Territorial Note Index

Note 46. Summary of Significant Accounting Policies - Territorial

The Directorate’s accounting policies are contained in Note 2:  Summary of Significant Accounting Policies.  The policies outlined in Note 2 apply to both the Controlled and Territorial financial statements.

Note 47. Payment for Expenses on Behalf of the Territory - Territorial

Under the Financial Management Act 1996, funds can be appropriated for expenses incurred on behalf of the Territory.  The Directorate receives this appropriation to fund a number of expenses incurred on behalf of the Territory, being on-passing of appropriated funds for capital funding for Calvary Public Hospital.

(See Note 49: Grants and Purchased Services – Territorial)

 

2015
$’000

2014
$’000

Payment for Expenses on Behalf of the Territorya

6,684

4,615

Total Payment for Expenses on Behalf of the Territory

6,684

4,615

  1. The increase is due to capital works paid to Calvary Public Hospital for an electrical substation, refurbishment and fit out for 15 new beds in various wards and the refurbishment of clinical spaces.

Note 48. Fees – Territorial

Fee refers to the collection of licence fees, including from food businesses, smoke free places, boarding houses and radiation equipment.

 

2015
$’000

2014
$’000

Fees

 

 

Fees for Regulatory Services

1,268

1,136

Total Fees

1,268

1,136

  1. The increase is mainly due to inflation, growth in licence numbers and the introduction of licences for pharmacies.

Note 49. Grants and Purchased Services — Territorial

Grants are amounts provided by the Directorate, to ACT Government entities and non-ACT Government entities for general assistance or for a particular purpose.  Grants may be for capital, current or recurrent purposes and the name or category reflects the use of the grant.  The grants given are usually subject to terms and conditions set out in a contract, correspondence, or by legislation.

 

2015
$’000

2014
$’000

Capital Grants to External Parties - Calvary Public Hospitala

6,684

4,615

Total Grants and Purchased Services

6,684

4,615

  1. This is due to capital works paid to Calvary Public Hospital for an electrical substation, refurbishment and fit out for 15 new beds in various wards and the refurbishment of clinical space.

Note 50. Transfer to Government — Territorial

‘Transfer to Government’ represents the transfer of money, which the Directorate has collected on behalf of the Territory, to Government.  The money collected by the Directorate on behalf of the Territory includes licence fees collected.

 

2015
$’000

2014
$’000

Transfers to the Territory Banking Account

1,267

1,133

Total Transfer to Government

1,267

1,133

Note 51. Cash and Cash Equivalents – Territorial

The Directorate holds one Territorial bank account. Interest is not earned on cash at bank held in the Territorial Bank Account.

 

2015
$'000

2014
$'000

Cash at Bank

242

268

Total Cash and Cash Equivalents

242

268

Note 52. Receivables – Territorial

 

2015
$’000

2014
$’000

Current Receivables

 

 

Net Goods and Services Tax Receivable

112

35

Less: Allowance for Impairment Losses

-

-

Total Current Receivables

112

35

Total Non-Current Receivables

-

-

Total Receivables

112

35

Ageing of Receivables

Overdue

 

 

Not Overdue
$'000

Less than
30 days
$'000

30 to
60 Days
$'000

Greater
than 60 days
$'000

Total
$'000

2015

 

 

 

 

 

Not Impaired Receivables

112

-

-

-

112

Impaired Receivables

-

-

-

-

-

2014

 

 

 

 

 

Not Impaired Receivables

35

-

-

-

35

Impaired Receivables

-

-

-

-

-

Classification of ACT Government/Non-ACT Government Receivables

2015
$’000

2014
$’000

Receivables with Non-ACT Government Entities

 

 

Net Goods and Services Tax Receivable

112

35

Total Receivables with Non-ACT Government Entities

112

35

 

 

 

Total Receivables

112

35

Note 53. Advance from the Territory Banking Account — Territorial

 

2015
$’000

2014
$’000

Advance from the Territory Banking Account

350

300

Total Advance from the Territory Banking Account

350

300

This cash advance is for the purpose of funding the Goods and Services Tax (GST) cash outlay due to timing difference between the GST payment and receiving of refunds from the Australian Taxation Office.  Capital upgrades funds transferred to Calvary Public Hospital attracts GST, which is not appropriated.

Note 54. Cash Flow Reconciliation — Territorial

a. Reconciliation of Cash at the end of the Reporting Period in the Cash Flow Statement on Behalf of the Territory to the Related Items in the Statement of Assets and Liabilities on Behalf of the Territory

 

2015
$’000

2014
$’000

Total Cash Disclosed on the Statement of Assets and Liabilities on Behalf of the Territory

242

268

Cash at the End of the Reporting Period as Recorded in the Cash Flow Statement on Behalf of the Territory

242

268

b.   Reconciliation of the Operating Surplus/ (Deficit) to Net Cash Inflows from Operating Activities

 

2015
$’000

2014
$’000

Operating Surplus

1

3

Cash Before Changes in Operating Assets and Liabilities

1

3

 

 

 

Changes in Operating Assets and Liabilities

 

 

(Increase) in Receivables

(77)

(30)

Increase in Advance from the Territory Banking Account

50

-

Net Changes in Operating Assets and Liabilities

(27)

(30)

 

 

 

Net Cash (Outflows) from Operating Activities

(26)

(27)

Note 55. Financial Instruments – Territorial

Details of the significant policies and methods adopted, including the criteria for recognition, the basis of measurement, and the basis on which income and expenses are recognised, with respect to each class of financial asset and financial liability are disclosed in Note 46: Summary of Significant Accounting Policies - Territorial

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Directorate has all of its Territorial financial assets and financial liabilities held in non‑interest bearing arrangements.  This means that the Directorate is not exposed to movements in interest rates, and, as such does not have any interest rate risk.  

A sensitivity analysis has not been undertaken for the interest rate risk of the Directorate as it is not exposed to movements in interest rates.        

Credit Risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss.  The Directorate’s credit risk is limited to the amount of the financial assets held less an allowance for impairment losses.

The Directorate’s Territorial financial assets mostly consist of Cash and Cash Equivalents.

Credit risk is managed by the Directorate for cash at bank by holding bank balances with the ACT Government’s banker, Westpac Banking Corporation (Westpac).  Westpac holds a AA- issuer credit rating with Standard and Poors.

Liquidity Risk

Liquidity risk is the risk that the Directorate will be unable to meet its financial obligations as they fall due.  The Directorate’s only Territorial financial obligation relates to an advance received from the Territory Banking Account where there is no requirement to repay the advance within the next twelve months.  The Directorate’s exposure to liquidity risk is therefore insignificant.

Price Risk

Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices, whether these changes are caused by factors specific to the individual financial instrument or its issuer, or by factors affecting all similar financial instruments traded in the market. 

The Directorate holds no investments on behalf of the Territory that are subject to price risk and as a result, is not considered to have any price risk.  Accordingly, a sensitivity analysis has not been undertaken.

Fair Value of Financial Assets and Liabilities

The carrying amounts and fair values of financial assets and liabilities at balance date are:

  Carrying
Amount
2015
$'000
Fair
Value
2015
$'000
Carrying
Amount
2014
$'000
Fair
Value
2014
$'000
Financial Assets        
Cash and Cash Equivalents 242 242 268 268
Total Financial Assets 242 242 268 268
         
Financial Liabilities        
Advance from the Territory Banking Account 350 350 300 300
Total Financial Liabilities 350 350 300 300
         
  (108) (108) (32) (32)

The following table sets out the Directorate’s maturity analysis for financial assets and liabilities as well as the exposure to interest rates, including the weighted average interest rates by maturity period as at 30 June 2015.  All financial assets and liabilities, excluding Advance from the Territory Banking Account, which are non‑interest bearing will mature in 1 year or less.  All amounts appearing in the following maturity analysis are shown on an undiscounted cash flow basis.

 

 

Note
no.

Weighted
Average
Interest
Rate

Floating
Interest
Rate
$'000

Fixed Interest Maturing In:

Non-
Interest
Bearing
$'000

Total
$'000

1 Year
or Less
$'000

Over 1 Year
to 5 Years
$'000

Over
5 Years
$'000

Financial Instruments

 

 

 

 

 

 

 

 

Financial Assets

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

51

 

-

-

-

-

242

242

Total Financial Assets

 

 

-

-

-

-

242

242

 

 

 

 

 

 

 

 

 

Financial Liabilities

 

 

 

 

 

 

 

 

Advance from the Territory Banking

  Account

53

 

-

-

-

-

350

350

Total Financial Liabilities

 

 

-

-

-

-

350

350

 

 

 

 

 

 

 

 

 

Net Financial Assets / (Liabilities)

 

 

-

-

-

-

(108)

(108)

The following table sets out the Directorate’s maturity analysis for financial assets and liabilities as well as the exposure to interest rates, including the weighted average interest rates by maturity period as at 30 June 2014.  All financial assets and liabilities, excluding Advance from Territory Banking Account, which are non‑interest bearing will mature in 1 year or less. All amounts appearing in the following maturity analysis are shown on an undiscounted cash flow basis.

 

Note
no.

 

Weighted
Average
Interest
Rate

 

Floating
Interest
Rate
$'000

 

Fixed Interest Maturing In:

Non-
Interest
Bearing
$'000

 

Total
$'000

 

 

1 Year
or Less
$'000

Over 1 Year
to 5 Years
$'000

Over
5 Years
$'000

Financial Instruments

 

 

 

 

 

 

 

 

Financial Assets

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

51

 

-

-

-

-

268

268

Total Financial Assets

 

 

-

-

-

-

268

268

 

 

 

 

 

 

 

 

 

Financial Liabilities

 

 

 

 

 

 

 

 

Advance from the Territory Banking

  Account

53

 

-

-

-

-

300

300

Total Financial Liabilities

 

 

-

-

-

-

300

300

 

 

 

 

 

 

 

 

 

Net Financial Assets / (Liabilities)

 

 

-

-

-

-

(32)

(32)

Carrying Amount of Each Class of Financial Asset and Financial Liability

2015
$'000

2014
$'000

Financial Liabilities

 

 

Financial Liabilities Measured at Amortised Cost

350

300

Fair Value Hierarchy

The Directorate does not have any financial assets or financial liabilities on behalf of the Territory at fair value.  As such no Fair Value Hierarchy disclosures have been made.

Note 56. Commitments — Territorial

Capital Commitments

Capital commitments at reporting date that have not been recognised as liabilities are as follows:

 

2015
$’000

2014
$’000

Capital Grant Commitments

 

 

Within One Year

1,076

784

Total Capital Commitments

1,076

784

All amounts shown in the commitment note are exclusive of Goods and Services Tax (GST).

Note 57. Contingent Liabilities and Contingent Assets – Territorial

There were no contingent liabilities or contingent assets as at 30 June 2015, (Nil at 30 June 2014).

There were no indemnities as at 30 June 2015, (Nil at 30 June 2014).

Note 58. Events Occurring After Balance Date – Territorial

There were no events occurring after the balance date, which would affect the financial statements as at 30 June 2015, or in the future reporting periods.

Note 59. Budgetary Reporting – Territorial – Explanations of Major Variances Between Actual Amounts and Original Budget Amounts

The following are brief explanations of major line item variances between budget estimates and actual outcomes.  Variances are considered to be major variances if both of the following criteria are met:

  1. The line item is a significant line item:  the line item actual amount accounts for more than 10% of the relevant associated category (Income, Expenses and Equity totals) or sub-element (e.g. Current Liabilities and Receipts from Operating Activities totals) of the financial statements; and
  2. The variances (original budget to actual) are greater than plus (+) or minus (-) 10% of the budget for the financial statement line item.

Statement of Income and Expenses on behalf of The Territory Line Items

Actual
2014-15
$'000

Original
Budget1
2014-15
$'000

Variance
$'000

Variance
%

Variance Explanation

Payments for Expenses on Behalf of the Territory

6,684

7,619

(935)

(12.3)

Payments for expenses on behalf of the Territory are lower than budget mainly due to delays in current year capital works and savings achieved in prior year capital upgrades.

Grants and Purchased Services

6,684

7,619

(935)

(12.3)

Grants and purchased services are lower than budget mainly due to delays in current year capital works and savings achieved in prior year capital upgrades.

1 Original Budget refers to the amounts presented to the Legislative Assembly in the original budgeted financial statements in respect of the reporting period (2014-15 Budget Statements).  These amounts have not been adjusted to reflect supplementary appropriation or appropriation instruments.

Statement of Assets and Liabilities on Behalf of The Territory Line Items

Actual
2014-15
$'000

Original
Budget1
2014-15

Variance
$'000

Variance
%

Variance Explanation

Cash and Cash Equivalents

242

295

(53)

(18.0)

Cash and cash equivalents are lower than budget mainly due to timing delay in receiving Goods and Services Tax  refund from Australian Taxation Office.

Receivables

112

5

107

2,140.0

Receivables are higher than budget mainly due to timing of Goods and Services Tax  refund from Australian Taxation Office.

Advance from the Territory Banking Account

350

300

50

16.7

Advance from the Territory Banking Account is higher than budget due to additional cash requirement to fund an increase in Goods and Services Tax cash outlay due to increased capital funding transferred to Calvary Hospital, which attracts GST.

Statement of Changes in Equity

 

 

 

 

These line items are covered in other financial statements

1 Original Budget refers to the amounts presented to the Legislative Assembly in the original budgeted financial statements in respect of the reporting period (2014-15 Budget Statements).  These amounts have not been adjusted to reflect supplementary appropriation or appropriation instruments.

Cash Flow Statement on Behalf of the Territory had no major variances.