Territorial Notes

Note 44. 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 45. 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 47 Grants and Purchased Services – Territorial )

 

  2013
$’000
2012
$’000
Payment for Expenses on Behalf of the Territorya 746 986
Total Payment for Expenses on Behalf of the Territory 746 986

 

a) This relates to capital upgrades at Calvary Hospital. The decrease reflects that the payment in 2012 included some of the 2011 capital upgrades funding.

Note 46. Fees – Territorial

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

 

  2013
$’000
2012
$’000
Fees    
Fees for Regulatory Servicesa 1,094 794
Total Fees 1,094 794

 

a) The increase is mainly due to price escalation increases, growth in licence numbers and the introduction of licences for pharmacies.

Note 47. 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 re-current 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.

 

  2013
$’000
2012
$’000
Capital Grants to External Parties - Calvary Hospitala 746 727
Total Grants and Purchased Services 746 727

 

a) This relates to payments for capital upgrades at Calvary Hospital.

Note 48. 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.

 

  2013
$’000
2012
$’000
Transfer to the Territory Banking Account 1,094 794
Total Transfer to the ACT Government 1,094 794

Note 49. Cash and Cash Equivalents – Territorial

The Directorate holds one Territorial bank account. In 2012‑13, as part of the Whole-of-Government banking arrangements, the Directorate transitioned banking services from the Commonwealth Bank to Westpac Banking Corporation. Interest is not earned on cash at bank held in the Territorial Bank Account.

 

  2013
$’000
2012
$’000
Cash at Bank 295 300
Total Cash and Cash Equivalents 295 300

 

Note 50. Receivables – Territorial

 

  2013
$’000
2012
$’000
Current Receivables    
Goods and Services Tax Receivable 5
Less: Allowance for Doubtful Debts
Total Current Receivables 5
Total Non-Current Receivables
Total Receivables 5

 

 

Ageing of Receivables
  Not Overdue
$’000
Past Due Less than
30 days
$’000
Past Due 30 to 60 days
$’000
Past Due Greater than 60 days
$’000
Total
$’000
2013          
Not Impaired Receivables 5 5
Impaired Receivables
2012          
Not Impaired Receivables
Impaired Receivables

 

 

Classification of ACT Government/Non-ACT Government Receivables 2013
$’000
2012
$’000
Receivables with Non-ACT Government Entities    
Net Goods and Services Tax Receivable 5 -
Total Receivables with Non-ACT Government Entities 5  
     
Total Receivables 5  

Note 51. Advance from Territory Banking Account – Territorial

 

  2013
$’000
2012
$’000
Advance from Territory Banking Account 300 300
Total Advance from Territory Banking Account 300 300

 

This cash advance in perpetuity is for the purpose of funding the GST (Goods and Services Tax) 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 Hospital attracts GST which is not appropriated.

Note 52. Cash Flow Reconciliation – Territorial

a) Reconciliation of Cash at the end of 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.

 

  2013
$’000
2012
$’000
Total Cash Disclosed on the Statement of Assets and
Liabilities on Behalf of the Territory
295 300
Cash at the End of the Reporting Period as Recorded in the Cash Flow
Statement on Behalf of the Territory
295 300

 

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

 

  2013
$’000
2012
$’000
Operating Surplus 259
Cash Before Changes in Operating Assets and Liabilities 259
     
Changes in Operating Assets and Liabilities    
(Increase)/Decrease in Receivables (5) 5
Net Changes in Operating Assets and Liabilities (5) 5
     
Net Cash (Outflows)/Inflows from Operating Activities (5) 264

 

Note 53. 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 44: 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.

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. In 2012‑13 as part of the Whole-of-Government banking arrangements, the Directorate transitioned banking services from the Commonwealth Bank to Westpac Banking Corporation. Both of these banks hold 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 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 2013
$’000
Fair Value 2013
$’000
Carrying Amount 2012
$’000
Fair Value 2012
$’000
Financial Assets        
Cash and Cash Equivalents 295 295 300 300
Receivables 5 5
Total Financial Assets 300 300 300 300
         
Financial Liabilities        
Advance from Territory Banking Account 300 300 300 300
Total Financial Liabilities 300 300 300 300
         
Net Financial (Liabilities)

 

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 2013. 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.

 

        Fixed Interest Maturing In:    
  Note No. Weighted Average Interest Rate Floating Interest Rate
$’000
1 Year or Less
$’000
Over 1 to 5 Years
$’000
Over 5 Years
$’000
Non-Interest Bearing
$’000
Total
$’000
Financial Instruments                
                 
Financial Assets                
Cash and Cash Equivalents 49   295 295
Total Financial Assets     295 295
                 
Financial Liabilities                
Advance from Territory Banking Account 51   300 300
Total Financial Liabilities     300 300
                 
Net Financial (Liabilities)     (5) (5)

 

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 2012.

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.

 

      Fixed Interest Maturing In:    
  Note No. Floating Interest Rate
$’000
1 Year or Less
$’000
Over 1 to 5 Years
$’000
Over 5 Years
$’000
Non- Interest
Bearing
$’000
Total
$’000
Financial Instruments              
Financial Assets              
Cash and Cash Equivalents 49 300 300
Total Financial Assets   300 300
Financial Liabilities              
Advance from Territory
Banking Account
51 300 300
Total Financial Liabilities   300 300
               
Net Financial Assets/(Liabilities)  

 

 

  2013
$’000
2012
$’000
Carrying Amount of Each Class of Financial Asset and Financial Liability    
Financial Assets    
Loans and Receivables Measured at Amortised Cost 5
Financial Liabilities    
Financial Liabilities Measured at Amortised Cost 300 300

 

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 54. Commitments – Territorial

Capital Commitments

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

 

  2013
$’000
2012
$’000
Capital Grant Commitments    
Within one year 4,615 746
Later than one year but not later than five years
Total Capital Commitments 4,615 746
     
All amounts shown in the commitment note are exclusive of Goods and Services Tax (GST).

Note 55. Contingent Liabilities and Contingent Assets – Territorial

There were no contingent liabilities or contingent assets as at 30 June 2013, (Nil at 30 June 2012).

There were no indemnities as at 30 June 2013, (Nil at 30 June 2012).

Note 56. 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 2013, or in the future reporting periods.