aboriginals benefit account statement of comprehensive...

265ABORIGINALS BENEFIT ACCOUNT FINANCIAL STATEMENTS / PART FOUR / FAHCSIA ANNUAL REPORT 2012!13

18

18

ABORIGINALS BENEFIT ACCOUNTSTATEMENT OF COMPREHENSIVE INCOMEfor the period ended 30 June 2013

1

2013 2012Notes $'000 $'000

EXPENSESCommittee members 3A 147 194Supplier 3B 819 1,187Grants 3C 44,683 60,659Payments for township leases 3D 2,026 2,407Payments to land councils for administrative purposes 3E 39,717 43,110Distribution to land councils 3F 31,070 46,068Write-down and impairment of assets 3G 1 -Other expenses 3H 18,431 2,129Total expenses 136,894 155,754

LESS: OWN-SOURCE INCOMEOwn-source revenueInterest 4A 20,808 25,442Lease rental income 4B 1,672 602Total own-source revenue 22,480 26,044

GainsSale of assets 4C - -Resources received free of charge 4D 2,103 2,129Total gains 2,103 2,129Total own-source income 24,583 28,173

Net cost of services 112,311 127,581

Revenue from Government 4E 103,566 153,563Surplus (Deficit) attributable to the Australian Government (8,745) 25,982Other comprehensive income - -Total comprehensive income (loss) attributable to the Australian Government (8,745) 25,982

The above statement should be read in conjunction with the accompanying notes.

266 ABORIGINALS BENEFIT ACCOUNT FINANCIAL STATEMENTS / PART FOUR / FAHCSIA ANNUAL REPORT 2012!13

18

ABORIGINALS BENEFIT ACCOUNTBALANCE SHEETas at 30 June 2013

2

2013 2012Notes $'000 $'000

ASSETSFinancial AssetsCash and cash equivalents 5A 22,932 15,379Trade and other receivables 5B 301 79Investments 5C 402,129 418,994Total financial assets 425,362 434,452

Non-Financial AssetsOther non-financial assets 6A 8,144 10,188Total non-financial assets 8,144 10,188Total assets 433,506 444,640

LIABILITIESPayablesSuppliers 7A 320 833Payables to land councils for administrative purposes 7B 2,020 -Grants 7C 462 460Other payables 7D 974 4,999Total payables 3,776 6,292

ProvisionsOther provisions 8A 195 68Total provisions 195 68Total liabilities 3,971 6,360Net assets 429,535 438,280

EQUITYRetained surplus 429,535 438,280Total equity 429,535 438,280



18

18

ABORIGINALS BENEFIT ACCOUNTSTATEMENT OF CHANGES IN EQUITYfor the period ended 30 June 2013

3

Retained earnings Total equity2013 2012 2013 2012$'000 $'000 $'000 $'000

Opening balanceBalance carried forward from previous period 438,280 412,298 438,280 412,298Adjusted opening balance 438,280 412,298 438,280 412,298

Comprehensive incomeSurplus (Deficit) for the period (8,745) 25,982 (8,745) 25,982Total comprehensive income (loss) (8,745) 25,982 (8,745) 25,982Closing balance as at 30 June 429,535 438,280 429,535 438,280



18

ABORIGINALS BENEFIT ACCOUNTCASH FLOW STATEMENTfor the period ended 30 June 2013

4

2013 2012Notes $'000 $'000

OPERATING ACTIVITIESCash receivedAppropriations 99,379 155,106 Net GST received 4,718 6,276 Lease rental receipts 1,617 624Total cash received 105,714 162,006

Cash usedCommittee members 149 197Suppliers 1,078 1,031 Grants 49,156 66,379 Payments for township leases 1,616 3,549 Payments to land councils for administrative purposes 37,697 54,972 Distribution to land councils 29,814 46,540 Other 16,328 -Total cash used 135,838 172,668Net cash used by operating activities 9 (30,124) (10,662)

INVESTING ACTIVITIESCash receivedProceeds from realisation of investments 697,863 859,500 Interest on investments 21,540 29,265 Total cash received 719,403 888,765

Cash usedInvestments 681,726 876,500 Total cash used 681,726 876,500Net cash from investing activities 37,677 12,265

Net increase in cash held 7,553 1,603Cash and cash equivalents at the beginning of the reporting period 15,379 13,776 Cash and cash equivalents at the end of the reporting period 5A 22,932 15,379



18

18

ABORIGINALS BENEFIT ACCOUNTSCHEDULE OF COMMITMENTSas at 30 June 2013

5

2013 2012BY TYPE $'000 $'000Commitments receivable

Net GST recoverable on commitments 4,972 6,029 Total commitments receivable 4,972 6,029

Commitments payableOther commitmentsGrant commitments (54,688) (66,311)Payments to land councils (37,443) (35,205)Office of Township Leasing (4,500) (4,800)ABA administration (9,229) (4,597)

Total other commitments (105,860) (110,913)Net commitments by type (100,888) (104,884)

BY MATURITYCommitments receivable

One year or less 4,777 4,734 From one to five years 195 1,295

Total commitments receivable 4,972 6,029

Commitments payableOther commitmentsOne year or less (98,587) (95,292)From one to five years (7,273) (15,621)

Total other commitments (105,860) (110,913)Net commitments by maturity (100,888) (104,884)

NB: Commitments are GST inclusive where relevant.

Commitments relate to activities approved by the Minister to be distributed for the benefit of Aboriginals living in the Northern Territory, administrative expenses to be paid to land councils approved by the Minister, payments for township leases and Aboriginals Benefit Account administration.



18

Table of contents - Notes

6

Note 1: Summary of Significant Accounting Policies ................................................................................... 7

Note 2: Events After the Reporting Period ...............................................................................................12

Note 3: Expenses..................................................................................................................................13

Note 4: Income .....................................................................................................................................16

Note 5: Financial Assets ........................................................................................................................17

Note 6: Non-Financial Assets .................................................................................................................18

Note 7: Payables...................................................................................................................................19

Note 8: Provisions .................................................................................................................................20

Note 9: Cash Flow Reconciliation ...........................................................................................................21

Note 10: Remuneration of Auditors ...........................................................................................................22

Note 11: Investments ..............................................................................................................................22

Note 12: Financial Instruments .................................................................................................................23

Note 13: Financial Assets Reconciliation ...................................................................................................25

Note 14: Special Accounts and FMA Act Section 39 Investments ................................................................26

Note 15: Compliance with Statutory Conditions for Payments from the Consolidated Revenue Fund...............28

271

276

277

280

281

282

283

284

285

286

286

287

289

290

292


18

18

Notes to and forming part of the financial statements

7

Note 1: Summary of Significant Accounting Policies

1.1 Objectives of the Aboriginals Benefit Account

The Aboriginals Benefit Account (ABA) is legislated under Part VI of the Aboriginal Land Rights (Northern Territory) Act 1976 (the ALRA) and is a Special Account for the purposes of the Financial Management and Accountability Act 1997 (FMA Act). The ABA is managed by the Australian Government.

The objective of the ABA is to receive and disburse statutory royalty equivalent monies derived from mining on Aboriginal Land in the Northern Territory for the benefit of Aboriginal people living in the Northern Territory.

The ABA is administered under Program 7.4 of the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) Outcome 7 – Indigenous:

x To provide support for individuals, families and communities to improve wellbeing, capability and governance.

The continued existence of the ABA in its present form is dependent on continued payments from consolidated revenue of royalty equivalent receipts into the Special Account under the ALRA and Government policy on continuing appropriations by Parliament for the ABA’s administration.

1.2 Basis of Preparation of the Financial Statements

The ABA’s activities are classified as administered activities carried out by FaHCSIA on behalf of the Commonwealth and reported in FaHCSIA's administered financial statements. In addition to being consolidated into FaHCSIA's financial statements, the ABA prepares separate audited financial statements as required by the FMA Act.

The Minister for Finance and Deregulation has issued the ABA with an exemption from the application of administered reporting requirements required by the Finance Minister's Orders (FMOs) for reporting periods on or after 1 July 2012, Part C - 17. This has been done on the basis that disclosure of accounts on a purely administered basis would not satisfy the definition of a general purpose financial report.

The financial statements and notes have been prepared in accordance with:

(a) The exemptions granted as part of the FMOs Part C – 17 for reporting periods ending on or after 1 July 2012, to present its administered activities in departmental format as illustrated in Part K; and

(b) Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The Minister for Finance and Deregulation has specifically exempted the ABA from complying with the following requirements of the FMOs:

(a) Part G and the administered disclosures in Part K;

(b) Part I to the extent that the ABA has no appropriation transactions and balances other than through its special account;

(c) Division 121 to the extent that the ABA does not have any defined outcomes; and

(d) Division 122 to the extent that the ABA has not made any payments specified in that Division.

The financial statements have been prepared on an accrual basis and in accordance with the 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 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 the entity 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 agreements equally proportionately unperformed are not recognised unless required by an accounting standard. Liabilities and assets that are unrecognised are reported in the schedule of commitments and the schedule of contingencies.


18


8

Unless an 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 Judgement and Estimates

No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next accounting period.

1.4 New Australian Accounting Standards

Adoption of New Australian Accounting Standard Requirements

No new 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 the ABA.

Future Australian Accounting Standard Requirements

There are no new standards, revised standards, amended standards or interpretations that have been issued by the AASB prior to the sign off date that are applicable to the future reporting period and are expected to have a future material financial impact on the ABA.

1.5 Revenue

Interest revenue is recognised using the effective interest method as set out in AASB 139 Financial Instruments: Recognition and Measurement.

Revenue from Government

Amounts appropriated are recognised as revenue. Revenue from Government is not typically recognised by administered entities, however, the determination provided by the Minister for Finance and Deregulation in relation to the ABA enables disclosure of such amounts as revenue.

Royalties in respect of uranium and non-uranium mining on Aboriginal land are paid to the Australian Government, Department of Resources, Energy and Tourism and the Northern Territory Treasury, Royalty Branch, respectively. Following advice from these entities, draw-downs are made from the Official Public Account (OPA) to enable royalty equivalents to be credited to the ABA, in accordance with section 63 of the Act.

These receipts are credited to the ABA shortly after receipt of advice from the respective entity, which usually occurs in the week following the payment of the royalties by mining companies to the entity.

Lease Rental Income

The ABA receives lease rental income for Township Head Leases in the Northern Territory. Lease rental income is recognised when received by the ABA (refer to Note 1.7 Leases).

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.

In the course of the administration of the ABA, FaHCSIA receives resources received free of charge in relation to audit services provided by the Australian National Audit Office (ANAO). These audit resources received free of charge are recognised in FaHCSIA's departmental financial statements, as it is FaHCSIA's role to manage and ensure financial accountability and governance for the ABA.


18

18


9

The ABA reports a number of resources received free of charge in relation to FaHCSIA expenses associated with the ABA secretariat. This secretariat is comprised of FaHCSIA staff who are responsible for the administration of the ABA.

Sale of Assets

Gains from disposal of assets are recognised when control of the asset has passed to the buyer.

1.7 Leases

The ABA has expenditure relating to incentive payments for Township Head Leases in the Northern Territory. These leases are accounted for as operating leases. In an operating lease, the lessor effectively retains substantially all risks and rewards incidental to ownership of leased non-current assets.

Operating lease payments are expensed on a straight line basis which is representative of the pattern of benefits derived from the leased assets.

Office of Executive Director Township Leasing

The Office of Township Leasing (OTL) is headed by the Executive Director, Township Leasing, which is a statutory appointment under the Act. The Executive Director, Township Leasing is responsible for managing, on behalf of the Commonwealth, any township leases entered into with Indigenous communities in the Northern Territory as specified under Section 19A of the Act. The OTL manages the head lease over the specified township and negotiates any sub leasing to commercial entities, government agencies, community organisations and so forth.

Expenses related to incentive payments for township head leases in the Northern Territory are:

x An amount of $5 million has been paid as an introductory payment for a 99 year lease for the Wurrumiyanga (formerly known as Nguiu) Head Lease on the Tiwi Islands;

x An amount of $4.5 million has been paid as an introductory payment for a 40 plus 40 year lease for the Groote Head Lease on the Groote Eylandt;

x An amount of $1.76 million has been paid as an introductory payment for a 99 year lease for the Milikapiti Township under the Milikapiti & Wurankuwu Head Lease on Tiwi Islands; and

x An amount of $0.190 million has been paid as an introductory payment for a 99 year lease for the Wurankuwu Township under the Milikapiti and Wurankuwu Head Lease on Tiwi Islands.

1.8 Cash

Cash is recognised at its nominal amount. Cash and cash equivalents includes:

(a) cash on hand;

(b) 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; and

(c) cash held by outsiders.

1.9 Financial Assets

The ABA classifies its financial assets in the following categories:

(a) held-to-maturity investments; and

(b) loans and receivables.

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.


18


10

Income is recognised on an effective interest rate basis except for financial assets that are recognised at fair value through profit and loss.

Held-to-Maturity Investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the ABA 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 held 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.

1.10 Financial Liabilities

Financial liabilities are classified as either financial liabilities at fair value through profit and loss or other financial liabilities (at amortised cost). Financial liabilities are recognised and derecognised upon ‘trade date’.

Financial Liabilities at Fair Value Through Profit and Loss

Financial liabilities at fair value through profit and loss are initially measured at fair value. Subsequent fair value adjustments are recognised in profit and loss. The net gain or loss recognised in profit and loss incorporates any interest paid on the financial liability.

Other Financial Liabilities (at amortised cost)

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. These financial 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 goods or services have been received (and irrespective of having been invoiced).

1.11 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.

There are no contingent liabilities or assets as at 30 June 2013 (2012: nil).


18

18


11

1.12 Taxation

The ABA is exempt from all forms of taxation except Mining Withholding Tax (MWT), Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

Revenues, expenses, assets and liabilities are recognised net of GST except:

(a) where the amount of GST incurred is not recoverable from the Australian Taxation Office; and

(b) for receivables and payables.

MWT is payable in respect of payments made from royalty equivalents credited to the ABA pursuant to section 63 of the Act. In accordance with the Taxation Laws Amendment Act (No. 3) 1994, the rate of MWT payable in respect of the payments made from royalty equivalents credited to the ABA pursuant to section 63 of the Act, is 4% (2012: 4%).

GST is payable on purchases made by the ABA under subsection 64(4) and 64(6) of the Act. These amounts are recoverable from the ATO.

1.13 Payment to Land Councils

Land councils obtain funding on a workload basis in accordance with subsection 64(1) of the Aboriginal Land Rights (Northern Territory) Amendment Act 2006. Estimates for funding are submitted to the Minister for Families, Housing, Community Services and Indigenous Affairs for approval and are distributed to land councils on a quarterly basis during the year.

1.14 Distribution to the Land Councils

In accordance with subsection 64(3) and 35(2) of the Act, 30% of the royalty equivalents are paid to the land councils for distribution to Aboriginal associations, communities or groups, for the benefit of those Aboriginal people who are affected by mining operations.

1.15 Grants

The ABA makes payments to or for the benefit of Aboriginals living in the Northern Territory under subsection 64(4) of the Act. These payments are considered to meet the definition of grants which is defined under the FMOs as assistance by Government in the form of transfers to an entity in return for past or future compliance with certain conditions relating to the operating activities of the entity. MWT is payable on grant payments made from royalty equivalents credited to the ABA pursuant to section 63 of the Act.

MWT is not payable on grant payments made from other income.


18


12

Note 2: Events After the Reporting Period

There are no known events occurring after the reporting period that need to be disclosed in the financial statements.


18

18


13

Note 3: Expenses2013 2012$'000 $'000

Note 3A: Committee MembersPayments to advisory committee members 147 194Total committee members expenses 147 194

Note 3B: SupplierGoods and servicesConsultants 68 174Travel and other administrative costs 189 409ABA Stores Infrastructure 562 604Total goods and services 819 1,187

Goods and services are made up of:Provision of goods – external parties 12 264Rendering of services – related entities 562 567Rendering of services – external parties 245 356Total goods and services 819 1,187Total supplier expenses 819 1,187

Note 3C: GrantsPublic sector:

State and Territory Governments 420 53Private sector:

Non-profit organisations 43,352 59,332Mining Withholding Tax 911 1,274

Total grants 44,683 60,659

Note 3D: Payments for Township LeasesOffice of Executive Director for Township Leasing administrative expenses 1,250 1,617Payments to township leases – amortisation of introductory payments 763 712Mining Withholding Tax 13 78Total payments for township leases 2,026 2,407


18


14

Note 3: Expenses (continued)2013 2012$'000 $'000

Note 3E: Payments to Land Councils for Administrative PurposesSubsection 64(1) payments:

Northern Land Council 18,597 19,929Mining Withholding Tax 744 797

Sub-total Northern Land Council 19,341 20,726

Central Land Council 16,555 18,313Mining Withholding Tax 662 733

Sub-total Central Land Council 17,217 19,046

Tiwi Land Council 1,482 1,584Mining Withholding Tax 59 63

Sub-total Tiwi Land Council 1,541 1,647

Anindilyakwa Land Council 1,556 1,626Mining Withholding Tax 62 65

Sub-total Anindilyakwa Land Council 1,618 1,691

Total payments to land councils for administrative purposes 39,717 43,110

Mining Withholding Tax paid to the Australian Taxation Office for subsection 64(1) $1.527 million(2012: $1.658 million).

Note 3F: Distribution to Land CouncilsSubsection 64(3) payments:

Northern Land Council 6,698 7,824Mining Withholding Tax 279 325

Sub-total Northern Land Council 6,977 8,149

Central Land Council 316 2,198Mining Withholding Tax 14 92

Sub-total Central Land Council 330 2,290

Anindilyakwa Land Council 22,812 34,204Mining Withholding Tax 951 1,425

Sub-total Anindilyakwa Land Council 23,763 35,629

Total distribution to land councils 31,070 46,068

Mining Withholding Tax paid to the Australian Taxation Office for subsection 64(3) $1.244 million(2012: $1.842 million).


18

18


15

Note 3: Expenses (continued)2013 2012$'000 $'000

Note 3G: Write-Down and Impairment of AssetsOther 1 -Total write-down and impairment of assets 1 -

Note 3H: Other ExpensesOther subsection 64(4) beneficial payments1 15,700 -Mining Withholding Tax1 628 -Salaries and operating expenses2 2,103 2,129Total other expenses 18,431 2,129

1 This relates to a one-off payment to a royalty association for a renegotiated agreement under section 44 of the ALRA including 4% Mining Withholding Tax.

2 Expenses associated with the administration of the ABA are received from FaHCSIA as resources free of charge.


18


16

Note 4: Income

OWN-SOURCE REVENUE 2013 2012$'000 $'000

Note 4A: InterestTerm deposits 20,345 24,733Interest bearing bank account 463 709Total interest 20,808 25,442

Note 4B: Lease Rental IncomeRevenue lease receipt – Wurrumiyanga 643 353Revenue lease receipt – Groote 830 248Revenue lease receipt – Milikapiti 196 1Revenue lease receipt – Wurankuwu 3 -Total lease rental income 1,672 602

GAINS

Note 4C: Sale of AssetsInvestments:

Proceeds from realisation 697,863 859,500Net book value of assets realised (697,863) (859,500)

Net gain from sale of assets - -

Note 4D: Resources Received Free of ChargeSalaries and operating expenses 2,103 2,129Total resources received free of charge 2,103 2,129

REVENUE FROM GOVERNMENT

Note 4E: Revenue from GovernmentAppropriations:

Special Appropriations 103,566 153,563Total revenue from Government 103,566 153,563


18

18


17

Note 5: Financial Assets2013 2012$'000 $'000

Note 5A: Cash and Cash EquivalentsCash on hand or on deposit 22,932 15,379Total cash and cash equivalents 22,932 15,379

Note 5B: Trade and Other ReceivablesOther receivables:

Interest 46 50Other 255 29

Total trade and other receivables 301 79

Receivables are expected to be recovered in:No more than 12 months 301 79

Total trade and other receivables 301 79

Receivables are aged as follows:Not overdue 301 79

Total receivables 301 79

Note 5C: InvestmentsTerm deposits 402,129 418,994Total investments 402,129 418,994

Total investments are expected to be recovered in: No more than 12 months 402,129 418,994

Total investments 402,129 418,994

Additional information relating to investments is disclosed in Note 11: Investments.


18


18

Note 6: Non-Financial Assets2013 2012$'000 $'000

Note 6A: Other Non-Financial AssetsPrepayments – subsection 64(3) 212 1,493Prepayments – subsection 64(4A) 7,932 8,695

Total other non-financial assets 8,144 10,188

Total other non-financial assets are expected to be recovered in:No more than 12 months 975 2,256 More than 12 months 7,169 7,932

Total other non-financial assets 8,144 10,188

No indicators of impairment were found for other non-financial assets.


18

18


19

Note 7: Payables2013 2012$'000 $'000

Note 7A: SuppliersOffice of Executive Director Township Leasing administrative liabilities 145 498Suppliers 175 335Total suppliers payables 320 833

Supplier payables expected to be settled within 12 months:Related entities 317 615External parties 3 218

Total 320 833Total suppliers payables 320 833

Settlement was usually made within 30 days.

Note 7B: Payables to Land Councils for Administrative PurposesSubsection 64(1)Land Councils 1,942 -Mining Withholding Tax 78 -Total payables to land councils for administrative purposes 2,020 -

Note 7C: GrantsPrivate sector:

Non-profit organisations 462 460Total grants 462 460

Total grants are expected to be settled in:No more than 12 months 462 460

Total grants 462 460

Settlement is usually made according to the terms and conditions of each grant. This is usually within 30 days of the performance or eligibility.

Note 7D: Other PayablesRoyalty equivalent overpayment 924 4,978GST payable to ATO 12 19Other 38 2Total other payables 974 4,999

Total other payables are expected to be settled in:No more than 12 months 974 4,999

Total other payables 974 4,999


18


20

Note 8: Provisions

2013 2012$'000 $'000

Note 8A: Other ProvisionsOther provision 195 68Total other provisions 195 68

Other provisions are expected to be settled in:No more than 12 months 97 68More than 12 months 98 -

Total other provisions 195 68

Other Provisions Total

$’000 $’000Carrying amount 1 July 2012 68 68Additional provisions made 127 127Closing balance 2013 195 195


18

18


21

Note 9: Cash Flow Reconciliation2013 2012$'000 $'000

Reconciliation of cash and cash equivalents as per Balance Sheet to Cash Flow Statement

Cash and cash equivalents as per:Cash flow statement 22,932 15,379 Balance sheet 22,932 15,379

Difference - -

Reconciliation of net cost of services to net cash used by operating activities:Net cost of services (112,311) (127,581)Add revenue from Government 103,566 153,563

Adjustments for non-cash itemsAdjustment for operating results components attributable to investing activities (20,808) (25,442)

Changes in assets / liabilitiesIncrease in net receivables (226) (7)(Increase) / decrease in prepayments 2,044 (1,701)Increase / (decrease) in supplier payables (513) 347Increase / (decrease) payables to Land Councils 2,020 (11,862)Increase in grants payables 2 400Increase / (decrease) in other payables (4,025) 1,553 Increase in provisions 127 68

Net cash used by operating activities (30,124) (10,662)


18


22

Note 10: Remuneration of Auditors2013 2012$'000 $'000

Financial statement audit services were provided free of charge to the ABA by the Australia National Audit Office.

Fair value of services providedFinancial statement audit services 39 39

39 39

No other services were provided by the auditor of the financial statements.

Note 11: Investments

The principal activities of the ABA’s investments are as follows:

Monies which are surplus to immediate requirements are invested under section 39 of the FMA Act. The ABA funds may only be invested in authorised investments as stipulated in the FMA Act.

Under section 39 of the FMA Act and regulation 22 of the FMA Regulations, public money may only be invested in authorised investments in the name of “The Minister for Finance and Deregulation of the Commonwealth” which include:

(a) Securities of the Commonwealth, a State or a Territory;

(b) Securities guaranteed by the Commonwealth, a State or a Territory;

(c) A deposit with a bank, including a deposit evidenced by a certificate deposit; and

(d) A bill of exchange accepted or endorsed only by a bank.

Term deposits and negotiable certificates of deposits

The ABA's investment portfolio is comprised of term deposits with the following institutions:2013

$'000 %

Bank of Western Australia 33,741 8Bendigo and Adelaide Bank Ltd 49,111 12Commonwealth Bank of Australia 12,048 3National Australia Bank 136,652 34St George Ltd 82,740 21Westpac Banking Corporation 44,483 11Suncorp Bank 43,354 11Total investments 402,129 100


18

18


23

Note 12: Financial Instruments2013 2012$'000 $'000

Note 12A: Categories of Financial InstrumentsFinancial AssetsHeld-to-maturity:

Term deposits 402,129 418,994 Total 402,129 418,994

Loans and receivables:Cash and cash equivalents 22,932 15,379 Interest receivable 46 50Other receivables 255 29

Total 23,233 15,458

Carrying amount of financial assets 425,362 434,452

Financial LiabilitiesAt amortised cost:

Supplier payables 320 833Grants payables – non-profit organisations 462 460

Total 782 1,293

Carrying amount of financial liabilities 782 1,293

Note 12B: Net Income and Expense from Financial AssetsHeld-to-maturity

Interest revenue 20,345 24,733 Net gain held-to-maturity 20,345 24,733

Loans and receivablesInterest revenue 463 709

Net gain loans and receivables 463 709

Net gain from financial assets 20,808 25,442

The above net gain is from financial assets not at fair value through profit and loss.


18


24

Note 12: Financial Instruments (continued)

Note 12C: Fair Value of Financial Instruments

Carrying Fair Carrying Fairamount value amount value

2013 2013 2012 2012$'000 $'000 $'000 $'000

Financial AssetsTerm deposits 402,129 402,129 418,994 418,994 Cash and cash equivalents 22,932 22,932 15,379 15,379 Interest receivable 46 46 50 50Other receivables 255 255 29 29

Total 425,362 425,362 434,452 434,452

Financial LiabilitiesSuppliers payables 320 320 833 833Grants payables – non-profit organisations 462 462 460 460

Total 782 782 1,293 1,293

Fair value measurements categorised by fair value hierarchy

Level in the fairvalue hierarchy2013 2012

Financial assets at fair valueTerm deposits 2 2

Level 2 – inputs other than quoted prices (unadjusted) in active markets for identical assets or liabilities that are observable for the asset or liability either directly (i.e. as prices) or directly (i.e. derived from prices).

Note 12D: Credit Risk

The ABA is exposed to credit risk through cash and receivables (recognised as loans and receivables) and bank term deposits (recognised as held-to-maturity). The maximum exposure to credit risk is the risk that arises from potential default of a debtor or financial institution. This amount is equal to the total amount of cash, cash equivalents, trade receivables and investments. FaHCSIA on behalf of the ABA has assessed the risk of potential default and has determined that no impairment allowances are required to be recognised.

The following table illustrates the ABA's gross exposure to credit risk, excluding any collateral or credit enhancements.

2013 2012$'000 $'000

Financial assetsTerm deposits 402,129 418,994 Cash and cash equivalents 22,932 15,379 Interest receivable 46 50Other receivables 255 29Total 425,362 434,452

No financial instruments are past due or impaired.


18

18


25

Note 12: Financial Instruments (continued)

Note 12E: Liquidity Risk

The ABA's financial liabilities are supplier payables and grant payables. The exposure to liquidity risk is based on the notion that the ABA will encounter difficulty in meeting its obligations associated with financial liabilities.

The ABA is appropriated funding from the Australian Government. FaHCSIA on behalf of the ABA manages its budgeted funds to ensure it has adequate funds to meet payments as they fall due. In addition, FaHCSIA on behalf of the ABA has policies in place to ensure timely payments are made when due and has no past experience of default.

The maturities for non-derivative financial liabilities for ABA are within one year in both the current and prior year.

The ABA has no derivative financial liabilities in both the current and prior year.

Note 12F: Market Risk

The ABA holds both basic financial instruments and held-to-maturity investments that do not expose the ABA to certain market risks. The ABA is not exposed to 'Currency risk', 'Other price risk' or 'Interest rate risk'.

Note 13: Financial Assets Reconciliation

2013 2012$'000 $'000

Financial assets

Total financial assets as per balance sheet 425,362 434,452Total non-financial instrument components - -Total financial assets as per financial instruments note 425,362 434,452


18


26

Note 14: Special Accounts and FMA Act Section 39 Investments

Note 14A: Special Accounts ('Recoverable GST exclusive')

Aboriginals Benefit Account1

2013 2012$'000 $'000

Balance brought forward from previous period 15,379 13,776 Increases:

Appropriation credited to special account 99,379 155,106 Realised investments 697,863 859,500 Interest receipts 21,540 29,265 Lease rental receipts 1,617 624

Total increases 820,399 1,044,495Available for payments 835,778 1,058,271Decreases:

AdministeredPayments made – land councils (67,511) (101,512)Payments made – suppliers (980) (937)Payments made – grants (44,536) (60,197)Payments made – committee members (149) (197)Payments made – township leases (1,616) (3,549)Payments made – other expenses (16,328) -Investments made from the special account (FMA Act section 39) (681,726) (876,500)Total administered decreases (812,846) (1,042,892)

Total decreases (812,846) (1,042,892)Total balance carried to the next period 22,932 15,379

1Appropriation: Financial Management and Accountability Act 1997; section 21

Establishing instrument: Aboriginal Land Rights (Northern Territory) Act 1976; sections 62, 63, 64 and 65

Purpose: For the receipt and disbursement of the equivalent of mining royalty monies derived from mining operations on Aboriginal land in the Northern Territory.


18

18

Not

es to

and

form

ing

part

of t

he fi

nanc

ial s

tate

men

ts

27

Not

e 14

: S

peci

al A

ccou

nts

and

FMA

Act

Sec

tion

39 In

vest

men

ts(c

ontin

ued)

Not

e 14

B: I

nves

tmen

ts M

ade

unde

r se

ctio

n 39

of t

he F

MA

Act

('R

ecov

erab

le G

ST

excl

usiv

e')

2013

Bal

ance

bro

ught

fo

rwar

d fr

om

prev

ious

per

iod

Inve

stm

ents

mad

eIn

vest

men

t inc

ome

Inve

stm

ents

re

alis

ed

Tota

l bal

ance

ca

rrie

d to

the

next

pe

riod

$'00

0$'

000

$'00

0$'

000

$'00

0A

borig

inal

s B

enef

it A

ccou

nt41

1,50

0 68

1,72

6 21

,540

(7

19,4

03)

395,

363

Tota

l41

1,50

068

1,72

621

,540

(719

,403

)39

5,36

3

2012

Bal

ance

bro

ught

fo

rwar

d fro

m

prev

ious

per

iod

Inve

stm

ents

mad

eIn

vest

men

t inc

ome

Inve

stm

ents

real

ised

Tota

l bal

ance

car

ried

to th

e ne

xt p

erio

d$'

000

$'00

0$'

000

$'00

0$'

000

Abo

rigin

als

Ben

efit

Acc

ount

394,

500

876,

500

29,2

65

(888

,765

)41

1,50

0 To

tal

394,

500

876,

500

29,2

65(8

88,7

65)

411,

500

The

AB

A d

id n

ot in

cur a

ny tr

ansa

ctio

nal c

harg

es re

latin

g to

its

inve

stm

ents

for t

he re

porti

ng p

erio

d (2

012:

Nil)

.

Info

rmat

ion

on th

e in

vest

men

t pol

icy

is in

clud

ed in

Not

e 11

: Inv

estm

ents

.


18


28

Note 15: Compliance with Statutory Conditions for Payments from the Consolidated Revenue Fund

Section 83 of the Constitution provides that no amount may be paid out of the Consolidated Revenue Fund except under an appropriation made by law. In 2011-12, the Department of Finance and Deregulation issued a guidance paper regarding the need for specific risk assessments in relation to compliance with statutory conditions on payments from special appropriations, including special accounts.

During 2012-13 additional legal advice was received that indicated there could be breaches of Section 83 under certain circumstances with payments for long service leave, goods and services tax and payments under determinations of the Remuneration Tribunal. FaHCSIA has reviewed ABA’s processes and controls over payments for these items to minimise the possibility for future breaches as a result of these payments. FaHCSIA has determined that there is a low risk of the certain circumstances mentioned in the legal advice applying to the ABA. Other than 3 breaches, relating to Remuneration Tribunal determinations reported below, FaHCSIA is not aware of any specific breaches of Section 83 in respect of these items.

During 2012-13, FaHCSIA reviewed ABA’s exposure to risks of not complying with statutory conditions on payments from the special account. The requirements of the updated plan included:

x reviewing legislation associated with the ABA special account to identify any changes to statutory conditions on payments;

x determining the risk of non-compliance by assessing the difficulty of administering any changes in the statutory conditions and assessing the extent to which payment systems and processes satisfy the statutory conditions;

x determining procedures to confirm the risk assessment;

x obtaining legal advice, as appropriate, to resolve questions of potential non-compliance; and

x progressing legislative changes to reduce the risk of non-compliance in the future to an acceptably low level.

As at 30 June 2013, work had been completed in respect to the special account statutory conditions for 2012-13payments. The work conducted has identified 3 payments made in 2012-13 from the ABA under section 64(3) of the Aboriginal Land Rights (Northern Territory) Act 1976 contravened section 83 of the Constitution due to erroneous reporting by the mining companies of the royalties.

Payments are required to be made out of the ABA based on royalties received by the Northern Territory or Commonwealth governments. Contraventions occur when it is subsequently found that the royalties upon which the payments were based were greater than required. Changes to the legislation have been prepared in order to reduce the risks of non-compliance associated with these payments to an acceptably low level but are yet to be introduced to Parliament.

Sitting fees and travel allowance for members of the ABA Advisory Committee are paid in accordance with a Remuneration Tribunal determination. 3 payments made in 2012-13 were found to be in excess of the entitlements available under the relevant determination.

Of the total amount paid in contravention of section 83 identified above:

x amounts totalling $335,770 were technical contraventions of section 83, despite the payments having been made in accordance with the requirements of section 64(3) of the Aboriginal Land Rights (Northern Territory) Act 1976;

x amounts totalling $83 were technical contraventions of section 83, being travel allowance paid to members of the ABA Advisory Committee in excess of amounts entitled to under the Remuneration Tribunal Determination 2012-13.

x amounts totalling $19,079 have been recovered or offset against a later payment;

x amounts for which recovery action is in process are $316,774; and

x amounts subject to waiver or write-off or other resolution are Nil.


18

18

Not

es to

and

form

ing

part

of t

he fi

nanc

ial s

tate

men

ts

29

Sum

mar

y

2012

-13

App

ropr

iatio

ns

iden

tifie

d as

sub

ject

to

cond

ition

s

Pay

men

tsin

2012

-13

Rev

iew

co

mpl

ete?

(Yes

/No)

Bre

ache

s id

entif

ied

for

paym

ents

mad

e du

ring

201

2-13

Pot

entia

l bre

ache

s to

da

te y

et to

be

reso

lved

Rem

edia

l ac

tion

take

n or

pro

pose

d1

$000

Num

ber

Tota

l$0

00In

corre

ct$0

00R

ecov

ered

/offs

etdu

ring

2012

-13

$000

Yes/

No

Indi

cativ

e ex

tent

SP

EC

IAL

AC

CO

UN

TSA

borig

inal

s B

enef

it A

ccou

nt23

,314

Yes

633

633

619

No

N/A

LP2

SP

EC

IAL

AP

PN

SA

borig

inal

Lan

d R

ight

s (N

orth

ern

Terr

itory

) Act

19

76

99,3

79Ye

sN

ilN

/AN

/AN

/AN

oN

/AN

/A

1L=

legi

slat

ive

chan

ge; S

= sy

stem

s ch

ange

; P=p

lann

ed; M

=mad

e (e

g S

M, o

r LP

)2

No

actio

n is

cur

rent

ly p

lann

ed in

resp

ect t

o th

e th

ree

brea

ches

tota

lling

$83

in re

spec

t to

over

paym

ents

of t

rave

l allo

wan

ce d

eter

min

ed in

acco

rdan

ce w

ith a

Rem

uner

atio

nTr

ibun

al d

eter

min

atio

n. T

hese

am

ount

s ha

ve b

een

fully

reco

vere

d.

aboriginals benefit account statement of comprehensive...

Documents