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CASA Annual Report 2004 05 Part 6: Financial Statements

Part 6: Financial Statements

CIVIL AVIATION SAFETY AUTHORITY NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

for the year ended 30 June 2005

Note 1 

Summary of Significant Accounting Policies 

Note 2

Adoption of Australian Equivalents to International Financial Reporting Standards from 2005-06 

Note 3

Economic Dependency 

Note 4

Events Occurring After Reporting Date 

Note 5

Operating Revenues 

Note 6

Operating Expenses 

Note 7

Borrowing Costs Expense 

Note 8

Financial Assets 

Note 9

Non-Financial Assets 

Note 10

Interest Bearing Liabilities 

Note 11

Provisions 

Note 12

Payables 

Note 13

Analysis of Equity 

Note 14

Cash Flow Reconciliation 

Note 15

Contingent Liabilities and Assets 

Note 16

Director Remuneration 

Note 17

Related Party Disclosures 

Note 18

Remuneration of Officers 

Note 19

Remuneration of Auditors 

Note 20

Average Staffing Levels 

Note 21

Financial Instruments 

Note 22

Appropriations 

Note 23

Reporting of Outcomes

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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 Orders (being the Commonwealth Authorities and Companies Orders (Financial Statements for reporting periods ending on or after 30 June 2005));
  • Australian Accounting Standards and Accounting Interpretations issued by the Australian Accounting Standards Board; and
  • Urgent Issues Group Abstracts.

CASA�s Statements 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.

Assets and liabilities are recognised in CASA�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 (other than unquantifiable or remote contingencies, which are reported at Note 15).

Revenues and expenses are recognised in CASA�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.

1.2 Revenue

The revenues described in this Note are revenues relating to the core operating activities of CASA.

Revenue from the sale of goods is recognised upon the delivery of goods to customers.

Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the relevant asset.

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

Revenue from the rendering of a service is recognised by reference to the stage of completion of the contract to provide the service. The stage of completion is determined according to the proportion that costs incurred to date bear to the estimated total costs of the transaction.

Receivables for goods and services 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 collectability of the debt is judged to be less rather than more likely.

Revenues from Government - Output Appropriations

The full amount of the appropriation for departmental outputs for the year is recognised as revenue.

Contributions of assets at no cost of acquisition or for nominal consideration are recognised as revenue at their fair value when the asset qualifies for recognition.

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1.3 Transactions by the Government as Owner

Equity Injections

Amounts appropriated by the Parliament as equity injections are recognised as �contributed equity� in accordance with the Finance Minister�s Orders.

1.4 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 and salaries (including non-monetary benefits), annual leave and sick leave are measured at their nominal amounts. Other employee benefits expected to be settled within 12 months of the 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

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

Leave

The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of CASA 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 CASA�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 by reference to the work of an actuary as at 30 June 2004. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and in. ation.

Separation and Redundancy

Provision is made for separation and redundancy benefit payments. CASA has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

Superannuation

Employees of CASA are members of a number of complying superannuation funds with the majority being members of the Commonwealth Superannuation Scheme and the Public Sector Superannuation Scheme. The liability for their superannuation benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course.

CASA makes employer contributions to the Australian Government at rates determined by an actuary to be sufficient to meet the cost to the Government of the superannuation entitlements of the Authority�s employees.

The liability for superannuation recognised as at 30 June 2005 represents outstanding contributions for the final fortnight of the year.

1.5 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 beginning of the lease term and a liability recognised at the same time and for the same amount. The discount 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 that 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.

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1.6 Borrowing Costs

All borrowing costs are expensed as incurred except to the extent that they are directly attributable to qualifying assets, in which case they are capitalised. The amount capitalised in a reporting period does not exceed the amounts of costs incurred in that period.

1.7 Cash

Cash means notes and coins held and any deposits held at call with a bank or financial institution. Cash is recognised at its nominal amount. Interest is credited to revenue as it accrues.

1.8 Appropriations Receivable

These receivables are recognised at the nominal amounts due.

1.9 Other Financial Assets

Debentures, term deposits and shares in listed companies are recognised at cost.

1.10 Other Financial Liabilities

Trade 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).

Interest payable is accrued over time.

1.11 Unrecognised Financial Liabilities

Other guarantees, not recognised in the Statement of Financial Performance of CASA are disclosed in the Schedule of Contingencies. At the time of completion of the financial statements, there was no reason to believe that these guarantees would be called upon, and recognition of a liability was therefore not required.

Indemnities are disclosed in the Schedule of Contingencies at the maximum amount payable under the indemnities given. At the time of completion of the financial statements, there was no reason to believe that the indemnity would be called upon, and recognition of the liability was therefore not required. The expected fair value of indemnities is shown in the Financial Instruments Note (Note 21B).

1.12 Acquisition of Assets

Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the 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 value 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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1.13 Property (Land, Buildings and Infrastructure), 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

Basis

Land, buildings, infrastructure, plant and equipment are carried at valuation. Revaluations were undertaken as at 30 June 2005.

Fair values for each class of asset are determined as shown below:

Asset class
Fair value measured at:
Land Market selling price
Buildings Market selling price
Leasehold improvements Depreciated replacement cost
Plant and equipment Market selling price
Motor Vehicles Market selling price

Assets that are surplus to requirements are measured at their net realisable value. At 30 June 2005 CASA held no surplus assets.

Land and building assets are subject to a formal valuation every three years. Plant and equipment assets are subject to a formal valuation every four years. Formal valuations are carried out by an independent qualified valuer. Between formal valuations, property, plant and equipment assets are revalued using an appropriate index reflecting movements in the value of similar assets.

Freehold land, buildings on freehold land and leasehold improvements subject to formal valuations are each revalued progressively on a geographical basis. In between formal valuations, these assets are revalued using an appropriate index reflecting movements in the value of similar assets.

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to CASA using, in all cases, the straight-line method of depreciation. Leasehold improvements are depreciated on a straight-line basis over the lesser of the estimated useful life of the improvements or the unexpired period of the lease.

Depreciation rates (useful lives) and methods are reviewed at each reporting 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 rates applying to each class of depreciable asset are based on the following useful lives:

  2004-05 2003-04
Buildings on freehold land Life of Tenancy Life of Tenancy
Leasehold improvements Lease term Lease term
Plant and equipment 1 to 25 years 3 to 25 years
Motor Vehicles 5 years 5 years

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

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1.14 Impairment of Non-Current Assets

Non-current assets carried at up-to-date fair value at the reporting date are not subject to impairment testing.

No non-current assets were held during the year for the purpose of generating net cash inflows. The non-current assets carried at cost, which are not held to generate net cash inflows, have been assessed for indications of impairment. Where indications of impairment exist, the asset is written down to the higher of its net selling price and, if the entity would replace the asset�s service potential, its depreciated replacement cost.

1.15 Intangibles

CASA�s intangibles comprise internally developed software for internal use. These assets are carried at cost.

Software is amortised on a straight-line basis over its anticipated useful life. The useful life of CASA�s software is 5 to 10 years (2003-04: 5 to 10 years).

All internally developed software were assessed for indications of impairment as at 30 June 2005. No impairment write down was booked for software as at 30 June 2005.

1.16 Taxation

CASA is exempt from all forms of taxation except fringe benefits tax and the goods and services tax (GST).

Revenues, 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.

1.17 Insurance

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

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2 Adoption of Australian Equivalents to International Financial Reporting Standards (AEIFRSs) from 2005-2006

The Australian Accounting Standards Board has issued replacement Australian Accounting Standards to apply from 2005-06. The new standards are the Australian Equivalents to International Financial Reporting Standards (AEIFRS). The International Financial Reporting Standards 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, including reporting periods ending on 30 June 2005.

The purpose of issuing AEIFRS is to enable Australian reporting entities reporting under the Corporations Act 2001 to be able to more readily access overseas capital markets by preparing their financial reports according to accounting standards more widely used overseas.

AEIFRS contain certain additional provisions that will apply to not-for-profit entities, including not-for-profit Australian Government Authorities. Some of these provisions are in Conflict with IFRS, therefore CASA will only be able to assert that the financial report has been prepared in accordance with Australian Accounting Standards.

AAS 29 Financial Reporting by Government Departments will continue to apply under AEIFRS.

Accounting Standard AASB 1047 Disclosing the Impacts of Adopting Australian Equivalents to International Financial Reporting Standards requires that the financial report for 2004-05 disclose:

  • an explanation of how the transition to AEIFRS is being managed;
  • narrative explanations of the key policy differences arising from the adoption of AEIFRS;
  • any known or reliably estimable information about the impacts on the financial report had it been prepared using the Australian equivalents to IFRS; and
  • if the impacts of the above are not known or reliably estimable, a statement to that effect.

Where an entity is not able to make a reliable estimate, or where quantitative information is not known, the entity should update the narrative disclosures of the key differences in accounting policies that are expected to arise from the adoption of AEIFRS.

The purpose of this Note is to make these disclosures.

Management of the transition to AEIFRS

CASA has taken the following steps for the preparation towards the implementation of AEIFRS:

  • CASA�s Audit and Risk Committee is tasked with oversight of the transition to and implementation of AEIFRS. The Chief Financial Controller is formally responsible for the project and reports regularly to the Audit and Risk Committee on progress.
  • The transition to AEIFRS involved the following key steps:
    • identification of all major accounting policy differences between current AASB standards and AEIFRS;
    • identification and implementation of process changes necessary for reporting under AEIFRS;
    • preparation of a transitional Balance Sheet as at 1 July 2004 using AEIFRS, for the information of the Audit and Risk Committee and review by the ANAO in April 2005;
    • preparation of an AEIFRS compliant 2004-05 Balance Sheet; and
    • reporting of the 2004-05 Balance Sheet under AEIFRS to the Department of Finance and Administration in accordance with their reporting deadlines.

Changes in accounting policies under Australian Equivalents are applied retrospectively, that is, as if the new policy had always applied except in relation to the exemptions available under AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards. This rule means that an AEIFRS compliant balance sheet was required to be prepared as at 1 July 2004. This will enable the 2005-06 financial statements to report comparatives under AEIFRS.

Changes to major accounting policies are discussed in the following paragraphs.

Management�s review of the quantitative impacts of AEIFRS represents the best estimate of the impacts of the changes as at reporting date. The actual effects of the impacts of AEIFRS may differ from these estimates due to:

  • continuing review of the impacts of AEIFRS on the Authority�s operations;
  • potential amendments to the AEIFRS and AEIFRS Interpretations; and
  • emerging interpretation as to the accepted practice in the application of AEIFRS and the AEIFRS Interpretations.

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Property, Plant and Equipment

It is expected that the 2005-06 Finance Minister�s Orders will continue to require property plant and equipment assets to be valued at fair value in 2005-06. CASA�s assets are carried at fair value, therefore no adjustments are required for compliance with AEIFRS.

Lease Make Good Asset

CASA has previously recognised a liability for lease make good commitments. AEIFRS (AASB 116 Property, Plant and Equipment) requires that CASA also recognise the lease make good asset.

CASA�s future make good obligations have been discounted at 5.78% which is the average 10 year bond rate for the period 01 January 2000 to 30 June 2004.

This change creates a leasehold improvement asset with a value of $501,000 and accumulated amortisation of $269,000, resulting in a net increase in equity of $232,000.

Impairment of Non-Current Assets

CASA�s policy on impairment of non-current assets is at Note 1.14.

Under AEIFRS these assets will be subject to assessment for impairment and, if there are indications of impairment, measurement of any impairment (impairment measurement must also be done, irrespective of any indications of impairment, for intangible assets not yet available for use). The impairment test is that the carrying amount of an asset must not exceed the greater of (a) its fair value less costs to sell and (b) its value in use. �Value in use� is the net present value of net cash inflows for for-profit assets of CASA and depreciated replacement cost for other assets that would be replaced if CASA were deprived of them.

An impairment assessment of CASA�s non-current assets indicated that no adjustments will be required.

Employee Benefits

The provision for long service leave is measured at the present value of estimated future cash outflows using market yields as at the reporting date on national government bonds.

AEIFRS also require that annual leave that is not expected to be taken within 12 months of balance date is to be discounted. After assessing the staff leave profile, CASA has discounted its non-current provision for annual leave in accordance with AASB 119 Employee Benefits. This change reduces the non-current provision for annual leave by $56,000 and increases retained earnings by $56,000.

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Reconciliation of CASA's Equity

 

2004-05

$’000
2003-04

$’000
Total Equity under AAS - 30 June 2004 - 19,552
Total Equity under AEIFRS - 1 July 2004 19,840 -
Adjustments to accumulated results 5 288
Adjustments to accumulated reserves - -
In year transactions  13,552  -
Total Equity under AEIFRS 33,397 19,840
Reconciliation of CASA's Operating Surplus / (Deficit) 
Total Surplus / (Deficit) under AAS - 30 June 2004 - 3,992
Total Surplus / (Deficit) under AEIFRS - 1 July 2004 3,992
Adjustments:
Depreciation (67)  -
In Year Transactions 8,554 -
Total Surplus / (Deficit) under AEIFRS 12,479 3,992
Reconciliation of CASA's Reserves 
Total Reserves under AAS - 30 June 2004 -  1,352
Total Reserves under AEIFRS - 1 July 2004 1,352   -
Adjustment:
In Year adjustment 1,073 -
Total Reserve under AEIFRS 2,425 1,352
Reconciliation of CASA's Capital 
Total Statutory Funds under AAS - 30 June 2004 - 2,150
Total Statutory Funds under AEIFRS - 1 July 2004 2,150 -
Adjustments:
In Year adjustments - -
Total Statutory Funds under AEIFRS 2,150 2,150

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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 appropriations from the Parliament of the Commonwealth for its continued existence and ability to carry out its normal activities.

4 Events Occurring After Reporting Date

There has not been any circumstance, other than referred to elsewhere in this report, in the accounts or notes thereto, that has arisen since the end of the financial year, that has significantly affected, or may significantly affect, the Authority�s operations, the result of those operations, or the Authority�s state of affairs in financial years after the financial year.

2005

$’000
2004

$’000
Note 5: Operating Revenues
Note 5A Revenues from Government
Appropriations for outputs 49,039 45,599
Total revenues from government 49,039 45,599
Note 5B Aviation Fuel Excise
Aviation Fuel Revenues (Special Appropriation) Act 1999 64,477 60,420
Total aviation fuel excise 64,477 60,420
Note 5C Regulatory Service Fees
Civil Aviation (Fees) Regulations 1995 4,897 3,203
Total regulatory service fees 4,897 3,203
Note 5D: Interest Revenue
Cash at bank and 11am call 543 245
Investments - Bank Bill and Term Deposits 749 689
Total interest revenue 1,292 934
Note 5E Revenue from Sale of Assets
Infrastructure, plant and equipment:
Proceeds from disposal 283 334
Net book value of assets disposed (201 (303)
Write-offs - (28)
Net gain / (loss) from disposal of infrastructure, plant and equipment 82 3
Total proceeds from disposals 283 334
Total value of assets disposed (201) (331)
Total net gain from disposal of assets 82 3
Note 5F: Other Revenue
Sales of forms & documents 148 135
Advertising in Flight Safety Magazine 74 43
Administrative fines 31 18
Insurance Recovery 2,500
Other sundry revenue 87 173
Total other revenue 2,840 369

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2005

$’000
2004

$’000
Note 6: Operating Expenses
Note 6A: Employee Expenses
Wages and salaries 52,249 53,172
Superannuation 9,782 9,716
Leave and other entitlements 5,333 2,433
Separation and redundancy 374 235
Other employee benefits 680 884
Total employee benefits expenses 68,418 66,440
Workers compensation premiums 725 468
Total employee expenses 69,143 66,908
Note 6B: Supplier Expenses
Services from external parties 25,552 25,856
Operating lease rentals 9,715 9,098
Total supplier expenses 35,266 34,954
Note 6C: Depreciation and Amortisation
Depreciation of property, plant and equipment 4,084 3,698
Amortisation of leased assets 1,350 890
Total depreciation and amortisation 5,434 4,588
The aggregate amounts of depreciation or amortisation expensed during the reporting period for each class of depreciable asset are as follows:
Buildings on freehold land 126 114
Leasehold improvements 1,320 1,530
Plant and equipment 2,058 1,500
Intangibles 1,930 1,444
Total depreciation and amortisation 5,434 4,588
Note 6D: Write-Down and Impairment of Assets
Bad and doubtful debts expense - loans - 40
Plant & equipment - revaluation decrement 120 -
Internally developed software - impairment - -
Other - -
Total write-down of assets 120 40

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2005

$’000
2004

$’000
Note 7: Borrowing Costs Expense
Leases 122 46
Total borrowing costs expense 122 46
Note 8: Financial Assets
Note 8A: Receivables
Goods and services 409 360
Less: Provision for doubtful debts (55) (55)
354 305
GST receivable 427 422
Other receivables 439  -
Total receivables (net) 1,220 727
All receivables are current assets.
Receivables (gross) are aged as follows:
Not overdue 331 681
Overdue by:
Less than 30 days - -
30 to 60 days 473 65
60 to 90 days 447 7
More than 90 days 24 29
944 101
Total receivables (gross) 1,275 782
The provision for doubtful debts is aged as follows:
Not overdue -  -
Overdue by:
Less than 30 days - 1
30 to 60 days 34 27
60 to 90 days - 1
More than 90 days 21 26
Total provision for doubtful debts 55 55

Receivables for Goods & Services

Credit terms are up front payments prior to service delivery in accordance with the Civil Aviation Act 1988 or issue of invoice, within 28 days of issue.

(2004: 28 days)

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2005

$’000
2004

$’000
Note 8B: Accrued Revenue
Accrued revenue 1,263 833
Accrued interest 175 133
Miscellaneous 2 65
Total accrued revenue 1,441 1,031
Accrued Interest
The interest rates range from 5.4% to 5.7% (2004: 2.8% to 8.0%) and the frequency of payments range from monthly to quarterly.
Note 9: Non-Financial Assets
Note 9A: Land and Buildings
Buildings on freehold land
- at fair value 30 June 2005 2,195 2,274
- Accumulated depreciation - (226)
2,195 2,048
- at cost - 18
- Accumulated depreciation - -
- 18
Total buildings on freehold land 2,195 2,066
Total Land and Buildings (non-current) 2,195 2,066
Note 9B: Infrastructure, Plant and Equipment
Technical Equipment
- at fair value 30 June 2005 218 427
- accumulated depreciation - (112)
218 315
Technical Equipment
- at cost - 7
- accumulated depreciation - -
- 7
Total Technical Equipment 218 322

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2005

$’000
2004

$’000
Motor Vehicles
- at fair value 30 June 2005 1,456 236
- accumulated depreciation - (173)
1,456 t63
Motor Vehicles
- at cost - 1,379
- accumulated depreciation - (243)
- 1,136
Total Motor Vehicles 1,456 1,199
Office furniture and equipment
- at fair value 30 June 2005 456 702
- accumulated depreciation - (278)
456 424
Office furniture and equipment
- at cost - 659
- accumulated depreciation - (93)
- 566
Total Office furniture and equipment 456 990
Office Fitout
- at fair value 30 June 2005 4,702 6,579
- accumulated depreciation - (2,763)
4,702 3,816
Office Fitout
- at cost - 1,261
- accumulated depreciation - (213)
- 1,048
Total Office Fitout 4,702 4,864
Computer equipment under finance lease
- at cost 6,728 4,356
- accumulated amortisation (4,919) (3,570)
Total Computer equipment under finance lease 1,809 786
Work in progress - at cost 112 323
Total Infrastructure, Plant and Equipment (non-current) 8,752 8,484

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2005

$’000
2004

$’000

Plant and equipment under finance lease is subject to revaluation. The carrying amount is included in the valuation figures above and is also disclosed in Table A and Table C in Note 9C below.

All revaluations are independent and are conducted in accordance with the revaluation policy stated at Note 1. In 2004-05, the revaluations were conducted by an independent valuer, the Australian Valuation Office, at fair value.

Movement in Asset Revaluation Reserve - -
Increment for Buildings 217 -
Decrement for Furniture and Fittings (320) -
Increment for Office Fitout 906 -
Decrement for Technical Equipment (49) -
Increment for Motor Vehicles 226 -
980 -
Increment for Property Plant and Equipment reversed & recognised as revenue (note 5E) - -
Decrement for Technical Equipment expensed (note 6D) (27) -
Total Revaluation 953 -

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Note 9C: Analysis of Property, Plant, Equipment and Intangibles
TABLE A - Reconciliation of the opening and closing balances of property, plant and equipment
Item
Land and Buildings on Freehold Land Other Infrastructure, Plant and Equipment Assets Under Finance Lease Intangibles Total
  $’000 $’000 $’000 $’000  
As at 1 July 2004
Gross book value 2,292 11,572  4,356  19,245  37,465
Accumulated Depreciation/Amortisation (226) (3,875) (3,570)  (4,746) (12,417)
Opening Net Book Value 2,066 7,697  786  14,499 25,048
Additions
By purchase 38  742 2,373  9,725 12,878
From acquisition of entities or operations (including restructuring) - - - - -
- -
Net revaluation increment/decrement 217 736 953
Depreciation/amortization expense (126) (2,028) (1,350) (1,930)  (5,434)
Recoverable Amount write-downs -
Disposals
From disposal of entities or operations (including restructuring) - - - - -
Other disposals (205) (205)
-
As at 30 June 2005 -
Gross book value 2,195 6,942  6,728  28, 932  44,797
Accumulated depreciation/amortisation - - (4,919)  (6,638) (11,557)
Closing Net Book Value 2,195  6,942  1,809  22,294  33,240

 Buildings: The class of buildings includes 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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Note 9C: Analysis of Property, Plant, Equipment and Intangibles
TABLE B - Assets at valuation
Item
Land and Buildings on Freehold Land Other Infrastructure, Plant and Equipment Intangibles Total
  $’000 $’000 $’000 $’000
As at 30 June 2005
Gross value 2,195 6,942   -  9,137
Accumulated depreciation/amortisation -  -  -  -
Closing Net Book Value 2,195   6,942   -  9,137
As at 30 June 2004
Gross value 2,274   7,944   -  10,218
Accumulated depreciation/amortisation (226)   (3,326)   -  (3,552)
Closing Net Book Value 2,048   4,618   -  6,666

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TABLE C - Assets held under finance lease
Item
Land and Buildings on Freehold Land Other Infrastructure, Plant and Equipment Intangibles Total
  $’000 $’000 $’000 $’000
As at 30 June 2005
Gross value 6,728   6,728
Accumulated depreciation/amortisation (4,919)   (4,919)
Closing Net Book Value 1,809   1,809
As at 30 June 2004
Gross value - 4,356 4,356
Accumulated depreciation/amortisation - (3,570)  (3,570)
Closing Net Book Value - 786 786

NB All finance leases have been revalued in 2004-05. Amounts shown are revalued amounts and are also included in Table B above

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TABLE D - Assets under construction
Item
Land and Buildings on Freehold Land Other Infrastructure, Plant and Equipment Intangibles Total
Gross value at 30 June 2005 - 112 20,143 20,255
Gross value at 30 June 2004 - 323  12,468  12,791

 

2005

$’000
2004

$’000
Note 9D: Intangibles
Computer software:
Internally developed - in progress (non-current) 20,143 12,468
Internally developed - in use (non-current) 8,789 5,507
Accumulated amortisation (6,638) (3,476)
2,151 2,031
Total intangibles 22,293 14,499

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TABLE A - Reconciliation of the opening and closing balances of intangibles
Item
Computer Software

$’000
As at 1 July 2004
Gross book value 19,245
Accumulated depreciation/amortisation (4,746)
Net book value 14,499
Additions
By purchase 9,725
From acquisition of operations -
Net revaluation increment/decrement -
Depreciation/Amortisation expense (1,930)
Recoverable Amount write-downs -
Disposals
From disposal of operations -
Other disposals -
As at 30 June 2005
Gross book value 28,932
Accumulated depreciation/amortisation (6,638)
Net book value 22,294

 

2005

$’000
2004

$’000
Note 9E: Other Non-Financial Assets
Prepaid property rentals 663 429
Other prepayments - 271
Total other non-financial assets 663 700
Note 10 Interest Bearing Liabilities
Leases
Finance lease commitments
Payable:
Within one year 859 830
In one to five years 1,136 -
In more than five years - -
Minimum lease payments 1,195 830
Deduct: future finance charges (147) (25)
Total lease liability 1,848 805
Lease liability is categorised as follows:
Current 764 805
Non-current 1,085 -
Total lease liability 1,848 805

Finance leases exist in relation to certain major Office equipment assets. The leases are non-cancellable and for a maximum term of five years. The Authority guarantees the residual values of all assets leased.  The interest rate implicit in the leases averaged 6.34% (2003-04: 6.16%). The lease liabilities are secured by these assets.

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2005

$’000
2004

$’000
Note 11:  Provisions
Note 11A:  Employee Provisions
Salaries and wages 869 1,459
Leave 16,352 15,840
Superannuation 148 475
Superannuation on cost on leave provision 1,928 1,765
Aggregate employee entitlement liability 19,298 19,539
Aggregate employee benefit liability and related on costs 19,298 19,539
Note 11A:  Employee Provisions (continued)
Current 8,694 9,522
Non-current 10,604 10,017
19,298 19,539
Note 11B: Other Provisions
Lease Restoration - Office Rental 721 660
Balance owing 30 June - 660
Balance owing 1 July 721 660

Nature of present obligation: Make good lease premises; Probability: Certain; Future Events: Termination of Lease; Nominal Value: $937,000; Present Value: $721,000

2005

$’000
2004

$’000
Note 12: Payables
Note 12A: Supplier Payables
Trade creditors 7,008 5,595
Operating lease rentals - -
Total supplier payables 7,008 5,595
All supplier payables are current.
Trade Creditors Settlement is usually made net 30 days.
Note 12B: Other Payables
Revenue received in advance 499 167
Total other payables 499 167
All other payables are current.

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Note 13: Analysis of Equity
Item
Accumulated Results Statutory Funds Assets Revaluation Reserve Total Contributed Equity TOTAL EQUITY
  2005

$’000
2004

$’000
2005

$’000
2004

$’000
2005

$’000
2004

$’000
2005

$’000
2004

$’000
2005

$’000
2004

$’000
Opening balance as at 1 July 2004 16,050 12,058 - - 1,352 1,352 2,150 2,030 19,552 15,440
Net surplus/Deficit 12,540 3,992 - - - - - 12,540 3,992
Net revaluation increment/(decrement) 0  - - - 1,074  - - - 1,074  -
Transactions with owner:
Appropriations (equity injections) 0 - - - - - - 120  - 120
Closing balance as at 30 June 2005 28,590 16,050 - - 2,425 1,352 2,150 2,150 33,165 19,552
Total equity attributable to the Australian Government 28,590 16,050 - - 2,425 1,352 2,150 2,150 33,165 19,552

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2005

$’000
2004

$’000
Note 14: Cash Flow Reconciliation
Note 14A: Reconciliation of Operating Surplus to Net Cash from Operating Activities:
Operating surplus (Deficit) before extraordinary items 12,540 3,992
Operating surplus (Deficit) 12,540 3,992
Non- Cash Items
Depreciation and amortisation 4,727 4,588
Gain on disposal of assets (81) (3)
Deferred gain on disposal of assets - -
Net write down of non-current assets 120 -
Deferred write down of non-current assets - -
Foreign exchange gain - -
Capitalised borrowing costs - -
Share of associates profit - -
Deterioration in financial condition of guarantee during the period - -
Changes in Assets and Liabilities
(Increase) / decrease in receivables (other than loans) (467) 132
(Increase) / decrease in accrued revenue (409) 666
(Increase) / decrease in prepayments 36 95
Increase / (decrease) in employee provisions 675 683
Increase / (decrease) in supplier payables 472 748
Increase / (decrease) in grants payable - -
Increase/(decrease) in provision for doubtful debts - (75)
Increase/(decrease) in revenue received in advance 332 117
Increase/(decrease) in provision for makegood 62 145
Increase / (decrease) in other payables - -
Net cash from / (used by) operating activities 18,007 11,088
Note: IPEX Lease amortisation write back of $830k included in depreciation & amortisation line

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2005

$’000
2004

$’000
Note 14B: Reconciliation of Cash
Cash balance comprises:
Cash on hand
Authority 65 386
Deposits at call 25,910 18,425
Total cash 25,975 18,811
Balance of cash as at 30 June shown in the Statement of Cash Flows 25,975 18,811
Cash

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 rate for cash at bank and money on call and is paid at the beginning of the following month.

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2005

$’000
2004

$’000
Note 15: Contingent Liabilities and Assets
Contingent liabilities
Claims for damages/costs1 300 700
Other Guarantees - -
Indemnities - -
Total contingent liabilities 300 700
Contingent assets
Legal claims - -
- -
Net contingent liabilities 300 700

1 The $300,000 is made up of $200,000 relating to Sydney Heli-Scenic Pty Ltd. This is the possible financial effect to CASA if Sydney Heli-Scenic Pty Ltd is successful with its claim. CASA is currently appealing this case. CASA also has a claim which is covered by CASA's professional indemnity cover with Comcover should the case proceed. In this event CASA will be required to pay the excess for that policy which amounts to $100,000.

Unquantifiable Contingencies

The major litigation where the liability is unquantifiable is the Deep Vein Thrombosis (DVT) litigation. Potentially this could run into hundreds of millions of dollars. However, CASA itself is not liable for this amount as this would be covered by CASA's AGL policy for the part of the relevant period and the Commonwealth deed of indemnity for the remainder of the period.

Remote Contingencies

At 30 June 2005, CASA had a number of legal claims that arose out of proceedings brought by third parties against the Authority, for which CASA has insurance cover for all claims. In all other cases, CASA has denied liability and is defending the claims. The probability of future payments as a result of these claims is remote.

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Note 16: Director Remuneration

 

2005

No.
2004

No.
The number of directors of the Authority included in these figures are shown below in the relevant remuneration bands
Nil - $ 9,999 - 1
$ 10,000 - $ 19,999 - 2
$ 20,000 - $ 29,999 - 1
$ 160,000 - $ 169,999 - 1
$ 360,000 - $ 369,999 1 -
Total number of directors of the Authority 1 5
$ $
Aggregate amount of superannuation payments in connection with the retirement of directors - -
Other remuneration received or due and receivable by directors of the Authority 364,531 213,010
Total remuneration received or due and receivable by directors of the Authority 364,531 213,010

The director of CASA is appointed by the Minister for Transport and Regional Services. The Officer receives no additional remuneration for performing his duties of director. The total remuneration of this Officer whilst in the capacity of Director is $364,531 (2004: $213,010). This amount is included in Note 18 Remuneration of Officers.

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Note 17: Related Party Disclosures

Directors of the Authority

The Director of the Authority during the year was:

Mr B Byron - Appointed Director of Aviation Safety 1 December 2003

The aggregate remuneration of Directors is disclosed in Note 16.

Transactions with Directors or Director related entities

There are no transactions between director-related entitities and the Authority

Transactions with related parties

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

Note 18: Remuneration of Officers

The number of Officers who received or were due to receive total remuneration of $100,000 or more:

 

2005

$
2004

$
$ 100,000 - $ 109,999 - 1
$ 110,000 - $ 119,999 1 3
$ 120,000 - $ 129,999 4 3
$ 130,000 - $ 139,999 3 6
$ 140,000 - $ 149,999 8 6
$ 150,000 - $ 159,999 8 6
$ 160,000 - $ 169,999 3 2
$ 170,000 - $ 179,999 1 2
$ 180,000 - $ 189,999 - 4
$ 190,000 - $ 199,999 1 2
$ 200,000 - $ 209,999 1 1
$ 210,000 - $ 219,999 1 -
$ 220,000 - $ 229,999 - -
$ 230,000 - $ 239,999 - -
$ 240,000 - $ 249,999 - -
$ 250,000 - $ 259,999 - -
$ 260,000 - $ 269,999 - -
$ 270,000 - $ 279,999 - -
$ 280,000 - $ 289,999 1 -
$ 290,000 - $ 299,999 - -
$ 300,000 - $ 319,999 - 1
$ 360,000 - $ 369,999 1 -
Total 33 37
The aggregate amount of total remuneration of Officers shown above. 5,016,476 5,779,053
The aggregate amount of separation and redundancy/termination benefit payments during the year to Officers shown above. 319,773 59,874

The Officer remuneration includes all Officers concerned with or taking part in the management of the economic entity during 2004-05.

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Note 19: Remuneration of Auditors

 

2005

$
2004

$
Remuneration to the Auditor-General for auditing the financial statements for the reporting period.
The fair value of services provided was: 64,000 44,000

No other services were provided by the Auditor-General during the reporting period.

Note 20: Average Staffing Levels
  2005 2004
The average staffing levels for the Authority during the year were: 704 701

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Note 21: Financial Instruments
Note 21A: Interest Rate Risk
Financial Instrument
Notes
Floating Interest Rate
Fixed Interest Rate Maturing in
Non-Interest Bearing
Total
Weighted Average Effective Interest Rate
       
1 Year or Less
1 to 5 Years
> 5 Years
           
    2005

$000
2004

$000
2005

$000
2004

$000
2005

$000
2004

$000
2005

$000
2004

$000
2005

$000
2004

$000
2005

$000
2004

$000
2005

%
2004

%
Financial Assets
Cash on hand 14B 49 369 - - - - - - 16 17 65 386 3.83 3.55
Deposits at call 14B 25,910 18,425 - - - - - - - 25,910 18,425 5.25 4.89
Receivables for goods and services (gross) 8A - - - - - - - - 1,221 360 1,221 360 n/a n/a
Accrued revenue 8B - - - - - - - - 1,440 1,031 1,440 1,031 - -
Total 25,959 18,794 - - - - - - 2,677 1,408 28,636 20,202
Total Assets 62,539 46,318
Financial Liabilities
Finance lease liabilities 10 - - 764 805 1,084 - - - 1,848 805 6.34 6.16
Supplier payables 12A - - - - - - - 7,008 5,595 7,008 5,595 - -
Other payables 12B - - - - - - - 499 167 499 167 - -
Total - - 764 805 1,084 - - - 7,507 5,762 9,355 6,567
Total Liabilities 29,374 26,766
Other guarantees 15 - - - - - - - - - - - - -
Indemnities 15 - - - - - - - - - - - - -
Total Financial Liabilities (Unrecognised) - - - - - - - - - - - - -

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Note 21B: Net Fair Values of Financial Assets and Liabilities
   
2005
2004
    Total Carrying Amount Aggregate Net Fair Value Total Carrying Amount Aggregate Net Fair Value
 
Notes
$000 $000 $000 $000
Financial Assets
Cash on hand 14B 65 65 386 386
 Deposits at call 14B 25,910 25,910 18,425 18,425
Receivables for goods and services 8A 1,221 1,221 360 360
Accrued revenue 8B 1,440 1,440 1,031 1,031
28,636 28,636 20,202 20,202
Financial Liabilities
Finance lease liabilities 10 1,848 1,848 805 805
Suppliers payables 12A 7,008 7,008 5,595 5,595
Other payables 12B 499 499 167 167
9,355 9,355 6,567 6,567
Financial Liabilities (Unrecognised)
Other guarantees 15 - - - -
Indemnities 15 - - - -
Total Financial Liabilities (Unrecognised) - - - -

Financial Assets

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

Financial Liabilities

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

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

Note 21C: 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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Note 22: Appropriations
  Departmental Outputs
Loans
Equity
Total
  2005

$’000
2004

$’000
2005

$’000
2004

$’000
2005

$’000
2004

$’000
2005

$’000
2004

$’000
Year ended 30 June
Balance carried forward from previous year - - - - - - - -
Appropriation Acts 1 and 3 49,039  45,599 - - - - - -
Appropriation Acts 2 and 4 - 120 - - - - - -
Available for payment of CRF 49,039 45,719 - - - - - -
Cash payments made out of CRF 49,039 45,719
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.

Note 23: Reporting of Outcomes
Note 23A: Outcomes of the Authority

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.

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Note 23B: Net Cost of Outcome Delivery
  Outcome 1
  2005

$’000
2004

$’000
Expenses
Administered - -
Departmental 110,167 106,867
Total expenses  110,167 106,867
Costs recovered from provision of goods and services to the non-government sector
Administered - -
Departmental 4,897 3,203
Total costs recovered  4,897 3,203
Other external revenues
Departmental
Aviation fuel excise 64,477 60,420
Sale of goods and services - to related entities -  -
Interest 1,291 934
Donation and bequests -  -
Revenue from sale of assets 283   334
Industry contributions -  -
Reversal of previous asset write-downs -  -
Net foreign exchange gains  -  -
Other 2,840 369
Total Departmental 68,891   62,057
Total other external revenues  68,891   62,057
Net cost/(contribution) of outcome  36,379   41,607

The net costs shown include intra-government costs that would be eliminated in calculating the actual Budget outcome.

Refer to Outcome 1 Resourcing Table on page 170 of this annual report.

CASA uses an Activity Based Costing System to determine the attribution of its shared items. This system was based on a time and motion study for corporate activities conducted in 2002 for the 2002-2003 Budget. An update of the time and motion study has been concluded for the 2005-2006 Budget.

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Note 23C: Departmental Revenues and Expenses by Output Groups and Outputs
Outcome 1
  Output 1 Output 2 Output 3 Output 4 Total
  2005

$’000
2004

$’000
2005

$’000
2004

$’000
2005

$’000
2004

$’000
2005

$’000
2004

$’000
2005

$’000
2004

$’000
Operating expenses
Employees 17,604 17,643  33,299  32,199  6,361  2,336  11,879  14,730  69,143  66,908
Suppliers 6,877  6,364  19,694  18,889  7,042  5,344  1,654  4,357  35,267  34,954
Depreciation and amortisation 1,539  1,312  3,304  2,706 216  149  375  421  5,434  4,588
Write-down of assets - - - - - - - 40 - 40
Value of assets disposed 57 108  122  178  8  8  14  37  201  331
Borrowing cost expense 35  13  74  27  5  2  8  4  122  46
Extraordinary loss - - - - - - - - - -
Total operating expenses 26,112  25,440  56,493  53,999  13,632  7,839  13,930  19,589  110,167  106,867
Funded by:
Revenues from Government 28,901  27,957  4,509  4,285  14,357  12,148  1,272  1,209  49,039  45,599
Aviation fuel excise - - 50,292  40,786  - - 14,185  19,634  64,477  60,420
Regulatory service fees - - - - - - 4,897  3,203  4,897  3,203
Interest 366  267  785  551  51  30  89  86  1,291  934
Revenue from Sale of Assets  72  118  136  171  26  7  49  38  283  334
Other 804  105  1,727  218  113  12  196  34  2,840  369
Total operating revenues 30,143  28,447  57,449  46,011  14,547  12,197  20,688  24,204  122,827 110,859

The Authority�s outcomes and outputs are described at Note 23A.

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