Our Locations - Parliament of Victoria · project will see us develop a virtual reality training program, putting our interpreters in the thick of a challenging police interview,

Our Locations Head Office Level 16,607 Bourke street Melbourne VIC 3000 P 03 9280 1941

Reserve Bank Building Level 6, 111 Macquarie Street Hobart TAS 7000 P 03 9280 1941

Level 28, AMP Tower 140 St Georges Terrace Perth WA 6000 P 08 6246 4700

Santos Place, 32 Turbot St Brisbane QLD 4000 P 07 3082 1400

[email protected] languageloop.com.au

2018

/19

Annual ReportÅrsrapportRelazione AnnualeRapport annwaliGodišnji izvještaj

A great experience in any language. We provide organisations with the language skills and technology they need to be fluent in the most important language of all – great experience.

Technology to connect anywhere. We open the door to possibilities with advanced technology that helps you form stronger connections anywhere, in any language.

Focus that comes with experience. Our focus on the ESL market has been honed over years. That means we bring a true understanding of the needs of your customers to every engagement.

Trust that builds loyalty. A shared language builds trust. We’re proud to be the partner enterprise and government clients choose to help them turn language into loyalty.

03 Who are we

04 Highlights 2018-2019

05 Chair’s report

06 CEO‘s report

07 Business outcomes

16 Sector investment

17 Our workforce

19 Our people

21 Community

22 Governance

23 Board of Directors

27 Financial statements

Turning wordsinto possibilities Contents

ANNUAL REPORT 2018-2019 LANGUAGELOOP

OUR MANTRA

Who we are Key highlights 2018–19

As a Government Business Enterprise we were created with a mission to ensure access and equity to services for all.

Throughout 2018-2019 we focused on expanding our services to the commercial sector and our core markets in Tasmania, Victoria and Queensland.

Our network of over 3000 interpreters, speaking 180+ languages, gives people a voice to enable them to take part in society, and to live life without limits.

With a full suite of telephone, onsite and video interpreting and translating solutions, we connect people when it matters, anytime, anywhere, any channel.

The ability to communicate in a new language opens the door to a new world. A world where words do not divide, and where choice of channel is no barrier. We believe that helping organisations connect with customers anywhere, in any language leads to greater understanding, better experiences, and more opportunities.

Turning words into possibilities. That’s LanguageLoop.

MissionTo connect non-English speakers and organisations through language, to live life without limits via services they can trust.To provide leadership for our sector and contribute to the development of our industry by working with stakeholders, decision makers, Australian business leaders – and by setting practice standards.

VisionTo give people a voice, so they can not only participate in society, but thrive.

Six new languages Interpreted in 18/19

6

Total revenue 2018 / 2019

$27.2 M

Non-English speakers assisted

500,000

Growing National presence

Onsite interpreting requests

210,000+

485New clients

Registered language professionals

3000+

Words translated

16 % Growth in translations

New NAATI Accredited language professionals

384

5.5M+

Growth in telephone Interpreting requests

23%

180+Hola

Languages interpreted

Values – Adventurous, creative,

and open-minded – Innovate by being bold

and imaginative – Open and honest relationships

through communication – Support each other and deliver

quality services that excites our customers

– Reward and recognise achievement

– Celebrate difference


03 0404

WHO WE ARE KEY ACHIEVEMENTS

Chair’s Report

CEO’s Report

It has been a privilege to continue overseeing LanguageLoop and watch the ongoing growth and expansion of this wonderful organisation.

We connect people with the organisations that serve them. As a Board we are aligned in our passion for language services and a company based on access and equity to ensure people can live life without limits or barriers.

Over the past 12 months the Board has approved significant investment in our IT infrastructure and the latest technology in AI and machine learning to ensure we are meeting the needs of our customers - both now and into the future. When we look at the mega-trends that will drive the economy into the future it is our role to ensure LanguageLoop is positioned to leverage and exploit these.

This means a school in regional Australia can access an interpreter for parent- teacher meetings via our on-demand video interpreting app VideoLoop. Or it might mean a newly arrived migrant can walk

into a bank and at the touch of a button have an interpreter on hand to assist in a loan application. It means via our 24/7 on-demand telephone interpreting service a non-English speaker can access anything, from settlement and housing services to accessing a medical professional when their child is sick. Across our vast country and multicultural communities we can all have the freedom to access any service, at any time, to feel valued and respected as members of the community.

In our 40th year a particular highlight was the support of 4 major projects via our $150,000 Innovation Fund. We are the only language services provider to invest back into the sector to see its ongoing development. We invested in 4 major projects with RMIT (2 projects), Monash University and the University of Queensland. The research undertaken across these institutions will improve how we deliver language services in courts, improve outcomes in telephone interpreting and improve the preparedness of our interpreters working in the most

challenging of situations. This particular project will see us develop a virtual reality training program, putting our interpreters in the thick of a challenging police interview, a family violence mediation or a life changing medical appointment. Again we are the only language services provider to plough money back into the ongoing improvement of the sector.

Finally I would like to thank our new Minister for Multicultural Affairs, the Hon Richard Wynne who has already shown his great support for our service and the Treasurer Tim Pallas. None of this would be possible without the guidance and expertise of my fellow Board members. I would also like to thank our CEO Elizabeth Compton who in three years has turned the organisation around to deliver a 50% increase in revenue which in turn means more and more people are benefiting from our services to life live without limits and reach their full potential.

With 21% of Australians speaking a language other than English and 28.5% of our population born overseas, our work connecting people is more critical than ever. A shared language builds trust. We provide organisations with the language skills and technology to bring a true understanding of the needs of customers to every engagement.

The year has been marked with continued growth as our strategy to expand nationally, together with our service offering leveraging the latest technology, has continued to pay off. This saw us significantly ramp up our services in Queensland where we were a successful tenderer for the whole of Queensland Government contract. We are now delivering our leading services in courts, hospitals and other institutions across the state.

We also saw continued growth in Victoria, especially in onsite services. We reached an Australian first milestone with the most completed interpreting calls using our on-demand mobile video interpreting app VideoLoop. Further VideoLoop was used for the first time in the Federal election to provide Auslan (sign-language) on-

demand interpreting services for Australian voters in pre-polling voting stations across the country. We worked closely with the Australian Electoral Commission to deliver this world first service to make it the most accessible election ever.

In addition to delivering services for some of the largest government departments across schools, courts, hospitals, police and other areas, we also service the commercial sector. Business is realising the limitless opportunity language connection brings. This saw us win the tender to deliver language services for one of Australia’s largest insurers, a big four bank, in addition to our long standing work in the Utilities and Telco sectors.

These achievements saw us deliver our best results ever with $27.2M in revenue which was significant growth on last year. Most of this growth was from our laser sharp strategy to enter new markets and focus on strategic business development activities which ultimately means more and more non-English speakers are accessing language services so they can fully participate in society.

We have cemented ourselves as the leading language services provider –with the most innovative offerings allowing us to deliver across any channel, anytime, in any language.

I would like to thank our Chair, George Lekakis AO, for more than just his ongoing support, but for his deep understanding and commitment to the future of language services. I couldn’t deliver these results without a talented Management Team who have been key partners in driving through the changes that have allowed us to deliver new services and capture new markets and clients. Thank you also to the wonderful staff at LanguageLoop HQ who work every day to ensure non-English speakers and our clients receive the highest level of customer service.

Finally, our service would not be possible without the thousands of language professionals speaking 180+ languages who so diligently undertake their role to give people a voice.

Elizabeth Compton Chief Executive Officer –––

George Lekakis AO Chair –––


05 06

CEO’S REPORTCHAIR’S REPORT

10.5% increase in people with low English proficiency over 10 years*

Onsite interpreting

We are well versed with providing high level language services that meet compliance obligations and regulations of government agencies, schools and healthcare providers when offering professional interpreter services. With an ever growing Australian migrant community, the need for reliable onsite interpreting services are as critical as ever. We have seen continued growth in onsite interpreting and this approach is still a vital component of our service delivery.

Our network of over 3000 professional interpreters/linguists, speaking 180+ languages, seamlessly deliver these services throughout our vast country.

*Taken from identitycomms.com.au/2017/06/top-10-languages-spoken-in-australia-2016-census

ARABIC

VIETNAMESE

MANDARIN

PERSIAN

DARI

GREEK

TURKISH

ITALIAN

CANTONESE

BURMESE

0 4 6 2 8% 10 10 12 2

12

12

9.5

5

5

3

3

3

3

2.5

Overview of services

With our population continuing to grow we are working with businesses to ensure they can deliver a great experience in any language. We deliver the technology so business can connect anywhere, anytime in any language. Working with us, business can deliver huge benefits to their multicultural customers with reduced time to service, improved customer satisfaction, accessibility and the ability to provide an omni-channel experience with improved understanding, while also meeting compliance obligations.

Our full suite of high-quality onsite, telephone, video interpreting, digital delivery and translating services provide tailor-made solutions that allow our clients to connect with their customers anywhere, in any language via any channel delivering a seamless omni-channel experience.

We are intent on bringing you the right balance of language skills, technology, and processes for a solution that is perfectly shaped to allow you to connect with your customers anywhere, in any language.

Onsite interpreting Top 10 Languages (%)

LANGUAGELOOP

08

BUSINESS OUTCOMES

ANNUAL REPORT 2018-2019

07

BUSINESS OUTCOMES

Strong growth for telephone interpretingTelephone Interpreting showed strong growth for a third consecutive year, with a 23% increase in service requests compared to the previous year.

With our state-of-the-art, 24 x7 on-demand automated Enterprise telephone interpreting system we handle in excess of 200,00 calls per year - seamlessly connecting business and customers in under 30 seconds across 180+ languages.

Demonstrating our ability to scale to meet fluxuating usage we delivered telephone interpreting support during the recent Federal election that saw our service scale seamlessly to meet this peak in demand.

We serviced 6 new languages for the first time during 2018-19:

Chin (Zo) | Syriac | Anuak | Chichewa | Fuliiru | Sango

Our long standing partnership with the Australian Electoral Commission (AEC) reached a new highlight during the 2019 Federal Election with the delivery of on-demand Auslan (Australian sign language) services via VideoLoop.

For the first time ever, deaf or hard-of-hearing Australians were able to take advantage of the latest digital innovation using our interpreting app VideoLoop, connecting users to an accredited Auslan interpreter and providing much needed assistance during the enrolment and voting process.

We also delivered multilingual telephone information lines that could be accessed 24/7 with the ability to speak to an interpreter in up to 180 languages, providing support to the 21% of Australians who speak a language other than English to participate in our democratic process.

Australian Electoral Commission Collaboration

MANDARIN

ARABIC

VIETNAMESE

PERSIAN

CANTONESE

GREEK

DARI

KOREAN

TURKISH

SOMALI

0 8 12 16 20% 24 4

Telephone interpreting Top 10 languages (%)

23% Growth In Telephone Interpreting

Languages Serviced For The First Time

6

21

17.5

17

4.5

4

2.5

2.5

2

2

2

LANGUAGELOOP

10


09

BUSINESS OUTCOMESBUSINESS OUTCOMES

5.5 million words translated

Translation & multimedia services

Translation requests increased by 16% on the previous year, along with a 5% increase in the total number of words translated.As our multicultural communities continue to grow, both governments and business are realizing the importance of ensuring that information is broadly available for the communities they serve.

LanguageLoop works with government agencies and businesses to translate key information into over 180 languages. This content is across written collateral, website

content, multimedia, social media and other mediums. It ensures everyone can be in the loop.

In 2019 we implemented our new Translation Management System which leverages artificial intelligence and machine learning to deliver increased efficiencies and cost savings to our clients.

We translated over 5.5 millions words across 3,200 projects, reflecting the on-going demand for our translation services.

We saw a continued trend towards business and government using multimedia to engage with multicultural audiences, in particular through videos (subtitle translations).

SIMPLIFIED CHINESE

VIETNAMESE

ARABIC

GREEK

ITALIAN

PERSIAN

TRADITIONAL CHINESE

TURKISH

DARI

PUNJABI

0 6 9 12 15% 18 24 21 3

Translations Top 10 Languages (%)

Video interpreting services

VideoLoop, our on-demand video interpreting app, provides access to interpreters 24/7 at the touch of a button.As successful commercial adopters of technological innovations including video interpreting and chat bots, we open the door to possibilities with advanced technology. This helps you form stronger customer connections anywhere, in any language. We open the door to possibilities with advanced technology - seamlessly connecting businesses with the over 5,000,000 non-English speakers in Australia, every year.

Sharing a language builds trust and with trust comes loyalty. That’s why leading businesses and government bodies choose to partner with us and our leading technology such as VideoLoop.

27

25

22

19

8

7

7

7

6

6

6

BUSINESS OUTCOMES


11 12

BUSINESS OUTCOMES

Australian National Asthma Council This year we completed the translation of a handbook produced by the Australian National Asthma Council on how to manage asthma in 4 languages. The handbook is one of the National Asthma Council’s key resources for people with asthma and it’s the first time it has been produced in languages other than English. Completion of this piece of work for an important national provider also helps to bolster LanguageLoop as a leading provider of translation services on a national scale.

e-Safety Commissioner We were also the preferred supplier to the Office of the eSafety Commissioner to provide ongoing translations of tip sheets across various topics of digital literacy for older CALD Australians into 8 languages.

Department of Education We completed the translation of a very large project for the International Skills Training division of the Department of Education. Managing the translation of over 120,000 words of course material designed and developed for the offshore international student market in Vietnam. LanguageLoop won this contract through a competitive tender.

Business connecting in any language

Highlights

Region’s largest insurer Another major new client we secured via a competitive tender process – was one of Australia’s largest insurers, with brands in Australia, New Zealand and Asia. They were looking for a partner to implement a holistic approach to engagement at all levels with their multicultural customer base both in Australia and internationally. We are working with them to review all their channels of engagement from translation of their brand websites, multilingual resources and in-branch signage, telephone interpreting in their contact centre and digital delivery of multilingual services.

Fair Work A further project delivered was the translation and recordings of scripts for the Fair Work Ombudsman into two additional languages, which will be used for animated videos dealing with employee rights in Australia and employer responsibilities. This brings the total number of languages for this project to 18 across 2 years, with further languages planned, and highlights the growth of multimedia as a more effective tool to effectively engage with non-English speakers on complex legal matters.

I want to say a big thank you to you and the team for your patience and efforts in working on the ESL Resources for translation. You were always quick to act, attentive, always sought clarity when needed and collaborated with all parties involved.

As this is a new journey for us, times have been tough but nothing has ever been too hard for you and the team, and I want to share my appreciation... thank you

Again demonstrating our expertise in the digital technology space we delivered over 20,000 words of content in 8 languages for a Maternal Child and Health app developed by the Department of Education and Training. The app contains age-specific information for new parents and is a crucial resource for migrant families from countries without developed maternal and child health services. The app is available on both the App Store and Play Store and users can toggle between languages according to preference. Languages provided were: Arabic, Dari, Khmer, Simplified Chinese, Persian, Punjabi, Spanish, Vietnamese.

LANGUAGELOOP

14


13

BUSINESS OUTCOMESBUSINESS OUTCOMES

Global top 100

The Nimdzi Insights 100 is the definitive annual analysis of the language services industry. In 2019, it recognised LanguageLoop as the leading interpreting and translations service provider for enterprise and government in Australia, and we were ranked as the 72nd largest LSP in the world.

In 2019, The Common Sense Advisory (CSA) recognised Languageloop as one of the top 100 largest Language Service Providers (LSPs) in the world. LanguageLoop was the only Australian provider that made it into the top 100, ranking at number 57 of 100 largest LSPs in the world.

We reinvest heavily in the language services sector. This goes back into funding scholarships and other language programs, and we reinvest directly via our:

– Sponsorship o f the Ethnic Communities Councils of Victoria (ECCV) annual conference

– Sponsorship of the ECCV Walter Lippmann Memorial Oration keynote speaker Gillian Triggs

– $150,000 Industry Innovation Fund supporting innovative new research into language services

Part of our role as a leader is to grow community perceptions and drive initiatives that help even more uptake and innovation in our sector. Our LanguageLoop Research and Innovation Grants Program is part of our ongoing effort – with funds provided to professional development and cutting-edge research to redefine what’s possible for our industry.

The Research and Innovation Grants Program aims to:

– Identify and adopt new practices that benefit the Australian language services industry;

– Identify and adopt new training or skills development initiatives and human resource practices that benefit Australia’s language services industry;

– Identify emerging industry trends that may be incorporated into future strategic planning.

Submissions for 2019’s Grants Program were so strong that we increased the funding pool from $50k to $150k, to be shared across four projects.

This year our Grant Award winners were:

Monash University – to develop a contextualised, immersive and interactive Virtual Reality training program for interpreters

RMIT – to research the benefits of simultaneous interpreting in courts and tribunals

RMIT – to research the benefits of a mentoring program in courts for interpreters from new and emerging languages

The University of Queensland(UQ) – to research the quality of telephone interpreting and develop best practice guidelines for interpreters and professionals using this service.

Our innovation winner from last year was Monash University who we funded to undertake research into interpreting in mental health settings and to develop best practice guidelines for professionals and interpreters working in these very challenging settings. From the research a course was exclusively designed for LanguageLoop interpreters working in mental health. This year our first group of leading interpreters successfully completed the specialist course, enabling them to achieve better mental health outcomes for the most vulnerable.

Leading by investing in the sector

We were created with a mission to ensure access and equity to services for all. We continue to invest heavily in the sector to ensure the ongoing sustainability and advancement of language professionals.

Research & InnovationResearch & InnovationGrants Program

LANGUAGELOOP

16

BUSINESS OUTCOMES


15

SECTOR INVESTMENT

Adding to our 3000-strong contractor workforce, 485 new language professionals were recruited, and of these, 95 different languages were spoken by the group, representing an increase of nearly 13.9%.

The strong growth in recruitment was primarily achieved through efforts to expand our national presence into Queensland, Western Australia and Tasmania, as well as new Victorian clients.

Ongoing engagement with major language education providers including RMIT and Monash University continued, alongside relationships with community based organisations to also provide another avenue for recruitment.

The % increase in new language professionals

14%

Our continued efforts in recruitment delivered strong growth with 14% more language professionals joining us compared to the previous year.

Breaking down barriers

Our CEO Elizabeth Compton featured in the September 2018 issue of the CEO Magazine.

In the feature article, Elizabeth talked about the critical role LanguageLoop plays in giving a voice to our multicultural communities in settings such as schools, courts and hospitals.

She also spoke about our growing portfolio of work to help business improve their service delivery to non-English speaking customers via our leading technology such as VideoLoop and our automated enterprise contact-centre telephone interpreting solution.

LANGUAGELOOP

18


17

OUR WORKFORCE OUR WORKFORCE

Leading diversity in our people

Australia is among the most culturally diverse countries in the world, with the last Census results revealing that 26% of Australians are born overseas.

GM Relationships

& GrowthCzarinaHowell

CustomerService

ManagerNitin Padman

TranslationsManager

Claire Mullins

IT ManagerSelvakumar

Arulraj

FinanceManager

MarcellinaWijaya

Head ofStrategic Progects

Frans Moens

LanguageLoopBoard ofDirectors

CEOElizabethCompton

Our leadership team works each day to make our goals a reality – with more people, businesses and organisations connecting through language when it matters.

The “Loop All Stars” Our inaugural Basketball team competed in the Australian Corporate Games in November 2018. It was a great exercise in building team culture, working towards a common goal.

Between our 38 head office staff, an impressive 15 languages are spoken. Our passionate people are true supporters of cultural diversity and local community, with employee fundraising generating valuable funds during the year for a range of charities and causes.

At the close of 30 June 2019, the total number of full time equivalent staff working for LanguageLoop was 25 people.

Leadership Team We are proud to be leading the way in representing cultural diversity through our head office staff including at a senior level, with our leadership team representing five cultures; Irish, Filipino, Indian, Dutch and Indonesian.

With mounting evidence that more diverse organisations make for better decision-making and achieve better performance, including research by McKinsey & Company showing that ethnically diverse Executive teams are 33% more likely to out-perform their peers on profitability, we are poised to continue our strong growth trajectory through inclusive, dynamic leadership.

.

Our Board, Leadership team and staff reflect the truly multicultural nation that we are.Staff Numbers 2018-2019

FT PT C T

Female 17 4 4 25

Male 8 2 3 13

Total 25 6 7 38

Full Time / Part Time / Casual / Total

Head office staff reflect the community we serve, speaking 15 languages collectively: Hindi / Punjabi / Tamil / Indonesian / Greek / Spanish / Dutch / Mandarin / Tagalog / Gujarati / Malayalam /

Marathi / Kannada / Vietnamese / Arabic

Customer Experience. We were excited to be a Major Event Partner at Australia’s largest Customer Experience Management conference. We continue to work with some of Australia’s largest organisations to deliver outstanding customer experiences – in any language.


19

OUR PEOPLEOUR PEOPLE

Proud to belong

LanguageLoop is led by five independent Board members, who are appointed by the government, and are required to meet dual reporting commitments to the Minister for Multicultural Affairs and the Treasurer. Our Board of Directors is supported through two committees, including the Risk Management and Audit Committee, and Human Resources Remuneration Committee.

These committees oversee: – Strategic and operational planning – Risk management and compliance – Financial management and reporting – CEO performance

Good governance

*Period of service: July 2018 to October 2018

Board Committee Meeting Attendance

NameBoard eligible

to attend AttendedHR eligible to attend Attended

Audit & risk eligible to attend Attended

George Lekakis 10 9 2 2 0 0

Meng Heang Tak* 4 2 2 1 0 0

Miriam Suss 10 9 2 2 0 0

Sabah Khan 10 8 0 0 3 3

Carlo Carli 10 8 0 0 3 2

Ruth Owen 10 7 0 0 3 3

We are committed to delivering great value to our customers and stakeholders, through best practice governance principles.

We were once again proud to be a sponsor of Cultural Diversity Week in 2019, presented by the Victorian Multicultural Commission with support from the Victorian Government.

In its 17th year, Cultural Diversity Week ‘Proud to belong – Your Generation Your Stories’ celebrated the everyday diversity of Victorians and reflected on what gives us all a sense of belonging in our multicultural community.

The Commission sees the power of humanity every day – even in the most simple of encounters where people from different cultures come together and connect through common values and experiences.


21 22

GOVERNANCECOMMUNIT Y

Appointed as Chair of the Board in May 2015, George brings more than three decades of experience at the highest levels of multicultural affairs and organisations – which in 2010 led to his award as the Officer of the Order of Australia for distinguished service to the community through leadership roles in multicultural organisations.

He previously stood as the longest serving Chairperson of the Victorian Multicultural Commission from 2001 to 2011 – where he led major initiatives including the development of the Victorian Multicultural Act 2004, Community Grants program, the Cultural Precincts and Community Infrastructure Enhancement Fund, Diversity Week, Interfaith initiatives, Refugee Communities Support Program and Interpreting and Translation policy initiatives program in Victoria, among others.

Other roles included Chairperson of the Ethnic Communities’ Council of Victoria, and service on many government and community-based Boards and committees, including time as a member of the Social Security Appeals Tribunal.

With formal qualifications in social work and nursing, George’s career has since spanned all aspects of organisational governance, policy development, program administration and service delivery.

Serving on the Board first in 2012 and then returning in April 2016, Miriam has an accomplished career in health, community and multicultural sectors. Recognised in 2013 with a Medal of the Order of Australia for Service to the Jewish Community, Miriam has held positions as the Director of Social Work and Community Development Services at Jewish Care, headed up the Jewish Community Council of Victoria and the Ethnic Communities’ Council of Victoria, and was the General Manager of Development, Communications and Marketing at Jewish Care.

Miriam is currently a Board member of Alfred Health. A social worker by profession, she has a strong commitment to social justice and access and equity to opportunities for all Australians. Miriam speaks five languages and strongly believes in the need for excellent language services in our community having immigrated to Australia with her family at two-years- old.

Carlo was member of the Victoria Parliament for more than 16 years, and brings a depth of experience to the complexity of government and pursuing changes to public policy. He is currently Chair of the Legislative Leadership and Governance Group at Deakin University (Victoria) – an organisation that provides training and parliamentary strengthening programs for overseas parliaments.

Carlo is also Chair of community health service Merri Health in Melbourne’s north, and works as a consultant and lecturer at Victoria University. In recent years he worked on governance and capacity building in the Pacific region and in Uganda, and also with Aboriginal-managed health organisations. Carlo speaks Veneto, Italian, Spanish and French, and is an advocate for access and equity, multiculturalism, and broader human rights issues in the community and within the political process.

Sabah has over 15 years of experience in commercial and corporate law, including her current role as Legal Counsel for contingent workforce specialist Entity Solutions, which is positioned in AUSNZ and APAC regions. As part of the senior management team, Sabah helps lead decision-making by providing strategic and expert legal advice on all areas of business activity, including risk management.

Previously, she was Legal Counsel for one of Australia’s largest franchise networks, Jim’s Group. She provided legal advice on the contractual and commercial management of the Group’s franchisees, and delivered improvements relating to legal and business procedures, compliance and documentation. Committed to social inclusion, Sabah has volunteered at the Women’s Legal Centre, providing free legal advice and representation to women in Victoria. She is fluent in Hindi and Urdu.

From a career in legal and accounting sectors in mostly management and finance roles, Ruth moved to Chief Financial Officer in the not-for-profit sector, which further ignited her passion to advocate for those facing disadvantage. She has served on boards and committees for VMA Ltd, The Council for Homeless People, Mind Australia, International Women’s Development Agency, Victorian Asthma Foundation, Cerno Ltd, Dianella Community Health Centre, Dental Health Services Victoria, City of Yarra and the Royal Australian College of General Practitioners. She chaired Finance and Audit and Risk Committees in her various Board roles.

Ruth has worked to support refugees and women through the Brotherhood of St Laurence’s Ecumenical Migration Centre program, and more recently with The Social Studio in Collingwood. Ruth has mentored both newly arrived residents and professional women looking at advance careers.

George Lekakis AO

Chairperson –––

Miriam Suss OAM

Deputy Chairperson –––

Carlo Carli –––

Sabah Khan –––

Ruth Owens BBUS, MBA, FCPA, FAICD

–––

Board of Directors


23 24

BOARD OF DIRECTORSBOARD OF DIRECTORS

aaAcholi Ugand (Northern)

Afar EritreaEthiopia

Afrikaans South AfricaAkan Ghana

Albanian AlbaniaAmharic Ethiopia

Arabic AlgeriaEgyptJordanKuwaitLebanonMoroccoPalestineSaudi ArabiaSyriaTunisiaYemen

Armenian ArmeniaAssyrian Iraq

SyriaAuslan Australia

Azerbaijani / AzerbaijanBari Sudan (South)

Byelorussian BelarusBengali BangladeshBislama Vanuatu

Kurdish Kurdistan (Iraq)SyriaTurkey

Laotian LaosLatvian/Lettish LatviaLiberian English Liberia

Lingala CongoLithuanian Lithuania

Luganda UgandaMacedonian Macedonia

Madingo GambiaMalay Brunei

MalaysiaMalayalam India

Maltese MaltaMandarin China

SingaporeTaiwan

Marathi IndiaMaori Cook Islands

New ZealandMende Sierra Leone

Mongolian ChinaMongolia

Nauruan NauruNepali Nepal

Norwegian Norway

Bosnian BosniaBulgaria BulgariaBurmese Myanmar

Cambodian/ CambodiaCantonese China

Hong KongMacau

Catalan SpainCebuano Philippines

Chad SudanChaldean Iraq

Chin MyanmarChinese China

Creole Seychelles/OceaniaCroatian Croatia

Czech Czech RepublicDanish Denmark

Dari AfghanistanDinka SudanDutch Belgium

HollandSuriname

Dzongkha BhutanEstonian Estonia

Ewe GhanaFanti Ghana

Fiji Hindi Fiji

Nuer SudanOromo Eritrea

EthiopiaPashto Afghanistan

PakistanPersian/Farsi Iran

Pidgin Papua New GuineaPolish Poland

Portuguese BrazilMacauPortugal

Punjabi IndiaPakistan

Rohingya MyanmarRomanian Romania

MoldovaRussian Estonia

RussiaSaho Eritrea

EthiopiaSamoan SamoaSerbian Montenegro

SerbiaShanghainese China

Sinhalese Sri LankaSlovak Slovakia

Slovene Slovenia

Filipino/ PhilippinesFinnish FinlandFlemish BelgiumFrench Algeria

BelgiumCanadaFranceFrench GuianaHaitiMadagascarMaliNew CaledoniaNigerSenegalSwitzerlandVanuatu

Fujian China/Fujian ProvinceFuzhou China

German AustriaGermanySwitzerland

Greek GreeceCyprus

Gujarati IndiaPakistan

Hakka ChinaHararic Ethiopia

Somali SomaliaSpanish Argentina

BoliviaChileColombiaCosta RicaCubaDominican RepublicEcuadorEl SalvadorGuatemalaHondurasMexicoNicaraguaPanamaParaguayPeruPuerto RicoSpainUruguayVenezuela

Sudanese SudanSwahili Congo

KenyaTanzania

Swedish SwedenTaiwanese Taiwan

Hazaragi AfghanistanHebrew Israel

Hindi IndiaHmong Laos

Hokkien ChinaHungarian Hungary

Ilonggo PhilippinesIndonesian Indonesia

Italian ItalyJapanese Japan

Juba Arabic SudanKachin Myanmar

Kannada India (Southern)Karen Myanmar

Karenni MyanmarKayah MyanmarKikuyu Kenya

Kinyarwanda RwandaKirundi Burundi

Kissi Africa (Western)Kiswahili Congo

KenyaTanzania

Korean KoreaKrio Sierra Leone

Kurdish IraqIran

Tamil IndiaSri Lanka

Telugu IndiaTeocheow China

Tetum TimorThai Thailand

Tibetan TibetTigre Eritrea

EthiopiaTigrigna Eritrea

EthiopiaToishan ChinaTongan TongaTurkish Cyprus

TurkeyTurkmen Turkmenistan

Twi GhanaUighur China

TurkeyUkrainian Poland

RussiaUkraine

Urdu IndiaPakistan

Uzbek UzbekistanVietnamese Vietnam

Visayan Philippines

Communities are best served when all people have a voice. Every day we are helping to connect more people and businesses, in 180+ languages, to live life without limits.


25 26

Financial Statement 2018/2019 FOR THE YEAR ENDED 30 JUNE 2019

2018/ 19 Audited Financial Statements

29 Comprehensive Operating Statement for the year ended 30 June 2019

30 Balance sheet as at 30 June 2019

31 Statement of changes in equity for the year ended 30 June 2019

32 Cash flow statement for the year ended 30 June 2019

33 Notes to the financial statements for the year ended 30 June 2019

33 Note 1 About this report

33 Note 2 Income from transactions

35 Note 3 Expenses from transactions

38 Note 4 Non financial assets

41 Note 5 Other assets and liabilities

42 Note 6 How we finance our operations

43 Note 7 Risk, contingencies and valuation judgements

47 Note 8 Other disclosures

50 Statement by Directors and Management

51 Independent auditors report


27 28

FINANCIAL STATEMENTSFINANCIAL STATEMENTS

Note(s) 2019 $

2018 $

Income from transactions

Sale of services 2.2 27,109,895 22,690,561

Interest 2.3 36,348 29,500

Other income 2.4 - 909

Total income from transactions 27,146,243 22,720,970

Expenses from transactions

Cost of services provided 3.2 20,444,925 17,211,999

Employee expenses 3.3 3,466,678 3,137,158

Supplies and services 3.4 1,576,384 1,234,068

Depreciation and amortisation 4.2.1 366,804 412,290

Total Expenses from transactions 25,854,791 21,995,514

Net result from transactions (net operating balance) 1,291,452 725,456

Other economic flows included in net result 8.1

Net gain/(loss) on disposal non-financial assets - (3,350)

Net gain/(loss) on financial instrument (7,941) (3,951)

Net gain/(loss) on the revaluation of long service leave liability 20,649 (351)

Total other economic flows included in net result 12,708 (7,652)

Net result 1,304,160 717,804

Comprehensive result 1,304,160 717,804

Comprehensive Operating Statement FOR THE YEAR ENDED 30 JUNE 2019

Balance Sheet AS AT 30 JUNE 2019

Note(s) 2019 $

2018 $

Assets

Financial Assets

Cash 6.1 4,466,161 3,662,720

Receivables 5.1 4,104,648 2,938,486

Total financial assets 8,570,809 6,601,206

Non-financial Assets

Prepayments 4.1 189,893 41,235

Plant, equipment & intangible assets 4.2 1,024,276 1,136,587

Total non-financial assets 1,214,168 1,177,822

Total assets 9,784,977 7,779,028

Liabilities

Payables 5.2 2,297,621 2,023,743

Unearned Income 5.3 145,833 172,187

Provisions 3.3.1 361,729 317,227

Borrowings 5.4 409,761 -

Total liabilities 3,214,944 2,513,156

Net Assets 6,570,033 5,265,872

Equity

Contributed capital 400,000 400,000

Accumulated surplus 6,170,033 4,865,872

Net worth 6,570,033 5,265,872

The comprehensive operating statement should be read in conjunction with the accompanying notes.The balance sheet should be read in conjunction with the accompanying notes.

29


30


Note(s) 2019 $

2018 $

Cash flows from operating activities

Receipts from customers 28,611,657 25,456,692

Payments to suppliers & employees (25,764,307) (22,128,083)

GST paid to the ATO (2,227,456) (2,114,053)

Interest received 36,348 29,500

Interest paid (8,071) -

Net cash inflow from operating activities 6.2 648,172 1,244,055

Cash flows from investing activities

Proceeds from investments - 73,057

Payments for Telecommunication/IVR System (22,568) (38,250)

Payments for Booking System - (24,900)

Payments for Office equipment and Furniture (5,665) (6,720)

Payment for New Booking System System (226,259) (331,689)

Payment for Leasehold Improvement - (202,109)

Net cash used in investing activities (254,492) (530,611)

Cash flows from financing activities

Proceed from TCV 500,000 -

Repayment of TCV Loan (90,239) -

Dividend paid - (319,112)

Net cash used in financing activities 409,761 (319,112)

Net increase/(decrease) in cash held 803,441 394,332

Cash at the beginning of financial year 3,662,720 3,268,388

Cash at the end of financial year 4,466,161 3,662,720

Statement of Changes in Equity FOR THE YEAR ENDED 30 JUNE 2019

Cash Flow Statement FOR THE YEAR ENDED 30 JUNE 2019

The cash flow statement should be read in conjunction with the accompanying notes.

The statement of changes in equity should be read in conjunction with the accompanying notes.

Accumulated Surplus

$

Contributions by Owner

$Total

$

Balance at 1 July 2018 4,467,181 400,000 4,867,181

Net result for the year 717,804 - 717,804

Dividends paid (319,112) - (319,112)

Balance at 30 June 2018 4,865,872 400,000 5,265,872

Net result for the year 1,304,160 - 1,304,160

Dividends paid - - -

Balance at 30 June 2019 6,170,033 400,000 6,570,033

31


32


2019 $

2018 $

Interest on bank deposits 36,348 29,500

Total interest income 36,348 29,500

2019 $

2018 $

Interpreting service 25,164,594 20,786,122

Translation service 1,943,091 1,897,660

Others 2,210 6,779

Total sales of service 27,109,895 22,690,561

Note(s) 2019 $

2018 $

Sales of service 2.2 27,109,895 22,690,561

Interest income 2.3 36,348 29,500

Other income 2.4 - 909

Total income from transactions 27,146,243 22,720,970

2019 $

2018 $

- 909

Total other income - 909

Notes to the financial statements FOR THE YEAR ENDED 30 JUNE 2019

Note(s)

1 About This Report

The financial statements cover LanguageLoop as an individual reporting entity. Its principle address is: LanguageLoop, Level 16, 607 Bourke Street Melbourne Vic 3000

State Business Corporation

On the 17th December 1998 LanguageLink (formerly known as Victorian Interpreting and Translating Service)

was declared to be a State Business Corporation.

On the 14th January, 1999 the Treasurer formerly announced under Section 46 of the State Owned Enterprises Act

1992 that initial capital of LanguageLink was to be the sum of $400,000.

On the 25th September 2018 LanguageLink changed business name to LanguageLoop.

Statement of compliance

These general purpose financial statements have been prepared in accordance with the Financial Management Act 1994 and applicable Australian Accounting Standards (AASs) which includes interpretations issued by the Australian Accounting Standards Board (AASB).

Basis of Accounting preparation and measurement

The accrual basis of accounting has been applied in the preparation of these financial statements whereby assets, liabilities, equity, income and expenses are recognised in the reporting period to which they relate, regardless of when cash is received or paid.

Judgements, estimates and assumptions are required to be made about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on professional judgements derived from historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

The report has been prepared on a historical cost basis. Historical cost is the fair value of the consideration given in exchange for assets.

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events are reported.

2 Income From Transactions

LanguageLoop is organisation for profit. The income is generated mainly from providing interpreting and translating service.

2.1 Summary of income that funds the delivery of our services

2.2 Sales of service

2.3 Interest income

2.4 Other income

AASB 15 supersedes AASB 118 Revenue, AASB 111 Construction Contracts and related Interpretations and it applies, with limited exceptions, to all revenue arising from contracts with its customers.

AASB 15 establishes a five-step model to account for revenue arising from an enforceable contract that imposes a sufficiently specific performance obligation on an entity to transfer goods or services. AASB 15 requires entities to only recognise revenue upon the fulfilment of the performance obligation. Therefore, entities need to allocate the transaction price to each performance obligation in a contract and recognise the revenue only when the related obligation is satisfied.”

2 Income From Transactions (continued...)

AASB 15 did not have any significant impact on the accounting policies and financial performance or position of the company. There were no adjustments required to the Statement of profit or loss and other comprehensive income for the period ending 30 June 2019 and amounts recognised in the balance sheet at the date of initial application (1 July 2019) and the beginning of the earliest period presented (1 July 2018). “

2.1 Summary of income that funds the delivery of our services

Income from the provision of interpreting and translation services is recognised when the service has been provided.

Interest income includes interest received on cash in bank and term deposits.

Other income includes when used plant and equipment is sold.

2.2 Sales of service

2.3 Interest income

2.4 Other income

33


34


2019 $

2018 $

Salary, wages, annual leave and long service leave 3,233,737 2,874,002

Employer superannuation contribution 220,884 207,696

Staff training and development 12,057 55,460

Total employee expenses 3,466,678 3,137,158

2019 $

2018 $

Cost of interpreting 19,275,540 15,995,264

Cost of translating 1,169,385 1,216,734

Total cost of services 20,444,925 17,211,999

Note(s) 2019 $

2018 $

Cost of services 3.2 20,444,925 17,211,999

Employee expenses 3.3 3,466,678 3,137,158

Supplies and services 3.4 1,576,384 1,234,068

Total expenses incurred in delivery of service 25,487,987 21,583,224

2019 $

2018 $

Provisions

Current Provisions

Employee benefits

Annual Leave

Unconditional and expected to settle within 12 months 154,835 151,432

Long Service Leave

Unconditional and expected to settle within 12 months -

Unconditional and expected to settle after 12 months 63,389 27,158

218,224 178,590

Provisions for on-costs:

Unconditional and expected to settle within 12 months 23,814 23,290

Unconditional and expected to settle after 12 months 9,749 4,177

33,563 27,467

Total current provisions 251,787 206,057

Non-Current Provisions

Employee benefit

Long service leave 77,741 78,806

On-costs 11,957 12,120

Restoration - make good provision 20,244 20,244

Total non-current provisions 109,942 111,170

Total provisions 361,729 317,227

3 Expenses from transactions

Introduction

This section provides an account of the expenses incurred by LanguageLoop in delivering the services and outputs. Expenses are recognised as they are incurred and reported in the financial year to which they relate.

Structure

3.1 Expenses incurred in delivery of services

3.2 Cost of services

3.3 Employee expenses

3.3.1 Employee benefits in the balance sheet

3.3.2 Superannuation

3.4 Supplies and services

3.1 Expenses incurred in delivery of services

3.3.1 Employee benefits in balance sheet

Cost of services provided, generally the hiring of interpreters and translators, are costs related to the income received as sales of services and are recognised in the same period as income.

3.3 Employee expenses

Employee expenses include wages and salary, superannuation expenses, annual leave and long service leave payments, fringe benefit tax and termination expenses.

Provisions are recognised when the company has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the present value of those cashflows.

3.2 Cost of services

Movement in Provisions

2019 Annual leave LSL Restoration On-costs Total

Opening balance 151,432 105,961 20,244 39,588 317,227

Reduction arising from payments

(178,198) (8,744) - (28,752) (215,694)

Additional provision provided

181,602 43,911 - 34,684 260,197

Closing balance 154,836 141,128 20,244 45,520 361,729

35


36


2019 $

2018 $

Prepaid Expenses 189,893 41,235

Total prepayment 189,893 41,235

2019 $

2018 $

Plant and Equipment

Furniture and fittings (at fair value) 32,742 32,742

Less: accumulated depreciation (31,667) (29,799)

1,075 2,943

Office equipment (at fair value) 71,305 65,639


13,286 20,380

Infrastructure (at fair value) 137,855 137,855

Less: accumulated amortisation (129,288) (101,712)

8,567 36,143

Leasehold improvement 332,779 332,779


256,987 298,717

Total Plant and Equipment 279,915 358,183

Intangible Assets

Booking system 894,334 894,334


- 147,591

2019 $

2018$

Computer expenses 348,230 242,278

Communication expenses 136,385 130,901

Utilities and property expenses 331,113 298,485

Business promotion 173,854 90,644

Board management fees 89,326 97,638

Industry development program 130,623 -

Other administration expenses 366,852 374,123

Total supplies and services 1,576,384 1,234,068

3.4 Supplies and services (continued...)

Supplies and services include all other significant related expenses that associated with provision of services during the financial year. They are recognised as an expense in the reporting period in which they are incurred.

Industry development program is research and innovation program funded by LanguageLoop to invest in language services sector and to ensure the ongoing sustainability of the industry. Funding was provided in a one-off payment.

4 Non financial assets

Non financial assets include:

4.1 Prepayment

4.2 Plant, equipment and intangible asset

4.2.1 Reconciliation of movements in non-financial assets

4.1 Prepayment

Prepayments represent payments in advance of receipt of services.

4.2 Plant, equipment & intangible assets

3.3.1 Employee benefits in balance sheet (continued...)

Employee benefits

(i) Wages and salaries and annual leave

Liabilities for wages and salaries, including annual leave are all recognised in the provision for employee benefits as ‘current liabilities’, because LangaugeLoop does not have an unconditional right to defer settlement of these liabilities.

Liabilities for wages and salaries and annual leave are measured at undiscounted value as it is expected to be wholly settled within 12 months

(ii) Long service leave

Liability for long service leave (LSL) is recognised in the provision for employee benefits.

Unconditional LSL is disclosed as a current liability, even when LanguageLoop does not expect to settle the liability within 12 months because it will not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months

The component of this current liability are measured at:

-undiscounted value if it is expected to be wholly settled within 12 months; and

-present value if it is not expected to be wholly settled within 12 months.

Conditional LSL is disclosed as a non-current liability. There is an unconditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service. This non-current LSL liability is measured at present value.

Any gain or loss following revaluation of the present value of non-current LSL liability is recognised as a transaction, except to the extent that a gain and loss arises due to changes in discount rates for which it is then recognised as an other econmic flow.

3.3.2 Superannuation

Superannuation contributions paid or payable for the reporting period are included as part of employee expenses in the comprehensive operating statement.

The name and details of the major employee superannuation funds and contributions made thereto are as follows:

3.4 Supplies and services

Contributions made:

Fund No of employees No of employees Contributions $

Contributions $

2019 2018 2019 2018

Vic Super 15 17 67,223 80,441

Others 36 36 173,062 165,131

51 53 240,284 245,572

There was total $15,006 contributions outstanding as at 30th June 2019 (2018 nil)

37


38


2019 $

2018 $

Telecommunication/IVR system 572,488 549,919


75,982 165,245

ERP system 234,524 234,524


110,431 133,879

New Booking System * 557,948 331,689

Less: accumulated amortisation - -

557,948 331,689

Total Intangible Assets 744,361 778,404

Total Plant, Equipment & Intangible Assets 1,024,276 1,136,587

* LanguageLoop is in the process of implementing a new booking system with an expected to go live in September 2019

Plant and equipment All non-current physical assets are measured initially at cost and subsequently recognised at fair value less accumulated depreciation and impairment. The fair value of plant and equipment is normally determined by reference to the assets depreciated replacement cost.

For plant and equipment, existing depreciated historical cost is generally a reasonable proxy for depreciated replacement cost because of the short lives of the assets concerned. Intangible assets Intangible assets are initially recognised at cost. Subsequently, intangible assets with finite useful lives are carried at cost less accumulated amortisation and accumulated impairment losses. Costs incurred subsequent to initial acquisition are capitalised when it is expected that additional future economic benefits will flow to the company.

4.2 Plant, equipment & intangible assets (continued...)

4.2.1 Reconciliation of movements in non-financial assets

4.2.1 Reconciliation of movements in non-financial assets (continued...)

Change for period

Intangible Asset

Furniture and Fittings

Office Equipment Infrastructure

LeaseholdImprovement Total

30 June 2018

Balance at 1 July 2017

641,563 11,752 23,368 137,855 130,670.0 945,208

Additions 394,839 - 10,070 - 202,109 607,018

Disposal - (3,350) - - - (3,350)

Depreciation & amortisation

(257,998) (5,459) (13,059) (101,712) (34,062) (412,290)

Balance at 30 June 2018

778,404 2,943 20,379 36,143 298,717 1,136,587

Change for period

Intangible Asset

Furniture and Fittings

Office Equipment Infrastructure

LeaseholdImprovement

Total

30 June 2019

Balance at 1 July 2018

778,404 2,943 20,379 36,143 298,717 1,136,587

Additions 248,827 - 5,665 - 254,492

Depreciation & amortisation

(282,870) (1,868) (12,760) (27,576) (41,730) (366,804)

Balance at 30 June 2019

744,361 1,075 13,286 8,567 256,987 1,024,276

Depreciation and Amortisation

All fixed assets (office equipment, furniture and fittings, and intangible assets) that have a limited useful life are depreciated or amortised. Depreciation and amortisation are calculated on a straight line basis, at rates that allocate the asset’s value, less any estimated residual value, over its estimated useful life.

Estimated useful lives applicable for the years ended 30 June 2019 and 30 June 2018 were as follows:

Asset class Useful life 2019 Useful life 2018Office equipment 3 years 3-5 yearsFurniture and fittings 5 years 5 yearsInfrastructure 5 years 5 yearsLeasehold Improvement 8 years 8 yearsIntangible assets 8 years 8-10 years

LanguageLoop reviews the useful life of all assets annually. During the financial year, LanguageLoop reassessed the estimated total useful lives of certain items of fixed assets. The net financial effect of this reassessment in the current financial year was not material.

Plant and equipment is held at fair value. When plant and equipment is specialised in use, such that is rarely sold other than as part of a going concern, fair value is determined using the depreciated replacement cost method.

There were no changes in valuation techniques throughout the period to 30 June 2019.

For all assets measured at fair value, the current use is considered the highest and best use.

The movements in fair value of furniture and fittings and office equipment relates to purchases and depreciation for the year. There have been no transfers between levels or revaluations during the period.

39


40


2019 $

2018 $

Contractual

Supplies and services 1,210,936 1,231,697

Accrued expenses 882,481 594,514

2,093,417 1,826,211

Statutory

Taxes payable 204,203 197,532

204,203 197,532

Total current payables 2,297,621 2,023,743

2019 $

2018 $

Prepaid languagelink 145,833 172,187

Total unearned income 145,833 172,187

Unearned Income is revenue received in advance for services that have not been fully provided.

2019 $

2018 $

Trade receivables 4,110,215 2,867,235

Allowance for impairment losses of contractual receivable (5,567) (3,375)

Accrued revenue - 74,627

Total receivable 4,104,648 2,938,486 2019 $

2018 $

Cash at bank 4,465,911 3,662,470

Petty cash 250 250

Total cash balance 4,466,161 3,662,720

2019 $

2018 $

Net result for the period 1,304,160 717,804

Add:

Depreciation and Amortisation 366,804 412,290

Increase/(Decrease) in provision 44,502 (13,649)

Increase/(Decrease) in payables 247,525 25,766

(Increase)/Decrease in receivables and prepayments (1,314,820) 101,847

Net cash provided by operating activities 648,172 1,244,055

2019 $

2018 $

Loan from TCV 409,761 -

Total borrowings 409,761 -

Borrowings are initially measured at fair value, being the cost of the borrowings, net of transaction costs.

Receivables consists predominantly of amounts owing from our debtors in relation to the service we have provided.

From 1 July 2018, LanguageLoop has been recording the allowance for expected credit loss for the relevant financial instruments, replacing AASB 139’s incurred loss approach with AASB 9’s Expected Credit Loss approach.

Details about LanguageLoop’s exposure to credit risk and the calculation of the loss allowance are set out in note 7.1.2.

Cash includes cash on hand, cash at bank and those highly liquid investments (with an original maturity of three months or less), which are held for the purpose of meeting short term cash commitments rather than for investment purposes, and readily convertible to known amounts of cash with an insignificant risk of changes in value.

Payables consist of:

- Contractual payable

Payables consist predominantly of accounts payable and other sundry liabilities. Accounts payable represent liabilities for services provided to the company prior to the end of the financial year that are unpaid, and arise when the company becomes obliged to make future payments in respect of the purchase of services.

- Statutory payable

Payable consists of goods and services tax and pay as you go (PAYG) payable.

5 Other assets and liabilities

5.1 Receivable5.2 Investment5.3 Payable5.4 Unearned income

5.1 Receivable

6.3 Commitments for expenditure

Commitments for future expenditure include operating and capital commitments arising from contracts. These commitments are disclosed at their nominal value and inclusive of the GST payable. These future expenditures cease to be disclosed as commitments once the related liabilities are recognised in the balance sheet.

AASB 16 Leases

AASB 16 Leases replaces AASB 117 Leases, AASB Interpretation 4 Determining whether an Arrangement contains a Lease, AASB Interpretation 115 Operating Leases-Incentives and AASB Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

AASB 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases on the balance sheet by recording a Right-Of-Use (RoU) asset and a lease liability except for leases that are shorter than 12 months and leases where the underlying asset is of low value (deemed to be below $10,000).

6 How we financed our operations

6.1 Cash flow information and balance6.2 Reconciliation of net result for the period to cash flow from operating activities6.3 Commitment for expenditurese

6.1 Cash flow information and balance

5.2 Payable

6.2 Reconciliation of net result for the period to cash flow from operating activities

5.3 Unearned income

5.4 Borrowings

41


42


2019 $

2018 $

Within one year 259,371 249,996

Later than one year and not longer than 5 years 595,100 854,471

Total Commitment 854,471 1,104,467

Weighted average 2019 effective interest rate (%)

Carrying Amount

$

Fixed Interest

$

VariableInterest

$

Non InterestBearing

$

Total

$

Financial Assets

Cash 1.02 4,466,161 - 3,552,914 913,247 4,466,161

Receivables 4,104,648 - - 4,104,648 4,104,648

Total financial assets 8,570,809 - 3,552,914 5,017,895 8,570,809

Financial Liabilities

Payables * 2,093,417 - - 2,093,417 2,093,417

Total financial liabilities 2,093,417 - - 2,093,417 2,093,417

6.3 Commitments for expenditure (continued...)

AASB 16 also requires the lessees to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset, and remeasure the lease liability upon the occurrence of certain events (e.g. a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The amount of the remeasurement of the lease liability will generally be recognised as an adjustment to the RoU asset.

Lessor accounting under AASB 16 is substantially unchanged from AASB 117. Lessors will continue to classify all leases using the same classification principle as in AASB 117 and distinguish between two types of leases: operating and finance leases.

The effective date is for annual reporting periods beginning on or after 1 January 2019. LanguageLoop intends to adopt AASB 16 in 2019-20 financial year when it becomes effective.

LanguageLoop will apply the standard using a modified retrospective approach with the cumulative effect of initial application recognised as an adjustment to the opening balance of accumulated surplus at 1 July 2019, with no restatement of comparative information.

Various practical expedients are available on adoption to account for leases previously classified by a lessee as operating leases under AASB 117. LanguageLoop will elect to use the exemptions for all short-term leases (lease term less than 12 months) and low value leases (deemed to be below $10,000).

The adoption of AASB 16 will result in the recognition of a significant right-of-use asset together with corresponding leaseliabilities. The expected impact on future financial statements based on current management assessment is $1,500,000 which includes a three year lease option.

Commitments for minimum lease payments in relation to non-cancellable operating leases, not recognised as liabilities, are payable as follows:

7 Risk, contingencies and valuation judgements

7.1 Financial instruments

7.1.1 Interest rate risk

7.1.2 Credit risk

7.1.3 Liquidity risk

7.2 Contingent assets and liabilities

7.3 Fair value determination

AASB 9 Financial instruments

Financial instruments arise out of contractual agreements between entities that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Due to the nature of the Company’s activities, certain financial assets and financial liabilities arise under statute rather than a contract. Such financial assets and financial liabilities do not meet the definition of financial instruments in AASB 132 Financial Instruments: Presentation. For example, statutory receivables do not meet the definition of financial instruments as they do not arise under contract. From July 2018, LanguageLoop applied AASB 9 Financial Instruments and classified all of its financial assets based on the business model for managing the assets and the asset’s contractual terms.

Categories of financial assets under AASB 9

Financial Assets at amortised cost

Financial assets are measured at amortised cost if both of the following criteria are met and the assets are not designated as fair value through net result.

7 Risk, contingencies and valuation judgements (continued...)

- The assets are held by LanguageLoop to collect the contractual cash flows, and

- The assets’ contractual terms give rise to cash flows that are solely payments of principal and interest.

These assets are initially recognised at fair value plus any directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method less any impairment. LanguageLoop recognises the following assets in this category:

- Cash and deposits

- Trade receivables (excluding statutory receivables)

7.1 Financial instruments

LanguageLoop principal financial instruments comprise:

- cash assets;

- term deposit;

- receivables;

- payables (excluding statutory payables); and

- borrowings

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement, and the basis on which income and expenses are recognised, with respect to each class of financial assets and financial liabilities above are disclosed in Note 1 of the financial statements.

7.1.1 Interest rate risk

Interest rate risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market

interest rate. Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate

because of changes in market interest rates.

LanguageLoop does not hold any interest bearing financial instruments that are measured at fair value, and therefore has no exposure to fair value interest rate risk.

LanguageLoop has minimal exposure to cash flow interest rate risks through its cash and term deposits that have floating interest rates. LanguageLoop manages this risk by mainly undertaking fixed rates or non-interest bearing financial instruments with relatively even maturity profiles.

The carrying amount of financial assets and financial liabilities that are exposed to interest rate risk are set out in the following table:

* Payables exclude Statutory Payable

43


44


2019 $

2018 $

Balance at beginning of the year (3,375) (3,376)

Increase in provision recognised in the net result (7,941) (3,950)

Reversal of provision of receivables written off during the year as uncollectible 5,749 3,951

Balance at end of the year (5,567) (3,375)

7.1.1 Interest rate risk (continued...)

7.1.2 Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to LanguageLoop. LanguageLoop has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults.

Credit risk arising from receivables is managed on an individual customer basis through a stringent credit assessment process. Customers exceeding their capacity and credit limit are placed on a cash on delivery basis.

LanguageLoop does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The credit risk on liquid funds is limited as funds are invested in banks with high credit ratings assigned by international credit-rating agencies.

The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents LanguageLoop’ maximum exposures to credit risk.

Impairment of financial assets under AASB 9 Financial instruments

LanguageLoop applies AASB 9 simplified approach for all contractual receivables to measure expected credit losses using a lifetime expected loss allowance based on the assumptions about risk of default and expected loss rates.

LanguageLoop has grouped trade receivable characteristics and days past due and selected the expected credit loss rate based on its past history, existing market conditions, as well as forward looking estimates at the end of the financial year.

On this basis, LanguageLoop determines the opening loss allowance on initial application date of AASB 9 and

the closing loss allowance at end of the financial year as follows:

Weighted average 2018 effective interest rate (%)

Carrying Amount

$

Fixed Interest

$

VariableInterest

$

Non InterestBearing

$

Total

$

Financial Assets

Cash 0.99 3,662,720 - 2,616,615 1,046,104 3,662,720

Receivables 2,938,486 - - 2,938,486 2,938,486

Total financial assets 6,601,205 - 2,616,615 3,984,590 6,601,205

Financial Liabilities

Payables * 1,826,211 - - 1,826,211 1,826,211

Total financial liabilities 1,826,211 - - 1,826,211 1,826,211

01-Jul-18 < 30 days 30- 60 days 60-90 days 90-120 days > 120 days Total

Expected loss rate 0% 0% 0% 2% 98% 100%

Gross carrying amount of contractual receivables

$2,162,249 $492,916 $152,734 $10,661 $48,675 $2,867,235

Loss allowance - - - $68 $3,308 $3,375

30-Jun-19 < 30 days 30- 60 days 60-90 days 90-120 days > 120 days Total

Expected loss rate 0% 0% 0% 3% 97% 100%

Gross carrying amount of contractual receivables

$2,483,348 $1,519,511 $41,097 $24,790 $41,469 $4,110,215

Loss allowance - - - $167 $5,400 $5,567

* Payables exclude Statutory Payable

Taking into account past performance, future expectations, economic forecasts, and management’s knowledge and experience of the financial markets, we believe the interest rate will remain stable over the next 12 months.

The only realistic positive or negative movement in interest rate will have a negligible impact on the net result.

The reconciliation of the movement in the loss allowance for contractual receivable is shown as follows:

Credit loss allowance is classified as other economic flows in the net result.

7.1.3 Liquidity risk

Liquidity risk is the risk that the company will be unable to meet its financial obligations as and when they fall due.

LanguageLoop manages its liquidity risk by:

a) careful maturity planning of our financial obligations based on forecasts of future cash flows; and

b) maintaining an adequate level of uncommitted funds that can be drawn at short notice to meet our short term obligations.

The carrying and nominal amount of contractual payables is $2,093,417 in 2019 ($1,826,211 in 2018). The contractual maturity dates of these payables is less than one year.

7.2 Contingent assets & contingent liabilities

Contingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of a note and, if quantifiable, are measured at nominal value. Contingent assets and liabilities are presented inclusive of GST receivable or payable respectively.

There were no contingent assets and contingent liabilities for LanguageLoop at 30 June 2019 or 30 June 2018.

7.3 Fair value determination

Consistent with AASB 13 Fair Value Measurement, plant and equipment and financial instruments are measured at fair value and categorised in the financial statements within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and

Level 3 - Valuation technique for which the lowest level input that is significant to the fair value measurement is unobservable.

The carrying amount of furniture and fitting and office equipment equates to the fair value. Based on the lowest level input that is significant to the fair value of these asset classes, the fair value measurement is level 3 because useful life are unobservable.

The accounting policies set out have been applied in preparing the financial statements for the year ended 30 June 2019 and the comparative information presented for the year ended 30 June 2018.

Management consider that the carrying amount of financial assets and the financial liabilities recorded in the financial statements approximates their net fair values.

The net fair value of all the contractual financial assets and liabilities are the same as the carrying amounts.

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Salary Band ($) Number of Persons

2019 $

2018 $

0 - 9,999 - -

10,000 - 19,999 5 5

20,000 - 29,000 1 1

140,000 - 149,999 - -

230,000 - 239,999 - -

310,000 - 319,999 1 1

Total number 7 7

Total amount 399,965 390,877

2019 $

2018 $

Net gain/(loss) on disposal non-financial assets - (3,350)

Net gain/(loss) on financial instrument (7,941) (3,951)

Net gain/(loss) on the revaluation of long service leave liability 20,649 (351)

Total other economic flows included in net result 12,708 (7,652)

Compensation of KMPS 2019 $

2018 $

Short-term employee benefits 372,466 355,606

Post-employment benefits 27,499 29,084

Other long-term benefits - 6,187

Termination benefits - -

Share based payments - -

Total Remuneration 399,965 390,877

Responsible Ministers Richard Wynne MP

1 December 2018 to 30 June 2019Minister for Planning

Minister for Housing

Minister for Multicultural Affairs

Hon. Robin Scott MP

1 July 2018 to 30 November 2018Minister for Finance

Minister for Multicultural Affairs

Governing Board of Directors Mr. George Lekakis - Chair 1 July 2018 to 30 June 2019

Ms. Miriam Suss - Deputy Chair 1 July 2018 to 30 June 2019

Cr. Meng Heang Tak 1 July 2018 to 26 October 2018

Ms. Ruth Catherine Owens 1 July 2018 to 30 June 2019

Ms. Sabah Khan 1 July 2018 to 30 June 2019

Mr. Carlo Carli 1 July 2018 to 30 June 2019

Accountable Officer Ms. Elizabeth Compton 1 July 2018 to 30 June 2019

8 Other disclosures

8.1 Other economic flows included in the net result

Other economic flows measure the change in volume or value of assets or liabilities that do not result from transactions. This includes:

Net gain/(loss) on disposal non-financial assets

Any gain or loss on disposal of plant and equipment that are no longer in used.

Net gain/(loss) on financial instruments

Where the bad debt is written off following a management decision (not by mutual agreement with the debtor), the carrying amount of the receivable needs to be reduced, and a bad debt expense for the write-off recognised in the result as an other economic flow.

Other gain/(loss) from other economic flows

Any gain or loss from the revaluation of the present value of long service leave liability due to changes in the bond interest rate.

8.2 Responsible Persons

In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994, the following disclosures are made regarding responsible persons for the reporting period.

NamesThe persons were responsible persons for the reporting period are as follows:

8.3 Remuneration of responsible persons

Remuneration received or receivable by the responsible persons in connection with the management of LanguageLoop during the reporting period was in the range:

8.4 Related parties

LanguageLoop is a wholly owned and controlled entity of the State of Victoria.

Related parties of LanguageLoop, include:

- all key management personnel and their close family members and personal business interests (controlled entities, joint ventures and entities they have significant influence over);

- all cabinet ministers and their close family members; and

- all departments and public sector entities that are controlled and consolidated into the whole of state consolidated financial statements.

All related party transactions have been entered into on an arm’s length basis.

Key management personnel of LanguageLoop includes the Minister for Multicultural Affairs, the members Board of Directors and the Chief Executive Officer. The compensation detailed below excludes the salaries and benefits the Minister receives. The Minister’s remuneration and allowances is set by the Parliamentary Salaries and Superannuation Act 1968 and is reported within the Department of Parliamentary Services’ Financial Report.

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8.5 Remunerations of auditors 2019 $

2018 $

Victorian Auditor-General's Office Audit of the financial statements

23,000 22,400

8.4 Related parties (continued...)

Transactions and balances with key management personnel and other related partiesGiven the breadth and depth of State government activities, related parties transact with the Victorian public sector in a manner consistent with other members of the public e.g. stamp duty and other government fees and charges. Further employment of processes within the Victorian public sector occur on terms and conditions consistent with the Public Administration Act 2004 and Codes of Conduct and Standards issued by the Victorian Public Sector Commission. Procurement processes occur on terms and conditions consistent with the Victorian Government Procurement Board requirements.

Outside of normal citizen type transactions with LanguageLoop, there were no related party transactions that involved key management personnel, their close family members and their personal business interests. No provision has been required, nor any expense recognised, for impairment of receivables from related parties.

Significant transaction with government-related entities

LanguageLoop provided interpreting and translation service to Victorian Government Departments and Agencies which represents approximately just over 50% of our total revenue. All transactions with Victorian Government Departments and Agencies were made on normal commercial term and conditions.

During the reporting period, dividend has not been paid to the Department of Treasury and Finance (2018: $319,112)

8.6 Subsequent events

As LanguageLoop is owned by government, it is required to pay a dividend in accordance with a determination by the Treasurer of Victoria (Treasurer) under the State Owned Enterprises Act 1992. An obligation to pay a dividend only arises after a formal determination is made by the Treasurer following consultation between the Board, the relevant portfolio Minister and the Treasurer. As this process had not been finalised as at 30 June 2019, no liability is recognised on the Balance Sheet.

2019 Statement by Directors and ManagementIn the opinion of the Directors and Management:

A) the accompanying comprehensive operating statement, balance sheet, statement of changes in equity, cashflow statement and notes to the financial statements of LanguageLoop present fairly the financial transactions during the year ended 30 June 2019 and the financial position at that date.

B) the accompanying financial statements have been prepared in accordance with the directions of the Minister of Finance under Financial Management Act 1994, applicable Australian Accounting Standards and other mandatory reporting requirements.

C) at the date of signing, there are no circumstances which would render any particulars in the financial statements to be misleading or inaccurate.

Signed

Elizabeth Compton Chief Executive Officer LanguageLoop Date 29th August 2019

Signed

Ruth Catherine Owens Member of the Board of Directors Chair of the Audit Committee LanguageLoop Date 29th August 2019

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FINANCIAL STATEMENTS


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AUDITORS REPORTAUDITORS REPORT

Documents

Our Locations - Parliament of Victoria · project will see us develop a virtual reality training program, putting our interpreters in the thick of a challenging police interview,