Australian Capital Territory Consolidated Annual Capital Territory Consolidated Annual Financial Statements Australian Capital Territory Government

  • Published on
    05-May-2018

  • View
    222

  • Download
    10

Transcript

Australian Capital TerritoryConsolidated Annual Financial StatementsAustralian Capital Territory Government CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORYIndependent Audit OpinionCertification by the Treasurer and the Chief Executive of the Department of TreasuryConsolidated Statement of Financial PerformanceConsolidated Statement of Financial PositionConsolidated Statement of Cash FlowsConsolidated Statement of Financial Performance by SectorConsolidated Statement of Financial Position by SectorConsolidated Statement of Cash Flows by SectorStatement of AppropriationNote 1 - The Australian Capital Territory GovernmentNote 2 - Summary of Significant Accounting PoliciesNote 3 - Change in Accounting PoliciesNote 4 - Disaggregated InformationNote 5 - Australian Capital Territory Government Controlled EntitiesNote 6 - Taxes, Fees and FinesNote 7 - User Charges for Goods and ServicesNote 8 - Grants from the CommonwealthNote 9 - Other RevenueNote 10 - Employee ExpensesNote 11 - SuperannuationNote 12 - Supplies and ServicesNote 13 - Grants and Purchased ServicesNote 14 - Other ExpensesNote 15 - Waivers and Write-offs of DebtsNote 16 - Net Extraordinary ItemsNote 17 - CashNote 18 - ReceivablesNote 19 - InvestmentsNote 20 - Investments Accounted for Using the Equity MethodNote 21 - InventoriesNote 22 - Property, Plant and EquipmentNote 23 - Capital Works in ProgressNote 24 - Other AssetsNote 25 - PayablesNote 26 - Interest Bearing LiabilitiesNote 27 - Finance LeasesNote 28 - Employee Superannuation Benefits Note IndexContents 2003-2004 Financial Year CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORYNote 29 - Other Employee BenefitsNote 30 - Other LiabilitiesNote 31 - Reconciliation of Changes in EquityNote 32 - Decrease in Accumulated Funds on the Adoption of a New Accounting StandardNote 33 - Reconciliation of Cash FlowsNote 34 - Operating Lease CommitmentsNote 35 - Capital CommitmentsNote 36 - Other CommitmentsNote 37 - Commitment ReceivableNote 38 - Contingencies, Guarantees and IndemnitiesNote 39 - Third Party Trust MoniesNote 40 - Interest in Joint Venture EntitiesNote 41 - Joint Venture OperationsNote 42 - Economic DependencyNote 43 - The Territory's Credit RatingNote 44 - Auditor's RemunerationNote 45 - Events Subsequent to Balance DateNote 46 - Financial InstrumentsNote Index (continued) 2003-2004 Financial YearAUDITOR-GENERAL Austral ian Capital Terri tory INDEPENDENT AUDIT REPORT AUSTRALIAN CAPITAL TERRITORY To the Members of the ACT Legislative Assembly Qualified Audit Opinion In my opinion, except for the effects on the financial statements of the matter referred to in the following Qualification paragraphs, the Consolidated Annual Financial Statements of the Australian Capital Territory for the year ended 30 June 2004: (i) are presented in accordance with the Financial Management Act 1996, Accounting Standards and other mandatory financial reporting requirements in Australia; and (ii) present fairly the financial position of the Australian Capital Territory as at 30 June 2004 and the results of its operations and its cash flows for the year then ended. Qualification Limitation on the Scope of the Audit in Relation to 2003 Comparatives Recoverable Amount of the Territorys Investment in TransACT The Consolidated Statement of Financial Position of the Australian Capital Territory and the Consolidated Statement of Financial Position by Sector Public Trading Enterprises included an investment by ACTEW in TransACT Communications Pty Limited (TransACT). As disclosed in Note 20: Investments Accounted for Using the Equity Method the carrying amount of this investment at 30 June 2003 was $40m. Under Australian Accounting Standard AASB 1016 Accounting for Investments in Associates, the carrying amount of this investment must not exceed its recoverable amount. Even though ACTEW undertook an assessment of the recoverable amount of the investment in TransACT at 30 June 2003, no independent valuation or other sufficient and appropriate evidence was provided to me to support the reasonableness of the cash flow projections and the discount rates used in the determination of the recoverable amount. As a result, no opinion could be formed on the appropriateness of the carrying amount of the investment in TransACT of $40m at 30 June 2003. Responsibility for the Financial Statements The Treasurer and the Chief Executive of the Department of Treasury are responsible for the financial statements. This includes responsibility for accounting policies and estimates used in the preparation of the financial statements and the maintenance of adequate accounting records and internal controls. Scala House, 11 Torrens Street Braddon ACT 2612 PO Box 275, Civic Square ACT 2608 Telephone: (02) 620 70833 Facsimile: (02) 620 70826 Office Email: actauditorgeneral@act.gov.au Content of the Financial Statements The Consolidated Annual Financial Statements of the Australian Capital Territory for the year ended 30 June 2004 comprises the following financial statements together with accompanying notes: Consolidated Statement of Financial Performance Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Consolidated Statement of Financial Performance by Sector Consolidated Statement of Financial Position by Sector Consolidated Statement of Cash Flows by Sector Statement of Appropriation ***** The Auditors Responsibility My responsibility is to express an opinion on the financial statements as required by the Financial Management Act 1996. The Audit Scope My audit was conducted in accordance with Australian Auditing Standards to provide reasonable assurance as to whether the financial statements are free of material misstatement. I formed the audit opinion by performing procedures to assess whether, in all material aspects, the financial statements present fairly, in accordance with the Financial Management Act 1996, Accounting Standards and other mandatory financial reporting requirements in Australia, a view that is consistent with my understanding of the financial position and performance of the Australian Capital Territory. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and in many cases, the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected. My procedures included: (i) examining, on a test basis, evidence supporting the amounts and other disclosures in the financial statements; and (ii) evaluating accounting policies and significant accounting estimates used in the preparation of the financial statements. I considered the effectiveness of internal controls when determining the nature and extent of my procedures, however, the audit was not designed to provide assurance on internal controls. My audit also did not involve the evaluation of the prudence of decisions made by the entities included in the Consolidated Annual Financial Statements of the Australian Capital Territory. Tu Pham Auditor-General 30 September 2004 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY2003-2004 2003-2004 2002-2003Actual Budget ActualNotes $m $m $mREVENUES FROM ORDINARY ACTIVITIESTaxes, Fees and Fines 6 801 700 734 User Charges 7 411 398 393 Grants from the Commonwealth 8 1,064 1,021 1,018 Interest Received 74 88 93 Revenue from Joint Ventures 40,41 56 46 46 Other Revenue 9 522 258 303 Total Revenues from Ordinary Activities 2,928 2,511 2,588 EXPENSES FROM ORDINARY ACTIVITIESEmployee Expenses 10 918 870 816 Superannuation Expenses 11 411 225 212 Supplies and Services 12 572 582 484 Depreciation and Amortisation 22 195 206 180 Borrowing Costs 52 52 55 Cost of Goods Sold 2ac 122 102 111 Grants and Purchased Services 13 368 356 339 Other Expenses 14 169 97 180 Expenses from Joint Ventures 41 - - 1 Total Expenses from Ordinary Activities 2,806 2,491 2,379 Operating Surplus from Ordinary Activities 122 20 209 Extraordinary Items (Net) 16 (13) (3) 21 Operating Surplus 109 17 230 Increase in Asset Revaluation Reserve 31 609 17 443 (Decrease) in Other Reserves 31 (2) - 0 Transfer from Reserves 31 36 28 151 (Decrease) in Accumulated Funds on the Adoption of a New Accounting Standard 32 (0) 0 (6)Change in Equity 752 61 817 Total Equity at the Beginning of the Year 8,628 8,178 7,810 Total Equity at the End of the Year 31 9,380 8,240 8,628 The above Consolidated Statement of Financial Performance should be read in conjunction with the accompanying notes.The actual totals of reported figures may vary slightly from totals in the statements due to the reported figures being rounded to the nearest million dollars (see Note 2(e)).AUSTRALIAN CAPITAL TERRITORY GOVERNMENTCONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCEFOR THE YEAR ENDED 30 JUNE 2004 2003-2004 Financial Year Page- 2 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY2004 2004 2003Actual Budget ActualNotes $m $m $mASSETSCurrent AssetsCash 17 88 61 69 Receivables 18 182 167 242 Investments 19 854 872 746 Investments Accounted For Using the Equity Method 20 8 - - Inventories 21 35 68 31 Capital Works in Progress 23 3 0 0Other 24 35 45 71 Total Current Assets 1,205 1,212 1,160 Non-Current AssetsReceivables 18 62 63 68 Investments 19 1,466 1,102 1,244 Investments Accounted For Using the Equity Method 20 349 394 390 Inventories 21 16 9 3 Property, Plant and Equipment 22 9,600 8,608 8,799 Intangibles 21 15 8 Capital Works in Progress 23 140 94 139 Other 24 105 42 61 Total Non-Current Assets 11,757 10,328 10,713 TOTAL ASSETS 12,962 11,540 11,873 LIABILITIESCurrent LiabilitiesPayables 25 165 115 152 Interest Bearing Liabilities 26 29 224 240 Finance Leases 27 35 31 34 Employee Superannuation Benefits 28 44 64 43 Unrealised Gain from Actuarial Review of Employee Superannuation Benefits 28 - - 17 Other Employee Benefits 29 152 111 144 Other 30 39 81 67 Total Current Liabilities 463 625 698 Non-Current LiabilitiesPayables 25 78 66 60 Interest Bearing Liabilities 26 793 578 597 Finance Leases 27 51 36 37 Employee Superannuation Benefits 28 2,045 1,853 1,606 Unrealised Gain from Actuarial Review of Employee Superannuation Benefits 28 - - 95 Other Employee Benefits 29 140 135 127 Other 30 14 7 24 Total Non-Current Liabilities 3,119 2,675 2,547 TOTAL LIABILITIES 3,582 3,300 3,245 NET ASSETS 9,380 8,240 8,628 REPRESENTED BY:Accumulated Funds 31 6,641 6,283 6,497 Asset Revaluation Reserve 31 2,686 1,901 2,077 Other Reserves 31 53 56 55 TOTAL FUNDS EMPLOYED 9,380 8,240 8,628 AUSTRALIAN CAPITAL TERRITORY GOVERNMENTCONSOLIDATED STATEMENT OF FINANCIAL POSITIONAS AT 30 JUNE 2004The actual totals of reported figures may vary slightly from totals in the statements due to the reported figures being rounded to the nearest million dollars (see Note 2(e)).The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. 2003-2004 Financial Year Page- 3 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORYAUSTRALIAN CAPITAL TERRITORY GOVERNMENTCONSOLIDATED STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 30 JUNE 20042003-2004 2003-2004 2002-2003Actual Budget ActualNotes $m $m $mCASH FLOW FROM OPERATING ACTIVITIESReceiptsTaxes Fees and Fines 776 690 700 User Charges for Goods and Services 419 393 426 Commonwealth Government Grants 1,064 1,029 1,032 Interest Received 57 51 60 Other 495 478 312 Extraordinary Receipts 0 - 1 Operating Receipts 2,811 2,642 2,531 PaymentsRelated to Superannuation 83 69 66 Other Payments related to Employees 898 878 789 Related to Supplies and Services 576 593 496 Grants, Subsidies and Transfer Payments 371 361 341 Borrowing Costs 53 53 56 Other 360 323 303 Extraordinary Payments 3 3 25 Operating Payments 2,343 2,279 2,076 Net Cash Inflows from Operating Activities 33(b) 469 364 455 CASH FLOWS FROM INVESTING ACTIVITIESReceiptsProceeds from Sale/Maturity of Investments 78 10 16 Proceeds from Sale of Property, Plant and Equipment 45 59 38 Repayment of Home Loan Principal 10 17 20 Investing Receipts 134 86 74 PaymentsPurchase of Investments 138 84 415 Purchase of Property, Plant and Equipment 309 324 210 Investing Payments 446 408 624 Net Cash (Outflows) from Investing Activities (313) (322) (550)CASH FLOWS FROM FINANCING ACTIVITIESReceiptsFinance Leases 42 - 9 Financing Receipts 42 0 9 PaymentsRepayment of Advance - - 2 Repayment of Finance Leases 50 20 20 Repayment of Borrowings 19 18 22 Financing Payments 69 39 44 Net Cash (Outflows) from Financing Activities (27) (38) (34)NET INCREASE / (DECREASE) IN CASH HELD 129 3 (130)CASH AT THE BEGINNING OF THE YEAR 803 632 932CASH AT THE END OF THE YEAR 33(a) 932 635 803 The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.The actual totals of reported figures may vary slightly from totals in the statements due to the reported figures being rounded to the nearest million dollars (see Note 2(e)).Note: 'Cash' for the purposes of the Consolidated Statement of Cash Flows is defined differently to 'Cash' for the purposes of the Consolidated Statement of Financial Position. As a result the 'Cash' reported on the Consolidated Statement of Cash Flows does not equal 'Cash' in the Consolidated Statement of Financial Position. 2003-2004 Financial Year Page- 4 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORYAUSTRALIAN CAPITAL TERRITORY GOVERNMENTCONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE BY SECTORFOR THE YEAR ENDED 30 JUNE 20042003-2004 2003-2004 2002-2003 2003-2004 2003-2004 2002-2003Actual Budget Actual Actual Budget Actual$m $m $m $m $m $mREVENUES FROM ORDINARY ACTIVITIESGovernment Payment for Outputs - - - 79 47 6 Taxes, Fees and Fines 851 724 755 - - -User Charges - Non ACT Government 187 175 170 224 222 223 User Charges -ACT Government 15 13 15 79 76 109 Grants from the Commonwealth 1,063 1,021 1,018 19 19 0 Interest Received 89 106 110 6 6 5 Revenue from Joint Ventures 4 6 3 52 40 43 Dividend Revenue 1 51 48 - - -Other Revenue 523 264 299 19 21 25 Total Revenues from Ordinary Activities 2,733 2,360 2,420 478 430 413 EXPENSES FROM ORDINARY ACTIVITIESEmployee Expenses 848 804 753 74 70 67 Superannuation Expenses 408 224 210 7 8 8 Supplies and Services 494 509 427 96 86 79 Depreciation and Amortisation 155 164 141 40 42 39 Borrowing Costs 43 46 46 30 30 32 Cost of Goods Sold 61 50 56 70 67 62 Grants and Purchased Services 429 410 434 4 8 -Other Expenses 211 158 282 80 42 27 Expenses from Joint Ventures - - 1 - - - Total Expenses from Ordinary Activities 2,650 2,365 2,350 402 354 315 Operating Surplus / (Deficit) before Income Tax Equivalents Expense 83 (5) 69 76 76 97 Extraordinary Items (Net) (12) (3) 85 (7) - 26 Income Tax Equivalent Expense - - - 29 0 (1)Operating Surplus / (Deficit) 70 (8) 155 40 76 123 Increase/(Decrease) in Asset Revaluation Reserve 197 39 (84) 412 (22) 527 (Decrease) in Other Reserves (2) - 0 - - - Transfer from Reserves 4 6 127 32 22 23 (Decrease) in Accumulated Funds on the Adoption of a New Accounting Standard (0) - (5) - - (1)Changes in Equity Other Than Those Resulting From Transactions With Owners As Owners 269 37 193 484 76 673 Total Equity at the Beginning of the Year 5,195 5,067 5,002 3,433 3,112 2,809 Dividends Declared - - - (1) (51) (48)Total Equity at the End of the Year 5,464 5,104 5,195 3,916 3,136 3,433 The above Consolidated Statement of Financial Performance by Sector should be read in conjunction with the accompanying notes.General Government Public Trading EnterprisesThe actual totals of reported figures may vary slightly from totals in the statements due to the reported figures being rounded to the nearest million dollars (see Note 2(e)). 2003-2004 Financial Year Page- 5 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORYAUSTRALIAN CAPITAL TERRITORY GOVERNMENTCONSOLIDATED STATEMENT OF FINANCIAL POSITION BY SECTORAS AT 30 JUNE 20042004 2004 2003 2004 2004 2003Actual Budget Actual Actual Budget Actual$m $m $m $m $m $mASSETSCurrent AssetsCash 64 48 53 24 12 17 Receivables 193 171 249 42 26 109 Investments 806 834 711 95 97 75 Investments Accounted for Using the Equity Method 8 - - - - - Inventories 35 68 31 0 0 0 Capital Works in Progress 3 0 0 0 0 0Other 24 34 61 11 11 11 Total Current Assets 1,133 1,155 1,105 171 147 211 Non-Current AssetsReceivables 375 382 386 35 - - Investments 1,448 1,102 1,232 17 - 12 Investments Accounted for Using the Equity Method - - 6 349 394 385 Inventories 16 9 3 - - - Property, Plant and Equipment 5,788 5,501 5,454 3,812 3,109 3,345 Intangibles 20 14 7 1 1 1 Capital Work in Progress 67 80 120 73 14 18 Other 61 2 19 44 40 42 Non-Current Tax Assets - - - 14 10 12 Total Non-current Assets 7,775 7,089 7,227 4,345 3,568 3,816 TOTAL ASSETS 8,908 8,243 8,332 4,516 3,715 4,027 LIABILITIESCurrent LiabilitiesPayables 142 96 215 48 30 34 Interest Bearing Liabilities 67 278 272 13 11 9 Finance Leases 34 30 32 1 1 1 Employee Superannuation Benefits 44 64 60 0 0 0 Unrealised Gain from Actuarial Review of Employee Superannuation Benefits - - 17 - - - Other Employee Benefits 135 96 110 17 15 17 Current Tax Liability - - - 8 - 0 Other Provisions 1 0 1 2 20 10 Other 32 66 62 7 4 4 Total Current Liabilities 455 631 770 96 81 76 Non-Current LiabilitiesPayables 123 68 61 1 0 1 Interest Bearing Liabilities 646 432 442 462 465 479 Finance Leases 49 36 36 2 0 1 Employee Superannuation Benefits 2,045 1,775 1,606 - - - Unrealised Gain from Actuarial Review of Employee Superannuation Benefits - - 95 - - - Other Employee Benefits 115 194 106 24 19 21 Other Provisions 12 3 8 1 4 3 Non-Current Tax Liability - - - 14 9 13 Other 0 0 13 0 0 1 Total Non-Current Liabilities 2,989 2,508 2,367 504 498 518 TOTAL LIABILITIES 3,444 3,139 3,137 600 579 594 NET ASSETS 5,464 5,104 5,195 3,916 3,136 3,433 REPRESENTED BY:Accumulated Funds 4,749 4,455 4,675 1,892 1,828 1,821 Asset Revaluation Reserve 671 603 475 2,014 1,298 1,602 Other Reserves 43 46 45 10 10 10 TOTAL FUNDS EMPLOYED 5,464 5,104 5,195 3,916 3,136 3,433 The above Consolidated Statement of Financial Position by Sector should be read in conjunction with the accompanying notes.The Actual totals of reported figures may vary slightly from totals in the statements due to the reported figures being rounded to the nearest million dollars (see Note 2(e)).General Government Public Trading Enterprises 2003-2004 Financial Year Page- 6 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORYGeneral Government Public Trading Enterprises2003-2004 2003-2004 2002-2003 2003-2004 2003-2004 2002-2003Actual Budget Actual Actual Budget Actual$m $m $m $m $m $mCASH FLOW FROM OPERATING ACTIVITIESReceiptsTaxes, Fees and Fines 811 715 721 - - - User Charges 206 182 213 306 298 338 Interest Received 73 70 78 6 6 6 Grants Received from the Commonwealth 1,063 1,029 1,032 19 19 0 Other Revenue 504 451 279 42 81 54 Extraordinary Receipts - - 1 28 66 6 Operating Receipts 2,656 2,447 2,325 401 470 404 PaymentsRelated to Superannuation 81 67 64 12 12 12 Other Payments Related to Employees 829 813 730 69 65 59 Related to Supplies and Services 499 523 439 106 89 75 Borrowing Costs 44 46 45 30 31 38 Grants, Subsidies and Transfer Payments 432 415 440 4 8 - Other 359 367 258 103 95 91 Transfer of Territory Receipts to Govt - - - 19 19 - Extraordinary Payments 2 3 21 1 - 4 Operating Payments 2,245 2,234 1,997 344 319 279 Net Cash Inflows from Operating Activities 411 213 327 58 150 125 CASH FLOWS FROM INVESTING ACTIVITIESReceiptsProceeds from Sale of Property, Plant and Equipment 2 4 2 43 55 36 Proceeds from Sale/Maturity of Investments 30 9 16 48 8 5 Repayment of Advance 7 5 5 - - - Repayment of Home Loan Principal 10 17 20 - - - Dividends 10 51 50 - - - Investing Receipts 60 87 92 91 63 41 PaymentsPurchase of Property, Plant and Equipment 162 201 127 145 108 79 Purchase of Land and Intangibles 2 10 4 - 6 - Purchase of Investments 131 84 408 13 46 6 Capital Payments to Government Agencies 49 12 6 - - - Advances Issued to Agencies 2 8 - - - - Investing Payments 347 314 545 157 160 85 Net Cash (Outflows) from Investing Activities (287) (227) (453) (66) (98) (44)CASH FLOWS FROM FINANCING ACTIVITIESReceiptsCapital Injection from Government - - - 49 12 6 Borrowings Received 7 39 0 2 8 - Receipt of Transferred Cash Balances - - - 2 1 - Finance Leases 39 - 9 3 - - Financing Receipts 46 39 9 57 21 6 PaymentsDividends to Government - - - 10 51 50 Repayment of Borrowings 11 9 11 16 14 13 Repayment of Finance Leases 48 19 19 2 1 1 Repayment of Advance to Government Agencies - - 7 - - - Payment of Tranferred Cash Balances 2 1 - - - - Financing Payments 61 29 36 28 66 63 Net Cash (Outflows)/Inflows from Financing Activities (15) 10 (27) 29 (45) (57)NET INCREASE / (DECREASE) IN CASH HELD 109 (5) (153) 20 8 23 CASH AT THE BEGINNING OF THE YEAR 752 589 904 51 42 28 CASH AT THE END OF THE YEAR 860 585 752 71 50 51 AUSTRALIAN CAPITAL TERRITORY GOVERNMENTCONSOLIDATED STATEMENT OF CASH FLOWS BY SECTORFOR THE YEAR ENDED 30 JUNE 2004 2003-2004 Financial Year Page- 7 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORYAUSTRALIAN CAPITAL TERRITORY GOVERNMENTSTATEMENT OF APPROPRIATIONDepartmentAppropriation Act 2003-04Neutral Transfers between/within AppropriationsCommonwealthGrants VariationsTreasurers Advance*Additional Approved AppropriationTotal AppropriatedFinal Appropriation Drawn$'000 $'000 $'000 $'000 $'000 $'000 $'000Legislative Assembly Secretariat Net cost of outputs 4,607.0 20.0 4,627.0 4,627.0 Capital injection 436.0 436.0 436.0 Payment on behalf of the Territory 3,803.0 3,803.0 3,803.0 ACT Executive Net cost of outputs Capital injection Payment on behalf of the Territory 4,071.0 4,071.0 4,071.0 Auditor General Net cost of outputs 961.0 961.0 961.0 Capital injection Payment on behalf of the TerritoryChief Ministers Department Net cost of outputs 60,220.0 190.0 1,000.0 30,275.0 91,685.0 87,915.0 Capital injection 7,838.0 120.0 7,958.0 1,523.0 Payment on behalf of the Territory 3,000.0 3,000.0 2,415.0 ACT Workcover Net cost of outputs 5,280.0 1,656.0 848.0 7,784.0 7,784.0 Capital injection 164.0 164.0 164.0 Payment on behalf of the TerritoryDepartment of Treasury Net cost of outputs 29,351.0 195.0 29,546.0 28,406.0 Capital injection 4,861.0 4,861.0 4,707.0 Payment on behalf of the Territory 40,046.0 180.9 40,226.9 38,726.9 *Additional Appropriations relate to Appropriation Act No.2 and No.3.FOR THE YEAR ENDED 30 JUNE 2004 2003-2004 Financial Year Page- 8 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORYAUSTRALIAN CAPITAL TERRITORY GOVERNMENTSTATEMENT OF APPROPRIATIONDepartmentAppropriation Act 2003-04Neutral Transfers between/within AppropriationsCommonwealthGrants VariationsTreasurers Advance*Additional Approved AppropriationTotal AppropriatedFinal Appropriation Drawn$'000 $'000 $'000 $'000 $'000 $'000 $'000Central Financing Unit Net cost of outputs Capital injection Payment on behalf of the Territory 10,857.0 200.0 11,057.0 10,875.0 Home Loan Portfolio Net cost of outputs Capital injection Payment on behalf of the TerritoryInTACT Net cost of outputs 6,271.0 6,271.0 1,839.0 Capital injection 5,920.0 5,920.0 5,661.0 Payment on behalf of the TerritorySuperannuation Unit Net cost of outputs Capital injection 68,800.0 68,800.0 68,800.0 Payment on behalf of the Territory 43,968.0 43,968.0 43,968.0 ACT Health Net cost of outputs 429,099.0 1,155.0 12,146.0 442,400.0 435,014.0 Capital injection 25,432.0 25,432.0 16,411.0 Payment on behalf of the Territory 8,436.0 8,436.0 4,756.0 Department of Urban Services Net cost of outputs 229,807.0 (290.0) 65.0 13,013.0 242,595.0 239,945.0 Capital injection 83,084.0 (240.0) 144.0 1,255.0 84,243.0 67,143.0 Payment on behalf of the Territory 44,664.0 (23,795.0) 20,869.0 20,869.0 ACT Planning and Land Authority Net cost of outputs 23,995.0 758.0 24,753.0 24,753.0 Capital injection 40.0 2,390.0 2,430.0 840.0 Payment on behalf of the Territory*Additional Appropriations relate to Appropriation Act No.2 and No.3.FOR THE YEAR ENDED 30 JUNE 2004 2003-2004 Financial Year Page- 9 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORYAUSTRALIAN CAPITAL TERRITORY GOVERNMENTSTATEMENT OF APPROPRIATIONDepartmentAppropriation Act 2003-04Neutral Transfers between/within AppropriationsCommonwealthGrants VariationsTreasurers Advance*Additional Approved AppropriationTotal AppropriatedFinal Appropriation Drawn$'000 $'000 $'000 $'000 $'000 $'000 $'000ACT Forests Net cost of outputs 21.0 21.0 Capital injection Payment on behalf of the TerritoryDisability, Housing and Community Services Net cost of outputs 71,429.0 469.0 2,395.0 74,293.0 74,160.0 Capital injection 1,425.0 1,093.0 2,518.0 1,748.0 Payment on behalf of the Territory 21,668.0 4.0 318.0 21,990.0 21,990.0 Housing ACT Net cost of outputs 32,895.0 32,895.0 32,736.0 Capital injection 4,400.0 33,200.0 37,600.0 36,164.0 Payment on behalf of the TerritoryDepartment of Justice and Community Safety Net cost of outputs 110,852.0 10,566.0 121,418.0 121,416.0 Capital injection 20,373.0 4,158.0 24,531.0 15,353.0 Payment on behalf of the Territory 90,687.0 996.0 4,408.0 96,091.0 96,091.0 Department of Education and Training Net cost of outputs 422,138.0 (5,758.0) 1,216.0 18,316.0 435,912.0 430,351.0 Capital injection 56,936.0 (2,135.0) 465.0 55,266.0 47,766.0 Payment on behalf of the Territory 127,001.0 400.0 485.0 127,886.0 127,419.4 Office for Children, Youth and Family Support Net cost of outputs 5,458.0 5,458.0 5,155.0 Capital injection 2,135.0 2,135.0 2,135.0 Payment on behalf of the TerritoryTreasurers Advance 20,800.0 (1,656.0) 19,144.0 Total Appropriations 2,101,580.0 - 5,534.0 - 136,340.9 2,243,454.9 2,138,897.3 *Additional Appropriations relate to Appropriation Act No.2 and No.3.FOR THE YEAR ENDED 30 JUNE 2004 2003-2004 Financial Year Page- 10 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY1 THE AUSTRALIAN CAPITAL TERRITORY GOVERNMENTAUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004The ACT Government is responsible for administering both state like and municipal powers andfunctions in accordance with the Australian model of Government.The Australian Capital Territory Government (the Territory) represents a popularly elected LegislativeAssembly empowered to govern the Australian Capital Territory. The ACT Government waseffectively created by the Commonwealth Governments Australian Capital Territory (SelfGovernment) Act 1988 , with the first elections held in 1989. The common term of each Assembly isthree years. The next election is to be held in October 2004.Financial Administration and Preparation of Consolidated Financial StatementsThe ACT Government owns or controls a diverse range of administrative entities, statutory authoritiesand corporations (refer Note 4) to deliver services funded by the Government or the communitydirectly. The Financial Management Act 1996 (the FMA) governs the administration of financialaffairs of the ACT Government and its agencies.Section 22 of the FMA requires the Treasurer to prepare annual consolidated financial statements forthe Territory. 2003-2004 Financial Year Page- 11 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES1 a) Basis of Accounting(i) a Statement of Financial Performance of the Territory for the year;(ii) a Statement of Financial Position of the Territory at the end of the year;(iii) a Statement of Cash Flows of the Territory for the year;(iv) a Statement of Appropriation of the Territory for the year; (v) a summary of the significant accounting policies adopted by the Territory for the year; and(vi) such other statements as are necessary to fairly reflect the financial operations of theTerritory during the year and its financial position at the end of the year.(i) Australian Accounting Standards;(ii) Urgent Issues Group Abstracts;(iii) Other authoritative pronouncements of the Australian Accounting Standards Board; and(iv) ACT accounting policies.Where considered material, differing accounting treatments between agencies have been amended toensure the consolidated financial statements are prepared on a consistent basis and illustrate a fair andaccurate financial depiction of the Territorys activities and position. All agencies are required toprepare their financial statements according to Australian Accounting Standards and generally acceptedaccounting principles.These general purpose consolidated financial statements have been prepared in accordance withgenerally accepted accounting practice pursuant to the FMA. The consolidated financial statementshave been prepared to comply with:AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004The Financial Management Act 1996 (FMA) requires the preparation of annual financial statements ofthe Territory.Subsection 22(2) of the FMA and the Financial Management Guidelines, requires that the financialstatements include:The consolidated financial statements have been prepared using the accrual basis of accounting whichrecognises the effects of transactions and events when they occur. The consolidated financialstatements have also been prepared according to the historical cost convention, except for certain assetswhich were valued in accordance with the (re)valuation policies applicable to departments and statutoryauthorities during the financial year. 2003-2004 Financial Year Page- 12 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY2 b) The Reporting Period3 c) Comparative Figures4 d) Prior Year Comparatives5 e) Rounding6 f) Revenue RecognitionRevenue from Joint Ventures encompasses the Territorys share of revenue resulting from its JointVenture interests.Other Revenue includes items not sufficiently significant to require separate disclosure. The mainitems included in this category are sales/rentals of land stocks, dividends, asset revaluation anddonations.Revenues are recognised in the Statement of Financial Performance when the transaction or eventgiving rise to the revenue occurs.Taxes, Fees, and Fines generally reflect compulsory levies imposed by Government, fees forregulatory services, including granting of permit/privilege or regulation of activity, and civil andcriminal penalties imposed by law.User Charges for Goods and Services encompasses revenues for services rendered, or the sale ofgoods and services by Territory agenciesGrants from the Commonwealth', disclosed in Note 8, are recognised as revenue when the cash isreceived.Use of a zero (0) represents amounts rounded down to zero. Use of a hyphen (-) represents nilamounts.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004These consolidated financial statements report the operations and financial position of the Territory forthe financial year ending 30 June 2004.Budget information for 2003-2004 has been provided in the financial statements. The FMA requiresthe statements to facilitate comparison with the Budget Papers. The budgeted amounts are as publishedin the ACTs 2003-2004 Budget Papers.Where necessary the prior year comparatives have been amended to facilitate comparison with thecurrent year presentation of financial information.AUSTRALIAN CAPITAL TERRITORY GOVERNMENTAll amounts in the financial statements have been rounded to the nearest million dollars ($m) unlessotherwise indicated. The Statement of Appropriation shows amounts in thousands of dollars consistentwith the Appropriation Act 2003-2004.Amendments include: an adjustment of $25m to guarantees (Note 38) representing a standby debtfacility for TransACT Communications by ACTEW Corporation Ltd; Third Party Monies and OtherExpenses. 2003-2004 Financial Year Page- 13 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY7 g) Resources Received and Provided Free of Charge8 h) Repairs and Maintenance9 i) Waiver of Debt10 j) Extraordinary Items11 k) Taxation12 l) 'Current' and 'Non-current' ItemsThe ACT Government is exempt from all forms of Commonwealth taxation except Fringe Benefits Taxand Goods and Services Tax. While certain agencies are subject to ACT taxation, includingCommonwealth taxation equivalents, and this may be shown as relevant in the disaggregated sectorinformation, all related amounts are eliminated on consolidation to the single Territory entity.Assets and liabilities are characterised as either current or non-current in nature. Current assets arethose which are not expected to be held for greater than 12 months, and current liabilities are expectedto be extinguished within the same time frame. Other assets and liabilities are classified as non-current.Debts that are waived during the year under section 65 of the FMA are expensed during the year inwhich they are waived. Further details of such waivers are disclosed at Note 15.Extraordinary items are revenues and expenses that are attributable to transactions or other events of atype that are outside the ordinary activities of the Government and are not of a recurring nature.Extraordinary items exclude reprioritisation of existing resources, but include items that are beyond theexisting budget, ie additional employee expenses and write-off and write-down of destroyed, damagedassets and public liability claims.In January 2003, an intense and catastrophic bushfire burned areas of the ACT and Canberra. Abushfire of this magnitude has not previously occurred in the ACT and is considered by experts to beone of the most catastrophic bushfires to have occurred in Australia. As a result of the January 2003Bushfire, and the catastrophic impacts to the ACT, it is considered that an event of this nature andextent is unlikely to recur in the ACT. Accordingly it is considered that related revenue and expensetransactions meet the AASB 1018 Statement of Financial Performance requirements for classification asextraordinary.FOR THE YEAR ENDED 30 JUNE 2004Resources Received Free of Charge from entities external to the ACT Government are recorded asdonations. Services that are received free of charge are only recorded in the Statement of FinancialPerformance if they can be reliably measured and would have been purchased if not provided to theTerritory free of charge.All costs involved with the maintenance of infrastructure assets are recorded as an expense unless theyadd to the service potential of the existing infrastructure asset.AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2003-2004 Financial Year Page- 14 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY13 m) Cash14 n) Receivables15 o) Revaluation of Non-Current Assets16 p) Recoverable Amount of Non-Current Assets17 q) Asset Acquisition and RecognitionAll non-current physical assets are valued using the cost or fair value method of valuation in accordancewith AASB 1041 Revaluation of Non-Current Assets . Fair value methodology requires assets to bevalued according to market prices.AAS 10 Recoverable Amount of Non-Current Assets is the accounting policy that applies to agenciesthat are profit-making entities. The recoverable amount of an asset is an estimate determined bymanagement. It is the net amount expected to be recovered through the net cash inflows arising from thecontinued use and subsequent disposal of the asset.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004For the purposes of the Statement of Cash Flows, cash includes cash at bank and deposits at call that arereadily converted to cash and are used in the cash management function on a day-to-day basis, net ofbank overdrafts. Cash also includes highly liquid investments with short periods to maturity which arereadily convertible to cash on hand and are subject to an insignificant risk of changes in value. Cash ismeasured at nominal value.Receivables are reported net of any provision for bad and doubtful debts so as to reflect amountsexpected to be eventually collected.AUSTRALIAN CAPITAL TERRITORY GOVERNMENTWhere the carrying amount of a non-current asset is greater than its recoverable amount, the asset iswritten-down to its recoverable amount. Where the net cash inflows are derived from a group of assetsworking together, recoverable amount is determined on the basis of the relevant group of assets. The future expected cash flows included in determining recoverable amounts are discounted to theirpresent value, using an appropriate discount rate.Assets are initially recorded at acquisition cost or the value of any liability(s) assumed, plus anyincidental cost involved with the acquisition. Assets acquired at no cost, or for nominal consideration,are taken up in the Statement of Financial Position at fair value at the date of acquisition.ACT Government policy is to capitalise all non-current physical assets with a value of $5,000 or more.However, some ACT Government agencies may have a lower threshold. 2003-2004 Financial Year Page- 15 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY18 r) Inventories19 s) Intangible Assets20 t) Depreciation and Amortisation of Non-Current AssetsAUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Inventories include raw materials relating to the production of goods and services for sale and land heldfor resale. The cost of land held for resale includes the acquisition costs as well as any developmentcosts incurred in the development of the land. The costs of raw materials include direct materials, directlabour and a share of both fixed and variable overhead expenditure.The acquisition or internal development of software is capitalised when the expenditure meets thedefinition and recognition criteria of an asset and when the amount of expenditure is greater than orequal to $50,000.FOR THE YEAR ENDED 30 JUNE 2004Inventories are stated at the lower of cost and net realisable value. Inventory is measured at cost, withcosts being allocated in accordance with the first-in, first-out method. Net realisable value isdetermined using the estimated sales proceeds less costs incurred in marketing, selling and distributioncosts to customers.The value of leasehold improvements is amortised over the estimated useful life of each improvement,or the unexpired period of the relevant lease, whichever is the shorter.The depreciation/amortisation policy for non-current assets is as follows:Useful life commences when an asset is first acquired. When an asset is revalued it is depreciated overthe remaining useful life of that asset.Capitalised software is amortised over the useful life of the asset, with a maximum time limit foramortisation of five years. All non-current assets having a limited useful life are systematically depreciated/amortised over theiruseful lives in a manner which reflects the consumption of their service potential. Amortisation is usedin relation to intangible and leased assets, while depreciation is applied to physical assets such asproperty, plant and equipment.Class of Asset Depreciation/Amortisation Method Useful Life (Years) Buildings Straight Line 20-100 Leasehold Improvements Straight Line 2-10 Plant and Equipment Straight Line 5-20 Infrastructure Straight Line 10-100 Heritage and Community Assets Straight Line 10-100 Intangibles Straight Line 2-5 2003-2004 Financial Year Page- 16 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY21 u) Payables22 v) Joint VenturesJoint Venture OperationsJoint Venture Entities23 w) Interest Bearing Liabilities24 x) Employee BenefitsAccrued expenses represent goods and services provided by other parties during the period that areunpaid at the end of the reporting period and where an invoice has not been received.Other creditors are those unpaid invoices that do not directly relate to the normal operations of theTerritory.The share of assets, liabilities and expenses of the joint venture operations have been incorporated inthe financial statements under the appropriate headings. Details of the Joint Ventures are outlined inNote 40 and Note 41.The equity method has been used to account for the interest in joint venture entities. The equity methodinvolves recognising the movement in the post-acquisition equity of the joint venture entities in theaccounts of the Territory as a movement in its investment in the joint venture entities and as either arevenue or an expense from the joint venture entities. Details relating to the joint ventures are set out inNote 40.FOR THE YEAR ENDED 30 JUNE 2004The Territory measures all interest-bearing liabilities at cost. The associated interest expense isrecognised in the reporting period in which it occurs. For further details in relation to interest-bearingliabilities see Note 26.Employee benefits include wages and salaries, annual leave and long service leave. These entitlementsaccrue as a result of services provided by employees up to the reporting date that remain unpaid.Wages and salaries and annual leave are measured based on the nominal amounts of current wages andsalaries.A long service leave liability is recognised for both employees with ten years or more service andemployees with less than the ten years of required qualifying service. For those employees with lessthan the ten years of required qualifying service, the liability is calculated through a shorthand approachby recording a 100% liability for employees with five or more years service. Use of this shorthandapproach is an approximation process to recognise the probable liability to eventuate for officers withless than ten years of service, when ten years of service is achieved. The determination of current andnon-current portions is based on a past history of payments and any specific known factors.Consideration is given, when making this estimate, to expected future wage and salary levels,experience of employee departures and periods of service.Payables include trade creditors, accrued expenses and other creditors. Trade creditors represent theamounts owing for goods and services received prior to the end of the reporting period that are unpaidat the end of the reporting period. Trade creditors include all unpaid invoices received relating to thenormal operations of the Territory.AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2003-2004 Financial Year Page- 17 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY25 y) SuperannuationThe Unrealised Gain from Actuarial Review of Employee Superannuation Benefits' was then amortisedover a period to reflect the age retirement profile of the members of the superannuation schemes, whichrepresents the expected average working lives of the employees participating in the superannuationschemes as determined by the actuary. Currently, this period is 12 years.Unrealised Gain from Actuarial Review of Employee Superannuation Benefits' occurring in subsequentperiods were offset against the balance carried forward and the residual then amortised. The amountamortised is taken to the Statement of Financial Performance as Superannuation Expense.This accounting policy was implemented with effect from 1 July 1998.The opening balance of the 'Unrealised Gain from Actuarial Review' as at 1 July 2003 has been written off. From 1 July 2003 all superannuation liability movements from Actuarial Reviews will be recognised in full as an expense or a revenue in the period in which they occur. Detailed financial effect of the change is set out in Note 3.2.The Territorys liabilities only reflect superannuation liabilities of employees accrued since selfgovernment, as the ACT Government is only responsible for the superannuation payments in relation tothis period. The Commonwealth Government is responsible for the satisfaction of emergingsuperannuation entitlements in relation to the period prior to self-government.The accrued superannuation liability represents the obligation of the ACT to make payments to theCommonwealth in respect of superannuation arising from ACT Government employment. A fullactuarial review is conducted every three years, with annual reviews to reflect actual staff numbers andsalary movements.Reductions or increases in the superannuation liability as a result of actuarial assessed gains and lossesdetermined in the reviews were capitalised as an Unrealised Gain from Actuarial Review of EmployeeSuperannuation Benefits' depending on whether there had been a reduction or increase in the liability.The ACT Government is required to reimburse the Commonwealth for the emerging costs of benefitspaid for ACT Government service after 1 July 1989. This arrangement is subject to the ACT meetingComSuper's administration costs for ACT staff and any associated actuarial costs.The amount disclosed as Superannuation Expense represents the expense accrued in relation to thePublic Sector Superannuation (PSS) Scheme and the Commonwealth Superannuation Scheme (CSS), aswell as superannuation expenses relating to employees who are members of other superannuationschemes.The Commonwealth (through ComSuper) manages all superannuation benefits of ACT Governmentemployees in the CSS and PSS Schemes. ComSuper is liable to pay superannuation benefits to ACTGovernment retirees in accordance with the provisions of the Superannuation Act 1976 (for CSSmembers) and the Superannuation Act 1990 (for PSS members).AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004 2003-2004 Financial Year Page- 18 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY26 z) Insurance loss, damage or destruction of Territory assets; and the legal liabilities by the Territory for third party property damage and injury to third parties.27 aa) Leases28 ab) Investments29 ac) Cost of Goods Soldad) Variance AnalysisCost of goods sold includes costs associated with inventory sales by the ACT Health, LandDevelopment Agency, Department of Urban Services, Australian International Hotel School, ACTEW,and Totalcare.Investments are measured at the market value applicable to the investment at balance date. Resultantincrements and decrements from one valuation date to the next are included in the Statement ofFinancial Performance as they arise.AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004The Territorys rights and obligations under finance leases, which are leases that effectively transfer tothe Territory substantially all of the risks and benefits incidental to ownership of the leased items, areinitially recognised as assets and liabilities equal in amount to the present value of the minimum leasepayments. The assets are disclosed as being under lease and are amortised over the period during whichthe Territory is expected to benefit from use of the leased assets. Minimum lease payments areallocated between interest expense and reduction of the lease liability, according to the interest rateimplicit in the lease. Lease liabilities are classified as current and non-current.The Territory also insures its workforce with Comcare for compensation for loss or injury in theworkplace.In respect of operating leases, where the lessor effectively retains substantially all of the risks andbenefits incident to ownership of the leased items, lease payments are charged as expenses over thelease term.The Territory insures at a catastrophe level for the usual range of conventional insurance classes. Thisincludes:Significant movements between financial years ending 30 June 2004 and 30 June 2003, are discussed atAppendix A . 2003-2004 Financial Year Page- 19 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY3 CHANGE IN ACCOUNTING POLICIES3.1 The Impact of Adopting Australian Equivalents to International Financial Reporting Standards2004-05i. analyse the AIFRS and advise agencies of any significant changes that might impact them; run training courses for agency staff to ensure that staff are aware of the new standardrequirements; and assist agencies where required with restating their opening AIFRSs balance sheets.ii.2005-06i.ii.During the 2005-06 Budget process, budget financial statements for the Territory will be preparedin accordance with AIFRSs.All Territory agencies will implement AIFRSs on 1 July 2005 by adjusting the opening 1 July2005 Statement of Financial Position system accounts to reflect the recast AIFRS figures andcommence accounting treatments using AIFRSs.The Territory Consolidated Financial Statements will be reported under AIFRSs requirements forthe year ended 30 June 2006, meaning that the results for the year ended 30 June 2006 and allcomparatives will be prepared using AIFRSs.FOR THE YEAR ENDED 30 JUNE 2004Australia is adopting Australian Equivalents to International Financial Reporting Standards (AIFRSs)for reporting periods commencing on or after 1 January 2005. This means that most ACT GovernmentEntities will commence applying AIFRSs from 1 July 2005. Managing the Transition to Australian Equivalents to International Financial ReportingStandards (AIFRSs)Implementation of AIFRSs in the Territory is being coordinated by the Department of Treasury(Treasury). Treasury has analysed the new standards and assessed the potential impact of adoptingAIFRSs on the accounting policies used in the preparation of the Territorys agency and consolidatedfinancial statements.The following steps will be taken to manage the transition to Australian Equivalents to InternationalFinancial Reporting Standards.During 2004-05 Treasury will:AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Key Differences in Accounting Policies Expected to Arise from the Adoption of AIFRSsBased on its assessment, Treasury expects the following key differences in accounting policies to arisefrom the adoption of AIFRSs:Revaluation of Property, Plant and EquipmentUnder the new requirements of AASB 116, revaluation increments and decrements of for-profit entitiesmust be offset against the individual asset being revalued.This has the potential to result in increased revaluation expenses for for-profit entities, as individualasset revaluation movements can no longer be offset against other asset revaluation movements withinthe class. 2003-2004 Financial Year Page- 20 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORYUnder the new requirements of AASB 110, dividends declared after the reporting date shall not berecognised as a liability at reporting date. Dividends are declared if the dividend is appropriatelyauthorised and is no longer at the discretion of the entity.Insurance ContractsUnder the new requirements of AASB 1023, only contracts that involve the transfer of significantinsurance risk can be treated as insurance activities and each class of business will need to recognise up-front, as a provision for unexpired risks, any expected loss due to inadequacy of premiums.Financial InstrumentsNot-For-Profit Agencies previously regarded as For-ProfitDividend PolicyAUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004Impairment of assetsAs a result of the narrower definition of for-profit, some agencies previously classified as for-profit maybe reclassified as not-for-profit. This would mean that any assets previously written-off as impairedwith nil net cash flows, may be able to be recognised as assets either at cost or depreciated replacementcost.AASB 136 defines a not-for-profit entity as an entity whose principal objective is not the generation ofprofit. This standard allows impaired not-for-profit assets to be measured at the higher of fair value ordepreciated replacement cost.As part of its preparation for the implementation of AIFRS, Treasury is currently reviewing insuranceactivities to determine whether they satisfy the criteria for treatment as insurance contracts and whetherany further recognition is required.AASB 139, Financial Instruments: Recognition and measurement may have some impact on theclassifications of financial assets and liabilities and whether they are measured at fair value or amortisedcost. The impact of this standard is still being assessed.The above should not be regarded as a complete list of changes in accounting policies that will resultfrom the transition to IFRS, as not all standards have been analysed as yet, and some decisions have notyet been made where choices of accounting policies are available. For these reasons it is not yetpossible to quantify the impact of the transition to IFRS on the Territory's financial position or reportedresults.AASB 136 requires assets to be tested for impairment by using discounted cashflow methodology toestimate the asset's value-in-use. Whilst the Territory does use discounted cashflow methodology whenestimating the recoverable amount of non-current assets, AASB 136 has more stringent rules as to thediscount rate to be used and when assets need to be tested for impairment.This contrasts with current requirements that allow a dividend provision to be recorded when a dividendmethodology is determined prior to 30 June. This could result in some delay in dividend revenuerecognition, as final dividends are not declared until Annual General Meetings are held after year-end. 2003-2004 Financial Year Page- 21 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY3.2 Superannuation(i) the opening balance of the liability offset account of $111.996m was written-off and a matching contra expense recorded;(ii) there is no longer revenue or expenses resulting from the apportionment of the offsetaccount; and(iii) the full amount of the actuarial loss for the financial year of $231.846m was immediately expensed.AUSTRALIAN CAPITAL TERRITORY GOVERNMENTIn changing the accounting treatment, adjustments were made as follows:Until this financial year, due to the absence of a specific Australian Accounting Standard on postemployement superannuation benefits, the ACT had based its accounting treatment for superannuationliabilities on a hybrid of an International Accounting Standard (IAS 19 - Employee Benefits). Underthis approach the ACT recorded all movements in the superannuation liability, resulting from annualactuarial reassessments, to a liability offset account. The balance of this account was apportioned backto revenue or expenditure over a twelve year period. If the Territory had continued this accountingtreatment in 2003-04, for the first time since the Territory had commenced smoothing, the liabilityoffset account would have been negative (debit balance) at 30 June 2004, effectively understatingsuperannuation liabilities.As a result of the potential liability understatment and developments in Australian AccountingStandards, the Territory has voluntarily changed its accounting policy this financial year to align withthe treatment used in AASB 119. From 1 July 2003, all superannuation actuarial gains and losses willbe recognised as income or expense immediately. The new policy is compliant with the existingAustralian Accounting Standards framework and has been implemented in accordance with existingAustralian Accounting Standard AAS 6 Accounting Policies.Extraordinary ItemsFOR THE YEAR ENDED 30 JUNE 2004NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS In March 2004, the Australian Accounting Standards Board released the pending Austalian Equivalentof IAS 19 (AASB 119 Employee Benefits). All Australian reporting entities are required to apply thisstandard (which was officially approved in July 2004) from 1 July 2005. In line with the InternationalAccounting Standards Board's intention to abolish smoothing, the Australian Equivalent Standard doesnot allow the use of smoothing in Australia and instead requires all actuarial gains and losses to berecognised as income or expense immediately. In the absence of a currently applicable AustralianAccounting Standard on post employment superannuation benefits, the Territory considers that the newAustralian Equivalent Standard is now the most authoritative guidance to follow.Under the new requirements of AASB 101, revenue or expenditure cannot be classified as extraordinaryin either the Statement of Financial Performance or in the notes. This will result in a change to current accounting policy as extraordinary items, such as in relation torevenue and expenses relating to the January 2003 bushfire, will no longer be able to be included in theStatement of Financial Performance. 2003-2004 Financial Year Page- 22 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORYThe restated financial statements below show the information that would have been disclosed had thenew Accounting policy always been applied and what the Auditor-General considered should have beenreported:NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004AUSTRALIAN CAPITAL TERRITORY GOVERNMENT General Government Total Territory Sector Restated Actuals Restated Actuals Restated Statement of Financial Performance Actual Actual Actual Actual 2004 2003 2004 2003 $m $m $m $m Total Revenue 2,733 2,420 2,928 2,588 Superannuation Expenses 520 245 523 247 Total Expenses 2,762 2,385 2,918 2,414 Operating Result (42) 120 (3) 195 Restated Statement of Financial Position Total Assets 8,908 8,332 12,962 11,873 Employee Superannuation Benefit (Current) 44 60 44 43 Employee Superannuation Benefit (Non Current) 2,045 1,606 2,045 1,606 Total Liabilities 3,444 3,025 3,582 3,133 Total Equity 5,464 5,307 9,380 8,740 2003-2004 Financial Year Page- 23 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY4 DISAGGREGATED INFORMATIONGeneral Government SectorPublic Trading Enterprises SectorAUSTRALIAN CAPITAL TERRITORY GOVERNMENTThe Consolidated Statement of Financial Performance by Sector, Consolidated Statement of FinancialPosition by Sector and Consolidated Statement of Cash Flows by Sector set out the assets and liabilities,revenues and expenses and receipts and payments that are reliably attributable to each broad sector ofactivities of the Government. The sectors have been determined in accordance with the principles usedin the Government Financial Statistics conventions of the Australian Bureau of Statistics. Thisdisaggregated information includes transactions and balances between sectors (but excludes transactionsbetween entities within each sector). The aggregate of the General Government Sector (GGS) andPublic Trading Enterprises (PTE) amounts may therefore vary from the consolidated total for theTerritory due to consolidation eliminations. A list of entities in each sector can be found at Note 5.GGS entities include Government departments and other administrative units, statutory authorities andother entities which predominantly receive funding directly or indirectly from Government sources. Itcovers those agencies that provide non-market goods or services (such as police or consumerprotection) or are responsible for the transfer of income for public policy purposes (such as by way ofincome support). The Government funds the provision of the above services by compulsory levies(such as taxes) on the household and business sectors and from general revenue, such asCommonwealth grants.PTE entities include those departments, statutory authorities and Territory owned corporations thatlargely provide services direct to the community on a commercial fee for service basis, with the aim ofrecovering all, or a significant proportion, of their operating costs.FOR THE YEAR ENDED 30 JUNE 2004NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2003-2004 Financial Year Page- 24 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY5 AUSTRALIAN CAPITAL TERRITORY GOVERNMENT CONTROLLED ENTITIESGeneral Government SectorACT ExecutiveACT Gambling and Racing CommissionACT HealthACT Insurance AuthorityACT Legislative Assembly SecretariatACT Planning and Land AuthorityACT Public Cemeteries BoardACT WorkCoverAgents Board of the ACTAuditor-General's OfficeAustralian Capital Tourism CorporationAustralian International Hotel SchoolCanberra Institute of Technology (CIT)Canberra Cemeteries TrustCentral Financing UnitChief Ministers DepartmentCultural Facilities CorporationDepartment of Disability, Housing and Community ServicesDepartment of Education and TrainingDepartment of Justice and Community SafetyDepartment of TreasuryDepartment of Urban ServicesExhibition Park in Canberra (EPIC)HealthPact (Health Promotion ACT)Home Loan PortfolioIndependent Competition and Regulatory Commission (ICRC)InTACTLand Development AgencyLegal Aid Commission (ACT)Office for Children, Youth and Family Support (OCYFS)Public Trustee for the ACTSuperannuation UnitTotalcare Industries LtdWorkers Compensation Supplementation FundPublic Trading EnterprisesACT ForestsACTEW Corporation LtdACTION AuthorityACTTAB LimitedCIT Solutions Pty LtdHousing ACT Stadiums AuthorityFOR THE YEAR ENDED 30 JUNE 2004NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS AUSTRALIAN CAPITAL TERRITORY GOVERNMENT 2003-2004 Financial Year Page- 25 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORYREVENUES AND EXPENSES 2003-2004 2002-2003Actual Actual$m $m6 TAXES, FEES AND FINESTAXATIONGeneral Rates 112 106 Land Tax 47 38 Payroll Tax 173 165 Bank Account Debit Tax 14 14 Stamp Duty 269 238 Gambling Taxes 48 45 Other Taxes 7 6 Total Revenues from Taxation 671 612 REGULATORY FEES AND FINESChange of Use Charge 9 4 Drivers Licences 6 6 Motor Vehicle Registrations 59 54 Traffic Infringements 10 11 Parking Fines 7 9 Other Fines and Regulatory Fees 40 38 Total Revenue from Regulatory Fees and Fines 130 122 Total Revenues from Taxes, Fees and Fines 801 734 7 USER CHARGES FOR GOODS AND SERVICESParking Fees 12 10 Residential Tenants 61 60 Water, Sewerage and Other Services 109 108 Hospital and Other Health Services 100 91 Bus Services 16 16 Totalisator Commissions 26 24 Vocational and Tertiary Education and Training Fees 31 29 Forestry Log Sales 2 8 Fire Services 5 1 Other User Charges 50 46 Total User Charges from Goods and Services 411 393 AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004 2003-2004 Financial Year Page- 26 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY2003-2004 2002-2003Actual Actual$m $m8 GRANTS FROM THE COMMONWEALTH General Purpose Grants * 11 12 Specific Purpose Grants ** 358 347 GST Revenue Grant *** 658 616 Balancing Budget Assistance Grant **** - 4 Other Grants 37 39 Total Grants from the Commonwealth (refer Note 42) 1,064 1,018 Note: 9 OTHER REVENUESales/Rentals of Land Stocks 252 178 Dividends 16 15 Realised Gains on Investment Market Values*** 22 - Unrealised Gains on Investment Market Values*** 80 - Asset Revaluation ** 75 32 Gain on Disposal of Assets * 4 5 Donations 19 18 Superannuation Contributions 4 5 Other 49 50 Total Other Revenue 522 303 Note: *Proceeds from sale of Property, Plant and Equipment 45 38 ** Largely comprises revaluation of stormwater assets10 EMPLOYEE EXPENSESWages and Salaries 861 752 Long Service Leave 18 16 Other Employee Expenses 38 45 Termination Payments and Redundancies 0 3 Total Employee Expenses 918 816 ***Investments are recorded at market value as at the reporting date and changes in the market value arerecognised in the Statement of Financial Performance in the year in which they occur. Losses incurred during2002-03 are shown in Note 14 - Other Expenses*General Purpose Grants are made up of Special Revenue Assistance and Competition Payments.AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004**Specific Purpose Grants are payments made for policy purposes which are related to particularCommonwealth or State activities and which, in most cases, are subject to conditions on expenditure.***GST Revenue Grant representing the distribution of GST revenue collected by the Commonwealth,replace Financial Assistance Grants from the Commonwealth.****Balancing Budget Assistance Grant (BBA) ensures that the Territory is no worse off under the taxreform. It ensures that the combination of the GST Revenue Grant, and the BBA Grant are equal to theGuaranteed Minimum Amount (GMA). 2003-2004 Financial Year Page- 27 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY2003-2004 2002-2003Actual Actual$m $m11 SUPERANNUATIONSuperannuation Expenses 291 212 Write off Provision for Unrealised Gain from Actuarial Review (refer Note 3(2)(i)) (112) - Actuarial Loss from Annual Review (refer Note 3(2)(iii)) 232 - Total Superannuation Expenses 411 212 12 SUPPLIES AND SERVICESCommunication and Computer Expenses 37 38 Travel, Accomodation and Transport Expenses 9 7 Printing and Stationary 16 11 Materials, Equipment and Supplies 91 69 Property Rental and Occupancy Expenses (including Utilities) 39 34 Repairs and Maintenance 70 51 Consultant Fees, Contractor Payments and Professional Services 117 110 Staff Development and Recruitment 12 8 Community Policing 85 79 Prison Payments 8 8 Legal and Weapon Compensation 4 8 Other Supplies and Services * 74 52 GST Administration Costs to ATO 9 10 Total Supplies and Services 572 484 Note: * Other Supplies and Services represent items such as insurance, marketing, promotions and advertising, payment for business and employment programs, uniforms and protective clothing, ACTTAB licence fees, legal fees and events staging.AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004 2003-2004 Financial Year Page- 28 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY2003-2004 2002-2003Actual Actual$m $m13 GRANTS AND PURCHASED SERVICESGrants to Non-Government Schools 119 107 Grant Payment (Education and Community Services) 27 26 Purchase of Health Services from Calvary Hospital 74 66 Payments to Non-Government Organisations (Health and Disability) 68 67 First Home Owners' Grant 11 18 ACT Business Incentive Fund 5 5 Other Current Grants 38 22 National Information and Communications Technology Australia* - 10 Capital contribution of University of Canberra* 10 - Capital Grant 11 7 Community Activity 6 10 Total Grants and Purchased Services 368 339 Note: * These represent one-off grants for specific purposes14 OTHER EXPENSESRealised Loss on Investments * - 15 Unrealised Loss on Investments * - 26 Sub-total - 41 Share of Losses in Associate (TransACT) *** 6 3 School Managed Costs (Costs Incurred Directly by the Schools) 42 38 Waivers and Write-off of Debts (refer Note 15) 3 28 Diminution in Value of Assets 2 1 Transfer of Agents Board to a Trust Account ** 12 - Insurance Claim Payments 39 15 Provision for diminution of TransACT Investment *** 34 - Other 31 54 Total Other Expenses 169 180 Note: ** The establishment of the Agents Board as a Trust means that the accounts will not be consolidated into thestatements for the Territory. The expense was incurred when the net assets of the agency were transferred outof the Territory accounts.* Investments are recorded at market value as at the reporting date and changes in the market value arerecognised in the Statement of Financial Performance in the year in which they occur. Gains in 2002-03 areshown in Note 9 - Other Revenue.AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004Government grants and purchased services expense was comprised of amounts relating to:*** The $6m represents ACTEW's share, accounted for under the equity method, of the losses of TransACTCommunications Pty Ltd (TransACT) in 2003-04. The $34m provision for diminution represents the balanceof the investment in TransACT, leaving the carrying value of the investment in TransACT at nil. 2003-2004 Financial Year Page- 29 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY2003-2004 2002-2003Actual Actual$m $m15 WAIVERS AND WRITE-OFFS OF DEBTSThe Territory waived and wrote-off the following amounts during the year:Waivers * 0 28 Write-Offs 3 0 Total Waivers and Write-offs of Debts 3 28 16 NET EXTRAORDINARY ITEMSEXTRAORDINARY EXPENSESAsset Write-off 0 13 Asset Writedown - 56 Waiver Expense 1 0 Other 20 25 Total Extraordinary Expenses 21 95 EXTRAORDINARY REVENUEOther 8 115 Total Extraordinary Revenue 8 115 Total Net Extraordinary Items (13) 21 In 2003-04, other Extraordinary Expenses mainly represent recognition of public liability claims. In 2002-03, Asset Write-offs include Forest Headquarters, roads, bridges, urban and rural public housing properties and firetrucks. Asset Writedowns largely represent the destruction of plantation stock. Other extraordinary expenses include, Financial, Emergency and Business Assistance Grants, evacuation and recovery centres and cleanup, restoration and fuel management expenses.In 2003-04, Extraordinary Revenue largely represents recognition of public liability recoveries. In 2002-03, Extraordinary Revenue represents insurance recoveries from the January 2003 Bushfire.Extraordinary items represent revenue and expenses associated with the January 2003 Bushfire.Sub-section 65(1) of the Financial Management Act 1996 enables the Treasurer to waive the Territorys right to payment of an amount payable to the Territory. A number of allowances for the waiver of conveyancing, shares and business assets were agreed by the Treasurer for 2003-2004. The number of waivers in 2003-04 was 7 (258 in 2002-03).AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004Note: *The $28.0m decrease in waivers is mainly due to a 'one-off' stamp duty waiver given in 2003 ($22.9m) 2003-2004 Financial Year Page- 30 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORYASSETS 2004 2003Actual Actual$m $m17 CASHCash on Hand 1 1 Cash at Bank 87 68 Total Cash 88 69 18 RECEIVABLESCurrentTrade Debtors 123 79 Other Debtors * 28 139 Loans 2 2 Allowance for Doubtful Debts (12) (18)Net Current Debtors and Loans 141 202 Others 13 10 Accrued Revenue 29 30 Total Current Receivables (refer Note 2(n)) 182 242 Note: * The majority of Other Debtors in 2002-03 represented insurance recoveries from the January 2003 bushfire.Non-CurrentTrade Debtors 0 0 Other Debtors 48 40 Loans 25 35 Allowance for Doubtful Debts (12) (7)Net Non-Current Debtors and Loans 62 68 Total Non-Current Receivables (refer Note 2(n)) 62 68 19 INVESTMENTSCurrentOvernight Cash 775 670 At Call and Term Deposits 12 16 Short Term Securities 48 35 Other 19 26 Total Current Investments (refer Note 2(ab)) 854 746 Non-CurrentAt Call and Term Deposits 221 285 Long Term Securities 17 12 Government Fixed Interest Bonds 379 541 Shares and Equities 823 369 Property 23 36 Other 2 2 Total Non-Current Investments (refer Note 2(ab)) 1,466 1,244 AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004 2003-2004 Financial Year Page- 31 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY2004 2003Actual Actual$m $m20 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHODInvestments in Associated Entities* 40 43 Less: Share of Losses in Associate (TransACT) 6 3 34 40 Less: Provision for diminution of TransACT 34 - Carrying Value of Investments in TransACT (Associate) - 40 Investment in Joint Ventures - Current 8 - Investment in Joint Ventures - Non Current 349 390 Total Investments Accounted for Using the Equity Method (refer Note 2(v)) and Note 40 357 390 21 INVENTORIESCurrentRaw Materials and Stores 2 2 Finished Goods 9 7 Inventory Works in Progress 17 9 Land Held for Resale 8 14 Total Current Inventories (refer Note 2(r)) 35 31 Non-CurrentLand Held for Resale 3 3 Inventory Works in Progress 13 - Total Non-Current Inventories (refer Note 2(r)) 16 3 22 PROPERTY, PLANT AND EQUIPMENT Land- at cost 206 205 Land at Cost 206 205 - at independent valuation 2,044 1,627 - at officer valuation 0 0 Land at Fair Value 2,044 1,627 Total Value of Land 2,250 1,833 Buildings- at cost 1,345 1,323 Less: Accumulated depreciation 120 80 Buildings at Cost 1,225 1,242 - at independent valuation 1,077 972 Less: Accumulated depreciation 9 6 Buildings at Independent Valuation* 1,067 965 AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004*The value for 'Investments in Associated Entities' in 2003 represents an assessment of the recoverable amount in relation tothe investment in TransACT Communications Pty Ltd (TransACT). As there is no active or liquid market for thisinvestment which is still in an establishment phase, the determination of its recoverable amount is a matter of considerablejudgement. 2003-2004 Financial Year Page- 32 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY2004 2003Actual Actual$m $mTotal Buildings at Fair Value 1,067 965 Total Written Down Value of Buildings 2,293 2,208 Total Written Down Value of Land and Buildings 4,543 4,040 Plant and Equipment- at cost 331 305 Less: Accumulated depreciation 155 137 Plant and Equipment at Cost 176 168 - at independent valuation 0 2 Less: Accumulated depreciation 0 0 Plant and Equipment at Independent Valuation* 0 2 Total Plant and Equipment at Fair Value 0 2 Total Written Down Value of Plant and Equipment 176 170 Leasehold Improvements- at cost 37 29 Less: Accumulated depreciation 18 13 Leasehold Improvements at Cost 19 16 Total Leasehold Improvements 19 16 Infrastructure Assets- at cost 313 154 Less: Accumulated depreciation 24 17 Infrastructure Assets at Cost 289 137 - at independent valuation 937 933 Less: Accumulated depreciation 179 160 Infrastructure Assets at Independent Valuation* 758 773 - at officer valuation 5,411 5,361 Less: Accumulated depreciation 1,781 1,875 Infrastructure Assets at Officer Valuation* 3,630 3,486 Total infrastructure Assets at Fair Value 4,388 4,259 Total Written Down Value of Infrastructure Assets 4,677 4,396 AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004 2003-2004 Financial Year Page- 33 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY22 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)2004 2003Actual Actual$m $mHeritage and Community Assets- at cost 208 196 Less: Accumulated depreciation 25 19 Heritage and Community Assets at Cost 184 177 Total Written Down Value of Herritage and Community Assets 184 177 Total Property, Plant and Equipment (refer Note 2(q)) 9,600 8,799 Parks in the ACT Namadgi National ParkMurrumbidgee River Corridor Googong ForeshoresTidbinbilla Nature Reserve Canberra Nature ParkActon Jetty Lake GinninderraMolonglo Ridge Lake TuggeranongHorse Holding Paddocks Agistment LandRose Cottage Tuggeranong SchoolhouseLand under roads and other infrastructureNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004Where possible heritage and community assets are valued using an appropriate valuation methodology. However, thefollowing specific heritage and community assets are each included with a nominal value of $1,000:AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNote: * Valuation occurred progressively over the 2000-2004 period. Australian Valuation Office and Egan NationalValuers (ACT) Property Valuers and Consultants performed most of the assets revaluation. 2003-2004 Financial Year Page- 34 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY22 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)Reconciliation of Property, Plant and Equipment Additions Disposals Depreciation Revaluation Adjustments $m $m $m $m $m $m2004Land 1,833 40 30 - 407 2,250 Buildings 2,208 103 10 57 48 2,293 Plant and Equipment 170 52 7 38 0 177 Leasehold Improvements 16 10 0 6 - 19 Infrastructure Assets 4,396 182 0 88 187 4,677 Heritage and Community Assets 177 13 - 6 - 184 Total 8,799 400 47 195 643 9,600 Balance at 1 July 2002 Additions Disposals Depreciation Revaluation Adjustments Balance at 30 June 2003 $m $m $m $m $m $m2003Land 1,374 19 24 - 464 1,833 Buildings 2,119 77 23 52 87 2,208 Plant and Equipment 161 48 5 40 6 170 Leasehold Improvements 14 7 - 4 (1) 16 Infrastructure Assets 4,318 114 1 78 43 4,396 Heritage and Community Assets* 181 2 - 6 - 177 Total 8,167 267 53 180 599 * 8,799 AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004* Differs from Net Asset Revaluation Increments as per Note 31 of $593m due to the revaluation of assets in the ACTION Authority brought to account as a prior year adjustment and recognised as revenue.Balance at 30 June 2004Balance at 1 July 2003 2003-2004 Financial Year Page- 35 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY2004 2003Actual Actual$m $m23 CAPITAL WORKS IN PROGRESSCapital Works in Progress - Current 3 0 Capital Works in Progress - Non Current 140 139 Total Works in Progress 143 139 Construction - Residential 13 12 Construction - Non-Residential 41 8 Infrastructure 89 119 Total Works in Progress 143 139 24 OTHER ASSETSCurrentPrepayments 14 15 Consumables 2 3 Right to Receive Infrastructure from Land Developers 9 26 Growing Stock - Forest Plantations 1 1 Other 9 26 Total Other Current Assets 35 71 Non-CurrentRight to Receive Infrastructure from Land Developers 44 15 Growing Stock - Forest Plantations 30 29 Other 31 17 Total Other Non-Current Assets 105 61 AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004 2003-2004 Financial Year Page- 36 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORYLIABILITIES2004 2003Actual Actual$m $m25 PAYABLESCurrentTrade Creditors 77 44 Other Creditors 38 45 Accrued Expenses 42 53 GST Liability 4 1 HIH Claims Payable 4 9 Total Current Payables 165 152 Non-Current Trade Creditors 66 40 HIH Claims Payable 12 19 Total Non-Current Payables 78 60 26 INTEREST BEARING LIABILITIESCurrentAdvances from the Commonwealth 11 11 Banks and Financial Institutions 4 3 Bonds and Bills * 5 215 Borrowings - Other 9 12 Total Current Interest Bearing Liabilities (refer Note 2(w)) 29 240 Non-Current Advances from the Commonwealth 251 262 Banks and Financial Institutions 40 38 Bonds and Bills * 501 297 Total Non-Current Interest Bearing Liabilities (refer Note 2(w)) 793 597 Note: * The variance represents a movement of commerical paper from current to non-current.27 FINANCE LEASESNot later than one year 37 34 Later than one year and not later than five years 53 37 Later than five years 1 2 Minimum Lease Payments 91 73 Deduct: Future finance charges 5 2 Total Finance Lease Liabilities 86 71 Represented by: Current Liability 35 34 Non-Current Liability 51 37 Total Finance Lease Liabilities (refer Note 2(aa)) 86 71 At the reporting date, the Government had the following commitments under finance leases (the Statement of Financial Position reports the liability for the total commitment, net of future lease finance charges):AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004 2003-2004 Financial Year Page- 37 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY28 EMPLOYEE SUPERANNUATION BENEFITS2004 2003Actual Actual$m $mLiability at the beginning of the year 1,761 1,615Actuarial Loss from Annual Review 232 - Expense accrued during the period for Commonwealth super* 248 204 Adjustment for Unrealised Loss Provision from Actuarial Review (112) - Other superannuation expense 42 25 Less: Amortisation of superannuation gain 0 17 Superannuation Expense (refer Note 11) 411 212Less: Payments during the period for superannuation 83 66 Liability at the end of the year 2,089 1,761Represented by: Current Superannuation Benefits 44 43 Current Unrealised Gain from Actuarial Review - 17 Non-Current Superannuation Benefits 2,045 1,606 Non-Current Unrealised Gain from Actuarial Review - 95Total Employee Superannuation Benefits 2,089 1,76129 OTHER EMPLOYEE BENEFITSCurrentAccrued Wages and Salaries 24 29 Annual Leave 108 97 Long Service Leave 20 18 Other 0 1 Total Current Other Employee Benefits 152 144 Non-CurrentLong Service Leave 136 126 Other 3 2 Total Non-Current Other Employee Benefits 140 127 Aggregate Other Employee Benefits 292 271 Accrued wages, salaries and annual leave are measured at remuneration rates current as at the reporting date. Long service leave entitlements are accrued annually at current wage rates and discounted at a rate of 5% to reflect the estimated present value of future cash flows. The Territory had on average 14,988 employees (14,802 in 2002-03).Note: *Included in this provision is an amount of $18m in relation to the employees of Totalcare Industries Limited and Australian International Hotel School, which did not exit the ComSuper Scheme appropriately. This estimate is based on the best information available at the time. The final amount may vary from this estimate.Actuarial advice indicating the net present value of the accrued liability of the Territory, to reimburse the Commonwealth for benefits payable to members of the Commonwealth superannuation schemes; the balance of unrealised gain from the actuarial review; and other off budget agency balances were:AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004 2003-2004 Financial Year Page- 38 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY2004 2003Actual Actual$m $m30 OTHER LIABILITIESCurrentOther Provisions 3 1 Revenue Received in Advance 32 50 Other 4 16 Total Current Other Liabilities 39 67 Non-Current Other Provisions 13 11 Revenue Received in Advance 0 1 Other 0 13 Total Non-Current Other Liabilities 14 24 AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004 2003-2004 Financial Year Page- 39 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY31 RECONCILIATION OF CHANGES IN EQUITYAccumulatedAssetRevaluation Other TotalFunds Reserve Reserves$m $m $m $mBalance at 1 July 2003 6,497 2,077 55 8,628Net Effect of Adoption of a New Standard (0) 0 0 (0)Operating Surplus 109 0 0 109Net Asset Revaluation Increments 0 643 0 643Transfers from/(to) Reserves 36 (34) (2) 0sub-total 145 609 (2) 752Balance at 30 June 2004 6,642 2,686 53 9,380As at 30 June 2004, there were no external interests owning equity in the Territory or its agencies.AccumulatedAsset Revaluation Other TotalFunds Reserve Reserves$m $m $m $mBalance at 1 July 2002 6,121 1,634 55 7,810Net Effect of Adoption of a New Standard (6) 0 0 (6)Operating Surplus 230 0 0 230Net Asset Revaluation Increments 0 593 0 593Transfers from/(to) Reserves 151 (151) 0 0sub-total 375 443 0 817Balance at 30 June 2003 6,497 2,077 55 8,628As at 30 June 2003, there were no external interests owning equity in the Territory or its agencies.AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004 2003-2004 Financial Year Page- 40 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY2004 2003Actual Actual$m $m32AASB 1028 - Employee Benefits * (0) (5)Other - (0)(0) (6)33 RECONCILIATION OF CASH FLOWS (a) Reconciliation of Statement of Financial Position to Statement of Cash Flows.Cash as per the Statement of Financial Position 88 69 Add: Investments included as cash on the Statement of Cash Flows 844 733 Cash as per the Statement of Cash Flows 932 803 Operating Surplus 109 230 Non-Cash MovementsAdd:Depreciation and Amortisation 195 180 Movement in Provisions 5 2 Less:Realised/Unrealised Gains/(Losses) on Investments 102 (41)Net Revaluation of Non-Financial Assets 33 (23)Capitalised Interest 13 31 Dividends 16 15 Net (Loss) on Disposal of Non-Current Assets (11) (8)Net Joint Venture Revenue 56 45 Infrastructure Land Revenue - 68 Change in Operating Assets and Liabilities:Decrease/(Increase) in Receivables 52 (95)(Increase) in Inventories (17) (10)(Increase) in Other Assets (6) (6)Increase in Payables 31 9 Increase in Employee Benefits 347 179 Increase in Other Liabilities (39) 53 Net Cash Inflows from Operating Activities 469 455 AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004(b) Reconciliation of the Operating Surplus to Net Cash Inflows from Operating Activities(DECREASE) IN ACCUMULATED FUNDS ON THE ADOPTION OF A NEW ACCOUNTING STANDARDTotal (Decrease) in Accumulated Funds on the Adoption of a New Accounting StandardNote: * The revised AASB 1028 Accounting for Employee Entitlements prescribes the recognition and measurementfor employee benefits expected to be paid in the next 12 months to include the measurement of employee benefitsusing remuneration rates that agencies expect to pay out when an obligation is settled.For the purposes of the Statements of Cash Flows, cash includes cash on hand, cash at bank and investments in highlyliquid money market instruments which are considered to be highly liquid investments with short periods of maturity,are readily convertible to cash on hand and are subject to an insignificant risk of changes in value, net of bankoverdrafts which are intergral to the cash management function and are not subject to a term facility. 2003-2004 Financial Year Page- 41 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY2004 2003Actual Actual$m $m34 OPERATING LEASE COMMITMENTSNot later than one year 18 18 Later than one year but not later than five years 49 47 Later than five years 14 25 Total Operating Lease Commitments 81 90 35 CAPITAL COMMITMENTSNot later than one year 178 138 Later than one year but not later than five years 10 29 Later than five years - - Total Capital Commitments 188 167 36 OTHER COMMITMENTSNot later than one year 85 60 Later than one year but not later than five years 113 71 Later than five years 6 11 Total Other Commitments 204 142 37 COMMITMENT RECEIVABLENot later than one year 1 4 Later than one year but not later than five years 7 2 Later than five years 0 - Total Commitment Receivable 8 6 38 CONTINGENCIES, GUARANTEES AND INDEMNITIESContingent liabilities 138 109 Guarantees 25 28 Total Quantifiable Contingent Liabilities and Guarantees 163 138 AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004These commitments include contracts for waste management and collection, housing constructions and purchases,community grants, outstanding purchase orders and long term employment contracts.Contingencies are items which may in the future constitute a liability, depending on the occurrence of a futurespecified event. They have not been recognised as liabilities. At the reporting date, the Territory had the following obligations under non-cancellable operating leases (theseobligations are not recognised as liabilities):At the reporting date, the Territory had entered into contracts for the following expenditure (these commitments arenot recognised as liabilities):ACTEW has an Alliance Contract with ActewAGL to operate the water and sewerage infrastructure owned byACTEW. The majority of these expenditure commitments relate to this contract.At the reporting date, the Territory had entered into contracts for the following capital expenditure (thesecommitments are not recognised as liabilities): 2003-2004 Financial Year Page- 42 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY38 CONTINGENCIES, GUARANTEES AND INDEMNITIES (CONTINUED)Guarantees Contingencies The Agency has undertaken to construct major infrastructure works on its Kingston project in future years atan estimated cost of approximately $30m. The construction of these works is required to achieve theparamount objectives of the development described in Variation to the Territory Plan No 113. Thisundertaking has not been reflected in the financial statements as no relevant development applications havebeen approved and consequently no contractual commitments have been entered into as at balance date.ACTEW ACTEW Corporation Ltd has underwritten a $25m ($25m at 30 June 2003) standby debt facilityfor TransACT Communications.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004Australian Capital Tourism Corporation Pursuant to an agreement with the National Capital Authorityregarding the use of Commonwealth Park for the 2004 Floriade event, the corporation has given a guarantee tomeet the cost of repair of any damage to the park that may be caused by contractors engaged by theCorporation to perform work at the site.AUSTRALIAN CAPITAL TERRITORY GOVERNMENTTotalcare Industries Limited The company has provided a number of bank guarantees in past years, thesehave now all be extinguished ($1.095m at 30 June 2003).All taxation related claims being made against the Territory have been assessed and where the court decision is likelyto favour the plaintiff, the amounts in dispute have been provided for as a liability. This amount represents claimsagainst the Territory for which there has been no provision.Non-taxation related contingencies are largely comprised of pending legal claims. Claims lodged against theTerritory include property damage, contract disputes, economic loss and personal injury.Due to the protracted nature of legal proceedings and the various discoveries that can be made over the foreseeableperiod, it is not possible, with any degree of accuracy, to make an assessment of liabilities of some legal claims. Thecontingent liabilities reported by agencies have used this methodology.Central Financing Unit - The ACT Fleet Financing Facility includes a Residual Management ReserveAccount which is currently in deficit. The balance of this account at 30 June 2004 is $4.598m ($2.944m at 30June 2004) and reflects mainly the excess of agreed residual values over net sale proceeds. Liabilities for thisamount only exist should the facility be terminated prior to the completion of the agreed commitment term.ACTEW There are a number of public liability claims pending which cannot be measured reliably. Shouldthese claims be successful the Corporation estimates the liability will not be significant. There are also acouple of pending actions against the Corporation. Should these actions be successful, the Corporationestimates the liability will not be significant.Land Development Agency Guarantee for Gold Creek Country Club Pty Ltd, this is a guarantee by theTreasurer under Section 47 of the Financial Management Act 1996 to give a guarantee for the payment ofmoney or the performance of an obligation in accordance with this Act. The ACT Government guaranteesthe operations of Gold Creek Country Club Pty Ltd. 2003-2004 Financial Year Page- 43 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY The Agency is responsible for Government land development and sales and is therefore responsible for thecosts of any remediation work, where this is provided for in a contract for sale. The decision for the Territoryto fund such remediation work stems from the difficulty of quantifying the costs of such work and the resultantimpact this would have on auction bids. The Territory has chosen to remain liable for such unquantified costsin order to maximise bids for the sale of land.AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004ACT Workers Compensation Supplementation Fund The Fund has a number of claims pending as at 30June 2004 where the likelihood of a case proceeding to a hearing was significant, with a total of $0.668m($0.390m at 30 June 2003). Department of Justice and Community Safety - The Department has 33 contingent liabilities in respect ofcriminal injuries compensation and damages cases, with an assessed value of $1.101m (28 claims, of $1.337m,at 30 June 2003). Department of Education and Training The estimated liability for known personal injury litigation cases notsettled is $2.899m ($2.750m at 30 June 2003).Department of Urban Services The Department has claims with a potential liability of up to $15.635m asadvised by the ACT Government Solicitor ($10.394m, at 30 June 2003). Estimated insurance claims, inrelation to costs resulting form the January 2003 bushfires 2004 is $1.720m.ACTION Authority The Authority has contingent liabilities relating to third party accident claims prior tothe formation of the ACT Insurance Authority. There are 10 long-term claims and liability has not beenadmitted by the ACTION Authority at this stage. The total value of these claims as assessed by theGovernment Solicitors Office is $1.040m ($1.192m, at 30 June 2003). Department of Treasury The Department has contingent liabilities in relation to appeals and objectionsprimarily related to payroll tax and stamp duties.Chief Minister's Department - The Department estimates the total amounts of claims for Non ACT BusinessIncentive Fund (ACTBIF) waiver to be approximately $24.1m. The amount is contributed from twoagreements. The Department has entered into agreement with Canberra Raiders and ACT Brumbies to providepayroll tax exemption in return of certain level of sport activities to be performed by the organisations. TheDepartment has also entered into agreement with National ICT Australia Limited to provide cash grant andpayroll tax waiver to this organisation for five years until 2007 for the establisment an ACT node of theNational ICT Australia Centre of Excellence.Canberra Institute of Technology The estimated liability for known damages and injuries is $0.260m($0.178m at 30 June 2003).Chief Minister's Department - The ACT Government has engaged the Australian National University toestablish a fund to invest in research activities and the Commercialisation of Intellectual Property in theTerritory (Knowledge-Based Commercialisation Funding Agreement). The Territory has agreed to make the$10m grant subject to the terms and conditions of the contract.Land Development Agency An organisation has a claim against the Agency relating to documentationprovided in the sale of one of its estates, which the Agency is actively defending. A claim for injury has beenbrought against Gold Creek Country Club Pty Ltd, which the Agency is actively defending. The sum total ofexposure for the above claims is estimated to not exceed $0.150m. 2003-2004 Financial Year Page- 44 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY Indemnities Housing ACT Contingent liabilities for public liability claims arising from operations expected to settle overthe next 12 to 18 months have been assessed by the Government Solicitors Office to be $0.760m ($0.896m, at30 June 2003). Department of Disability, Housing and Community Services The contingent liabilities reflect severalindividual contingent claims against the Department where the final financial ramifications are unclear pendinglegal settlement. The ACT Government Solicitors Office had estimated the contingent claims for 2004 as$1.001m ($0.151, at 30 June 2003).Office for Children, Youth and Family Support The estimated liability for known litigation cases not settledas at 30 June 2004 is $0.303m.AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004ACT Health ACT Health is currently defending 137 actions (last year 210 actions). These actions have anestimated maximum liability of $59.311m ($24.663m, at 30 June 2003).As the restructuring process at Totalcare progresses, the ACT Government will provide such support asnecessary for Totalcare to meet its financial obligations, as it has done in the past. On 21 March 2003, theTerritory indemnified the Board of Totalcare Industries Limited in respect of all liabilities, claims, demands,costs and expenses incurred in relation to or arising out of the operations of the wind-up. All of Totalcare'soperations, except for the Fleet business unit, were transferred to Government departments during the 2003-04financial year.In the event that the Australian International Hotel School is wound down, the ACT Government wouldprovide such support as necessary for the School to meet its financial obligations, as it has done in the past. 2003-2004 Financial Year Page- 45 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY39 THIRD PARTY TRUST MONIESThird Party Monies held in Trust by the Territory 2004 2003$m $mConstruction Industry Long Service Leave Board 17 17 Rental Bonds Board 24 21 NRMA Trust 6 3 Private Practice Hospital Account 11 11 Health Professional Registration 2 2 Public Trustee Common Fund 90 78 Agents Board Trust Account 13 - InTACT payroll float 32 - Other Third Party monies 34 13 Total 230 145 40 INTEREST IN JOINT VENTURE ENTITIES2004 2003$m $mRevenue from Joint Venture Entities 56 44 Retained Profits Attributable to the PartnershipAt the Beginning of the Financial Year 110 66 At the End of the Financial Year 166 110 Movement in Carrying Amount of Investment in the PartnershipCarrying Amount at the Beginning of the Financial Year 350 355 Share of Operating Profits 55 44 Distributions Received (49) (49)Carrying Amount Reflected in the Net Assets of the Partnership 356 350Carrying Amount at the End of the Financial Year 356 350 Share of Joint Venture Assets and LiabilitiesCurrent Assets 71 55 Non-current Assets 350 357 Total Assets 421 412Current Liabilities 56 49 Non-current Liabilities 9 13 Total Liabilities 65 62Net Assets 356 350 AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004Territory agencies are also responsible for a number of other Boards and Trusts which are immaterial innature.ACTEW Retail Ltd and ACTEW Distribution Ltd have entered into joint ventures with AGL Ltd to manageand market the network and retail operations of the ACT electricity network and the ACT and Queanbeyangas networks.All entities have a 50% participating interest in the respective joint ventures and a 50% share of the profit.Information relating to the joint ventures, presented in accordance with the accounting policy described innote 2(v) is set out below. The Land Development Agency has a joint venture with St Hilliers Pty Ltd for the residential and commercialdevelopment in stage 1A of the Kingston Foreshore project. 2003-2004 Financial Year Page- 46 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY40 INTEREST IN JOINT VENTURE ENTITIES (CONTINUED) 2004 2003$m $mShare of Joint Ventures' revenues, expenses and resultsRevenues 277 249 Expenses 222 205 Operating profit 56 44 Share of Joint Ventures' commitmentsLease commitments 5 6 Remuneration commitments 23 18 Total expenditure commitments 29 24 Capital and other commitments 36 31 Total Share of Joint Ventures' commitments 65 55 Contingent liabilities relating to Joint Ventures41 JOINT VENTURE OPERATIONS 2004 2003$m $mTotal Revenue - 3 Total Expenses - 1 Operating Surplus - 2 2004 2003$m $mTotal Assets * - 3 Total Liabilities * - 1 Net Assets - 2 Note: *The Land Development Agency is engaged in a number of joint venture partnerships. These haveceased trading prior to the 2003-04 financial year. AUSTRALIAN CAPITAL TERRITORY GOVERNMENTThe amounts below represent the Territory's share of revenues and expenses in joint venture operations, forthe year ended 30 June 2004. These amounts have been included in the Revenues and Expenses of thesefinancial statements.The following amounts represent the Territory's share of assets and liabilities of joint venture operations as at30 June 2004. The proportionate interests in the assets, liabilities and expenses of a joint venture operationhave been incorporated in the financial statements under the appropriate headings.Each of the partners in the ActewAGL Joint Venture are jointly and severably liable for the debts of the JointVenture. The assets of the Joint Venture exceed its debts. The Joint Ventures have a number of publicliability claims pending. Should these claims be successful the liability of the partners is not considered toexceed $100,000.A bank guarantee has been provided by ActewAGL Distribution Partnership in relation to a contract betweenECOWISE Environmental Pty Ltd and another party for consulting services.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004 2003-2004 Financial Year Page- 47 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY42 ECONOMIC DEPENDENCY43 THE TERRITORY'S CREDIT RATING The Territory has no economic dependency on any other party.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004The ACT Legislative Assembly is empowered by an Act of the Commonwealth Government of Australia.Commonwealth funding accounts for approximately 36.5% of the Territorys revenue.Commonwealth funding include Specific Purpose Payments that provide services to the community onbehalf of the Commonwealth, and the ACT Governments share of GST which is distributed in accordancewith the Principle of Fiscal Equalisation exercised by the Commonwealth Grants Commission. AUSTRALIAN CAPITAL TERRITORY GOVERNMENTAt the end of the reporting period, there are reasonable grounds to believe the Territory can continue to meetits liabilities as and when they fall due. As a result of independent assessment, the Territory has the followingcredit risk ratings, including the highest domestic long term rating available in Australia:An obligation rated AAA has the highest rating assigned and indicates that the obligators capacity to meet itsfinancial commitments is strong. A short-term obligation/obligor rated A1+ is also the highest short-termrating assigned.A Standard & Poors credit rating is formally defined as a current assessment of the ability of a borrower torepay principal and interest with respect to a specific long or short-term obligation in a timely manner. Theratings are based in varying degrees, on the following considerations:protection afforded by and relative position of, the obligation in the event of bankruptcy,reorganisation or other arrangements under the laws of bankruptcy and those affecting creditors rights.likelihood of default-capacity and willingness of the borrower to make timely payment of interest andrepayment of principal;nature and provisions of the obligations; andDomestic Long Term Domestic Short Term Foreign Currency Long Term Standard & Poors AAA A1+ AAA 2003-2004 Financial Year Page- 48 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY44 AUDITOR'S REMUNERATION2003-2004 2002-2003Actual Actual$m $mThe ACT Auditor-Generals Office earned:Financial statement audits (fees for services) 2.424 2.076Other audits (Legislative Assembly appropriation) 0.961 0.943Total Auditor's Remuneration 3.385 3.0192003-200445 EVENTS SUBSEQUENT TO BALANCE DATELand Development AgencyThe sale of Gold Creek Country Club is planned for the 2004-05 financial year. The Agency is conducting negotiations with the Commonwealth to acquire some 133 hectares of land atCrace in Gungahlin for $40.5m.The Agency has also agreed in principle with the Commonwealth to enter into a deed of agreement to acquire1.7 hectares of land in Bruce for $2.8m.AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004The ACT Auditor-Generals Office paid $5,800 for independent audit of its own financial statements forThe ACT Auditor-Generals Office is required by the Financial Management Act 1996 to audit the activitiesand agencies of the ACT. Financial statement audits of agencies are conducted on a fee for service basis.Performance audits are met by appropriation from the Legislative Assembly. 2003-2004 Financial Year Page- 49 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY46 FINANCIAL INSTRUMENTS (a) Terms, conditions and accounting policiesNet Fair Values; andFinancial Assets Carried at an Amount in Excess of Net Fair Value.FOR THE YEAR ENDED 30 JUNE 2004AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Since 31 December 1997 ACT Government agencies have been required to comply with Australian AccountingStandards AAS 33 and Accounting Standard AASB 1033, which cover disclosure of recognised andunrecognised financial instruments.Credit Risks;The aim of these standards is to enhance users understanding of the significance of financial instruments onfinancial positions, operating results and cash flows.Items which are to be disclosed under AAS 33 and AASB 1033 include:Terms, Conditions and Accounting Policies;Interest Rate Risk;Financial Instrument Notes Accounting Policies and Methods (Including recognition criteria and measurement basis) Nature of underlying instrument (including significant terms and conditions affecting the amount, timing and certainty of cash flows) Financial Assets Financial assets are recognised when control over future economic benefits is established and the amount of the benefit can be reliably measured. Cash 17 Deposits are recognised at their nominal amounts. Interest is credited to revenue as it accrues. No interest is earned on the most of these funds. Receivables 18 These receivables are recognised at the nominal amounts due less any provision for bad and doubtful debts. Collectability of debts is reviewed at balance date. Provisions are made when collection of the debt is judged to be less rather than more likely. Credit terms are usually 28-30 days. Investments 19 Financial investments are measured at the market value applicable to the investment at balance date. Resultant increments and decrements from one valuation date to the next are included in the Statement of Financial Performance as they arise. The average return on investments for the year was approximately 5.4% (compared to 4.91% in 2002-03) 2003-2004 Financial Year Page- 50 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY46 FINANCIAL INSTRUMENTS (CONTINUED)FOR THE YEAR ENDED 30 JUNE 2004AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Financial Liabilities Financial liabilities are recognised when a present obligation to another party is entered into and the amount of the liability can be reliably measured. Payables 25 Payables and accruals are recognised at their nominal amounts, being the amounts at which the liabilities will be settled. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced). Trade creditors are normally settled within 28-30 days. Interest Bearing Liabilities 26 Interest Bearing Liabilities are carried at capital value. Interest is expensed as it occurs. All are repaid on maturity. Finance Lease Liabilities 27 Liabilities are recognised at the present value of the minimum lease payments at the beginning of the lease. The discount rates used are estimates of the interest rates implicit in the leases. Interest rates implicit in the leases vary from 4.5% to 9.85%. 2003-2004 Financial Year Page- 51 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY2004Financial InstrumentsWeighted Average Effective Int Rate%Floating Interest Rate1 year or lessOver 1 to 5 yearsMore than 5 yearsNon-Interest BearingTotalFinancial AssetsCash at Bank 4.41 58 10 - - 20 88 Receivables for Goods and Services 6.52 16 - - - 229 244 Investments 5.40 764 312 258 166 819 2,319 Investments Accounted for Using the Equity Method - - - - 357 357 838 322 258 166 1,425 3,008 Financial LiabilitiesPayables 10.72 6 - - - 237 243 Interest Bearing Liabilities 5.58 454 15 123 221 9 822 Finance Lease Liabilities 6.53 41 15 29 0 1 86 Other - - - - 28 28 501 29 152 221 275 1,178 Net Financial Assets/(Liabilities) 338 292 107 (55) 1,148 1,829 2003Financial InstrumentsWeighted Average Effective Int Rate%Floating Interest Rate1 year or lessOver 1 to 5 yearsMore than 5 yearsNon-Interest BearingTotalFinancial AssetsCash at Bank 4.60 59 7 - - 3 69 Receivables for Goods and Services 6.93 35 1 - - 275 310 Investments 4.91 136 611 236 612 396 1,990 Investments Accounted for Using the Equity Method - - - - 390 390 230 619 236 612 1,064 2,760 Financial LiabilitiesPayables 5.00 33 8 2 - 169 212 Interest Bearing Liabilities 5.29 210 24 169 425 10 837 Finance Lease Liabilities 5.79 48 8 13 1 1 71 Other - 0 - - 41 41 291 40 184 426 221 1,161 Net Financial Assets/(Liabilities) (61) 579 52 186 843 1,598 AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Fixed Interest maturing in:Fixed Interest maturing in:FOR THE YEAR ENDED 30 JUNE 2004 2003-2004 Financial Year Page- 52 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORY(b) Interest Rate Risk (continued)Reconciliation of Net Financial Assets to Net Assets 2004 2003$m $mNet Financial Assets 1,829 1,598 Inventories 51 35 Other Assets 139 132 Property, Plant and Equipment 9,600 8,799 Intangibles 21 8 Work in Progress 143 139 Superannuation Benefits (2,088) (1,761)Employee Benefits (291) (272)Revenue Received in Advance (24) (49)Net Assets as per Statement of Financial Position 9,380 8,628 (c ) Net Fair values of Financial Assets and LiabilitiesCarrying Amount$'000Net Fair Value$'000Carrying Amount$'000Net Fair Value$'000Financial AssetsCash at Bank 88 88 69 69 Receivables for Goods and Services 244 244 310 310 Investments 2,319 2,319 1,990 1,990 Investments Accounted for Using the Equity Method 357 357 390 390 3,008 3,008 2,760 2,760 Financial LiabilitiesPayables 243 243 212 212 Interest Bearing Liabilities 822 822 837 837 Finance Lease Liabilities 86 86 71 71 Other 28 28 41 41 1,178 1,178 1,161 1,161 Net Financial Assets 1,829 1,829 1,598 1,598 AUSTRALIAN CAPITAL TERRITORY GOVERNMENT2004 2003NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004 2003-2004 Financial Year Page- 53 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORYFinancial LiabilitiesThe net fair values of finance leases and guarantees are based on discounted cash flows using current interest rates forliabilities with similar risk profiles. The ACT Government has the highest credit rating available, being short-term A1+ and long-term AAA. It is assumedthat credit risk is minimal.(d) Credit Risk ExposuresThe Territorys maximum exposures to credit risk at reporting date in relation to each class of recognised financial assetsis the carrying amount of those assets as indicated in the Statement of Financial Position.The Territory has no significant exposures to any concentrations of credit risk.FOR THE YEAR ENDED 30 JUNE 2004Financial AssetsThe net fair values of cash and non-interest bearing monetary financial assets approximate their carrying amounts.AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2003-2004 Financial Year Page- 54 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORYAPPENDIX AVARIANCE EXPLANATION2003-2004 2002-2003Notes Actual Actual Variance VarianceNo. $m $m $m %6 TAXES, FEES AND FINESLand Tax 47 38 9 24%An increase in land tax is largely due to the growth of Average UnimprovedValue (AUV) and a higher level of rental property ownership.Stamp Duty 269 238 31 13%The increase in stamp duty is mainly due to the increase the residential andcommercial property prices, which in turn, drives the increase of conveyancerevenue. Moreover, the commercial conveyance in 2003-04 are abnormallyhigh and are not expected to reach the same level in the future years.9 OTHER REVENUESales/Rentals of Land Stocks 252 178 74 42%The increase is mainly due to the record land prices experienced in 2003-04 atthe height of the property market cycle.10 EMPLOYEE EXPENSESWages and Salaries 861 752 109 14%The increase is consistent with the increase in number of employees; 14,988 in2003-04 compared to 14,803 in 2002-03 and the impact from the newEnterprise Bargaining Agreement for the clerical staff, teachers and nurses.11 SUPERANNUATION 411 212 199 94%The increase is the result of the latest triennial actuarial review conducted bythe ACT Government's consulting Actuary using the latest salary data as at30/06/2004. The increase also reflects the change in the accounting policy toalign with the treatment used in AASB 119. From 1/07/2003, allsuperannuation actuarial gains or losses, will be recognised as income orexpense immediately.12 SUPPLIES AND SERVICESMaterials, Equipment and Supplies 91 69 22 32%The increase is mainly contributed from ACT Health, and it is due to increasesin the cost of pharmaceuticals, medical , surgical and special services supplies.Repairs and Maintenance 70 51 19 37%The increase is mainly contributed from repairs and maintenance work donedue to additional funding which was bushfire related in Department UrbanServices ($11m) and a change in the capitalisation policy for propertyimprovements and upgrades in Housing ACT ($8m). Housing ACT capitalisestwo thirds of the costs assoicated with improvements and upgrades in 2003-04,whereas the capitalisation rate was 100% in 2002-03.Other Supplies and Services 74 52 22 42%The increase is mainly due to the legal expenses associatied with the resolutionof a contractual dispute in ACT WorkCover and the legal expenses associatedwith the Coronial Inquest into the January 2003 bushfire in Department ofJustice and CommunitySafety, and the rest is represented by minor increases inmost agencies.13 GRANTS AND PURCHASED SERVICESGrants to Non-Government Schools 119 107 12 11%The increase is reflecting the on-passing of increased grant revenue from theCommonwealth ($6m) and the rest is related with the growth in the sector andincreased government funding for indexation, increased enrolments and budgetinitiatives.Purchase of Health Services from Calvary Hospital 74 66 8 12%The increase in grants and purchased services is reflecting additional grantscomprising $3.5m for the new Enterprise Bargaining Agreement for nurses,$3m for an initiative for elective surgery and $1m for extra Visiting MedicalOfficers (VMOs).AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004 2003-2004 Financial Year CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORYAPPENDIX AVARIANCE EXPLANATION2003-2004 2002-2003Notes Actual Actual Variance VarianceNo. $m $m $m %13 GRANTS AND PURCHASED SERVICESOther Current Grant 38 22 16 73%The increase in other current grant is mainly comprised of $4m of grants to thecommunity sector from Housing ACT, and $4m in CMD represents ACTSoftwood Industries Assistance Package ($1m) and Hockey CentreRedevelopment ($4.5m), offset by Bushfire Forestry Assistant Grant ($0.1m)and the Knowledge Fund ($2.4m), and $1.5m funding to Office for Children,Youth and Family Support. 14 OTHER EXPENSESInsurance Claim Payments 39 15 24 160%The increase is mainly due to an increase in the claims provision resulting fromadditional medical malpractice claims and incident, equivalent of over twoyears' activity. The increase is also contributed by revised actuarialmethodology in claim provisions and some additional bushfire losses which arenot covered by reinsurance.18 RECEIVABLESNon-Current Other Debtors 48 40 8 20%The increase is mainly due to the public liability claims arising from thebushfires.Non-Current Loans 25 35 -10 -29%The decrease is due to early termination of loans in Home Loan Portfolio.19 INVESTMENTSCurrent Investment 854 746 108 14%Non-Current Investment 1,466 1,244 222 18%The major variances in investments mainly relate to Superannuation ProvisionAccount (SPA) rebalancing its investment portfolio during the year toward ahigher asset allocation to equities. This allocation is required to achieve thelong-term rate of return objectives of the SPA and as a result, reflects theincrease of investments.22 PROPERTY, PLANT AND EQUIPMENTInfrastructure Assets (at Cost) 289 137 152 111%The increase is predominantly comprised of road infrastructure, of which themajority relates to both capital works and infrastructure assets associated withland development. These assets include roadworks, stormwater drains,lines/signs, foothpaths, driveways, landscaping and related works.24 Other AssetsRight to Receive Infrastructure from Land DevelopersCurrent 9 26 -17 -65%Non-Current 44 15 29 193%The recategorisation from current to non-current is to reflect the timing ofexpected completion of more accurately. The increase reflects the increasingvalue of the infrastructure assets to be constructed by the purchasers.Current Other - Other Assets 9 26 -17 -65%Non Current Other - Other Assets 31 17 14 82%The increase is largely comprised of ACTIA reinsurance of $22m (current) andincrease of finance leases in Totalcare of $14m (non-current).25 PAYABLESCurrent - Trade Creditors 77 44 33 75%The increase is mostly due to the increase of trade creditors in ACTEWCorporation (+$28m) due to higher accrued expenses relating to Googong damand Stromlo projects.Total Non-Current Payables 78 60 18 30%The increase is largely due to a larger increase in the claims provision thananticipated in ACT Insurance Authority of $28m.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2004AUSTRALIAN CAPITAL TERRITORY GOVERNMENT 2003-2004 Financial Year CONSOLIDATED ANNUAL FINANCIAL STATEMENTS OF THE AUSTRALIAN CAPITAL TERRITORYAPPENDIX AVARIANCE EXPLANATION2003-2004 2002-2003Notes Actual Actual Variance VarianceNo. $m $m $m %27 FINANCE LEASESNon-Current Liability 51 37 14 38%The increase is largely from the increase of fleet business in Totalcare.29 OTHER EMPLOYEE BENEFITSAnnual Leave 108 97 11 11%The increase is consistent with the increased number of employees and the newEnterprise Bargaining Agreement for the clerical staffs, teachers and nurses.30 OTHER LIABILITIESCurrent - Revenue Received in Advance 32 50 -18 -36%The decrease is predominantly due to the fewer outstanding interim assesmentsthat are in doubt for taxation assessments and the downward revision of payrolltax assistance offered as part of the ACT Business Incentive Fund inDepartment of Treasury (decreased by $14m from 2002-03).38 CONTINGENCIES, GUARANTEES AND INDEMNITIESContingent Liabilities 138 109 29 27%The increase is firstly due to the total amounts of claims for Non-ACT BusinessIncentive Fund (ACTBIF) waiver to be approximately $24.1m. This comprisedof two agreements with Canberra Raiders and ACT Brumbies, and withNational ICT Australia Limited. The second factor of the increase is theKnowledge-Based commercialisation Funding Agreement with AustralianNational University of $10m.FOR THE YEAR ENDED 30 JUNE 2004AUSTRALIAN CAPITAL TERRITORY GOVERNMENTNOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2003-2004 Financial Year

Recommended

View more >