: (i) giving a true and fair view of the consolidated entity s financial position as at 0 June and of its performance for the year ended on that date; and (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 00; and. the financial report also complies with International Financial Reporting Standards as disclosed in Note. T J BENFOLD Partner 8 September PITCHER PARTNERS Melbourne Leadership and representation and savings Support functions Council and Committees Financial report Liability limited by a scheme approved under Professional Standards Legislation Pitcher Partners, including Johnston Rorke, is an association of independent firms Melbourne Sydney Perth Adelaide Brisbane An independent member of Baker Tilly International Annual Report
Law Institute of Victoria 70 Bourke Street Melbourne Victoria 000 Australia Phone: 0 9607 9 Fax: 0 960 70 Email: lawinst@liv.asn.au www.liv.asn.au