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CASA Annual Report 2003 04 Part 6: Financial reports

Financial statements

Summary of Significant Accounting Policies

1.1 Basis of Accounting

The financial statements are required by clause 1(b) of Schedule 1 to the Commonwealth Authorities and Companies Act 1997 and are a general purpose financial report.

The statements have been prepared in accordance with:

  • Finance Minister’s Order (being the Commonwealth Authorities and Companies Orders (Financial Statements for reporting periods ending on or after 30 June 2004);
  • Australian Accounting Standards and Accounting Interpretations issued by the Australian Accounting Standards Board; and
  • Consensus Views of the Urgent Issues Group.

The Authority’s Statement of Financial Performance and Financial Position have been prepared on an accrual basis and are in accordance with historical cost convention, except for certain assets, which, as noted, are at valuation. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.

Asset and liabilities are recognised in the Authority’s Statement of Financial Position when and only when it is probable that future economic benefits will flow and the amounts of the assets or liabilities can be reliably measured. Assets and liabilities arising under agreements equally proportionately unperformed are however not recognised unless required by an Accounting Standard. Liabilities and assets that are unrecognised are reported in the Schedule of Commitments and the Schedule of Contingencies.

Revenues and expenses are recognised in the Authority’s Statement of Financial Performance when and only when the flow or consumption or loss of economic benefits has occurred and can be reliably measured.

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1.2 Changes in Accounting Policy

The accounting policies used in the preparation of these financial statements are consistent with those used in 2002–03.

In 2002–03, the Finance Minister’s Orders introduced an impairment test for non-current assets which were carried at cost and not subject to AAS10 Recoverable Amount of Non-Current Assets. In 2003–04 no software was written down under this policy.

1.3 Appropriations

Appropriations for outputs are recognised as revenue to the extent they have been received into the Authority’s bank account or are entitled to be received by the Authority at year-end.

Equity Injections

The Authority received $0.120m as an equity injection in 2003–04. The amount was appropriated by the Parliament as an equity injection and was recognised as ‘contributed equity’ in accordance with the Finance Minister’s Orders.

1.4 Other Revenue

Revenue from aviation fuel excise is recognised upon receipt of a claim notice from the Australian Taxation Office. Regulatory service fees and other revenue are recognised upon delivery of the goods or services.

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

Revenue from disposal of non-current assets is recognised when control of the asset has passed to the buyer.

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1.5 Employee Benefits

Benefits

Liabilities for services rendered by employees are recognised at the reporting date to the extent that they have not been settled.

Liabilities for wages, salaries and annual leave are measured at their nominal amounts. Other employee benefits that are expected to be settled within 12 months of their reporting date are also measured at their nominal amounts.

The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability. CASA’s Certified Agreement expires in 2005. The Certified Agreement provides for a pay rise of 3% on 1 June 2004. The financial effect of this increase is fully reflected in the Financial Statements. There are no pay increases in the next 12 months.

All other employee benefit liabilities are measured as the present value of the estimated future cash outflows, in respect of services provided by employees up to the reporting date.

Salaries, Wages and Superannuation Accrual

The salaries and wages relating to the final pay period in 2003–04 were paid by CASA on 30 June 2004 and therefore, no accrual was required at balance date. However, as this pay period related to the fortnight ending on Sunday 27 June 2004 employee expenses for salaries and wages were accrued for the remaining 3 working days of the financial year.

Tax instalment deductions, superannuation contributions and other employee deductions, were accrued for 10 working days for the pay period ending 27 June 2004 and the remaining 3 working days to balance date. This reflects the fact that these expenses were not paid until 1 July 2004 for the pay period ending 27 June 2004.

Leave

The liability for employee benefits includes a provision for annual leave and long service leave. No provision has been made for sick leave as all sick leave is nonvesting and the average sick leave to be taken in future years by employees of the Authority is estimated to be less than the annual entitlement for sick leave.

The leave liabilities are calculated on the basis of employees’ remuneration, including the Authority’s employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.

The liability for long service leave has been determined with reference to the work undertaken by the Australian Government Actuary as at 31 May 2004. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Superannuation

CASA contributes primarily to the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS) and AvSuper Pty Ltd (AvSuper). Employer contributions to these schemes amounted to $10,270,587 (2002–03: $8,676,686) and have been expensed in these Financial Statements.

The liability for superannuation recognised as at 30 June 2004 represents outstanding contributions for the final fortnight of the financial year.

Employee Productivity Superannuation Contributions totalled $1,021,545 (2002–03: $1,234,348).

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1.6 Leases

A distinction is made between finance leases and operating leases. Finance leases effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of leased non-current assets. In operating leases, the lessor effectively retains substantially all such risks and benefits.

Where a non-current asset is acquired by means of a finance lease, the asset is capitalised at the present value of minimum lease payments at the inception of the lease and a liability recognised for the same amount. The discounted rate used is the interest rate implicit in the lease. Leased assets are amortised over the period of the lease. Lease payments are allocated between the principal component and the interest expense.

Operating lease payments are expensed on a basis which is representative of the pattern of benefits derived from the leased assets. The net present value of future net outlays in respect of surplus space under non- cancellable lease agreements is expensed in the period in which the space becomes surplus.

1.7 Cash

Cash includes notes and coins held and any deposits held at call with a bank or financial institution.

1.8 Financial Instruments

Accounting policies for financial instruments are stated in Note 21.

1.9 Acquisition of Assets

Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes fair value of assets transferred in exchange and liabilities undertaken.

Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and revenues at their fair values at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor entity’s accounts immediately prior to the restructuring.

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1.10 Buildings, Other Infrastructure, and Plant and Equipment

Asset Recognition Threshold

Purchases of property, plant and equipment are recognised initially at cost in the Statement of Financial Position, except for purchases costing less than $5,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

Revaluations

Land, buildings, infrastructure, plant and equipment are carried at valuation. Revaluations undertaken up to 30 June 2002 were done on a deprival value basis. Revaluations since that date are at fair value basis.

Depreciation and Amortisation

In regards to depreciable building and other infrastructure, plant and equipment assets, CASA uses the straight-line method of depreciation to write off the estimated residual value of the asset over the estimated useful lives. Leasehold improvements are amortised on a straight-line basis over the lesser of either the estimated useful life of the improvements or the unexpired period of the lease.

Depreciation/amortisation rates (useful life) and methods are reviewed at each balance date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate. Residual values are re-estimated for a change in prices only when assets are revalued.

Depreciation and amortisation rates applying to each class of depreciable asset are based on the following useful lives:

  2003–04 2002–03
Buildings Life of tenancy Life of tenancy
Leasehold improvements Term of lease Term of lease
Plant and equipment 3 to 25 years 3 to 25 years
Motor vehicles 5 years 5 years

The aggregate amount of depreciation allocated for each class of depreciable asset during the reporting period is disclosed at Note 6C.

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1.11 Intangibles

Schedule 1 of the Commonwealth Authorities and Companies (Report of Operations) Orders requires internally developed and externally acquired computer software for internal use to initially be recognised and capitalised at the cost of development or acquisition. Schedule 1 also now requires such assets, if carried on a cost basis, to be assessed for indications of impairment. Where indications of impairment exist, the carrying amount of impaired assets is compared to its net selling price or depreciated replacement cost and is written down to its higher of the two amounts, if necessary.

All software assets were assessed for indications of impairment as at 30 June 2004. No impairment write down was booked for software as at 30 June 2004.

Software is amortised on a straight-line basis over the anticipated useful life. Useful life is as follows:

  2003–04 2002–03
Computer software 5 –10 years 5 years

1.12 Taxation

The Authority is exempt from all forms of taxation except Fringe Benefits Tax and the Goods and Services Tax (GST).

Revenue, expenses and assets are recognised net of GST:

  • except where the amount of GST incurred is not recoverable from the Australian Taxation Office; and
  • except for receivables and payables.

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1.13 Insurance

CASA has insured for risks through the Government’s insurable risk managed fund, called ‘Comcover’. Workers’ compensation is insured through Comcare Australia.

1.14 Comparative

Comparative figures have been adjusted to conform to changes in presentation in these financial statements where required.

1.15 Rounding

Amounts are rounded to the nearest $1,000 except in relation to:

  • Remuneration of directors;
  • Remuneration of officers (other than directors); and
  • Remuneration of auditors.

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2. Adoption of Australian Equivalents to International Financial Reporting Standards from 2005–06

The Australian Accounting Standards Board has issued replacement Australian Accounting Standards to apply from 2005–06. The new standards are the Australian Equivalent to International Financial Reporting Standards (IFRSs) which are issued by the International Accounting Standards Board. The new standards cannot be adopted early. The standards being replaced are to be withdrawn with effect from 2005–06, but continue to apply in the meantime.

It is expected that the Finance Minister will continue to require compliance with the Accounting Standards issued by the AASB, including the Australian Equivalents to IFRSs, in his Orders for the Preparation of Authorities financial statements for 2005–06 and beyond.

Existing AASB standards that have no IFRS equivalents will continue to apply.

Accounting Standard AASB 1047 Disclosing the Impact of Adopting Australian Equivalents to IFRSs require that the financial statements for 2003–04 disclose:

  • An explanation of how the transition to the Australian Equivalents is being managed, and
  • A narrative explanation of the key differences in accounting policies arising from the transition.

The purpose of this note is to make these disclosures.

Management of the transition to AASB Equivalents to IFRSs

CASA has taken the following steps in preparation towards the implementation of Australian Equivalents to IFRS:

  • CASA’s Audit Committee is tasked with oversight of the transition to and implementation of the Australian Equivalents to IFRSs. CASA’s Audit Committee has also been provided detailed information, which provides a comparison between Australian Standards & Australian Equivalents of International Financial Reporting Standards.
  • The Chief Financial Controller (CFC) is formally responsible for the implementation and adoption of the Australian equivalents to IFRS applicable to CASA. The CFC will report to the Audit Committee on progress against the formal implementation plan and timetable.
  • CASA has developed a plan for the implementation of the Australian Equivalents to IFRS, which includes the key steps to be undertaken for the implementation and the deadlines for their achievement. In particular the plan seeks to:
    • Identify all major accounting policy differences between current AASB standards and the Australian Equivalents to IFRSs. For this purpose, the Authority’s accounting policies have been reviewed, taking into account Australian Equivalents on IFRSs and relevant Finance Briefs issued by the Department of Finance and Administration (DOFA);
    • Identify system changes necessary to be able to report under the Australian Equivalents and the implementation of the system changes; and
    • Facilitate the preparation of an Australian Equivalent balance sheet as at 30 June 2005.

To date, preparation of a transitional balance sheet as at 1 July 2004 required by AASB 1 First Time Adoption of Australian Equivalents of International Financial Reporting Standards has commenced and is expected to be completed by 31 August 2004. In addition, the Authority’s financial management system has been modified to allow for the reporting under the Australian Equivalents, including those necessary to enable capture of data under both sets of rules for 2004–05.

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Major Changes in Accounting Policies

Changes in accounting policies under Australian Equivalents are applied retrospectively i.e. as if the new policy had always applied. This rule means that a balance sheet prepared under the Australian Equivalents must be made as at 1 July 2004, except as permitted in particular circumstances by AASB 1 First – time Adoption of Australian Equivalent to International Financial Reporting Standards. This will enable the 2005–06 financial statements to report comparatives under the Australian Equivalents also.

Expected changes to major accounting policies under Australian Equivalents likely to affect CASA are discussed in the following paragraphs.

Presentation of Financial Statements

The pending standard AASB 101 Presentation of Financial Statements requires entities to prepare an Income Statement (currently titled ‘Statement of Financial Performance’), Balance Sheet (currently titled ‘Statement of Financial Position’), Statement of Changes in Equity (new statement) and a Statement of Cash Flow. The new statement that CASA will be required to prepare will show either all changes or changes in equity other than from transactions with owners.

Property, Plant and Equipment

In anticipation of the potential requirement that property, plant and equipment (PPE) assets be measured at fair value or historical cost proposed by AASB 116 Property, Plant and Equipment, CASA undertook to revalue its PP&E assets to fair value on 1 July 2002. In the year ended 30 June 2004, CASA carried out an officer’s valuation to ensure that PP&E remained at fair value.

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3. Economic Dependency

The Civil Aviation Safety Authority was established in 1995 as a statutory authority by an amendment to the Civil Aviation Act 1988. The authority is dependent on Parliamentary appropriations, aviation fuel excise and regulatory service fees for its continued existence and to carry out its normal activities.

4. Subsequent Events

During the 2003–04 period CASA undertook legal action for breach of contract by a supplier. Settlement of this legal action occurred after balance date and has not been brought to account in the 2003–04 financial statements.

On 12 July 2004, the Civil Aviation Fees Regulations 1995 were amended allowing CASA to increase its existing charges for regulatory services provided to industry. The financial effect of this increase in fees is expected to be in the order of $2.000m in 2004–05.

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5. OPERATING REVENUES

    2004 2003
    $000 $000
5A Revenues from Government    
  Commonwealth Annual Appropriation Act No 1, 2002-2003 - 44,944
  Commonwealth Annual Appropriation Act No 3, 2002-2003 - (98)
  Commonwealth Annual Appropriation Act No 1, 2003-2004 45,515 -
  Commonwealth Annual Appropriation Act No 3, 2003-2004 84 -
  Total Revenue from Government 45,599 44,846
       
5B Aviation Fuel Excise    
  Aviation Fuel Revenues (Special Appropriation) Act 1999 60,420 53,964
  Total Aviation Fuel Excise 60,420 53,964
       
5C Interest on Deposits    
  Cash at bank and 11 am call 245 184
  Investment – Bank Bills & Term Deposits 689 1,086
  Total Interest on Deposits 934 1,270
       
5D Other Revenue    
  Sales of forms & documents 135 122
  Refund of overpaid superannuation in prior years - 128
  Advertising in Flight Safety Magazine 43 51
  Administrative fines 18 10
  Sundry revenue 173 235
  Total Other Revenue 369 546

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6. OPERATING EXPENSES – GOODS AND SERVICES

    2004 2003
    $000 $000
6A Employee Expenses    
  Wages and Salaries 53,172 51,981
  Superannuation 9,716 10,313
  Leave and other entitlements 2,433 2,065
  Separation and redundancy 235 2
  Other employee benefits 884 821
  Total Employee Benefit Expenses 66,440 65,183
  Workers compensation premium 468 575
  Total Employee Expenses 66,908 65,758
  • Superannuation expenses in 2002–03 included a one off payment of $2.342 million to maintain a 100% assets to liabilities ratio for CASA staff in the AvSuper defined benefits scheme.
  • The workers compensation premium increased in 2003–04 by 18%. In addition, the workers compensation premium in 2002–03 included pre Comcare expenses associated with liabilities taken over by CASA from the Civil Aviation Authority.

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    2004 2003
    $000 $000
6B Suppliers Expenses    
  Operating lease rentals -    
  Office accommodation 5,178 5,064
  Provision of information technology infrastructure 3,920 3,592
    9,098 8,656
  Suppliers -    
  Occupancy costs 1,426 1,192
  Travel and transport 5,335 5,453
  Consultancies and service contractors 2,847 3,037
  Software licence renewals 700 380
  Flying training & staff training costs 2,430 2,417
  Insurance & legal expenses 2,077 1,857
  Library, publication & media costs 787 852
  Printing, freight & postage 1,405 1,622
  Administrative & sundry expenses 2,318 2,088
  Telephone & mobile expenses 1,675 1,676
    21,000 20,574
  CASA Improvement Programme 1,087 4,809
  Other Project expenses 3,769 2,691
  Total Supplier Expenses 34,954 36,730

CASA sought and gained Government approval in the 2001–02 budget for a New Policy Proposal focusing on improving CASA’s business processes. The Government agreed to provide $9.0m per annum over four years. This project was named the CASA Improvement Programme.

On the 24 July 2002, CASA entered into a ‘CASA IP Foundation Stage Alliance Contract’. The key objective of the Foundation Stage was to establish the core entry control business systems and processes using new integrated technical platforms and structure.

During the 2002–03 period the CASA Improvement Programme was primarily focused upon completion of the software selection process. CASA entered into negotiations with the successful software vendors, and subsequently signed a number of procurement contracts in June 2003.

In 2003–04 the CASA Improvement Programme moved into the implementation phase which involved the advancement of development work for the new business systems for licensing and the individual aviation participants register.

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    2004 2003
    $000 $000
6C Depreciation and Amortisation    
  Depreciation of buildings, other infrastructure, plant and equipment 3,698 3,103
  Amortisation of leased assets 890 900
  Total Depreciation and Amortisation 4,588 4,003
The aggregate amounts of depreciation or amortisation expensed during the reporting period for each class of depreciable assets are as follows:
  Buildings 114 114
  Technical equipment 56 56
  Vehicles 319 313
  Office furniture and equipment 235 185
  Computer software 1,444 792
  Office Fitout 1,530 1,643
  Computer equipment under finance lease 890 900
  Total Allocated 4,588 4,003
       
6D Net Gain (loss) from sale of assets    
  Non – financial assets – Infrastructure, plant and equipment:    
  Proceeds from sale 334 167
  Net book value (303) (152)
  Asset written off on disposal (28) -
  Net gain (loss) from sale of assets 3 15
       
6E Write down of assets    
  Bad and doubtful debts expense 40 3
  Total write-down of assets 40 3

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7. BORROWING COST EXPENSES

  2004 2003
  $000 $000
Finance charges on lease liabilities 46 92
Total Borrowing Cost Expenses 46 92

8. FINANCIAL ASSETS

    2004 2003
    $000 $000
8A Cash    
  Cash at bank and cash on hand 386 426
  Deposits at call 18,425 4,800
  Bank Bills - 14,100
  Total Cash 18,811 19,326
       
8B Receivables    
  Goods and services 360 449
  Less: Provision for doubtful debts (55) (130)
    305 319
  GST receivable 422 466
  Total Receivables (net) 727 785
 
Receivables (gross) which are overdue are aged as follows:
  Not Overdue 681 700
  Overdue by:    
  - less than 30 days - -
  - 30 to 60 days 65 68
  - 60 to 90 days 7 30
  - more than 90 days 29 117
  Total Receivables (gross) 782 915
 
The provision for doubtful debts is aged as follows
  Overdue by:    
  - Less than 30 days 1 10
  - 30 to 60 days 27 9
  - 60 to 90 days 1 1
  - More than 90 days 26 110
  Total Provision for doubtful debts 55 130
       
8C Accrued Revenue    
  Accrued revenue 833 1,477
  Accrued interest 133 158
  Miscellaneous 65 62
  Total Accrued Revenue 1,031 1,697

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9. NON-FINANCIAL ASSETS

    2004 2003
    $000 $000
9A Land and Buildings    
  Buildings – at 1 July 2002 valuation (fair value) 2,274 2,280
  Accumulated depreciation (226) (113)
    2,048 2,167
  Buildings – at cost 18 -
  Accumulated depreciation - -
    18 -
  Total Land and Buildings 2,066 2,167
       
9B Infrastructure, Plant and Equipment    
  Technical equipment – at 1 July 2002 valuation (fair value) 427 427
  Accumulated depreciation (112) (56)
    315 371
  Technical equipment – at cost 7 -
  Accumulated depreciation - -
  Total Technical equipment 7 -
    322 371
  Motor Vehicles – at 1 July 2002 valuation (fair value) 236 724
  Accumulated depreciation (173) (225)
    63 499
  Motor Vehicles - at cost 1,379 537
  Accumulated depreciation (243) (59)
    1,136 478
  Total Motor Vehicles 1,199 977
  Office furniture and equipment – at 1 July 2002 valuation (fair value) 702 728
  Accumulated depreciation (278) (166)
    424 562
  Office furniture and equipment - at cost 659 223
  Accumulated depreciation (93) (18)
    566 205
  Total Office furniture and equipment 990 767
  Office fitout – at 1 July 2002 valuation (fair value) 6,579 6,788
  Accumulated depreciation (2,763) (1 578)
    3,816 5,210
  Office fitout - at cost 1,261 414
  Accumulated depreciation (213) (65)
    1,048 349
  Total Office –Fitout 4,864 5,559
       
  Work in progress - at cost 323 974
  Total Infrastructure, Plant and Equipment 7,698 8,648
       
9C Intangibles    
  Computer software – at 1997-98 valuation (deemed cost) 1,270 1,270
  Accumulated amortisation (1,270) (1,270)
    - -
  Computer software – at cost 5,507 4,484
  Accumulated amortisation (3,476) (2,031)
    2,031 2,453
  Work in progress – at cost 12,468 3,887
       
  Total Intangible Assets 14,499 6,340
       
9D Assets Under Finance Lease    
  Computer equipment under finance lease 4 356 4 356
  Accumulated amortisation (3,570) (2,680)
    786 1,676
  Total Assets Under Finance Lease 786 1,676

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9E Analysis of Property, Plant, Equipment and Intangibles

TABLE A: Reconciliation of the opening and closing balances of property, plant and equipment and intangibles

Item Land and

Buildings
Other Infrastructure, Plant and Equipment Intangibles Assets Under

Finance Lease
Total
  $000 $000 $000 $000 $000
As at 1 July 2003          
Gross Book value 2,280 10,815 9,642 4,356 27,093
Accumulated depreciation/amortisation (113) (2,167) (3,302) (2,680) (8,262)
Net Book value 2,167 8,648 6,340 1,676 18,831
Additions          
By purchase 18 1,516 9,602 - 11,136
From acquisition of operation - - - - -
           
Net revaluation increment/decrement - - - - -
Depreciation/amortisation charge for the year (114) (2,140) (1,444) (890) (4,588)
Recoverable Amount write-downs - - - - -
           
Disposals          
From disposal of operation - - - - -
Other disposals (5) (326) - - (331)
As at 30 June 2004          
Gross Book value 2,292 11,572 19,245 4,356 37,465
Accumulated depreciation/amortisation (226) (3,875) (4,746) (3,570) (12,417)
Net Book value as at 30 June 2004 2,066 7,698 14,499 786 25,048

Buildings: The class of buildings include 2 buildings, which are located on Federal Airports. The Authority does not have legal title to the land upon which the buildings are constructed.

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9E TABLE B: Assets at valuation

Item Land and

Buildings
$000
Infrastructure,

Plant and Equipment
$000
Intangible Assets

$000
Total

$000
As at 30 June 2004        
Gross value 2,274 7,944 - 10,218
Accumulated depreciation/amortisation (226) (3,326) - (3,552)
Net book value 2,048 4,618 - 6,666
         
As at 30 June 2003        
Gross value 2,280 10,815 - 13,095
Accumulated depreciation/amortisation (113) (2,167) - (2,280)
Net book value 2,167 8,648 - 10,815

9E TABLE C: Assets held under finance lease

Item Land and

Buildings
$000
Infrastructure,

Plant and Equipment
$000
Intangible Assets

$000
Total

$000
As at 30 June 2004        
Gross value - 4,356 - 4,356
Accumulated depreciation/amortisation - (3,570) - (3,570)
Net book value - 786 - 786
         
As at 30 June 2003        
Gross value - 4,356 - 4,356
Accumulated depreciation/amortisation - (2,680) - (2,680)
Net book value - 1,676 - 1,676


9E TABLE D: Assets held under construction

Item Land and

Buildings
$000
Infrastructure,

Plant and Equipment
$000
Intangible Assets

$000
Total

$000
Gross value at 30 June 2004   323 12,468 12,791
         
Gross value at 30 June 2003   974 3,887 4,861

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10. OTHER NON-FINANCIAL ASSETS

  2004 2003
  $000 $000
Prepayments    
Prepaid property rentals 429 418
Other prepayments 271 377
Total Prepayments 700 795

11. INTEREST BEARING LIABILITIES

  2004 2003
  $000 $000
Lease    
Finance lease commitments    
Not later than one year 830 967
Later than one year and not later than five years - 830
Later than five years - -
Minimum lease payments 830 1,797
Deduct future finance charges (25) (71)
Net Lease Liability 805 1,726
     
Lease liability is represented by:    
Current 805 921
Non-current   805
Net Lease Liability 805 1,726

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12. PROVISIONS AND PAYABLES

    2004 2003
    $000 $000
12A Capital Usage Charge    
  Paid - 2,213
  Total Capital Usage Charge - 2,213
       
12B Employees    
  Salaries and wages 1,459 2,206
  Superannuation 475 509
  Annual leave 5,646 5,201
  Long service leave 10,194 9,710
  Superannuation on cost on leave provision 1,765 1,230
  Aggregate Employee Entitlement Liability 19,539 18,856
  Employee provisions are represented by:    
  Current 9,522 8,688
  Non-current 10,017 10,168
    19,539 18,856
12C Lease Restoration    
  Office rental 660 515
       
  Balance owing 1 July 2003 - 515
  Balance owing 30 June 2004 660 -

 

Nature of present obligation Probability Future events Nominal value

$000
Present value

$000
‘Make good’ lease premises Certainty Termination of lease 891 660

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13. PAYABLES

  2004 2003
  $000 $000
13A Suppliers    
  Trade creditors and accruals 5,595 4,847
  Total Suppliers Payable 5,595 4,847
       
  All supplier payables are current.    
       
13B Other Payables    
  Revenue received in advance 167 50
  Total Other Payable 167 50
       
  All other payables are current.    

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14. ANALYSIS OF EQUITY

Equity
Capital
Accumulated

Results
Asset

Revaluation

Reserve
Total

Reserves
Total

Equity
  2004 2003 2004 2003 2004 2003 2004 2003 2004 2003
  $000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Opening balance 1 July 2003 2,030 2,030 12,058 16,950 1,352 1,138 1,352 1,138 15,440 20,118
Operating result - - 3,992 (2,486) - - - - 3,992 (2,486)
Net revaluation increment

(decrement)
- - - - - 214 - 214 - 214
Increase (decrease) in accumulated results on application of transitional

provisions in accounting

standard
                   
1) AASB 1041 - - - 321 - - - - - 321
2) AASB 1044 - - - (515) - - - - - (515)
Transactions with owners:                    
Distributions to owners:                    
Return on Capital:                    
Capital use charge - - - (2,213) - - - - - (2,213)
Contribution by owner:                    
Appropriation (equity injection) 120 - - - - - - - 120 -
Closing balance 30 June 2,150 2,030 16,050 12,058 1,352 1,352 1,352 1,352 19,552 15,440
Total equity attributable to

the Commonwealth
2,150 2,030 16,050 12,058 1,352 1,352 1,352 1,352 19,552 15,440

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15. CASH FLOW RECONCILIATION

Reconciliation of operating surplus to net cash provided by operating activities:

  2004 2003
  $000 $000
Operating surplus (deficit) before extraordinary items 3,992 (2,486)
Operating surplus / (deficit) 3,992 (2,486)
     
Non-Cash Items    
Depreciation and amortisation of property, plant and equipment 4,588 4,003
Gain on disposal of assets (3) (15)
     
Changes in Assets and Liabilities:    
(Increase)/decrease in receivables 132 34
(Increase)/decrease in accrued revenue 666 (536)
(Increase)/decrease in prepayments 95 (259)
Increase/(decrease) in provision for doubtful debts (75) (56)
Increase/(decrease) in liability to suppliers 748 (801)
Increase/(decrease) in revenue received in advance 117 (32)
Increase/(decrease) in provision for employee entitlements 683 1,759
Increase/(decrease) in provision for makegood 145 -
Net cash provided by operating activities 11,088 1,611

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16. REMUNERATION OF DIRECTORS

The number of Directors of CASA included in these figures are shown below in the relevant remuneration bands:

  2004 2003
  No. No.
0 - 10,000 1 -
10,001 - 20,000 2 -
20,001 - 30,000 1 -
30,001 - 40,000 - 2
40,001 - 50,000 - 1
50,001 - 60,000 - -
60,001 - 70,000 - 1
150,001 - 160,000 - -
160,001 - 170,000 1 -
350,001- 360,000 - 1
  5 5
     
  2004 2003
  $ $
Aggregate amount of superannuation payments in connection with the retirement of Directors - -
Other remuneration received or due and receivable by Directors of the Authority 213,010 530,261
Total remuneration received or due and receivable by Directors of the Authority 213,010 530,261
The aggregate amounts paid to prescribed superannuation funds for the provision of retirement benefits for Directors (including the Director of Aviation Safety) were $7,463 (2002–03: $37,678).

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17. RELATED PARTY TRANSACTIONS

(a) The Directors of the Authority during the year were:

Mr Edward G Anson AM Appointed Chairman of the Board on 1 July 2001 for a period of 3 years. The Board was abolished on 21 October 2003.
Mr M Toller Appointed Director of Aviation Safety 1 July 1998 to 30 June 2001. Reappointed to position effective from 1 July 2001. He resigned on 8 August 2003.
Mr P Yuile Appointed Board member 1 October 2003. The Board was abolished on 21 October 2003.
Mr J Kimpton Appointed Board member 7 July 1999 to 30 June 2002. Appointed Deputy Chairman of the Board 7 July 1999 to 30 June 2002. Reappointed to position and as Deputy Chairman effective 1 July 2002 to 30 September 2003.
Mr N Smith Appointed Board member 30 March 2001 and appointed Deputy Chairman of the Board on 1 October 2003. The Board was abolished on 21 October 2003.

The aggregate remuneration and superannuation payments to Directors are disclosed at Note 16.

(b) Transactions with Related Parties

Transactions between related parties are on normal commercial terms and conditions unless otherwise stated.

(c) Director-related Entities

There are no transactions between director-related entities and the Authority.

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18. REMUNERATION OF OFFICERS

The number of officers (excluding the Director of Aviation Safety whose remuneration is disclosed in Note 15) concerned with or taking part in the management of CASA who receive total remuneration of $100,000 or more:

  2004 2003
  No. No.
100,001 - 110,000 1 -
110,001 - 120,000 3 -
120,001 - 130,000 3 4
130,001 - 140,000 6 7
140,001 - 150,000 6 9
150,001 - 160,000 6 5
160,001 - 170,000 2 1
170,001 - 180,000 2 3
180,001 - 190,000 4 2
190,001 - 200,000 2 3
200,001 - 210,000 1 1
210,001 - 220,000 - -
220,001 - 230,000 - -
230,001 - 240,000 - 1
240,001 - 250,000 - -
250,001 - 260,000 - -
260,001 - 270,000 - -
270,001 - 280,000 - -
280,001 - 290,000 - -
290,001 - 300,000 - -
300,001 - 310,000 - -
310,001 - 320,000 1 -
320,001 - 330,000 - -
330,001 - 340,000 - -
340,001 - 350,000 - -
350,001 - 360,000 - -
360,001 - 370,000 - -
  37 36
     
  2004 2003
  $ $
The aggregate amount of total remuneration of officers shown above 5,779,053 5,563,469
The aggregate amount of separation and redundancy payments during the year to officers shown above 59,874 -
The remuneration referred to is all remuneration received or due and receivable, directly or indirectly in cash and non cash terms, from CASA or any related party in connection with the management of the affairs of CASA. Included are wages and salaries, accrued superannuation, the cost of motor vehicles, housing allowance and fringe benefits tax included in remuneration agreements, where applicable.

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19. REMUNERATION OF AUDITORS

  2004 2003
  $ $
Remuneration to the Auditor-General for auditing the financial statements for the reporting period. 44,000 40,000
No other services were provided by the Auditor-General during the reporting period.    

20. AVERAGE STAFFING LEVEL

  2004 2003
  No. No.
The average staffing level during the year was: 701 699

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21. FINANCIAL INSTRUMENTS

(a) Terms, conditions and accounting policies

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.
Deposits at call 8A Deposits are recognised at their nominal amounts. Interest is credited to revenue as it accrues. Temporary surplus funds, mainly from fortnightly draw downs of appropriation and excise claims are placed on deposit at call with the Authority’s banker. Interest is earned on the daily balance at the prevailing daily rate for cash at bank and money on call and is paid at the beginning of the following month.
Bank Bills 8A Deposits are recognised at discounted value. Interest is accrued as it is earned. Investments are placed for periods of generally no more that 90 days with approximate yields, over the year, of 4.96% in 2002–03.
Receivables - Services 8B These receivables are recognised at the nominal amounts due less any provision for bad and doubtful debts. Provisions are made when collection of the debt is judged to be less rather than more likely. Credit terms are up-front payments prior to service delivery in accordance with the Civil Aviation Act 1988 or on issue of an invoice, within 28 days of issue.
Accrued revenue 8C Accrued revenues are recognised at the nominal amounts due. Amounts received fortnightly in the year of Appropriation. Accrual is made for the number of days between the last fortnight and the end of the year. Also, interest on investment yet to be received by CASA and Regulatory Service Fees yet to be charged.
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.
Finance lease liability 11 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. At reporting date, the Authority had finance leases with a maximum term of 5 years. The interest rate implicit in the leases averaged 6.16% (2002–03: 6.16%). The lease liabilities are secured by the lease assets.
Trade creditors 13A 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 been invoiced).
Settlement is usually made net 30 days.
Other Payables 13B Recognised on receipt. Will be recognised as Regulatory Service Fees progressively throughout the next financial year.

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(b) Interest Rate Risk

     
Fixed Interest Rate
     
Financial Instrument Notes
Floating Interest Rate
1 year or less 1 to 2 years 2 to 5 years > 5 years Non-Interest Bearing Total Weighted Av. Effective

Interest Rate
Financial Assets  
2004
2003
2004
2003
2004
2003
2004
2003
2004
2003
2004
2003
2004
2003
2004
2003
(recognised)  
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
Cash on Hand  
369
408
-
-
-
-
-
-
-
-
17
18
386
426
3.55
2.6
Deposits at call 8A
18,425
4,800
-
-
-
-
-
-
-
-
-
-
18,425
4,800
4.89
4.7
Bank Bills and

Negotiable Certificates of Deposit
8A
-
-
-
14,100
-
-
-
-
-
-
-
-
-
14,100
-
4.96
Receivables (gross) 8B
-
-
-
-
-
-
-
-
-
-
360
449
360
449
-
-
Accrued revenue 8C
-
-
-
-
-
-
-
-
-
-
1,031
1,697
1,031
1,697
-
-
Total  
18,794
5,208
-
14,100
-
-
-
-
-
-
1,775
2,527
20,202
21,472
Total Asset  
46,318
41,434
                                   
Financial Liabilities  
03-04
02-03
03-04
02-03
03-04
02-03
03-04
02-03
03-04
02-03
03-04
02-03
03-04
02-03
03-04
02-03
(recognised)  
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
Finance lease liabilities 11
-
-
805
921
-
805
-
-
-
-
-
-
805
1,726
6.16
6.16
Trade creditors 13A
-
-
-
-
-
-
-
-
-
-
5,595
4,847
5,595
4,847
-
-
Other Payables 13B
-
-
-
-
-
-
-
-
-
-
167
50
167
50
-
-
Total  
-
-
805
921
-
805
-
-
-
-
5,762
4,897
6,567
6,623
-
-
Total Liabilities  
26,766
25,994

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(c) Net Fair Values of Financial Assets and Liabilities

   
2004
2003
  Notes Total Carrying

Amount
Aggregate Net

Fair Value
Total Carrying

Amount
Aggregate Net

Fair Value
    $000 $000 $000 $000
Financial Assets          
Cash at bank and on hand 8A 386 386 426 426
Deposits at call 8A 18,425 18,425 4,800 4,800
Receivables (gross) 8B 360 360 449 449
Accrued revenue 8C 1,031 1,031 1,697 1,697
Bank Bills and Negotiable Certificates of Deposit 8A - - 14,100 14,100
Total Financial Assets   20,202 20,202 21,472 21,472
           
Financial Liabilities (recognised)          
Finance lease 11 805 805 1,726 1,726
Trade creditors 13A 5,595 5,595 4,847 4,847
Other Payables 13B 167 167 50 50
Total Financial Liabilities (recognised)   6,567 6,567 6,623 6,623
Financial Assets

The net fair value of cash and deposits on call approximate their carrying amounts. The net fair value of Bank Bills and Negotiable Certificates of Deposit are recognised at the discounted value together with interest, which would be due at the market rate on the day.

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Financial Liabilities

The net fair values for trade creditors, which are short-term in nature, are approximated by their carrying amounts.

The net fair values for finance leases are based on discounted cash flows using estimates of the interest rates implicit in the leases.

(d) Credit Risk Exposures

The Authority’s maximum exposures to credit risk at reporting date in relation to each class of recognised financial assets is the carrying amount of those assets as indicated in the Statement of Financial Position.

CASA has no significant exposures to any concentrations of credit risk.

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22. APPROPRIATIONS

Particulars
Departmental Outputs
  2004 2003
  $000 $000
Year ended 30 June 2004    
Balance carried forward from previous year - -
Appropriation Acts 1 and 3 45,599 44,846
Appropriation Acts 2 and 4 120 -
Available for payment of CRF 45,719 44,846
Payments made out of CRF 45,719 44,846
     
Balance carried forward to next year - -
Represented by:

Appropriations Receivable
- -

This table reports on appropriations made by the Parliament of the Consolidated Revenue Fund (CRF) in respect of CASA. When received by CASA, the payments made are legally the money of CASA and do not represent any balance remaining in the CRF.

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23. REPORTING OF OUTCOMES

CASA’s outputs and vision ’Safe skies for all’, is inherently linked to the Transport and Regional Services’ portfolio outcome ‘A better transport system for Australia’.

CASA is structured to meet a sole outcome: ‘Safe skies for all’. This outcome is achieved through four core outputs.

Output 1 – Aviation Safety Standards

A safer aviation community achieved through development and application of quality safety standards.

Output 2 – Aviation Safety Compliance

Compliance with Australian aviation safety legislation is secured through effective education, surveillance and procedurally fair enforcement.

Output 3 – Aviation Safety Promotion

An informed and safety motivated aviation community is achieved.

Output 4 – Aviation Regulatory Services

Regulatory services are provided in a timely and consistent manner, aligned with CASA’s safety obligations.

Departmental Revenue and Expenses by Output Groups and Outputs

Outcome 1
 
Output 1
Output 2
Output 3
Output 4
Total
  2004 2003 2004 2003 2004 2003 2004 2003 2004 2003
  $000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Operating Expenses
Employees 17,643 14,467 32,199 30,906 2,336 3,945 14,730 16,440 66,908 65,758
Suppliers 6,364 5,112 18,889 17,861 5,344 6,158 4,357 7,599 34,954 36,730
Depreciation and amortisation 1,312 1,049 2,706 2,516 149 178 421 260 4,588 4,003
Value of assets sold 108 - 178 - 8 - 37 152 331 152
Write down of assets - - - - - - 40 3 40 3
Borrowing Costs 13 24 27 58 2 4 4 6 46 92
Total operating expenses 25,440 20,652 53,999 51,341 7,839 10,285 19,589 24,460 106,867 106,738
                     
Funded by:                    
Revenue from Government 27,957 21,801 4,285 11,153 12,148 8,253 1,209 3,639 45,599 44,846
Aviation fuel excise - - 40,786 34,853 - - 19,634 19,111 60,420 53,964
Regulatory service fees - - - - - - 3,203 3,459 3,203 3,459
Interest 267 280 551 597 30 106 86 287 934 1,270
Revenue from sale of assets 118 4 171 8 7 1 38 154 334 167
Other Revenue 105 109 218 232 12 41 34 164 369 546
Total Operating Revenue 28,447 22,194 46,011 46,843 12,197 8,401 24,204 26,814 110,859 104,252

 

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