AUSTRALIAN INTERNATIONAL HOTEL SCHOOL
Objectives
The Australian International Hotel School (AIHS) operates under the Hotel School Act 1996.
The objective of the AIHS is to graduate students with academic and professional competencies required for success in the global hospitality industry.  The AIHS also operates the Hotel Kurrajong on a commercial basis to provide practical experience for its students.
The AIHS operates in affiliation with RMIT University.  RMIT University jointly accredits the degree and provides quality monitoring and joint marketing services.
2005-06 Highlights
Strategic and operational issues to be pursued in 2005‑06 include:
•	facilitating the sale or disposal of the AIHS and the Hotel Kurrajong operations prior to the proposed cessation of the Government subsidy in June 2007;
•	rebuilding enrolments in the Bachelor of Business (Hotel Management) program during the 2005‑06 and 2006‑07 financial years;
•	maintaining the existing high quality education standards;
•	concluding an articulation agreement with the CIT which guarantees progression from the Advanced Diploma to the Bachelor of Business program and degree completion;
•	employing excess residential capacity at AIHS to conclude and renew, if practicable, a contract with the ANU that provides residence accommodation for ANU students;
•	seeking approval to implement exit points from the Bachelor of Business (Hotel Management) Degree that would be recognised with the award of a Certificate or Associate Degree; and
•	seeking approval to implement an extension of the Bachelor of Business (Hotel Management) Degree that would be recognised with the award of a Graduate Diploma.

Australian International Hotel School	
Operating Statement	
  2004-05			  2004-05	   2005-06		  2006-07	  2007-08	  2008-09		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		Income								
		Revenue								
4  162		User Charges - Non ACT Government	3  926	4  316	10	4  881	0	0		
1  500		User Charges - ACT Government	1  500	1  500	‑	1  500	0	0		
0		Interest	4	3	-25	10	0	0		
14		Other Revenue	53	17	-68	18	0	0		
5  676		Total Revenue	5  483	5  836	6	6  409	0	0		
		Gains								
0		Total Gains	0	0	-	0	0	0		
5  676		Total Income	5  483	5  836	6	6  409	0	0		
		Expenses								
2  913		Employee Expenses	2  702	2  906	8	2  990	0	0		
262		Superannuation Expenses	244	251	3	258	0	0		
1  843		Supplies and Services	1  908	2  044	7	2  188	0	0		
79		Depreciation and Amortisation	100	39	-61	69	0	0		
578		Cost of Goods Sold	529	570	8	586	0	0		
1		Other Expenses	0	0	-	0	0	0		
5  676		Total Ordinary Expenses	5  483	5  810	6	6  091	0	0		
0		Operating Result	0	26	#	318	0	0		

Australian International Hotel School	
Balance Sheet	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/05			as at 30/6/05	as at 30/6/06	   Var	as at 30/6/07	as at 30/6/08	as at 30/6/09		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
		Current Assets								
509		Cash	384	414	8	0	0	0		
81		Receivables	231	224	-3	0	0	0		
97		Other	72	74	3	0	0	0		
687		Total Current Assets	687	712	4	0	0	0		
		Non Current Assets								
53		Property, Plant and Equipment	236	297	26	0	0	0		
53		Total Non Current Assets	236	297	26	0	0	0		
740		TOTAL ASSETS	923	1  009	9	0	0	0		
		Current Liabilities								
237		Payables	408	414	1	0	0	0		
290		Employee Benefits	243	283	16	0	0	0		
376		Other	475	550	16	0	0	0		
903		Total Current Liabilities	1  126	1  247	11	0	0	0		
		Non Current Liabilities								
90		Employee Benefits	75	79	5	0	0	0		
91		Other	65	0	-100	0	0	0		
181		Total Non Current Liabilities	140	79	-44	0	0	0		
1  084		TOTAL LIABILITIES	1  266	1  326	5	0	0	0		
-344		NET ASSETS	-343	-317	8	0	0	0		
		REPRESENTED BY FUNDS EMPLOYED								
-344		Accumulated Funds	-343	-317	8	0	0	0		
-344		TOTAL FUNDS EMPLOYED	-343	-317	8	0	0	0		

Australian International Hotel School	
Cash Flow Statement	
  2004-05			  2004-05	   2005-06		  2006-07	  2007-08	  2008-09		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		CASH FLOWS FROM OPERATING ACTIVITIES								
		Receipts								
5  640		User Charges	5  425	5  969	10	6  132	0	0		
0		Interest Received	3	5	67	10	0	0		
329		Other Revenue	353	332	-6	340	0	0		
5  969		Operating Receipts	5  781	6  306	9	6  482	0	0		
		Payments								
3  163		Related to Employees	2  976	3  104	4	3  620	0	0		
1  863		Related to Supplies and Services	1  886	2  039	8	2  530	0	0		
1  033		Other	972	1  033	6	974	0	0		
6  059		Operating Payments	5  834	6  176	6	7  124	0	0		
-90		NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES	-53	130	345	-642	0	0		
		CASH FLOWS FROM INVESTING ACTIVITIES								
		Receipts								
0		Proceeds from Sale of Property, Plant & Equipment	0	0	-	228	0	0		
0		Investing Receipts	0	0	-	228	0	0		
		Payments								
0		Purchase of Property, Plant and Equipment	125	100	-20	0	0	0		
0		Investing Payments	125	100	-20	0	0	0		
0		NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES	-125	-100	20	228	0	0		
-90		NET INCREASE/(DECREASE) IN CASH HELD	-178	30	117	-414	0	0		
598		CASH AT BEGINNING OF REPORTING PERIOD	562	384	-32	414	0	0		
508		CASH AT THE END OF THE REPORTING PERIOD	384	414	8	0	0	0		

Australian International Hotel School	
Statement of Changes in Equity	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/05			as at 30/6/05	as at 30/6/06	   Var	as at 30/6/07	as at 30/6/08	as at 30/6/09		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
-344		Opening Balance	-343	-343	-	-317	0	0		
		Accumulated Funds								
0		Operating Result for the Period	0	26	#	318	0	0		
		Reserves								
0		Transfer to/from Reserves	0	0	-	-1	0	0		
0		Total Income And Expense For The Period	0	26	#	317	0	0		
		Transactions Involving Equity Holders Affecting Accumulated Funds								
-344		Closing Balance	-343	-317	8	0	0	0		
Notes to the Budget Statements
The financial statements have been prepared on the basis that the Australian International Hotel School (AIHS) will cease to be operated by the Government after 30 June 2007.  The AIHS was granted approval in December 2004 to recruit and enrol new students beyond 2005, facilitating a seamless transition in the case of a sale and providing future revenue streams to the prospective buyer.
An Affiliation Agreement with the School of Hotel Administration (SHA) at Cornell University ceased on 30 December 2001.  This agreement covered a range of services that the SHA provided for the establishment of the AIHS.  As at 30 June 2005, the liability to Cornell University will be US$150,000.  The AIHS will continue to pay an amount of US$100,000 per annum until the liability is fully repaid in December 2006.  These payments will be made at the US dollar exchange rate applying at the date of payment.  The liability is included in the Balance Sheet based on a budgeted exchange rate of AUD$0.70.
In March 2005, the AIHS was approved as a Higher Education Provider and now receives funding from the Commonwealth Government on behalf of Australian students.  The AIHS estimates that approximately 30% of total future tuition fees will be received from the Federal Government via the Fee Help program.
Significant variations are as follows:
Operating Statement
•	user charges – non ACT Government:  the decrease of $0.236m in the 2004‑05 estimated outcome from the original budget is largely the result of lower student enrolments following a moratorium on new enrolments during 2004.  The increase of $0.390m in the 2005‑06 Budget from the 2004‑05 estimated outcome can be attributed to increased student fees following approval from the Government, in December 2004, to recruit and enrol new students beyond 2005;
•	employee expenses and superannuation:  the decrease of $0.229m in the 2004‑05 estimated outcome from the original budget is due to salary savings associated with management initiatives and a moratorium on new enrolments during 2004.  The increase of $0.211m in the 2005‑06 Budget from the 2004‑05 estimated outcome is due mainly to an increase in salary costs associated with increased student numbers;
•	depreciation and amortisation:  the increase of $0.021m in the 2004‑05 estimated outcome from the original budget is due to depreciation for purchases made in 2003‑04 and 2004‑05 that were not factored into the 2004‑05 Budget.  The decrease of $0.061m in the 2005‑06 Budget from the 2004‑05 estimated outcome is due to older assets being fully depreciated as at 30 June 2005; and
•	supplies and services:  the increase of $0.065m in the 2004‑05 estimated outcome from the original budget, and the increase of $0.136m in the 2005‑06 Budget from the 2004‑05 estimated outcome is due to increased marketing activity associated with the recruitment of new students.
Balance Sheet
•	cash:  the decrease of $0.125m in the 2004‑05 estimated outcome from the original budget, and the increase of $0.030m in the 2005‑06 Budget from the 2004‑05 estimated outcome is due largely to the fluctuation in student enrolments;
•	property, plant and equipment:  the increase of $0.183m in the 2004‑05 estimated outcome from the original budget is due to capital purchases in 2003‑04 and 2004‑05 that were not factored into the 2004‑05 Budget;
•	other current liabilities:  the increase of $0.099m in the 2004‑05 estimated outcome from the original budget, and the increase of $0.075m in the 2005‑06 Budget from the 2004‑05 estimated outcome is due to an increase of fees paid in advance associated with new enrolments in 2005, partially offset by the annual repayment of the Cornell University loan; and
•	other non current liabilities:  the decrease of $0.026m in the 2004‑05 estimated outcome from the original budget largely reflects the stronger Australian to US dollar exchange rate at the time of the Cornell University loan payment was made compared to the exchange rate used when the 2004‑05 Budget was developed.  The decrease of $0.065m in the 2005‑06 Budget from the 2004‑05 estimated outcome reflects the final repayment of the loan between the AIHS and Cornell University.