Notes to the Financial Statements
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2003
Note Description
Summary of significant accounting policies
1.1 Objectives and funding
1.2 Basis of accounting
1.3 Revenue from ordinary activities
(a) Revenues from Government - Appropriation
(b) Commonwealth grants
(c) User charges
(d) Interest
(e) Taxation, fees and fines
(f) Gross proceeds from the disposal of assets
(g) Resources received free of charge
(h) Assets assumed/(liabilities transferred)
(i) Other revenue from ordinary activity
(j) Correction of fundamental errors
1.4 Expenses from ordinary activities
(a) Employee benefits
(b) Depreciation and amortisation
(c) Grants and subsidies
(d) Written down value of disposed physical assets
(e) Write down of assets
(f) Resources provided free of charge
(g) Correction of fundamental errors
(h) Liabilities assumed/ (assets transferred)
(i) Other expenses from ordinary activities
1.5 Assets
(a) Cash on hand and deposit accounts
(b) Receivables
(c) Other financial assets
(d) Other assets
(e) Property, plant, equipment, vehicles and infrastructure
1.6 Liabilities
(a) Payables
(b) Provisions for employee benefits
(c) Superannuation
(d) Other liabilities
1.7 Leases
1.8 Comparative figures
1.9 Rounding
1.10 Departmental taxation
Events occurring after balance date
Revenues from ordinary activities
3.1 Commonwealth grants
3.2 User charges
3.3 Fees and fines
3.4 Gross proceeds and expense from the disposal of assets
3.5 Other revenues from ordinary activities
Expenses from ordinary activities
4.1 Employee benefits
4.2 Depreciation and amortisation
4.3 Grants and subsidies
4.4 Write down of assets
4.5 Liabilities assumed (assets transferred)
4.6 Other expenses from ordinary activities
Outputs of the Department
5.1 Department's outputs
5.2 Output summary
5.3 Statement of Outputs
Assets
6.1 Receivables
6.2 Property, plant, equipment, vehicles and infrastructure
6.3 Reconciliations of non-current physical assets
6.4 Other assets
Liabilities
7.1 Employee benefits
7.2 Payables
7.3 Other liabilities
7.4 Schedule of commitments
7.5 Schedule of unquantifiable contingencies
Equity
8.1 Equity and movements in equity
8.2 Adjustments recognised directly in equity
8.3 Asset revaluation reserve by class of asset
Cash flow reconciliation
Financial instruments
Administered Statements
11.1 Administered revenue from ordinary activities
11.1.1 Administered Commonwealth grants
11.1.2 Administered user charges
11.1.3 Administered fees and fines
11.1.4 Gross proceeds and expense from the disposal of assets
11.1.5 Other administered revenues from ordinary activities
11.2 Administered expenses from ordinary activities
11.2.1 Administered employee benefits
11.2.2 Administered depreciation and amortisation
11.2.3 Administered grants and subsidies
11.2.4 Liabilities assumed (assets transferred)
11.2.5 Other administered expenses from ordinary activities
11.3 Administered outputs of the Department
11.3.1 Department's administered outputs
11.4 Administered assets
11.4.1 Administered receivables
11.4.2 Administered property, plant, and equipment
11.4.3 Reconciliation of administered non-current physical assets
11.4.4 Other administered assets
11.5 Administered liabilities
11.5.1 Administered employee benefits
11.5.2 Administered payables
11.5.3 Other administered liabilities
11.5.4 Schedule of administered commitments
11.6 Administered cash flow reconciliation
11.7 Administered financial instruments
1. Summary of significant accounting policies
1.1 Objectives and Funding
The Department of Infrastructure, Energy and Resources brings together those arms of government which provide infrastructure for the social and economic development of Tasmania.
The Department's charter is to support the existing commercial and social structure and to facilitate new development that will enable Tasmania to prosper. In pursuing this purpose, the Department aims to ensure the effective integration of the key infrastructure serving the community. This comprises the physical transport and energy assets (for example roads, bridges, ports and powerlines), the information systems capturing, maintaining and providing data (for example in transport, mining and forestry) and the policy environment and regulatory systems in which business is conducted. A collaborative approach by the Department is a critical dimension to achieving its purpose.
The delivery areas within the Department comprise:
infrastructure policy;
land transport safety;
roads and public transport;
workplace standards;
minerals resources; and
racing services.
On behalf of the Minister for Infrastructure, the Minister for Economic Development, Energy and Resources and the Minister for Racing, Sport and Recreation, the Department also provides independent strategic policy advice and support in relation to the Government's relationships with many Government Business Enterprises (GBEs), State-owned Companies (SOCs) and Statutory Authorities. Operations of many of these organisations are described in Chapter 10 of Budget Paper No 1 Budget Overview 2002-03.
The Department aims to deliver a strategic approach to the provision of both physical and regulatory infrastructure through its corporate plan. The corporate plan has been developed ensuring that all key Government outcomes are addressed including those outlined in Tasmania Together, Industry Development Plans and Partnerships with Local Government. The strategic focus of the Department is on contributing to the achievement of the following major outcomes:
facilitation of a safe, accessible and equitable transport system that enhances economic development;
promotion of reliable, efficient and safe energy systems;
promotion of productive, safe workplaces where the rights of employees, employers, principals and the community are being met;
facilitation of mineral exploration and land management for Tasmanian land and offshore waters; and
maintenance of probity and integrity in the racing industry.
The Department is predominantly funded by parliamentary appropriations. Other funding sources include direct Commonwealth grants, industry grants and miscellaneous recoveries from various sources. The WorkCover Tasmania Board and Forest Practices Board are funded by industry contributions. The financial report encompasses all funds through which the Department controls resources to carry on its functions.
1.2 Basis of Accounting
The financial statements are a general purpose financial report and have been prepared in accordance with:
the Treasurer's Instructions issued under the provisions of the Financial Management and Audit Act 1990 ; and
Australian Accounting Standards, in particular AAS 29 'Financial reporting by Government Departments' and Urgent Issues Group Abstracts.
In the process of preparing accrual based reports for the Department as a single entity, all intra?entity transactions and balances have been eliminated.
The financial statements have been prepared using historical cost accounting, with the exception that land, buildings, infrastructure, heritage and cultural assets are valued at their current value to the Department, determined by reference to the asset's fair value.
Assets and liabilities are recognised in the Department's Statement of Financial Position when it is probable that future economic benefits will flow and the amounts of the assets or liabilities can be reliably measured.
Revenues and expenses are recognised in the Department's Statement of Financial Performance when the flow or consumption or loss of economic benefits has occurred and can be reliably measured.
The financial statements are prepared on the basis that the Department will continue to operate in its present form. The continued existence of the Department in its present form, undertaking its current activities, is dependent on Government policy and on continuing appropriations by Parliament for the Department's administration and activities.
Transactions and Balances Administered on a Whole of Government Basis
The Department administers, but does not control, certain resources on behalf of the Government as a whole. It is accountable for the transactions involving such administered resources, but does not have the discretion to deploy resources for the achievement of the Department's objectives.
Administered assets, liabilities, expenses and revenues are disclosed in the notes to the financial statements, forming a part of the general purpose report for the Department. The administered items are disclosed on the same basis as is described for the financial statements of the Department.
The schedules of administered revenues and expenses, assets and liabilities, and cash flows are prepared on the same basis, and using the same policies as for Departmental items, except where otherwise stated.
In line with Treasurer's Instruction 704 Definition of "Administered" and "Controlled" the Department undertook a full review of its administered items during 2002-03 which resulted in some items formerly classified as administered being reclassified as controlled, the main classification change being for the treatment of GST.
1.3 Revenue From Ordinary Activities
The revenues described in this Note are revenues relating to the ordinary activities of the Department.
Revenues are recognised in the Statement of Financial Performance when it is probable that the inflow or other enhancement or saving in outflows of future economic benefits has occurred and can be measured reliably.
a) Revenues from Government - Appropriations
Appropriations, whether recurrent or capital, are recognised as revenues in the period in which the Department gains control of the appropriated funds.
b) Commonwealth Grants
Grants payable by the Commonwealth Government are recognised as revenue when the Department gains control of the underlying assets. Where grants are reciprocal, revenue is recognised as performance occurs under the grant. Non-reciprocal grants are recognised as revenue when the grant is received or receivable. Conditional grants may be reciprocal or non-reciprocal depending on the terms of the grant.
c) User Charges
Amounts earned in exchange for the provision of goods and services are recognised when the good or service is provided.
d) Interest
Interest revenue is recognised as it accrues.
e)Taxation, Fees and Fines
Revenue from State taxation and from fees and fines is recognised upon the first occurrence of either:
(i) receipt by the State of a Taxpayer's self-assessed taxes and fees; or
(ii) the time the obligation to pay arises, pursuant to the issue of an assessment.
Interest is charged on outstanding amounts and is brought to account, where possible, on an accrual basis, otherwise as it is received. The collectability of debts is assessed at balance date and specific provision is made for doubtful debts.
f) Gross Proceeds From the Disposal of Assets
Revenue from the sale of non-current assets is recognised when control of the asset has passed to the buyer.
g) Resources Received Free of Charge
Services received free of charge by the Department are recognised as revenue when a fair value can be reliably determined and at the time the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense.
h) Assets Assumed/(Liabilities Transferred)
Contributions of assets at no cost of acquisition or for nominal consideration are recognised at their fair value when the asset qualifies for recognition, unless received from another government agency as a consequence of restructuring of administrative arrangements, when book values from the transferor Department may be used.
i) Other Revenue From Ordinary Activity
Revenue from sources other than those identified above are recognised when it is probable that the inflow or other enhancement or saving in outflows of future economic benefits has occurred and can be measured reliably
j) Correction of Fundamental Errors
Fundamental errors, which render past financial reports unreliable, are disclosed separately on the face of the statement. Their nature is disclosed in the notes, as well as the amount of the correction relating to prior periods including, where practicable, a restatement showing the information that would have been recognised had the error not been made.
1.4 Expenses From Ordinary Activities
The expenses described in this note are expenses arising from the ordinary activities of the Department.
Expenses are recognised in the Statement of Financial Performance when it is probable that the consumption or loss of future economic benefits resulting in a reduction in assets and/or an increase in liabilities has occurred and the consumption or loss of future economic benefits can be measured reliably.
a) Employee Benefits
Employee benefits include entitlements to wages and salaries, annual leave, long service leave, superannuation and other post-employment benefits.
b) Depreciation and Amortisation
All non-current assets having a limited useful life are systematically depreciated over their useful lives in a manner that reflects the consumption of their service potential. Depreciation on assets is provided for using the following rates and methods which are reviewed annually.
| Area | Estimated Useful Life (Years) |
Depreciation Rate (Per Annum) |
Method | |
| Road Infrastructure | ||||
| Long-life components | ||||
| - Earthworks, drainage, landscape, project specific (services, sound mounds etc) | 100 | 1.00% | Straight Line | |
| Medium life components | ||||
| - Pavement | 40 | 2.50% | Straight Line | |
| Short-life components | ||||
| - Surfacing, traffic facilities | 15 | 6.67% | Straight Line | |
| Bridge Infrastructure | ||||
| Steel, Concrete | 70 | 1.43% | Parabolic | |
| Timber | 25 | 4.00% | Parabolic | |
| T-Beam | 50 | 2.00% | Parabolic | |
| Historic | 250 | 0.40% | Parabolic | |
| Major Structures | 100 | 1.00% | Parabolic | |
| Traffic Signal Facilities | ||||
| Cable | 50 | 2.00% | Straight Line | |
| Above and below ground | 30 | 3.33% | Straight Line | |
| Electronics | 5 | 20.00% | Straight Line | |
| Buildings | 20 | 5.00% | Straight Line | |
| Electrical and Office Equipment |
5 | 20.00% | Straight Line | |
| Technical Equipment | 5 | 20.00% | Straight Line | |
| Plant | 10 | 10.00% | Straight Line | |
| Computer Hardware | 3 | 33.33% | Straight Line | |
| Computer Software | 3 | 33.33% | Straight Line | |
| Motor Vehicles | 5 | 20.00% | Straight Line |
Marine Vessels and Equipment 20 5.00% Straight Line
Road Infrastructure
Road assets have a limited useful life and are systematically depreciated over their useful lives in a manner which reflects the consumption of service potential embodied in those assets and which specifically recognises the varying useful lives of the identifiable components which comprise these roads. As detailed above the components of the road infrastructure have been grouped into three areas in terms of assigning an estimated useful life. Useful lives are based on analysis of historical data whilst also taking into account comparability with other State Road Authority practices.
Bridge Infrastructure
Bridges are depreciated systematically over their useful life having regard to their unique rate of deterioration. Bridge values are depreciated parabolically to reflect the greater depreciation towards the end of a bridge's life, i.e.:
Present Value = Replacement Cost x (1-(age/life)2)
c) Grants and Subsidies
Grants are recognised to the extent that (i) the services required to be performed by the grantee have been performed or (ii) the grant eligibility criteria have been satisfied. A liability is recorded when the Department has a binding agreement to make the grants but services have not been performed or criteria satisfied. Where grant monies are paid in advance of performance or eligibility, a prepayment is recognised.
d) Written Down Value of Disposed Physical Assets
The written down value reflects the carrying value of the asset at the time of disposal.
e) Write Down of Assets
A revaluation decrement is recognised as an expense in the Statement of Financial Performance except to the extent that the decrement reverses a revaluation increment previously credited to, and still included in the balance of, an asset revaluation reserve in respect of that same class of asset. In this case, it is debited direct to that revaluation reserve.
Where an increment reverses a revaluation decrement previously recognised as an expense in the Statement of Financial Performance in respect of that same class of non-current assets, the revaluation decrement is recognised as revenue.
f) Resources Provided Free of Charge
Services provided free of charge by the Department, to another entity, are recognised as an expense when fair value can be reliably determined.
g) Correction of Fundamental Errors
See note 1.3 (j).
h) Liabilities assumed (assets transferred)
The assumption of liabilities for nil or nominal consideration are recognised at their fair value when the liability qualifies for recognition, unless received from another government agency as a consequence of restructuring of administrative arrangements, when book values from the transferor Department may be used.
i) Other Expenses From Ordinary Activities
Expenses from activities other than those identified above are recognised in accordance with the general criteria noted above.
1.5 Assets
Assets are recognised in the Statement of Financial Position when it is probable that the future economic benefits embodied in the asset will eventuate and the asset possesses a cost or other value that can be measured reliably.
a) Cash on Hand and Deposit Accounts
Cash means notes, coins and deposits held at call with a bank or financial institution, as well as funds held in the Special Deposits and Trust Fund.
b) Receivables
Receivables are recognised at the amounts receivable as they are due for settlement. Collectability of receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off. A provision for doubtful debts is raised where some doubts exist as to collection.
c) Other Financial Assets
Investments are brought to account at the lower of cost and recoverable amount.
d) Other Assets
Assets other than those identified above are recognised in accordance with the general criteria noted above.
e) Property, plant, equipment, vehicles and infrastructure
(i) Valuation basis
Valuation of assets is undertaken in accordance with the Department of Treasury and Finance publication "Guidelines for the Recording, Valuation and Reporting of Non?Current Physical Assets in Tasmanian Government Departments" using historical cost accounting, with the exception that land, buildings, infrastructure, heritage and cultural assets are valued at their current value to the Department, determined by reference to the asset's fair value.
During 2002-03 a review of the valuation methodology for the Road Infrastructure was undertaken. An updated list of recent projects to 2000 was modelled and the resulting parameters were reviewed. This review recommended, and it was accepted, that a variation to the model be adopted from 2002-03. The effect of this model was to increase the valuation by approximately 10% compared with the previous model.
Road Infrastructure
The Road Infrastructure valuation is based on replacement value written down to reflect present condition where this is not as 'new'. Valuation occurs annually based on road condition surveys conducted in February/March of each financial year.
Road replacement cost is based on a unit rate per square metre of road carriageway area. This rate is then adjusted to reflect the additional factors which contribute significantly to the replacement cost. These factors are as follows:
land use;
traffic volumes; and
national highway as the Commonwealth Government demands a higher standard.
The relative importance of each factor is determined by a statistical analysis of recent road construction project costs.
The road replacement cost gives the cost to provide a new road of the existing standard.
Bridge Infrastructure
Bridge valuations have been based on replacement values calculated from base unit rates for different bridge types. Rates are indexed using ABS indexes for materials (ABS 6407.0) and labour (ABS 6345.0). No provision has been made for upgrading to current geometric or hydraulic standards. Anticipated lives have been assumed for different classes of structures as follows:
| Class of Structure | Anticipated Life (Years) |
| Steel, Concrete | 70 |
| Timber | 25 |
| T-Beam | 50 |
| Historic | 250 |
| Major Structures | 100 |
The major structures are the Tasman, Bowen, Batman and Paterson Bridges, which are expected to have a longer life.
Reduced lives have been adopted where structures are temporary or in poor condition.
Land Under Roads and Within Road Reserves
Land under roads and within road reserves is valued at the Valuer-General's average rateable value per hectare for the urban and non-urban sectors in each Local Government area. Average rateable value per hectare is supplied by the Valuer-General and is based on adjacent land use type.
Property Acquired for Roadworks
Expenditure on the acquisition of land and buildings acquired for roadworks is recognised in the accounts at settlement date and is capitalised until such time as formal possession of the property takes place for the purpose of commencing construction on the roadway.
Three methods of valuation for property and land purchased for infrastructure purposes are used by the Department which are:
Valuer-General Sale Valuation.
A sale valuation is obtained from the Valuer-General for properties that are intended to be sold in the near future. In most cases, these are the pieces of property that are left over as a result of the completion of a road construction project.
Valuer-General Rates Valuation.
The rates valuation is considered to be a reasonable valuation of properties held, mostly for future roadwork purposes.
Department of Infrastructure, Energy and Resources Valuation
This valuation is applied to properties that remain as a result of completion of the relevant road construction project, where the Valuer-General valuation is considered inappropriate. Due to factors such as non-accessibility, usefulness of land and marketability, the true value of a property may be close to zero when accounting for disposal costs or, in any case, significantly lower than the Valuer-General's valuation.
State-Owned Corporations (Administered Asset)
Investments in commercial enterprises are carried at the lower of cost or an estimate of the recoverable amount. In the case of State-Owned Corporations, the recoverable amount is based upon the net equity of the company at the last reporting period or actual market value, and in other cases upon the estimated market value of the investment.
Revaluations
(ii) Asset recognition threshold
In accordance with Treasurer's Instructions, the asset capitalisation threshold adopted by the Department is $5,000. Assets valued at less than $5,000 are charged to the Statement of Financial Performance in the year of purchase.
(iii) Revaluations
Assets are revalued at least once in every 5 years with the following exceptions:
plant and equipment having a cost or revaluation less than the threshold of $50,000;
land and buildings that are to be utilised for future roadworks;
land remaining after the completion of the relevant roadworks project which is regarded as non-saleable due to, for example, limited or no access; and
transport infrastructure which is revalued annually based upon condition surveys conducted in February/March each year.
Assets are grouped on the basis of having a similar nature or function in the operations of the Department.
The recoverable amount test is not applicable to the Department of Infrastructure, Energy and Resources as its non-current assets are not held for the purpose of generating net cash inflows from services provided by the Department.
Those assets which are restricted by government directives or legislation are disclosed in the Statement of Financial Position as administered assets. The restriction on these assets includes the inability of the Department of Infrastructure, Energy and Resources to benefit from the asset in the pursuit of its objectives and to deny access of others to that benefit.
1.6 Liabilities
Liabilities are recognised in the Statement of Financial Position when it is probable that the future sacrifice of economic benefits will be required and the amount of the liability can be measured reliably.
a) Payables
Payables, including accruals not yet billed, are recognised when the Department becomes obliged to make future payments as a result of a purchase of assets or services.
b) Provisions for Employee Benefits
Employee benefits include entitlements to wages and salaries, annual leave, sick leave, long service leave and superannuation benefits.
Liabilities for wages and salaries and annual leave are recognised and are measured as the amount unpaid at the reporting date at current pay rates in respect of employees' services up to that date. The liability for sick leave is not material and has not been recognised.
A liability for long service leave is recognised and is measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given, when assessing expected future payments, to expected future wage and salary levels plus on costs, experience of employee departures and periods of service. On-costs include payroll tax and employer superannuation contributions and exclude workers' compensation premiums and fringe benefits tax. Expected future payments are discounted using interest rates attaching, as at the reporting date, to Commonwealth Government guaranteed securities with terms to maturity that match, as closely as possible, the estimated future cash outflows. The Department uses reliable estimations based on the process outlined above to determine its Long Service Leave Provision.
c) Superannuation
No superannuation liability is recognised for the accruing superannuation benefits of Departmental employees. This liability is held centrally and recognised within the Finance-General Division of the Department of Treasury and Finance.
During the reporting period, the Department paid 11 percent of salary in respect of contributory members of the Retirement Benefits Fund into the Superannuation Provision Account within the Special Deposits and Trust Fund. The Department paid the appropriate Superannuation Guarantee Charge into the nominated superannuation fund in respect of non-contributors. Under these arrangements the Department has no further superannuation liability for the past service of its employees.
d) Other Liabilities
Liabilities other than those identified above are recognised in accordance with the general criteria noted above.
1.7 Leases
The Department of Infrastructure, Energy and Resources does not enter into finance leases.
The Department has entered into a number of operating lease agreements for buildings and office equipment, where the lessors effectively retain all of the risks and benefits incidental to ownership of the items leased. Equal instalments of lease payments are charged to the Statement of Financial Performance over the lease term as this is representative of the pattern of benefits to be derived from the leased property.
1.8 Comparative Figures
Comparative figures have been adjusted to conform to changes in presentation in these financial statements where required.
1.9 Rounding
All amounts in the financial statements have been rounded to the nearest thousand dollars unless otherwise stated.
1.10 Departmental Taxation
The Department is exempt from all forms of taxation except fringe benefits tax, payroll tax and the goods and services tax.
In the Statement of Cash Flows the GST component of cash flows arising from investing or financing activities which is recoverable from, or payable to, the Australian Taxation Office is, in accordance with the Australian Accounting Standards, classified as operating cash flows.
In 2002-03 the Department reviewed its classification of GST transactions with the Australian Taxation Office to align with the Treasurer's Instructions. This review resulted in this item being brought into the controlled Statement of Financial Position for 2002-03.
2 Events Occurring After Balance Date
Two contracts which assist the Department to supply and maintain its roads infrastructure expired during 2002-03 and were not signed until after 30 June 2003. The impact on the Department's financial statements was to reduce the Capital Commitment disclosed in note 7.4. The Capital Commitment associated with these contracts will be reported commencing with the 2003-04 financial statements.
3 Revenue From Ordinary Activities
3.1 Commonwealth Grants
| 2002 | 2003 | |
| $’000 | $’000 | |
| Specific grants | 426 | 971 |
| Total | 426 | 971 |
3.2 User Charges
| 2002 | 2003 | |
| $’000 | $’000 | |
| Goods | 63 | 40 |
| Services | ||
| Road Works | 246 | 589 |
| Other | 234 | 331 |
| Total | 543 | 960 |
3.3 Fees and Fines
| 2002 | 2003 | |
| $’000 | $’000 | |
| Racing Services | 212 | 242 |
| Other | 21 | 42 |
| Total | 233 | 284 |
3.4 Gross Proceeds and Expense From the Disposal of Fixed Assets
| 2002 | 2003 | |
| $’000 | $’000 | |
| Non financial assets – plant and equipment: | ||
| Revenue (proceeds) from sale | 13 | 3 |
| Written down value of disposed assets | -1 | -3 |
| Net Profit/(Loss) | 12 | ... |
| Non financial assets – land and buildings: | ||
| Revenue (proceeds) from sale | ... | 101 |
| Written down value of disposed assets | -367 | -2,001 |
| Net Profit/(Loss) | -367 | -1,900 |
| Total Revenue (proceeds) from sale | 13 | 104 |
| Total Written down value of disposed assets | -368 | -2,004 |
| Total Net Profit/(Loss) | -355 | -1,900 |
The gross proceeds of the sale of land and buildings owned by the Crown are usually paid into a central fund. Consequently, when land or buildings owned by the Crown, but controlled by the Department are sold, only the written down value of the sold assets are included in the Department's financial statements.
3.5 Other Revenues From Ordinary Activities
| 2002 | 2003 | |
| $’000 | $’000 | |
| Infrastructure Fund | 19,001 | 14,384 |
| Other Grants | 987 | 1,102 |
| Revenue on Revaluation - Road Infrastructure | 28,976 | ... |
| Revenue on Revaluation - Land and Buildings | 132 | ... |
| Other | 618 | 610 |
| Total | 49,714 | 16,096 |
During 2001-02 part of the revaluation increases for Roads Infrastructure and Land and Buildings were treated as revenue to offset previous revaluation decrements expensed in prior financial years.
4 Expenses from Ordinary Activities
4.1 Employee Benefits
| 2002 | 2003 | |
| $’000 | $’000 | |
| Wages and salaries | 25,872 | 27,809 |
| Long Service Leave | 646 | 594 |
| Superannuation | 2,714 | 2.978 |
| Payroll Tax | 1,811 | 1,956 |
| Fringe Benefits Tax | 163 | 201 |
| Workers’ Compensation | 133 | 128 |
| Total | 31,339 | 33,666 |
4.2 Depreciation and Amortisation
Depreciation expense for the reporting period was charged in respect of:
| 2002 | 2003 | |
| $’000 | $’000 | |
| Plant and Equipment | 222 | 216 |
| Motor Vehicles | 26 | 25 |
| Marine Vessels and Equipment | 328 | 235 |
| Traffic Signal Installations | 602 | 559 |
| Buildings | 179 | 174 |
| Aerodromes | 3 | 3 |
| Computer Equipment | 463 | 432 |
| Road Infrastructure | 70,298 | 77,694 |
| Total | 72,121 | 79,338 |
4.3 Grants and Subsidies
| 2002 | 2003 | |
| $’000 | $’000 | |
| Grants | 2,527 | 2,132 |
| Total | 2,527 | 2,132 |
The majority of grants and subsidies made by the Department are classified as Administered transactions.
4.4 Write Down of Assets
| 2002 | 2003 | |
| $’000 | $’000 | |
| Road Infrastructure - Write-down | 3,162 | 11,751 |
| Land and Buildings - Revaluation Decrement | ... | 44 |
| Land and Buildings - Write-down | 118 | ... |
| Traffic Signals – Write-down | ... | 15 |
| Total | 3,280 | 11,810 |
4.5 Liabilities Assumed (Assets Transferred)
| 2002 | 2003 | |
| $’000 | $’000 | |
| Fair Value of liabilities transferred at no cost or for nominal | ||
| consideration | ||
| Various land parcels transferred to councils | ... | 30 |
| Net liabilities transferred (assets assumed) | ... | 30 |
4.6 Other Expenses From Ordinary Activities
| 2002 |
2003 |
|
| $’000 | $’000 | |
| Advertising and promotion | 938 | 808 |
| Audit expenses | 100 | 132 |
| Communications | 1,548 | 1,740 |
| Consultants | 3,224 | 4,419 |
| Contractors payments (non IT) | 25,566 | 26,906 |
| Information technology | 4,159 | 4,856 |
| Other property related expenses | 1,452 | 1,650 |
| Rental of premises and rates | 2,782 | 2,665 |
| Supplies and consumables | 1,906 | 1,941 |
| Travel and transport | 2,312 | 2,564 |
| Other expenses | 2,291 | 2,565 |
| Total | 46,278 | 50,246 |
5 Outputs of the Department
5.1 Department's Outputs
Information about the Department's outputs and the expenses and revenues which are reliably attributable to those outputs is set out in Note 5.3 Statement of Outputs. Information about expenses and revenues administered by the Department is given in the Schedule of Revenues and Expenses administered on behalf of the whole of government for the year ended 30 June 2003.
5.2 Output Summary
Output Group 1 Development of Transport Policy Advice and Planning
This Output Group supports the broader strategic transport policy objectives of the Government. These objectives are shaped by moves to adopt best practice in transport services and infrastructure development and to develop consistent regulations between jurisdictions.
The outputs relate to:
planning, development and review of passenger and freight transport policies;
development of transport strategies to enhance the social, economic and environmental sustainable development of the State; and
development of regional transport plans, Local Government partnerships and road and rail corridor plans.
This Output Group enables strategic progress towards achieving Tasmania's draft transport vision: "Enhance Tasmania's development, lifestyle and community wellbeing through a safe, effective, efficient and sustainable transport system."
Divisional staff primarily provide Outputs in this Group with assistance from other Divisions and external consultants. There is close liaison with stakeholders, including other agencies, local government, industry bodies and community groups.
Output Group 2 Land Transport Safety Programs
This Output Group covers the work of the Department in promoting the safe and efficient movement of all traffic - including pedestrian, bicycle, vehicular and rail - within the Tasmanian land transport system.
The main outputs within the Group relate to:
safety interventions on the road network;
road safety education through community programs; and
school-based education programs and advertising and intervention campaigns.
The Output Group also reflects the Department's statutory responsibilities for maintaining a safe and efficient transport system. These responsibilities include the administration and registration of vehicles, appropriate standards and licensing of drivers and motorcycle riders, traffic regulations, heavy vehicle loading requirements and public vehicle safety standards. This Output Group directly contributes to the Agency's Outcome of a safe transport system.
The clients for this Output Group are all the users of Tasmania's land transport system.
The Outputs are essentially provided by Departmental staff, with external providers being used as required.
Output Group 3 Provision of Transport Services and Infrastructure
The focus of the Roads Program is the development and maintenance of roads and bridges consistent with the State Roads Infrastructure Investment Strategy. Work is prioritised by the strategic importance of the road network to be developed or upgraded and the most efficient use of resources.
Major activities relate to the development and delivery of a capital and maintenance works roads program for the National Highway and State Arterial Network, and the development of strategies and priority assessments to preserve the road asset and infrastructure.
In determining program delivery, it is recognised that social and cultural influences are increasing community awareness and demand for protection of the natural environment - in particular, on such matters as pollution and noise - while still requiring a road asset that will yield high economic, safety or social equity returns for the State.
The Roads Program directly contributes to the achievement of a safe, accessible and equitable transport system that supports economic development.
The general community, tourists and industry are the main beneficiaries of the Roads Program.
Agency staff undertake assessment of the transport task which is then reflected in a five-year works program and delivered through contracts and consultancies. External service providers are engaged to develop projects from the concept stage through community input and approval phases, to the works tender stage, while all works contracts are externally sourced. The maintenance of the classified road network is performed under a ten-year contract for southern Tasmania and shorter term contracts for the northern and north-western regions of Tasmania.
Output Group 4 Provision of Energy Advisory and Regulatory Services
This Output Group covers the services provided by the Office of Energy Planning and Conservation.
The Outputs within the Group relate to:
the provision of policy advice on energy issues; and
input into the development of the framework for the regulation of participants, including consumers, in Tasmania's energy industry.
The major users of policy advice provided on energy issues, as described in the Energy Co-ordination and Planning Act 1995, are the Minister for Economic Development, Energy and Resources and the Government. The primary users of this Output Group, as it relates to regulatory development, are the energy industry participants and domestic, commercial and industrial consumers of energy.
The Output Group is provided by staff of the Office in liaison with the State's electricity businesses (the Hydro Tasmania, Aurora Energy Pty Ltd and Transend Networks Pty Ltd), other private energy companies and involves interaction with community groups, universities, other agencies and governments.
This Output Group contributes to a reliable, efficient, safe and sustainable energy system, and the promotion of energy efficiency and conservation.
Output Group 5 Workplace Standards
Workplace Standards Tasmania (WST) is responsible for the administration of much of the legislation which regulates business in Tasmania, including occupational health and safety, workers compensation, long service leave, shop trading hours and statutory holidays. WST is also responsible for investigation and compliance activities ensuring effective workplace standards, conducting accident and incident investigations, undertaking audits for compliance with legislation, and assisting industry by delivering educative programs. Other responsibilities include promotion of occupational health and safety and workers compensation matters, provision of assistance on complaints about underpayment of entitlements and other industrial relations matters, along with the processing of dangerous goods registration and licensing permits. The focus is to improve the standard of Tasmanian workplaces. Outputs include:
conducting workplace inspections and investigations which contribute to the enforcement of health and safety standards;
ensuring compliance with conditions of employment matters such as entitlements in respect to workers compensation, long service leave and industrial awards and agreements;
ensuring the safe transportation, storage and handling of dangerous goods;
ensuring safe construction of the natural gas pipeline infrastructure, development of licensing systems including natural gas appliance safety; and
improving electrical safety and managing licensing functions.
In a rapidly changing industrial awards and safety environment, WST actively reviews and develops legislation, standards, codes of practice, licensing, registration and accreditation procedures. The Division also provides strategic policy advice to the Minister, the State Government and the WorkCover Tasmania Board.
Workplace Standards key clients include the Minister for Infrastructure, the Government, employers, employees, unions and employer organisations. There is also close liaison with other agencies, relevant industry bodies and the broader community.
This Output Group is delivered by departmental officers. There is also close liaison with other agencies, the Local Government Office, local government, relevant industry bodies and the broader community.
Output Group 6 Mineral Resources Management and Administration
Mineral Resources Tasmania (MRT) provides services to the mineral exploration, mining, quarrying and mineral processing industries, for infrastructure development, and to land management groups for geohazards, construction materials and groundwater.
The primary role of MRT is to ensure that Tasmania's natural resources are managed in a sustainable way now and for future generations in accordance with the goals of Tasmania Together, and to ensure that there is a fair and sustainable return to the community when mineral or petroleum resources are developed. MRT is responsible for the:
collection, integration, interpretation, publication and presentation of geoscientific information;
collection, integration, interpretation, publication and presentation of information promoting Tasmania's mineral resource potential, and land stability and groundwater issues;
issue of legal titles to mining tenements, collation and recording of statistics relating to mining production, collection of fees and rentals, management of royalty regimes, and recording of mining tenements.
regulation of mineral and petroleum exploration in Tasmania, including offshore waters administered by the State, and the promotion of vacant areas available for onshore and offshore exploration;
environmental appraisal and monitoring and management of mining heritage and land access issues; and
setting and monitoring of standards for both the performance of exploration activities and the technical reporting of exploration records and case histories.
This Output Group supplies services to the mineral and hydrocarbon exploration, mining, quarrying and mineral processing industries, as well as to the government and general public.
This Output Group contributes to the Department's goals of dynamic mineral exploration and land management for Tasmanian land and offshore waters, and effective and efficient tenement management of the exploration and minerals industry for the Tasmanian community.
The major clients of this Output Group include the Minister for Economic Development, Energy and Resources, the various levels of government, the mining and mineral processing industries, and the general public.
This Output Group is delivered by Departmental officers, in close liaison with industry bodies and other government departments.
Output Group 7 Support for Minister in Infrastructure Development and Business Management
The Department provides the Minister for Economic Development, Energy and Resources and the Minister for Racing, Sport and Recreation with advice on a diverse range of complex matters that are raised in connection with his portfolio.
The Output Group has specific responsibility for:
oversight of the Department's involvement in a number of major projects;
the provision of support and policy advice aimed at ensuring that the Government's requirements and expectations are met in relation to Government Business Enterprises (GBEs), Statutory Authorities and State-owned Companies (SOCs); and
the provision of specific advice to the Minister on the development of forest, minerals processing and mining policy by the Government.
The Output Group contributes to all Departmental outcomes.
This Output Group is delivered by Departmental officers in liaison with industry and other Government departments, business enterprises, statutory authorities and SOCs
Output Group 8 Support for Racing Industry
The focus of this Output Group is the regulation and direction of horse racing, greyhound racing and betting by and with bookmakers. Racing Services Tasmania administers the Racing Act 1983, and those sections of the Racing Regulation Act 1952 relating to racing and bookmaker betting activities, in order to maintain the probity and integrity of the racing industry.
Outputs within this Group include:
administering, on behalf of the Tasmanian Thoroughbred Racing Council, Tasmanian Harness Racing Council and Tasmanian Greyhound Racing Council (as constituted under the Racing Act 1983):
registration and licensing of persons engaged or employed in connection with the racing industry;
registration of horses and greyhounds for the purposes of horse racing and greyhound racing; and
registration of all other matters as required by the Rules of Racing
ensuring that horse and greyhound racing, and race related activities, are conducted in a safe and fair manner
registering race clubs and racecourses
registering bookmakers and their clerks
industry training (supervising, coordinating and setting standards in respect of the training and welfare of apprentice jockeys, junior drivers and other persons)
providing administrative support for the Tasmanian Racing Appeal Board
providing policy advice to Government
monitoring compliance with legislation and Rules of Racing
Key clients include Government, code councils, race clubs, industry bodies and participants, and the Tasmanian Racing Appeal Board.
The Outputs are delivered through the efforts of the Division's officers in close consultation with the code councils, TOTE Tasmania, race clubs and industry representative bodies. There is also regular liaison with other Divisions of the Department and relevant Government agencies.
Output Group 92 Capital Investment Program
The Roads Program supports the development and maintenance of roads and bridges consistent with the Strategic Road Network. Work is prioritised to reflect the strategic importance of the road network to be upgraded and the most efficient use of resources whilst meeting social and environmental objectives.
The major activities of the Program relate to the development and delivery of a capital and maintenance works roads program for the National Highway and State Arterial Network, and the development of strategies and priority assessments to preserve the road asset and infrastructure.
Departmental staff undertake the assessment and documentation of the transport task and works program, provide maintenance of contract systems and implement statutory processes. External service providers are engaged to assist the development of projects from the concept stage through community input and approval phases, to the works tender stage, whilst all works contracts are externally sourced. The maintenance of the classified road network is performed under a 10 year contract for Southern Tasmania and three year contracts for the Northern and North-Western regions of Tasmania.
The general community, tourists and industry are the main beneficiaries of the Roads Program. Program delivery recognises increasing community awareness and the need for protection of the natural environment, including issues such as noise pollution, environmental damage and protection of animal habitat and threatened species, whilst still requiring a road asset that will yield high economic, safety or social equity returns for the State.
The Roads Program directly contributes to the achievement of the Departmental Outcomes of a safe transport system, an accessible and equitable transport system and a transport system that facilitates economic development.
Output Group 93 Infrastructure Fund Program
The Infrastructure Fund (IF) was introduced in the 2001-02 Budget as a major Government initiative to provide one-off funding for Tasmanian economic and social infrastructure. IF funds are additional to the Government's ongoing Capital Investment Program.
$2.2 million carried forward from the Infrastructure Fund relates to the Land Transport Infrastructure Investment Strategy and other development works. These projects were completed during 2002-03.
Output Group 94: Social Infrastructure Fund
The Government established a $30 million Social Infrastructure Fund which will be used to improve services to the community and address social infrastructure needs.
The Department was allocated $3.8 million from the Fund for community renewal projects to improve rural infrastructure.
Output Group 95: Major Project Fund
Under the Major Project Fund the Department was allocated funding to assist with the completion of the infrastructure for the West Coast Wilderness Railway.
5.3 Statement of Outputs
Note: If you wish to see a copy of the Statement of Outputs sheet, please contact the Department.
Statement of Outputs - Output Group Names
Output Group Number Output Group Name
1 Development of Transport Policy Advice and Planning
2 Land Transport Safety Programs
3 Provision of Transport Services and Infrastructure
4 Provision of Energy Advisory and Regulatory Services
5 Workplace Standards
6 Mineral Resources Management and Administration
7 Support for Minister in Infrastructure Development and Business Management
8 Support for Racing Industry
92 Capital Investment Program
93 Infrastructure Fund
94 Social Infrastructure Fund
95 Major Project Fund
6 Assets
6.1 Receivables
| 2002 |
2003 |
|
| $’000 | $’000 | |
| User charges and other revenue inclusive of GST | 480 | 620 |
| Less: Provision for doubtful debts | -3 | -11 |
| Total | 477 | 609 |
| Current | 239 | 376 |
| Non-current | 238 | 233 |
| Total | 477 | 609 |
6.2 Property, Plant, Equipment, Vehicles and Infrastructure
| 2002 | 2003 | |
| $’000 | $’000 | |
| Plant and Equipment | 2,565 | 2,676 |
| Plant and Equipment | 1,936 | 2,123 |
| Less: Accumulated Depreciation | 629 | 553 |
| Motor Vehicles | 126 | 126 |
| Less: Accumulated Depreciation | 51 | 76 |
| 75 | 50 | |
| Marine Vessels and Equipment |
5,652 | 5,652 |
| Less: Accumulated Depreciation | ... | 235 |
| 5,652 | 5,417 | |
| Computer Equipment | 2,245 | 2,243 |
| Less: Accumulated Depreciation | 1,627 | 1,720 |
| 618 | 523 | |
| Total Plant and Equipment | 6,974 | 6,543 |
| Land and Buildings | ||
| Buildings | 3,648 | 2,962 |
| Less: Accumulated Depreciation | 890 | 835 |
| 2,758 | 2,127 | |
| Land Under Buildings | 2,243 | 1,218 |
| Less: Accumulated Depreciation | ... | ... |
| 2,243 | 1,218 | |
| Vacant Land Holdings | 6,179 | 6,278 |
| Less: Accumulated Depreciation | ... | ... |
| 6,179 | 6,278 | |
| Aerodromes | 360 | 360 |
| Less: Accumulated Depreciation | 27 | 30 |
| 330 | 330 | |
| Total Land and Buildings | 11,513 | 9,953 |
| 2002 |
2003 |
|
| Road Infrastructure | $’000 | $’000 |
| Roads | ||
| Opening Balance | 1,425,566 | 1,582,780 |
| Add: Additions | 29,290 | 10,021 |
| Less: Deletions | -2,622 | -7,984 |
| Add: Capital Improvements | 31,900 | 30,012 |
| Add: Revaluation Write Up (Down) | 152,690 | 246,177 |
| Less: Annual Depreciation | -54,044 | -59,939 |
| Written Down Value as at 30 June | 1,582,780 | 1,801,067 |
| Land Under Roads and within Road Reserves | 278,293 | 277,593 |
| Opening Balance | ||
| Add: Revaluation | -2,371 | 30,300 |
| Add: Net Additions | 1,671 | 122 |
| Value as at 30 June | 277,593 | 308,015 |
| Bridges Replacement | ||
| Opening Balance | 1,144,377 | 1,177,490 |
| Less: Deletions/ Corrections | -575 | -25,097 |
| Add: Bridge Additions | 7,037 | 24,614 |
| Add: Capital Improvements | 8,104 | 1,498 |
| Add: Revaluation | 18,547 | 21,184 |
| Bridges Replacement | 1,177,490 | 1,199,689 |
| Less: Bridge Accumulated Depreciation | 248,879 | 251,734 |
| Written Down Value as at 30 June | 928,611 | 947,955 |
| 2,788,984 | 3,057,037 | |
| Major Works-in-Progress | ||
| Opening Balance | 34,730 | 17,258 |
| Add: Additions | 20,483 | 17,319 |
| Less: Deletions | -37,955 | -34,577 |
| Value as at 30 June | 17,258 | ... |
| Total Road Asset Infrastructure | 2,806,242 | 3,057,037 |
| Other Infrastructure | ||
| Traffic Signal Installations | 19,524 | 19,584 |
| Add: Work in Progress Additions | ... | ... |
| Less: Accumulated Depreciation | 8,867 | 9,062 |
| 10,657 | 10,522 | |
6.3 Reconciliation of Non-Current Physical Assets
Reconciliations of the carrying amounts of each class of property, plant, equipment, vehicles and infrastructure at the beginning and end of the current financial year are set out below. The reconciliation for Road Infrastructure is shown in the previous note.
| Plant and Equipment | Motor Vehicles | Marine Vessels and Equipment | Computer Equipment | Buildings | Land Under Buildings | Vacant Land Holdings | Aerodromes | Traffic Signals |
|
| $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | |
| Carrying amount at start of year | 629 | 75 | 5,652 | 618 | 2,758 | 2,243 | 6,179 | 333 | 10,657 |
| Additions | 144 | ... | ... | 348 | 140 | ... | 13 | ... | 352 |
| Disposals | -3 | ... | ... | ... | -615 | -1,093 | -293 | ... | ... |
| Revaluations increments/(decrements) | ... | ... | ... | ... | ... | ... | ... | ... | 87 |
| Write-down of assets | ... | ... | ... | ... | 36 | 83 | -163 | ... | -15 |
| Net transfers free of charge | ... | ... | ... | ... | ... | ... | -30 | ... | ... |
| Depreciation/amortisation expense | -216 | -25 | -235 | -432 | -174 | ... | ... | -3 | -559 |
| Adjustment for prior years | -1 | ... | ... | -11 | -18 | -15 | 572 | ... | ... |
| Carrying amount at end of year | 553 | 50 | 5,417 | 523 | 2,127 | 1,218 | 6,278 | 330 | 10,522 |
6.4 Other Assets
| 2002 | 2003 | |
| $’000 | $’000 | |
| Other Current Assets | ||
| Prepayments | 2,030 | 1,901 |
| Stores | 89 | 192 |
| Total other current assets | 2,119 | 2,093 |
7 Liabilities
7.1 Employee Benefits
| 2002 | 2003 | |
| $’000 | $’000 | |
| Accrued salaries | 923 | 1,080 |
| Annual leave | 3,050 | 3,347 |
| Long service leave | 6,079 | 6,473 |
| Total | 10,052 | 10,900 |
| Current | 4,619 | 5,020 |
| Non-current | 5,433 | 5,880 |
| Total | 10,052 | 10,900 |
7.2 Payables
| 2002 | 2003 | |
| $’000 | $’000 | |
| Creditors | 864 | 631 |
| Accrued expenses | 1,791 | 1,386 |
| Total | 2,655 | 2,017 |
| Current | 2,655 | 2,017 |
| Non-current | ... | ... |
| Total | 2,655 | 2,017 |
7.3 Other Liabilities
| 2002 | 2003 | |
| $’000 | $’000 | |
| Revenue received in advance | 1,078 | 3,420 |
| Monies held in trust | 12 | 13 |
| Total | 1,090 | 3,433 |
7.4 Schedule of Commitments
At the reporting date, the Department had entered into contracts for the commitments in the following areas:
Schedule of Commitments as at 30 June
| 2002 | 2003 | |
| $’000 | $’000 | |
| Capital Commitments | ||
| Infrastructure – State Roads | 83,696 | 57,658 |
| Infrastructure – National Roads | 15,696 | 9,365 |
| Other Infrastructure | ... | 91 |
| Total capital commitments | 99,392 | 67,114 |
| Lease Commitments | ||
| Operating leases | 10,724 | 10,303 |
| Total lease commitments | 10,724 | 10,303 |
| By Maturity | ||
| Operating lease commitments | ||
| One year or less | 2,394 | 2,349 |
| From one to five years | 4,925 | 4,615 |
| Over five years | 3,405 | 3,339 |
| Total operating lease commitments | 10,724 | 10,303 |
NB: Commitments are shown as GST exclusive.
The decrease in Capital Commitments relates primarily to fewer contracts signed and not completed as at the end of the financial year.
The majority of the Department's leases are represented by land and building rental costs and vehicle lease costs. The total lease commitment for 2002-03 excludes local government and other executory costs where they are paid directly to a party other than the lessor. These costs are included elsewhere in the Department's expenditures.
Contingent rental costs relate to land and building leases, and in the main comprise local government charges and the periodic escalation of leases by the Consumer Price Index. Since Contingent Rentals cannot be reliably determined, they have been excluded in the calculations of Total Lease Commitments.
With the exception of one lease, which is escalated by $2,000 per annum for the next three years, there is no difference between the value of minimum lease payments and the value of Total Lease Commitments.
The Department does not have any purchase rights flowing from the lease of the land and buildings. Some buildings have renewal options exercisable by the lessee. There are no building leases that have renewal rights exercisable at the sole discretion of the lessor.
The minimum lease payment for vehicles is based on the average age of the vehicle fleet and a standard lease period of 24 months.
The reduction in the Total Lease Commitments is due to many building leases being twelve months closer to maturity.
7.5 Schedule of Unquantifiable Contingencies
At 30 June 2003 the following contingent liabilities exist:
A number of claims for limited access compensation;
A number of acquisitions for current road projects which are at various stages of settlement;
Contractual disputes which are not sufficiently clear or advanced to quantify; and
A number of claims relating to personal injury or damage caused to property (including vehicles) allegedly due to road works or road condition.
Due to the nature of the claims and the uncertainty as to the timing and quantum of potential settlement in each case, it is not possible to reliably measure these obligations in the Financial Statements.
8 Equity
8.1 Equity and Movements in Equity
| Accumulated Surplus | Asset Revaluation | Reserve Total Equity |
||||
| 2002 | 2003 | 2002 | 2003 | 2002 | 2003 | |
| $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | |
| Balance at 1 July | 2,680,344 | 2,686,809 | 126 | 143,757 | 2,680,470 | 2,830,566 |
| Net surplus/(deficit) | 5,917 | -44,496 | ... | ... | 5,917 | -44,496 |
| Assets not previously recognised / incorrectly recognised | 548 | -5,903 | ... | ... | 548 | -5,903 |
| Net revaluation | ||||||
| Increments | ... | ... | 143,631 | 297,748 | 143,631 | 297,748 |
| Decrements | ... | ... | ... | ... | ... | ... |
| Balance at 30 June | 2,686,809 | 2,636,410 | 143,757 | 441,505 | 2,830,566 | 3,077,915 |
8.2 Adjustments recognised directly in equity
| $’000 | |
| Plant and Equipment | -1 |
| Computer Equipment | -11 |
| Buildings | -18 |
| Land Under Buildings | -15 |
| Vacant Land Holdings | 572 |
| Road Infrastructure | -6,430 |
| Total | -5,903 |
The Vacant Land Holdings increase relates to a number of parcels of land which were identified as owned but not previously accounted for in the Department's financial statements.
The reduction in Road Infrastructure relates to the refinement of the dimensions of various bridge structures which has resulted in an overall reduction in the size and valuation of those bridges.
Asset revaluation reserve
The asset revaluation reserve is used to record increments and decrements on the revaluation of non-current assets, as described in accounting policy note (1.5).
The balance within the asset revaluation reserve for the following class of assets is:
| 2002 | 2003 | |
| $’000 | $’000 | |
| Road Infrastructure | 139,889 | 437,550 |
| Plant and Equipment | 2,285 | 2,285 |
| Traffic Signals | 1,583 | 1,670 |
| Total | 143,757 | 441,505 |
During 2002-03 a review of the valuation methodology for the Road Infrastructure was undertaken. An updated list of recent projects to 2000 was modelled and the resulting parameters were reviewed. This review recommended, and it was accepted, that a variation to the model be adopted from 2002-03. The effect of this model was to increase the valuation by approximately 10% compared with the previous model.
9 Cash Flow Reconciliation
| 2002 | 2003 | |
| (a) Reconciliation of Cash per Statement of Financial Position to Statement of Cash Flows | $’000 | $’000 |
| Cash at year end per Statement of Cash Flows | 6,381 | 5,860 |
| Statement of Financial Position Cash | 6,381 | 5,860 |
| (b) Reconciliation of operating surplus to net cash provided by operating activities: | ||
| Net surplus (deficit) | 5,917 | -44,496 |
| Depreciation/Amortisation | 72,121 | 79,338 |
| Write down of assets | 3,280 | 11,810 |
| Revenue on Revaluation | -29,108 | ... |
| Liabilities assumed (assets transferred) | ... | 30 |
| Decrease (increase) in receivables | -9 | -82 |
| Decrease (increase) in prepayments and stores | -872 | 107 |
| Decrease (increase) in other tax assets | ... | 368 |
| Increase (decrease) in employee benefits | 564 | 848 |
| Increase (decrease) in payables | 235 | -150 |
| Increase (decrease) in other liabilities | 1,090 | 2,343 |
| Net (Profit)loss on sale of assets | 355 | 1,900 |
| Net cash from (used by) operating activities | 53,573 | 52,016 |
As a result of changing the classification of GST revenue and expenditure from administered to controlled the cash at the beginning of the period ($4,512,000) reported in the Statement of Cash Flows is not the same as the cash at the end of the previous reporting period ($6,381,000).
10 Financial Instruments
| Financial Instrument | Notes | Accounting Policies and Methods (including recognition criteria and measurement basis) | Nature of underlying instrument (including significant terms & 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 | 9 | Cash includes cash deposits which are readily convertible to cash on hand plus cash available in Treasury’s Special Deposit and Trust Fund. Deposits are recognised at their nominal amounts. Interest is credited to revenue as it accrues. Cash is measured at nominal amounts and is also the net fair value. | The interest rate applicable at 30 June 2003 ranged from 0% to 4.55%. Exposure to interest rate and credit risks is considered to be minimal. |
| Receivables for user charges | 6.1 | 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. The net fair value of receivables is the nominal amount | Debtors terms are 30 days net. |
| Financial Liabilities | Liabilities are recognised when it is probable that the future sacrifice of economic benefits will be required and the amount of the liability can be measured reliably. | ||
| Creditors | 7.2 | Creditors 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 being invoiced). The net fair value of payables is the nominal amount. | Settlement is usually made within 30 days. |
