Note 1 : Summary of Significant Accounting Policies
Note 2 : Events After the Reporting Period
Note 3 : Expenses
Note 4 : Income
Note 5 : Financial Assets
Note 6 : Non-Financial Assets
Note 7 : Payables
Note 8 : Provisions
Note 9 : Cash Flow Reconciliation
Note 10 : Contingent Assets and Liabilities
Note 11 : Directors Remuneration
Note 12 : Related Party Disclosures
Note 13 : Senior Executive Remuneration
Note 14 : Remuneration of Auditors
Note 15 : Financial Instruments
Note 16 : Financial Assets Reconciliation
Note 17 : Compensation and Debt Relief
Note 18 : Assets Held in Trust
Note 19 : Reporting of Outcomes
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Note 1: Summary of Significant Accounting Policies
1.1 Objective of the Torres Strait Regional Authority
The Torres Strait Regional Authority (TSRA) is an Australian Government controlled entity. It is a not-for-profit entity. The objective of the Torres Strait Regional Authority is to achieve a better quality of life and develop an economic base for Torres Strait Islander and Aboriginal persons living in the Torres Strait.
The TSRA is structured to meet one outcome:
Progress towards closing the gap for Torres Strait Islander and Aboriginal people living in the Torres Strait Region through development planning, coordination, sustainable resource management, and preservation and promotion of Indigenous culture.
The continued existence of the TSRA in its present form and with its present programs is dependent on Government policy and on continuing funding by Parliament for the TSRA's administration and programs.
1.2 Basis of Preparation of the Financial Statements
The financial statements are general purpose financial statements and are required by clause 1(b) of Schedule 1 to the Commonwealth Authorities and Companies Act 1997.
The financial statements have been prepared in accordance with:
- Finance Minister's Orders (FMO's) for reporting periods ending on or after 1 July 2011; and
- Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.
The financial statements have been prepared on an accrual basis and in accordance with historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.
The financial statements are presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified.
Unless an alternative treatment is specifically required by an accounting standard or the FMOs, assets and liabilities are recognised in the balance sheet when and only when it is probable that future economic benefits will flow to TSRA or a future sacrifice of economic benefits will be required and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under executor contracts are not recognised unless required by an accounting standard. Liabilities and assets that are unrecognised are reported in the schedule of commitments or the schedule of contingencies.
Unless alternative treatment is specifically required by an accounting standard, income and expenses are recognised in the Statement of Comprehensive Income when and only when the flow, consumption or loss of economic benefits has occurred and can be reliably measured.
1.3 Significant Accounting Judgements and Estimates
In the process of applying the accounting policies listed in this note, the TSRA has made the following judgements that have the most significant impact on the amounts recorded in the financial statements:
- The fair value of land and buildings has been taken to be the market value of similar properties as determined by an independent valuer as detailed in Note 1.16.
- The initial fair value of concessional loans is taken to be the present value of all future cash receipts, discounted using the prevailing market rate of interest for instruments of a similar structure (currency, term, type of interest rate, credit risk). Subsequently the value of the loan is derived by applying the amortised cost using the effective interest method, with the initial market rate as the effective rate, and anticipated cash flows based on contracted repayment terms, resulting in the amortisation of the discount over the anticipated life of the loan.
No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting period.
1.4 New Australian Accounting Standards
Adoption of New Australian Accounting Standard Requirements
No accounting standard has been adopted earlier than the application date as stated in the standard. There have been no new standards, revised standards, amended standards or interpretations that were issued by the AASB prior to the sign off date that are applicable to the current reporting period and have a material financial impact on TSRA.
Future Australian Accounting Standard Requirements
The following new standards/revised standards/interpretations/amending standards were issued by the Australian Accounting Standards Board prior to the sign-off date, which are expected to have a financial impact on the TSRA for future reporting periods:
- AASB 13 - Fair Value Measurement - December 2012 (Principal) effective date 1 January 2013
- AASB 1055 - Budgetary Reporting - March 2013 (Principal) effective date 1 July 2014
Other new standards/revised standards/interpretations/amending standards that were issued prior to the sign-off date and are applicable to the future reporting period are not expected to have a future financial impact on the entity.
1.5 Revenue
Revenue from the sale of goods is recognised when:
- the risks and rewards of ownership have been transferred to the buyer;
- the TSRA retains no managerial involvement or effective control over the
- the revenue and transaction costs incurred can be reliably measured; and
- It is probable that the economic benefits associated with the transaction will flow to the TSRA.
Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when:
- the amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and
- the probable economic benefits associated with the transaction will flow to the entity.
The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction.
Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed as at end of the reporting period. Allowances are made when collectability of the debt is no longer probable.
Interest revenue is recognised using the effective interest method as set out in AASB 139 Financial Instruments: Recognition and Measurement .
Resources Received Free of Charge
Resources received free of charge are recoginised as revenue when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense.
Resources received free of charge are recorded as either revenue or gains depending on their nature.
Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Government agency or authority as a consequence of a restructuring of administrative arrangements (this did not occur in 2012-13 or 2011-12).
Revenue from Government
Funding received or receivable from agencies (appropriated to the agency as a CAC Act body payment item for payment to TSRA) is recognised as Revenue from Government unless they are in the nature of an equity injection or a loan.
1.6 Gains
Resources Received Free of Charge
Resources received free of charge are recognised as gains when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense.
Resources received free of charge are recorded as either revenue or gains depending on their nature.
Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Government entity as a consequence of a restructuring of administrative arrangements (this did not occur in 2012-13 or 2011-12).
Sale of Assets
Gains from disposal of assets are recognised when control of the asset has passed to the buyer.
1.7 Transactions with the Government as Owner
Equity Injections
Amounts appropriated which are designated as ‘equity injections' for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.
Other Distributions to Owners
The FMOs require that distributions to owners be debited to contributed equity unless it is in the nature of a dividend.
1.8 Employee Benefits
Liabilities for 'short-term employee benefits' (as defined in AASB 119 Employee Benefits ) and termination benefits due within twelve months of the end of the reporting period are measured at their nominal amounts.
The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability. Other long-term employee benefits are measured as net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.
Leave
The liability for employee benefits includes provision for annual leave and long service leave. A provision for personal leave payable also exists for a select number of staff as personal leave is vesting for these staff due to a clause in their employment agreement.
The leave liabilities are calculated on the basis of employees' remuneration at the estimated salary rates that will be applied at the time the leave is taken, including the TSRA'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 2013. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.
Separation and Redundancy
Provision is made for separation and redundancy benefit payments. The TSRA recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.
Superannuation
The TSRA's staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS) or the PSS accumulation plan (PSSap).
The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.
The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance and Deregulation's administered schedules and notes.
The TSRA makes employer contributions to the employee's superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. The TSRA accounts for the contributions as if they were contributions to defined contribution plans.
The liability for superannuation recognised as at 30 June represents outstanding contributions for the final fortnight of the year.
1.9 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 rewards incidental to ownership of leased assets. An operating lease is a lease that is not a finance lease. In operating leases, the lessor effectively retains substantially all such risks and benefits.
The TSRA does not have any finance leases.
Operating lease payments are expensed on a straight line basis which is representative of the pattern of benefits derived from the leased assets. In 2012-13, the TSRA leased three vehicles, office accommodation and equipment, commercial and residential property for the operation of the organisation.
1.10 Grants
Most grant agreements require the grantee to perform services, provide facilities, or to meet eligibility criteria. In these cases, the TSRA recognises grant liabilities only to the extent that the services required have been performed or the eligibility criteria have been satisfied by the grantee.
In cases where grant agreements are made without conditions to be monitored, liabilities are recognised on signing of the agreement.
1.11 Cash
Cash is recognised at its nominal amount. Cash and cash equivalents includes:
- cash on hand; and
- demand deposits in bank accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.
1.12 Financial Assets
The TSRA classifies its financial assets in the following categories:
- loans and receivables; and
- held-to-maturity investments.
The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
Financial assets are recognised and derecognised upon trade date.
Effective Interest Method
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.
Income is recognised on an effective interest rate basis except for financial assets that are recognised at fair value through profit or loss.
Financial Assets at Fair Value Through Profit or Loss
Financial assets are classified as financial assets at fair value through profit or loss (FVTPL) where the financial assets:
- have been acquired principally for the purpose of selling in the near future;
- are derivatives that are not designated and effective as a hedging instrument.; or
- are parts of an identified portfolio of financial instruments that the TSRA manages together and has a recent actual pattern of short-term profit-taking.
Assets in this category are classified as current assets.
Financial assets at fair value through profit or loss are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest earned on the financial asset.
Available-for-Sale Financial Assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories.
Available-for-sale financial assets are recorded at fair value. Gains and losses arising from changes in fair value are recognised directly in the reserves (equity) with the exception of impairment losses. Interest is calculated using the effective interest method and foreign exchange gains and losses on monetary assets are recognised directly in profit or loss. Where the asset is disposed of or is determined to be impaired, part (or all) of the cumulative gain or loss previously recognised in the reserve is included in surplus and deficit for the period.
Where a reliable fair value can not be established for unlisted investments in equity instruments, these instruments are valued at cost. The TSRA has no such instruments.
Held-to-Maturity Investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the group has the positive intent and ability to hold to maturity are classified as held-to-maturity investments. Held-to-maturity investments are recorded at amortised cost using the effective interest method less impairment, with revenue recognised on an effective yield basis.
Loans and Receivables
Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest rate.
Impairment of Financial Assets
Financial assets are assessed for impairment at the end of each reporting period.
Financial assets carried at amortised cost
- if there is objective evidence that an impairment loss has been incurred for loans and receivables or held to maturity investments held at amortised cost, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the asset's original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is recognised in the Statement of Comprehensive Income.
Available for sale financial assets
- if there is objective evidence that an impairment loss on an available-for-sale financial asset has been incurred, the amount of the difference between its cost, less principal repayments and amortisation, and its current fair value, less any impairment loss previously recognised in expenses, is transferred from equity to the Statement of Comprehensive Income.
Financial assets carried at cost
- if there is objective evidence that an impairment loss has been incurred the amount of the impairment loss is the difference between the carrying amount of the asset and the present value of the estimated future cash flows discounted at the current market rate for similar assets.
1.13 Financial Liabilities
Financial liabilities are classified as either financial liabilities 'at fair value through profit and loss' or other financial liabilities. Financial liabilities are recognised and derecognised around trade date.
Financial Liabilities at Fair Value Through Profit or Loss
Financial liabilities at fair value through profit or loss are initially measured at fair value. Subsequent fair value adjustments are recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.
Other Financial Liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.
Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).
1.14 Contingent Liabilities and Contingent Assets
Contingent liabilities and contingent assets are not recognised in the balance sheet but are reported in the relevant schedules and notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.
1.15 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. Financial assets are initially measured at their fair value plus transaction costs where appropriate.
Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income 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's accounts immediately prior to the restructuring.
1.16 Property, Plant and Equipment
Asset Recognition Threshold
Purchases of property, plant and equipment are recognised initially at cost in the balance sheet, except for purchases costing less than $1,000, 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). The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located.
Revaluations
Fair values for each class of asset are determined as shown below:
| Asset class | Fair value measurement : |
|---|---|
| Land | Market selling price |
| Buildings excluding leasehold improvements | Market selling price |
| Leasehold improvements | Depreciated replacement cost |
| Other Plant and equipment | Depreciated replacement cost |
| Heritage and cultural assets | Market selling price |
Following initial recognition at cost, property, plant and equipment were carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations were conducted with sufficient frequency to ensure that the carrying amounts of assets did not differ materially from the assets' fair values as at the reporting date. The regularity of independent valuations depended upon the volatility of movements in market values for the relevant assets.
Revaluation adjustments were made on a class basis. Any revaluation increment was credited to equity under the heading of asset revaluation reserve except to the extent that it reversed a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets were recognised directly in the surplus/deficit except to the extent that they reversed a previous revaluation increment for that class.
Any accumulated depreciation as at the revaluation date was eliminated against the gross carrying amount of the asset and the asset was restated to the revalued amount.
Depreciation
Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the TSRA using, in all cases, the straight-line method of depreciation.
Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.
Depreciation rates applying to each class of depreciable asset are based on the following useful lives:
| 2013 | 2012 | |
|---|---|---|
| Buildings on freehold land | 40 years | 40 years |
| Leasehold improvements | Lease term | Lease term |
| Other Plant and Equipment | 3 to 5 years | 3 to 5 years |
All heritage and cultural assets have indefinite useful lives and are not depreciated
Impairment
All assets were assessed for impairment at 30 June 2013. Where indications of impairment exist, the asset's recoverable amount is estimated and an impairment adjustment made if the asset's recoverable amount is less than its carrying amount.
The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset's ability to generate future cash flows, and the asset would be replaced if the TSRA were deprived of the asset, its value in use is taken to be its depreciated replacement cost.
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no further economic benefits are expected from its use or disposal.
Heritage and Cultural Assets
The TSRA has a limited collection of 21 (2012 : 21) distinct Cultural and Heritage assets with an aggregated fair value of $60,000 (2012: $60,000). Cultural assets are comprised of artworks, carvings, and traditional headdresseses. Heritage assets consist of models of two (2012 : 2) sailing vessels and a brass Pearl Diver's helmet (2012 : 1) each of which has historical significance to the region. The assets are on display at the TSRA's main office and the Gab Titui Cultural Centre. The conservation and preservation of TSRA's cultural heritage assets is achieved by a variety and combination of means including: the provision of education and awareness programs; asset management planning; professional training and development; research; and the provision of appropriate storage and display environments.
1.17 Taxation / Competitive Neutrality
The TSRA is exempt from all forms of taxation except Fringe Benefits Tax (FBT) 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
- for receivables and payables.
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Note 2: Events After the Reporting Period
There was no subsequent event that had the potential to significantly affect the ongoing structure and financial activities of the TSRA.
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements for the period ended 30 June 2013
Note 3: Expenses
|
2013
$'000 |
2012
$'000 |
|
|---|---|---|
| Note 3A: Employee Benefits | ||
| Wages and salaries | (10,999) | (9,322) |
| Superannuation | ||
| Defined contribution plans | (949) | (944) |
| Defined benefit plans | (477) | (335) |
| Leave and other entitlements | (1,376) | (1,445) |
| Total employee benefits | (13,801) | (12,046) |
| Note 3B: Suppliers | ||
| Goods and services | ||
| Consultants and professional fees | (5,419) | (3,635) |
| Travel | (2,607) | (2,318) |
| Repairs and maintenance | (859) | (439) |
| Other staff costs | (966) | (953) |
| Office running costs | (1,210) | (1,232) |
| Media, advertising, public relations | (280) | (412) |
| Other | (3,760) | (4,262) |
| Total goods and services | (15,101) | (13,251) |
| Goods and services are made up of: | ||
| Provision of goods – external parties | (576) | (536) |
| Rendering of services – external parties | (14,525) | (12,715) |
| Total goods and services | (15,101) | (13,251) |
| Other supplier expenses | ||
| Operating lease rentals - external parties: | ||
| Minimum lease payments | (645) | (648) |
| Workers compensation expenses | (65) | (30) |
| Total other supplier expenses | (710) | (678) |
| Total supplier expenses | (15,811) | (13,929) |
| Note 3C: Grants | ||
| Public sector: | ||
| Australian Government entities (related Entities) | (700) | - |
| State and Territory Governments | (48) | (6) |
| Local Governments | (6,654) | (9,977) |
| Private sector: | ||
| Non-profit organisations | (9,489) | (18,994) |
| For-profit organisations | - | (61) |
| Total grants | (16,891) | (29,038) |
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
|
2013
$'000 |
2012
$'000 |
|
|---|---|---|
| Note 3D: Depreciation | ||
| Depreciation: | ||
| Buildings | (656) | (662) |
| Plant and equipment | (612) | (459) |
| Total depreciation | (1,268) | (1,121) |
| Note 3E: Finance Costs | ||
| Finance costs: | ||
| Write down of loans to net present value | (132) | (157) |
| Total finance costs | (132) | (157) |
Finance costs are comprised of amortisation charges for new loan advances and amortisation charges as a result of revaluations to the total concessional loan portfolio using current market interest rates.
| Note 3F: Write-Down and Impairment of Assets | ||
| Asset writedowns and impairments from: | ||
| Receivables goods and services - external parties provided for as impaired | (77) | (47) |
| Total write-down and impairment of assets | (77) | (47) |
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements for the period ended 30 June 2013
Note 4: Income
|
2013
$'000 |
2012
$'000 |
|
|---|---|---|
| OWN-SOURCE REVENUE | ||
| Note 4A: Sale of Goods and Rendering of Services | ||
| Provision of goods - external parties | 105 | 250 |
| Rendering of services - external parties | 279 | 256 |
| Total sale of goods and rendering of services | 384 | 506 |
| Note 4B: Interest | ||
| Loans | 369 | 388 |
| Deposits | 2,003 | 1,389 |
| Total interest | 2,372 | 1,777 |
| Note 4C: Other Revenue | ||
| Rent | 12 | 67 |
| Other Government contributions | 5,387 | 13,672 |
| Total other revenue | 5,399 | 13,739 |
| GAINS | ||
| Note 4D: Sale of Assets | ||
| Proceeds from sale | - | 14 |
| Net gains from sale of assets | - | 14 |
| Note 4E: Reversals of Previous Asset Write-Downs and Impairments | ||
| Reversal of losses from remeasuring loans and receivables | 96 | 301 |
| Reversal of impairment losses | 48 | 19 |
| Total reversals of previous asset write-downs and impairments | 144 | 320 |
| REVENUE FROM GOVERNMENT | ||
| Note 4F: Revenue from Government | ||
| Department of Families, Housing, Community Services and Indigenous Affairs | ||
| CAC Act body payment item | 45,680 | 50,454 |
| Total revenue from Government | 45,680 | 50,454 |
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Note 5: Financial Assets
|
2013
$'000 |
2012
$'000 |
|
|---|---|---|
| Note 5A: Cash and Cash Equivalents | ||
| Cash on hand or on deposit | 931 | 21,231 |
| Cash on hand or on deposit - TSRA Housing Fund | 545 | 181 |
| Total cash and cash equivalents | 1,476 | 21,412 |
TSRA's financial performance and balance sheet must be read in the context of its enabling legislation, the Aboriginal and Torres Strait Islander Act 2005 (ATSI Act) and the impact of accounting standards on the valuation of financial assets.
The ATSI Act requires that funds available under the TSRA Housing Fund, including interest earnings, are to be used exclusively for housing loans. Consequently, income earned on the TSRA Housing Fund is not available for operational expenses but is directed back into new loans.
| Note 5B: Trade and Other Receivables | ||
| Goods and services | ||
| Goods and services - external parties | 1,235 | 1,729 |
| Total receivables for goods and services | 1,235 | 1,729 |
| Other receivables: | ||
| GST receivable from the Australian Taxation Office | 1,681 | - |
| Loans - external parties | 5,319 | 5,185 |
| Total other receivables | 7,000 | 5,185 |
| Total trade and other receivables (gross) | 8,235 | 6,914 |
| Less impairment allowance account: | ||
| Goods and services - external parties | (65) | (57) |
| Loans - external parties | (115) | (123) |
| Total impairment allowance account | (180) | (180) |
| Total trade and other receivables (net) | 8,055 | 6,734 |
| Receivables are expected to be recovered in: | ||
| No more than 12 months | 3,524 | 2,377 |
| More than 12 months | 4,531 | 4,357 |
| Total trade and other receivables (net) | 8,055 | 6,734 |
| Receivables are aged as follows: | ||
| Not overdue | 8,030 | 6,511 |
| Overdue by: | ||
| 0 to 30 days | 18 | 16 |
| 61 to 90 days | 8 | 5 |
| 31 to 60 days | 7 | 7 |
| More than 90 days | 172 | 375 |
| Total receivables (gross) | 8,235 | 6,914 |
| The impairment allowance account is aged as follows: | ||
| Overdue by: | ||
| More than 90 days | (180) | (180) |
| Total impairment allowance account | (180) | (180) |
Credit terms for goods and services were within 30 days (2012: 30 days).
TSRA holds a portfolio of concessional loans that are provided for business development and home ownership programs.
The values of these loans as at 30 June 2013 are as follows:
| Concessional loans - nominal value | 5,761 | 5,638 |
| Less: unexpired discount | (442) | (453) |
| Concessional loans - carrying value | 5,319 | 5,185 |
Loans to individuals and businesses were made under the Business Funding Scheme for periods up to 10 years and Home Loans for periods up to 32 years. In relation to the housing loans, TSRA holds mortgages as sole mortgagor over the houses for which the loans are provided. TSRA receives market advice from a qualified valuer or market expert on the value of a property prior to the loan being approved. In relation to Business Funding Scheme loans, from 2007-08 TSRA has required that inexperienced business owner(s) successfully complete an approved business course and submit a business plan prior to the loan being approved. Security is not required for Business Funding Scheme loans. Principal is repaid in full at maturity. Interest rates for Business Funding Scheme loans were fixed in accordance with the loan contracts. Housing Loan interest rates were varied on 1 January 2013 in accordance with the loan contracts. Effective interest rates average 4.17% (2012: 3.57%) for Business Funding Scheme loans and 5.29% (2012: 5.76%) for Housing loans.
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Reconciliation of the impairment allowance account:
Movements in relation to 2013
|
Goods and services
$'000 |
Loans
$'000 |
Total
$'000 |
|
|---|---|---|---|
| Opening balance | (57) | (123) | (180) |
| Amounts written off | - | 3 | 3 |
| Amounts recovered and reversed | - | 5 | 5 |
| Increase recognised in net surplus | (8) | - | (8) |
| Closing balance | (65) | (115) | (180) |
Movements in relation to 2012
|
Goods and services
$'000 |
Loans
$'000 |
Total
$'000 |
|
|---|---|---|---|
| Opening balance | - | (246) | (246) |
| Amounts written off | - | 104 | 104 |
| Amounts recovered and reversed | - | 19 | 19 |
| Increase recognised in net surplus | (57) | - | (57) |
| Closing balance | (57) | (123) | (180) |
|
2013
$'000 |
2012
$'000 |
|
|---|---|---|
| Note 5C: Other Investments | ||
| Term deposits | 30,000 | 19,168 |
| Term deposits - TSRA Housing Fund | 6,800 | 3,130 |
| Total other investments | 36,800 | 22,298 |
| Other investments are expected to be recovered in: | ||
| No more than 12 months | 36,800 | 22,298 |
| Total other investments | 36,800 | 22,298 |
Term deposits were invested at 30 June 2013 for $6,000,000 (4.15% interest rate maturing on 12 October 2013), $14,000,000 (4.18% interest rate maturing on 18 October 2013), $8,000,000 (4.2% interest rate maturing on 21 October 2013) and $8,800,000 (4.20% interest rate maturing on 28 October 2013).
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Note 6: Non-Financial Assets
|
2013
$'000 |
2012
$'000 |
|
|---|---|---|
| Note 6A: Land and Buildings | ||
| Land: | ||
| Land at fair value | 9,360 | 9,185 |
| Total land | 9,360 | 9,185 |
| Buildings on freehold land: | ||
| Work in progress | 175 | 482 |
| Fair value | 22,641 | 18,237 |
| Total buildings on freehold land | 22,816 | 18,719 |
| Leasehold Improvements: | ||
| Fair value | - | 34 |
| Total leasehold improvements | - | 34 |
| Total land and buildings | 32,176 | 27,938 |
No indicators of impairment were found for land and buildings.
No land or buildings were expected to be sold or disposed of within the next 12 months.
| Note 6B: Plant and Equipment | ||
| Heritage and cultural: | ||
| Artifacts and artworks | ||
| Fair value | 60 | 60 |
| Total heritage and cultural | 60 | 60 |
| Other plant and equipment: | ||
| Fair value | 3,517 | 3,008 |
| Accumulated depreciation | (1,937) | (1,325) |
| Total other plant and equipment | 1,580 | 1,683 |
| Total plant and equipment | 1,640 | 1,743 |
No indicators of impairment were found for plant and equipment.
No plant or equipment is expected to be sold or disposed of within the next 12 months.
Revaluations of non-financial assets
All revaluations are conducted in accordance with the revaluation policy stated at Note 1. In 2012-13, an independent valuer, Neil Teves- AAPI Registered Valuer No. 382, conducted the revaluations as at 30 June 2013.
There was a revaluation increment recorded for land of $175,000 (2012: Nil). There were no revaluation increments or decrements recorded for plant and equipment (2012: Nil). Revaluation increments were recorded for buildings on freehold land of $235,711 (2012: $732,796) and have been credited to the asset revaluation surplus by asset class and included in the equity section of the balance sheet and the other comprehensive income section of the statement of comprehensive income.
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Note 6: Non-Financial Assets
Note 6C: Reconciliation of the opening and closing balances of property, plant and equipment 2013
| Item |
Land
$'000 |
Buildings
$'000 |
Total land & buildings
$'000 |
Heritage 1
& cultural
$'000 |
Other plant
&
equipment
$'000 |
Total
$'000 |
|---|---|---|---|---|---|---|
| As at 1 July 2012 | ||||||
| Gross book value | 9,185 | 18,753 | 27,938 | 60 | 3,008 | 31,006 |
| Accumulated depreciation and impairment | - | - | - | - | (1,325) | (1,325) |
| Net book value 1 July 2012 | 9,185 | 18,753 | 27,938 | 60 | 1,683 | 29,681 |
| Additions: | ||||||
| By purchase | - | 4,483 | 4,483 | - | 509 | 4,992 |
| Revaluations and impairments recognised in other comprehensive income | 175 | 236 | 411 | - | - | 411 |
| Reclassification Depreciation expense | (656) | (656) | (612) | (1,268) | ||
| Net book value 30 June 2013 | 9,360 | 22,816 | 32,176 | 60 | 1,580 | 33,816 |
| Net book value as of 30 June 2013 represented by: | ||||||
| Gross book value | 9,360 | 22,816 | 32,176 | 60 | 3,517 | 35,753 |
| Accumulated depreciation and impairment | - | - | - | - | (1,937) | (1,937) |
| Net book value 30 June 2013 | 9,360 | 22,816 | 32,176 | 60 | 1,580 | 33,816 |
Note 6C (Cont'd): Reconciliation of the opening and closing balances of property, plant and equipment 2012
| Land $'000 |
Buildings
$'000 |
Total land &
buildings
$'000 |
Heritage 1
& cultural
$'000 |
Other plant
&
equipment
$'000 |
Total
$'000 |
|
|---|---|---|---|---|---|---|
| As at 1 July 2011 | ||||||
| Gross book value | 9,185 | 18,264 | 27,449 | 41 | 2,394 | 29,884 |
| Accumulated depreciation and impairment | (24) | (24) | (870) | (894) | ||
| Net book value 1 July 2011 | 9,185 | 18,240 | 27,425 | 41 | 1,524 | 28,990 |
| Additions: | ||||||
| By purchase | 442 | 442 | 19 | 618 | 1,079 | |
| Revaluations and impairments recognised in other comprehensive income | 733 | 733 | 733 | |||
| Depreciation expense | (662) | (662) | (459) | (1,121) | ||
| Net book value 30 June 2012 | 9,185 | 18,753 | 27,938 | 60 | 1,683 | 29,681 |
| Net book value as of 30 June 2012 represented by: | ||||||
| Gross book value | 9,185 | 18,753 | 27,938 | 60 | 3,008 | 31,006 |
| Accumulated depreciation and impairment | (1,325) | (1,325) | ||||
| Net book value 30 June 2012 | 9,185 | 18,753 | 27,938 | 60 | 1,683 | 29,681 |
1 Land, buildings and other plant and equipment that met the definition of a heritage and cultural item were disclosed in the heritage and cultural asset class.
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Note 7: Payables
|
2013
$'000 |
2012
$'000 |
|
|---|---|---|
| Note7A: Suppliers | ||
| Trade creditors and accruals | (5,491) | (9,205) |
| Total suppliers payables | (5,491) | (9,205) |
| Suppliers payables expected to be settled within 12 months: | ||
| External parties | (5,491) | (9,205) |
| Total | (5,491) | (9,205) |
| Settlement was usually made within 30 days. | ||
| Note7B: Grants | ||
| Public sector: | ||
| State and Territory Governments | (900) | - |
| Local Governments | (714) | (297) |
| Private sector: | - | |
| Non-profit organisations | (214) | (4,141) |
| Total grants | (1,828) | (4,438) |
| Total grant payables are expected to be settled in: | ||
| No more than 12 months | (1,828) | (4,438) |
| Total grant payables | (1,828) | (4,438) |
| Note 7C: Other Payables | ||
| Wages and salaries | (340) | (258) |
| Superannuation | (38) | (32) |
| GST payable | - | (177) |
| Total other payables | (378) | (467) |
| Total other payables are expected to be settled in: | ||
| No more than 12 months | (378) | (467) |
| Total other payables | (378) | (467) |
| Settlement was usually made within 30 days. (2012: 30 days) |
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Note 8: Provisions
|
2013
$'000 |
2012
$'000 |
|
|---|---|---|
| Note 8A: Employee provisions | ||
| Long Service Leave | (1,367) | (1,293) |
| Annual Leave | (1,414) | (1,443) |
| Personal Leave | (94) | (114) |
| Total employee provisions | (2,875) | (2,850) |
| Employee provisions are expected to be settled in: | ||
| No more than 12 months | (709) | (449) |
| More than 12 months | (2,166) | (2,401) |
| Total employee provisions | (2,875) | (2,850) |
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Note 9: Cash Flow Reconciliation
|
2013
$'000 |
2012
$'000 |
|
|---|---|---|
| Reconciliation of cash and cash equivalents as per Balance Sheet to Cash Flow Statement | ||
| Cash and cash equivalents as per: | ||
| Cash flow statement | 1,476 | 21,412 |
| Balance sheet | 1,476 | 21,412 |
| Difference | - | - |
| Reconciliation of net cost of services to net cash from operating activities: | ||
| Net cost of services | (39,681) | (39,982) |
| Add revenue from Government | 45,680 | 50,454 |
| Adjustments for non-cash items | ||
| Depreciation | 1,268 | 1,121 |
| Net writedown of financial assets | 107 | 114 |
| Interest on concessional loans | (45) | (83) |
| Reversal of previous loan writedowns and impairments | (144) | (320) |
| Changes in assets / liabilities | ||
| (Increase) / decrease in net receivables | (1,416) | 702 |
| Increase / (decrease) in employee provisions | 25 | 720 |
| Increase / (decrease) in supplier payables | (3,714) | 7,124 |
| Increase / (decrease) in grants payable | (2,610) | 4,202 |
| Increase / (decrease) in other payable | 89 | (210) |
| Net cash from operating activities | (441) | 23,842 |
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Note 10: Contingent Assets and Liabilities
Quantifiable Contingencies
There are no contingent assets or contingent liabilities as at 30 June 2013 (2011-12: Nil).
Unquantifiable Contingencies
There are no unquantifiable contingencies as at 30 June 2013 (2011-12 : Nil).
Significant Remote Contingencies
There are no significant remote contingencies as at 30 June 2013 (2011-12 : Nil).
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Note 11: Directors Remuneration
|
2013
No. |
2012
No. |
|
|---|---|---|
| The number of non-executive directors of the TSRA included in these figures are shown below in the relevant remuneration bands: | ||
| $0 to $29,999 | 31 | 19 |
| $30,000 to $59,999 | 2 | - |
| $60,000 to $89,999 | 1 | - |
| $150,000 to $179,999 | 1 | - |
| $270,000 to $299,999 | - | 1 |
| Total | 35 | 20 |
| $ | $ | |
| Total remuneration received or due and receivable by directors of the TSRA: | 461,723 | 424,508 |
The TSRA Board consists of 20 elected members who are Torres Strait Islander or Aboriginal people living within a ward in the region. In accordance with the
Aboriginal and Torres Strait Islander Act 2005
(Cth) the 2012 election was the first time all Members were directly elected to the TSRA board. The Australian Electoral Commission conducted the TSRA Board Member Elections on 15 September 2012.
They will now be elected every four years from 2012 with previous terms being three years. All Torres Strait Islander and Aboriginal people living within contested TSRA wards who are 18 years of age and over were eligible to vote. The directors other than the chairperson receive sitting fees when undertaking business of the TSRA.
Remuneration of senior executives is included in Note 13: Senior Executive Remuneration.
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Note 12A: Related Party Disclosures
Loans to Directors and Director-Related Entities
Loans were made to the following directors and director-related entities. They were approved under normal terms and conditions applying to the TSRA's loan schemes. The directors involved took no part in the relevant decisions of the TSRA.
| TSRA Director Name | Council Relationships |
|---|---|
| Mr Wayne Guivarra | Torres Strait Island Regional Council |
| Mr Donald Banu | Torres Strait Island Regional Council |
| Mr Phillemon Mosby | Torres Strait Island Regional Council |
| Mr Kenny Bedford | Torres Strait Island Regional Council |
| Mr Torenzo Elisala | Torres Strait Island Regional Council |
| Mrs Nancy Pearson | Torres Strait Island Regional Council |
| Mr David Bosun | Torres Strait Island Regional Council |
| Mr Keith Fell | Torres Strait Island Regional Council |
| Mr Ron Day | Torres Strait Island Regional Council |
| Mr Ron Enosa | Torres Strait Island Regional Council |
| Mrs Florianna Bero | Torres Strait Island Regional Council |
| Mr John Toshie Kris | Torres Strait Island Regional Council |
| Mr Ted Fraser Nai | Torres Strait Island Regional Council |
| Mr Walter Makie | Torres Strait Island Regional Council |
| Mr Eric Peter | Torres Strait Island Regional Council |
| Mr Marjo Sabatino | Torres Strait Island Regional Council |
| Mr Getano Lui | Torres Strait Island Regional Council |
| Mr Reginald Williams | Northern Peninsula Area Regional Council |
| Mr Jeffrey Aniba | Northern Peninsula Area Regional Council |
| Mr Joseph Elu | Northern Peninsula Area Regional Council |
| Ms Napcia Bin Tahal | Torres Shire Council |
| Mr John Abednego | Torres Shire Council |
| Mr Yen Loban | Torres Shire Council |
The table below outlines the loan holder/s and the TSRA director with whom a related party connection exists.
Loans
Anthony Titasey
- Mr Keith Fell - TSRA Board Member
Ruth Doolah
- Mr Keith Fell and Mr Mario Sabatino - TSRA Board Members
Triple A Family Values
- Mr Keith Fell and Mr Mario Sabatino - TSRA Board Members
Robert Sagigi
- Mr John Abednego - TSRA Board Member
Elthies Alion Bowie
- Mr John Kris - TSRA Board Member
Mica Newie
- Mr John Kris and Mrs Nancy Pearson - TSRA Board Members
Derek Brank
- Mrs Nancy Pearson and Mr Mario Sabatino - TSRA Board Members
James Mills
- Mr Keith Fell and Mr Mario Sabatino - TSRA Board Members
Quintin Mills
- Mr Keith Fell and Mr Mario Sabatino - TSRA Board Members
Seisia Island Council
- Mr Jeffrey Aniba and Mr Joseph Elu - TSRA Board Members
Loban Marine
- Mr Yen Loban - TSRA Board Member
Seisia Community Torres Strait Islander Corporation
- Mr Joseph Elu - TSRA Board Member
Harry Nona
- Mr Maluwap Nona and Mrs Romina Fujii - TSRA Board Members
Thomas Fujii
- Mr Maluwap Nona and Mrs Romina Fujii - TSRA Board Members
Yen Loban
- TSRA Board Member
Bonita Yamashita and Kevin Sabatino
- Mario Sabatino - TSRA Board Member
Nicholas Charles Loban
- Mr Yen Loban - TSRA Board Member
Michael Paul Mills
- Mr Keith Fell and Mr Mario Sabatino - TSRA Board Members
Samuel Lewin
- Mr Yen Loban and Mr Mario Sabatino - TSRA Board Members
| 2013 | 2012 | |
|---|---|---|
| $ | $ | |
| Loans to current Directors outstanding at year-end: | 10,563 | 5,324 |
| Loan repayments during the year: | 12,000 | - |
| Loans to current Director-related Entities outstanding at year-end: | 1,159,106 | 1,239,833 |
| Loans to current Director-related Entities during the year: | 421,234 | 361,524 |
| Loan repayments during the year: | 265,576 | 261,980 |
| Interest revenue included in operating result from loans to current Directors/Director-related Entities: | 76,003 | 90,461 |
| Related party loans for current Directors provided for as doubtful debts: | - | 5,324 |
| Related party loans written off: | 5,369 | 104,066 |
The TSRA has adopted AASB 139 Financial Instruments - Recognition and Measurement , and treated loans outstanding at year end as Loans and Receivables valued at amortised cost using the effective interest rate method.
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Note 12B: Related Party Disclosures
Other Transactions with Directors or Director-Related Entities
Grants were made to the following Director-related entities. They were approved under normal terms and conditions applying to the TSRA's grant programs. The directors involved took no part in the relevant decisions of the TSRA.
| Directors' Name | Council |
Grants Received
2013 $ |
Grants Received
2012 $ |
|---|---|---|---|
| * | Torres Shire Council | 254,000 | 1,035,000 |
| * | Torres Strait Island Regional Council | 5,967,536 | 8,721,266 |
| * | Northern Peninsula Area Regional Council | 476,850 | 287,755 |
| A Noah | Andrew Passi | 5,000 | - |
| M Nona & W Guivarra | Badhulgaw Kuthinaw Mudh (Torres Strait Islanders) Corporation | 25,000 | 65,000 |
| M Nona | Badu Art Centre | 124,000 | - |
| M Nona & W Guivarra | Badu Island Foundation Ltd | 101,440 | 408,417 |
| F Pearson & P Mosby | Buthu Lagau Saral (Torres Strait Islanders) Corporation | 45,000 | 21,730 |
| M Sabatino & N Pearson | Ceferino Sabatino | 10,000 | - |
| K Lui & S Savage | Community Enterprises Australia Ltd | 4,608,204 | - |
| S Maka & T Elisala | Dauanalgaw | 10,000 | - |
| M Sabatino & N Pearson | Edwin Turner | 10,500 | - |
| K Bedford | Erub Erwer Meta (TSI) Corporation | 60,000 | 85,000 |
| K Bedford | Erub FisheriesManagement Association | 9,460 | - |
| K Bedford | Erubam Le Traditional Land and Sea Owners Corporation Registered Native Title Body Corporate | - | 18,000 |
| F Pearson & P Mosby | Fred David | 5,000 | - |
| K Bedford | Ged Erub Trading Homeland Enterprise (Torres Strait Islander) | - | 35,000 |
| Corporation | |||
| G Lui (Jnr) & W Makie | Iama Mura Mabaigal (Torres Strait Islanders) Corporation | 15,000 | 20,000 |
| T F Nai | Kailag Enterprise Ltd | - | 96,000 |
| K Lui & J Kris | Kaziw Asesered Le Association | 21,615 | - |
| J Stephen & F Bero | Kos and Abob Fisheries (Torres Strait Islanders) Corporation | 30,000 | 125,000 |
| H Mosby, J Mosby, W | Kulkalgal (central Islands) Development Association Inc | 12,712 | - |
| Makie, P Mosby & W | |||
| Lui | |||
| R Day | Mer, Dowar & Waier Torres Strait Islanders Corporation For Fisheries | - | 100,000 |
| A Noah & R Day | Mer Gedkem Le | 39,000 | 70,100 |
| M Nona & W Guivarra | Mura Badulgal (Torres Strait Islanders) Corporation Registered Native | 14,000 | 11,500 |
| Title Body Corporate | |||
| R Fujii & N Pearson | Mura Kosker Sorority Inc | 697,000 | 372,000 |
| S Savage & D Bosun | Ngalmun Lagu Minaral (Torres Strait Islanders) Corporation | 50,000 | 50,000 |
| R Fujii | Port Kennedy Association | 790,500 | - |
| F Pearson & P Mosby | Porumalgal | 14,000 | - |
| P Mosby | Power of the Spirit Ltd | - | 113,773 |
| J Abednego | Relationships Australia Queensland | 98,000 | - |
| C Aniba & R Enosa | Saibai Community Development (Torres Strait Islanders) Corporation | 7,700 | 123,500 |
| J Elu | Seisia Community (TSI) Corporation | 39,000 | - |
| W Lui | Tony Harry | 5,000 | - |
| J Abednego & A Noah | Torres Strait Islanders Media Association | 1,347,636 | - |
| K Fell & W Guivarra | Torres Strait Youth and Recreation Sporting Association Inc | 1,183,000 | 450,000 |
| K Lui & JT Kris | Wug Danalaig Incorporated | 30,000 | 20,000 |
* Please refer to Note 12A for information regarding Director relationships with these entities.
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements for the period ended 30 June 2013
Note 13: Senior Executive Remuneration
Note 13A: Senior Executive Remuneration Expense for the Reporting Period
| 2013 $ | 2012 $ | |
|---|---|---|
| Short-term employee benefits: | ||
| Salary | 954,775 | 911,947 |
| Annual leave accrued | 110,153 | 96,763 |
| Performance bonuses | - | 19,694 |
| Other allowances | 156,682 | 130,409 |
| Total short-term employee benefits | 1,221,610 | 1,158,813 |
| Post-employment benefits: | ||
| Superannuation | 165,052 | 109,891 |
| Total post-employment benefits | 165,052 | 109,891 |
| Other long-term employee benefits: | ||
| Long-service leave | 38,484 | 60,634 |
| Total other long-term employee benefits | 38,484 | 60,634 |
| Total senior executive remuneration expenses | 1,425,146 | 1,329,338 |
Notes
1. Note 13A is prepared on an accrual basis.
2. Note 13A excludes acting arrangements and part-year service where remuneration expensed as a senior executive was less than $180,000.
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Note 13B: Average Annual Reportable Remuneration Paid to Substantive Senior Executives during the Reporting Period
Average annual reportable remuneration paid to substantive senior executives in 2013
|
Average annual reportable remuneration
1
|
Substantive senior executives
No. |
Reportable salary
2
$ |
Contributed superannuation
3
$ |
Reportable allowances
4
$ |
Bonus paid
5
$ |
Total reportable remuneration
$ |
|---|---|---|---|---|---|---|
| Total reportable remuneration (including part-time arrangements): | ||||||
| less than $180,000 | 5 | 115,381 | 17,971 | - | - | 133,352 |
| $180,000 to $209,999 | 1 | 161,788 | 28,665 | - | - | 190,453 |
| $210,000 to $239,999 | 1 | 188,138 | 22,588 | - | - | 210,726 |
| $240,000 to $269,999 | 1 | 208,744 | 32,484 | - | - | 241,228 |
| Total number of substantive senior executives | 8 |
Average annual reportable remuneration paid to substantive senior executives in 2012
|
Average annual reportable remuneration
1
|
Substantive senior executives
No. |
Reportable salary
2
$ |
Contributed superannuation
3
$ |
Reportable allowances
4
$ |
Bonus paid
5
$ |
Total reportable remuneration
$ |
|---|---|---|---|---|---|---|
| Total reportable remuneration (including part-time arrangements): | ||||||
| less than $180,000 | 4 | 119,485 | 14,500 | - | 6,220 | 140,205 |
| $180,000 to $209,999 | 1 | 162,830 | 20,244 | - | 12,514 | 195,588 |
| $210,000 to $239,999 | 1 | 196,455 | 22,480 | - | 6,427 | 225,362 |
| Total number of substantive senior executives | 7 |
- This table reports substantive senior executives who received remuneration during the reporting period. Each row is an averaged figure based on headcount for individuals in the band.
-
'Reportable salary' includes the following:
- gross payments (less any bonuses paid, which are separated out and disclosed in the 'bonus paid' column);
- reportable fringe benefits (at the net amount prior to 'grossing up' to account for tax benefits);
- exempt foreign employment income; and
- salary sacrificed benefits
- The 'contributed superannuation' amount is the average actual cost to the entity for the provision of superannuation benefits to substantive senior executives in that reportable remuneration band during the reporting period.
- 'Reportable allowances' are the average actual allowances paid as per the 'total allowances' line on individuals' payment summaries.
- 'Bonus paid' represents average actual bonuses paid during the reporting period in that reportable remuneration band. The 'bonus paid' within a particular band may vary between financial years due to various factors such as individuals commencing with or leaving the entity during the financial year.
- Various salary sacrifice arrangements were available to senior executives including superannuation, motor vehicle and expense payment fringe benefits. Salary sacrifice benefits are reported in the 'reportable salary' column, excluding salary sacrificed superannuation, which is reported in the 'contributed superannuation' column.
Note 13C: Other Highly Paid Staff
There were no other employees where total remuneration exceeded $180,000.
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Note 14: Remuneration of Auditors
| 2013 | 2012 | |
|---|---|---|
| $'000 | $'000 | |
| Financial statement audit services were provided by the Australian | ||
| National Audit Office (ANAO). | ||
| Fair value of the services provided | ||
| Financial statement audit services | 46 | 44 |
| Total | 46 | 44 |
No other services were provided by the ANAO
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Note 15: Financial Instruments
|
2013
$'000 |
2012
$'000 |
|
|---|---|---|
| Note 15A: Categories of Financial Instruments | ||
| Financial Assets | ||
| Held-to-maturity | ||
| Term deposits | 36,800 | 22,298 |
| Total | 36,800 | 22,298 |
| Loans and receivables | ||
| Cash and cash equivalents | 1,476 | 21,412 |
| Receivables for goods and services | 1,170 | 1,672 |
| Loans receivable | 5,204 | 5,062 |
| Total | 7,850 | 28,146 |
| Carrying amount of financial assets | 44,650 | 50,444 |
| Financial Liabilities | ||
| At amortised cost: | ||
| Trade creditors and accruals | (5,491) | (9,205) |
| Grant liabilities | (1,828) | (4,438) |
| Total | (7,319) | (13,643) |
| Carrying amount of financial liabilities | (7,319) | (13,643) |
TSRA holds a portfolio of concessional loans that are provided for business development and home ownership programs.
| The values of these loans as at 30 June 2013 are as follows: | ||
|---|---|---|
| Concessional loans - nominal value | 5,761 | 5,638 |
| Less: unexpired discount | (442) | (453) |
| Less: impairment allowance | (115) | (123) |
| Concessional loans - carrying value | 5,204 | 5,062 |
|
2013
$'000 |
2012
$'000 |
|
|---|---|---|
| Note 15B: Net Income and Expense from Financial Assets | ||
| Loans and receivables | ||
| Interest revenue (see note 4B) | 2,372 | 1,777 |
| Impairment (see note 4E) | 48 | 19 |
| Reversal of losses from remeasuring loans and receivables (see note 4E) | 96 | 301 |
| Write down of loans to Net Present Value (see note 3E) | (132) | (157) |
| Receivables Goods and services - external parties provided for as impaired (see note 3F) | (77) | (47) |
| Net gain from loans and receivables | 2,307 | 1,893 |
| Net gain from financial assets | 2,307 | 1,893 |
The net income from financial assets not at fair value from profit or loss is $2,307,000 (2012: $1,893,000)
Note 15C: Net Income and Expense from Financial Liabilities
There is no income or expense from financial liabilities for the year ending 30 June 2013 (2012: $Nil)
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Note 15D: Fair Value of Financial Instruments
The carrying amount of financial instruments matches their fair value in 2012-13 as in 2011-12.
Note 15E: Credit risk
TSRA was exposed to minimal credit risk as the majority of loans and receivables and all held-to- maturity fancial instruments are cash or high quality trade receivables. TSRA also holds a portfolio of concessional loans that are provided for business development and home ownership programs. The maximum exposure to credit risk is the risk that arises from potential default of a trade debtor or a concessional loan holder. This amount is equal to the total amount of trade and loan receivables (2013: $6,374,000 and 2012: $6,734,000)
In relation to the housing loans, TSRA holds mortgages as sole mortgagor over the houses for which the loans are provided. TSRA receives market advice from a qualified valuer or market expert on the value of a property prior to the loan being approved. In relation to Business Funding Scheme loans, from 2007-08 TSRA has required that inexperienced business owner(s) successfully complete an approved business course and submit a business plan prior to the loan being approved. These policies mitigate against credit risk for the TSRA's loans portfolio.
TSRA has assessed the risk of the default on payment and has allocated $179,945 in 2013 (2012: $180,031) to an allowance for impairment. Security underpinning this impairment includes a 5 bedroom house, which was independently valued in June 2011 at an estimated total value of $546,000.
Credit quality of financial instruments not past due or individually determined as impaired
|
Not past
due nor impaired 2013 $'000 |
Not past
due nor impaired 2012 $'000 |
Past due
or impaired 2013 $'000 |
Past due
or impaired 2012 $'000 |
|
|---|---|---|---|---|
| Cash and cash equivalents | 1,476 | 21,412 | - | - |
| Receivables for goods and services | 1,084 | ,383 | 151 | 346 |
| Loans receivable | 5,150 | 5,005 | 169 | 180 |
| Term Deposits | 36,800 | 22,298 | - | - |
| Total | 44,510 | 50,098 | 320 | 526 |
Ageing of financial assets that were past due but not impaired for 2013
|
0 to 30
days $'000 |
31 to 60
days $'000 |
61 to 90
days $'000 |
90+
days $'000 |
Total
$'000 |
|
|---|---|---|---|---|---|
| Receivables for goods and services | 5 | - | 2 | 79 | 86 |
| Loans receivable | 13 | 7 | 6 | 28 | 54 |
| Total | 18 | 7 | 8 | 107 | 140 |
Ageing of financial assets that were past due but not impaired for 2012
|
0 to 30
days $'000 |
31 to 60
days $'000 |
61 to 90
days $'000 |
90+
days $'000 |
Total
$'000 |
|
|---|---|---|---|---|---|
| Receivables for goods and services | 2 | - | - | 287 | 289 |
| Loans receivable | 14 | 7 | 5 | 31 | 57 |
| Total | 16 | 7 | 5 | 318 | 346 |
Note 15F: Liquidity Risk
TSRA's financial liabilities were trade creditors and accruals and grant liabilities. The exposure to liquidity risk was based on the notion that TSRA will encounter difficulty in meeting its obligations associated with financial liabilities. This was highly unlikely due to Government funding and mechanisms available to TSRA and internal policies and procedures put in place to ensure there were appropriate resources to meet its financial obligations.
Maturities for non-derivative financial liabilities 2013
|
On
demand $'000 |
within 1
year $'000 |
1 to 2
years $'000 |
2 to 5
years $'000 |
>5
years $'000 |
Total
$'000 |
|
|---|---|---|---|---|---|---|
| Trade creditors and accruals | - | (5,491) | - | - | - | (5,491) |
| Grant liabilities | - | (1,828) | - | - | - | (1,828) |
| Total | - | (7,319) | - | - | - | (7,319) |
Maturities for non-derivative financial liabilities 2012
|
On
demand $'000 |
within 1
year $'000 |
1 to 2
years $'000 |
2 to 5
years $'000 |
>5
years $'000 |
Total
$'000 |
|
|---|---|---|---|---|---|---|
| Trade creditors and accruals | - | (9,205) | - | - | - | (9,205) |
| Grant liabilities | - | (4,438) | - | - | - | (4,438) |
| Total | - | (13,643) | - | - | - | (13,643) |
TSRA receives funding from its Portfolio Department. TSRA manages its budgeted funds to ensure it has adequate funds to meet payments as they fall due. In addition, the TSRA has policies in place to ensure timely payments are made when due and has no past experience of default.
The entity has no derivative financial liabilities in either 2013 or 2012.
Note 15G: Market Risk
TSRA holds basic financial instruments that did not expose TSRA to certain market risks such as 'currency risk' and 'other price risk'.
The interest-bearing items on the balance sheet are cash at bank, loans and term deposits. Interest earned on cash at bank and term deposits after they mature may be effected by changes in market interest rates. The following table represents the effect to the statement of comprehensive income (and corresponding effect to the cash value in the balance sheet) when the current market interest rate is varied by 1.20%. 1.20% is anticipated to be a reasonable estimate of the maximum movement in market interest rates in financial year 2013-14.
| Value $'000 | Effect on Statement of Comprehensive Income Income (Expense) $'000 | |
|---|---|---|
| Anticipated interest earned for 2013-14 financial year at current market | ||
| interest rate | 1,738 | 0 |
| Decrease of 1.20% in market interest rate | 2,269 | 531 |
| Increase of 1.20% in market interest rate | 1,207 | (531) |
The value of concessional loans is derived by applying the amortised cost using the effective interest method. Because the loan portfolio is valued at net present value using market interest rates, movements in market interest rates will impact on the value of the loan portfolio and the income statement. The following table represents the effect to the income statement (and corresponding effect to the loan portfolio value in the balance sheet) when the current market interest rate is varied by 1.20%. 1.20% is anticipated to be a reasonable estimate of the maximum movement in market interest rates in financial year 2013-14.
| Value $'000 | Effect on Statement of Comprehensive Income Income (Expense) $'000 | |
|---|---|---|
| Net Present Value of Loans 30 June 2013 | 5,319 | - |
| Increase of 1.20% in market interest rate | 4,905 | (414) |
| Decrease of 1.20% in market interest rate | 5,800 | 481 |
Assets past due and impaired are represented by loans individually assessed to be at high risk of default.
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Note 16: Financial Assets Reconciliation
|
2013
$'000 |
2012
$'000 |
||
|---|---|---|---|
| Financial assets | Notes | ||
| Total financial assets as per balance sheet | 46,331 | 50,444 | |
| Less: non-financial instrument components | |||
| Other receivables | 5B | 1,681 | - |
| Total not-financial instrument components | 1,681 | - | |
| Total financial assets as per financial instruments note | 44,650 | 50,444 |
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Note 17: Compensation and Debt Relief
|
2013
$'000 |
2012
$'000 |
|
|---|---|---|
| Compensation and Debt Relief | ||
| No payments were made during the reporting period. (2012: No payments made). | - | - |
TORRES STRAIT REGIONAL AUTHORITY
Notes to and forming part of the financial statements
for the period ended 30 June 2013
Note 18: Assets Held in Trust