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AUSTRALIAN INDUSTRY DEVELOPMENT CORPORATION
SPECIAL PURPOSE FINANCIAL REPORT
1 JULY 2010 TO 3 DECEMBER 2010
Contents
Chairman and Chief Execut ives' Report Financial Statements Notes to the Financial Statements Statement by Board Members Independent Audit Reports
2
5
10 21
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CHAIRMAN & CHIEF EXECUTIVES' REPORT
INTRODUCTION
This Special Purpose Report ("SPR") records the operations of the Australian Industry Development Corporation ("the
Corporation") in the period I July 20 10 to 3 December 20 10. The report has been prepared by the members of the
Board in anticipation of the Corporat ion being abolished in accordance with the provisions of Schedule 2 of the
Australianlndustl)' Derelopment C01poration Act Sale Act/997 (the ''Sale Act").
THE MINISTER
At reporting date the Minister responsible for the Corporation was Senator the Hon Penny Wong. Minister for Finance
and Deregulation.
ENABLING LEGISLATION
The Corporation's enabling legislation is the AustralianlndusfiJ' Derelopmem C01poration Act 1970 (the '·Act"). The
Act was amended on 5 June 1997 by the Sale Act, to facilitate the sale of the Corporation and the winding down of the
Corporat ion's residual activities. The Corporation will be abolished when Schedule 2 of the Sale Act is proclaimed
alter the Minister for Finance and Deregulation gives the Governor-General a written cert ificate stating that she is
satisfied that the Corporation has no assets and no liabilities.
SCOPE OF REPORT
This SPR covers the activities of the Corporation for the period I July 20 I 0 to 3 December 20 I 0 and is prepared in
anticipation of the close down of the Corporation's financial operations as of 3 December 20 I 0 with the abol ishment
of the Corporation in 20 II. The Corporation is not expected to receive further revenue or other income and the
Statement of Comprehensive Income has been prepared to, as far as is practicable, identify and accrue remaining
expenses. The Balance Sheet has similarly been prepared to show at balance date the liabilities to be discharged and
the residual cash assets to be distributed to the Commonwealth as sole shareholder of the Corporation before it is
closed down.
REPORT OF OPERATIONS
Apart f rom actions taken to abolish the Corporation, there were no other signi ficant changes in the state of affairs of
the Corporation during the reporting period.
Fee Earning Guarantee
For the period I July 2010 to 3 December 2010 the Corporation earned approximately $77,507 (30 June 2010:
$307.500) from an arrangement whereby it has guaranteed certain third party obligations in relation to a Bond issue.
Given the Corporation's liabi lity arose only in the event of a default by the borrower, and by a major interposed
Australian Bank, the Corporation's risk and exposure were considered to be minimal. The one remaining Bond holder
redeemed all of its Bonds on 30 September 20 I 0 and this action concluded the Guarantee facility for the Corporation.
2
Financial Result
The Corporation's financial result for the SPR period was a net profit after income tax of S 184,227 (30 June 20 I 0:
profit of $4 I 0,865).
During the period, the Corporation received fees from a fcc earning guarantee totaling $77,507 (20 I 0: $307,500).
Dividends
On the basis of this outcome to 3 December 20 I 0, the Corporation is in a position to declare a final unfranked dividend
of$3,804,383 when directed to do so by the Minister for Finance and Deregulation.
The Staff
At reporting date the Corporation's only staff member was the Chief Executive engaged on a part-time, unpaid basis.
The Chief Executive is not employed by the Corporation under the Public Sen •ice Act 1922. The Corporation has
engaged ANL Container Line Pty Ltd to provide routine financial and accounting services and retained
PricewaterhouseCoopers to provide taxation advice. All staff and service provider arrangements will be terminated as
of the close down of the Corporation.
Members of the Board and Terms of Appointment
The names of the members of the Board, and their terms of appointment, are set out in the table below.
In regard to qualifications and experience, all the members at reporting date are currently serving Senior Executive
Service officers in the Department of Finance and Deregulation whose extensive experience equips them to deal with
the governance and other matters associated with the close down of a statutory corporation.
Members of the Board
D J Yarra
S N Hall
C J Plowman
Special responsibilities
Chairn1an
Chief Executive
Chairman of Audit Committee
Terms of Appointment*
18/04/08 to 17/04111
29/10/09 to 28/ l0/12
01 /07/0S to 30/06/ 11
* Pursuant to the Act, the Chairman and Board members, other than the Chief Executive, are appointed by the Minister and hold office during the Minister's pleasure. The Chief Executive is appointed by the Board.
Secretary:
Chief Financial Officer:
Information Officer:
Telephone:
Facsim ile:
Email:
OTHER MATTERS
Judicial Decisions
Nicholas Slingsby
Kamlesh Devchand
Nicholas Slingsby
(03) 8842 5618
(03) 8842 5609
There are no judicial decisions, decisions of administrative tribunals or reviews of the Auditor-General, a
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Parliamentary committee or the Commonwealth Ombudsman that will have a significant impact on the operations of
the Corporation.
Ministerial Directions
No Ministerial Directions were given to the Corporation under the Act during the reporting period.
Chairma n a nd Chief Execut ive's De cla ration
The members of the Board of the Corporation submit this SPR in anticipation of the Corporation, on behalf of the
shareholder Minister (Senator the Hon Penny Wong, Minister for Finance and Deregulation). being abolished in
accordance with the provisions of the Sale Act.
The SPR including a Report of Operations, Financial Statement and Statement by Board Members is submitted
in respect of the period I July 20 I 0 to 3 December 20 I 0.
Signed for and on behalf of Members' of the Board in accordance with a resolution ofthe Board.
D J Yarra
Chairman
Canberra, 12 January 20 I I
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STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD
FROM 1 JULY 2010 TO 3 DECEMBER 2010
For the
period from
I July 2010 to
3 December 2010
Note $000
INCOME ll even ue
Interest revenue 2 91 Other revenue 78 Other revenue- unclaimed money 127
Total revenue 296
Gains Realised gain on settlement ofCashOow Matching Portfolio
Total gains
TOTAL INCOME 296
EXPENSES Suppliers (11 2)
Total expenses (11 2)
J>rofit before income tax expense 184
Income tax expense 3
Net profit for the period/year 184
Other comprehensive income
Total comprehensive income for the per iod/year 184
The accompanying notes form an integral part of this financial report.
5
For the year
ended
30 June 20 10
$000
227 308
535
s
5
540
( 129)
( 129)
4 11
4 11
4 11
BALANCE SHEET AS AT 3 DECEM BER 20 10
3 December 20 10 30 June 2010
Note $000 sooo ASSETS
C urrent Assets
Cash and cash equivalents 5 3,805 4, 139
Receivables 6 lOS
Total C urrent Assets 3,805 4.244
TOTAL ASSETS 3,805 4.244
LIABIL IT IES
C urrent Liabili ties
Payablcs 7 147
Other 8 65
Total Current Lia bilities 212
TOTAL LlABILITIES 2 12
NET ASSETS 3,805 4.032
EQU ITY
Contributed Equity 9 14,661 14,661
Accumulated Losses 10 {10,856) {I 0,629}
TOTAL EQU ITY 3,805 4.032
The accompanying notes form an integral part of this financial report.
6
STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD FROM 1 JULY 2010 TO
3 DECEMBER 2010
Accum ulated Contributed Total Equity
Losses Equity
3 December 30 June 3 December 30 June 3 December 30 June
2010 20 10 2010 2010 20 10 2010
$000 $000 sooo sooo sooo $000
O pening balance (10,629) ( I 0.637) 17,661 17,661 4,032 7,024
Profit for the period/year 184 41 1 184 411
Other comprehensive income
Total co mprehensive income for the 184 411 184 41 1
period/year
Transact ions with owners
Distributions to owners
Return of capital (3,000) (3,000)
Dividends Notc4 (4 11 ) ~403) (4 11 ) {403}
C losing balnnce at the end of the (10,856) ( I 0.629) 14,661 14,661 3,805 4,032
period/year
7
STATEMENT OF CASH FLOWS FOR THE PERIOD FROM 1 JULY 2010 TO 3 DECEMBER 2010
For the For the year
period from ended
1 J uly 2010 to 30 June 2010
3 December 2010
Note $000 $000
OPERATlNG ACTI VITI ES
Cash r eceived
lntcrest 131 1!!8
Other 78 318
T otal cash r eceived 209 506
Cash used
Suppliers (132) ( 137)
e mployees
Total cash used { 1 32~ {137)
Net Cash from Operating Activities ll (b) 77 369
F INANCING ACTIVITI ES
C ash used
Retum of capital (3.000)
Dividend paid {411 ) {403)
Total cash used {411) {3.403)
Total Cash used in Financing Activities {411) (3.403)
Net decrease in Cash held (334) (3,034)
Cash at the beginning of the reporting period 4,139 7.173
Cash at the end of the reporting period ll (a) 3,805 4.139
The accompanying notes form an integral part of this financial report .
SCHEDULE OF COMMITMENTS AS AT 3 DECEMBER 2010
The Corporation has no commitments as at 3 Decemb.:r 20 I 0 (30 June 20 I 0: Nil).
SCHEDULE OF CONTINGENCIES AS AT 3 DECEMBER 2010
Contingent liabilities
Guammee and credit risk facilities:
Balance from previous period
Obligations expired
Total contingent liabilities
Note
17
Contingencies are conditions, situations or circumstances that:
• exist at the end of the f1n ancial period/year;
3 December 20 10
$000
75,000
(75,000)
• create uncertainly as to possible gain or loss to an entity; ;md
30 June 2010
$000
75,000
75.000
• wi ll be conf1nned only on the occurrence or non-occurrence of one or more unecnain future events.
'l11e accompanying notes form an integral pan of this f1nancial repon
9
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM 1 JULY 2010
TO 3 DECEMBER 2010
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Pre paration of the Special Purpose Financial Stateme nts
10
This SPR has been prepared for distribution to the members for the purpose of transparency and accounting closure.
The accounting policies used in the preparation of this SPR, as described below, are consistent wi th previous years
and are, in the opinion of the members of the Board, appropriate to meet the needs of members and the Minister.
The Financial statements and notes have been prepared on the basis of:
• a liquidation of the Corporation and on an accrual basis of accounting including the historical cost
convention; and
• The recognition and measurement aspects of all applicable Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ("AASB") that apply for the reporting
period.
The Corporation is not a going concern as it intends to be closed down after the signing of this SPR. This intention
however, has no effect on the realisation of assets and the settlement of liabilities.
Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.
The SPR is 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 Finance Ministers Orders for
periods ending on or after I July 2009, assets and liabilities are recognised in the Balance Sheet when and only when
it is probable that future economic benefits will flow to the Corporation and the amounts of the assets or liabilities can
be reliably measured. However, assets and liabilities arising under agreements equally proportionately unperfonned
are not recognised unless required by an Accounting Standard.
Unless alternative treatment is specifically required by an accounting standard, revenues and expenses are recognised
in the statement of comprehensive income when and only when the fl ow, consumption or loss of economic benefits
has occurred and can be reliably measured.
The Members of the Board have prepared the SPR on the basis that the Corporation is a non reporting entity because
there are no users dependent on a general purpose financial report. This report is therefore a special purpose financial
report that has been prepared in order to meet the needs of the members and the Minister.
The Members of the Board have determined that in order for the financial report to give a true and fair view of the
Corporation's financial performance, position and cashflow, the recognition and measurement requirements of
Australian accounting standards and other professional reporting requirements must be complied with.
Accordingly, this SJ>R has been prepared in accordance with these recognition & measurement rules and the
disclosure requirements of:
AASB I 0 I Presentation of financial statements
AASB I 07 Cash flow statements and
AASB 108 Accounting policies, changes in accounting estimates & errors
NOTES TO THE FINANCIAL STATEMENTS FOR T HE PERIOD 1 JULY 2010 T O 3 DECEMBER 2010
(b) State me nt of Compliance
The financial report complies with Australian Accounting Standards, which include Australian Equivalents to
International Financial Reporting Standards (AI FRS).
Financial instruments d isclosure
Under AASB 139 Financial Instruments: Recognition and Measurement. the Corporation has designated irrevocably
on in itial recognition any financial asset or fin ancial liability as one to be measured at fair value with gains and losses
recognised in profit or loss. This treatment is referred to as the "fair value option", which applies to the capital of a
financial instrument and excludes any component of the total fair value attributable to accrued interest.
The Corporation has considered the requirements of AASB 7 Financial Instruments: Disclosure and given that the
Corporation is nearing the end of its wind-down operations it has detem1ined that the disclosures made in the notes to
the financial statements, and commentary included in the attached Report of Operations, clearly underlines the
minimal net risk exposure to the Corporation.
The Corporation has been winding down its ongoing liabilities, including all its borrowings to which guarantees
apply, and has not entered into any new material financial commitments (other than in respect to its day to day
operations) since I July 1998.
Adoption of new Australian Accounting Standards
The accounting policies adopted arc consistent with those of the previous financial year.
The Corporation considers that all new and amended Australian Accounting Standards and AASB Interpretations as
of I July 2009, applicable to the current reporting period, have no material financial impact on the Corporation.
Future Australian Accounting Standard requirements
The following new standards, amendments to standards or interpretations that may impact on the Corporation have
been issued by the Austra lian Accounting Standard Board but are effective for future reporting periods. It is expected
that these pronouncements when effective will have no material financial impact on future reporting periods.
(c) Income Tax
II
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities based on the current period's taxable income. The tax rates and tax laws used
to compute the amount are those that are enacted or substantively enacted by the balance sheet date.
Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets
and liabilities and their carrying amounts for financia l reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary difl"erences.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD 1 JULY 2010 TO 3 DECEMBER 2010
(c) Income Tax (continued)
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets
and unused tax losses, to the extent that it is probable that taxable profi t will be available against which the deductible
temporary differences and the carry-forward of unused tax credits and unused tax losses can be uti lised (refer Note 4).
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent
that it is no longer probable that suffi cient taxable profits wi ll be available to allow all or part of the deferred income
tax asset to be uti lised.
Deferred income tax assets are not carried forward as it is not probable that sufficient taxable profits will be available
to allow all or part of the deferred income tax assets to be utilised (refer Note 3).
(d) Revenue Recognition
Interest revenue is recognised using the effective interest method as set out in AASB 139 Financial lnslrumems:
Recognilion and Measuremem.
For fee income, guarantee fees are accrued and credited to income over the relevant period of the faci lity or service.
(e) Finance Costs
Finance costs are recognised as an expense when incurred.
(f) Foreign Currency Transactions
Both the functional and presentation currency of the Corporation is Australian Dollars ($). For the period ended 3
December 20 I 0, the Corporation had no foreign currency transactions.
(g) Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term deposits that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(h) Rece ivables
12
Receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less an allowance for impairment. Collectability of receivables is reviewed on an ongoing basis.
Debts which are known to be uncollectable are written off when identified. An impainnent provision is recognised
when there is objective evidence that the Corporation will not be able to collect the receivable.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD 1 JULY 2010 TO 3 DECEMBER 2010
(i) Investments and Other Financial Assets
Financial assets in the scope of AASB 139 Financial lnstrumems: Uecognition and Aleasuremellf are classified as
either financial assets at fair value through profit or loss, loans and receivables, held to maturity investments, or
available for sale of investments, as appropriate. When financial assets arc recognised initially, they are measured at
fair value, plus. in the case of investments not at fair value through profit or loss, directly attributable transaction
costs. The Corporation detem1ines the classification of its financial assets after initial recognition and, when allowed
and appropriate, re-evaluates this designation at each financial period-end.
All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date that the
Corporation commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets
under contracts that require delivery of the assets within the period established generally by regulation or convention
in the marketplace.
Financial assets at fair value through profit or loss
Financial assets classified as held for trading are included in the category ' financial assets at fair value through profit
or loss'. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near
term with the intention of making a profit. Derivatives are also classified as held for trading unless they are
designated as effective hedging instruments. Government and Semi-Government bonds have been designated by the
Corporation at fair value through profit or loss. Gains or losses on investments held for trading are recognised in
profit or loss.
Substitution of investment securities
The Corporation has entered into an arrangement that provides for substitution of assets in the Cashllow Matched
Portfolio under certain circumstances, primarily to re-balance the portfolio for structural risk management purposes
or to take advantage of pricing arbitrage between securities. These securities are held for investment purposes.
Profits on substitution of assets within the cash flow matching portfolio are included in profit and loss when realised.
U) Trade and Othe r Payables
Trade and other payables are carried at amortised cost and represent liabilities for goods and services provided to the
Corporation prior to the end of the financial period which are unpaid and arise when the Corporation becomes
obliged to make future payments in respect of the purchase of these goods and services.
(k) Interest-Bearing Loans and Borrowings
13
All loans and borrowings are initially recognised at the fair value of the consideration received less directly
attributable transaction costs. After initial recognition, interest bearing loans and borrowings are subsequently
measured at fair value through profit or loss.
Gains and losses arc recognised in profit or loss when the liabilities arc derecogniscd.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD 1 JULY 2010 TO 3 DECEMBER 2010
(I) Derivative Financial Instruments and Hedging
14
The Corporation uses derivative financial instruments such as forward currency contracts and interest rate swaps to
hedge its risks associated with interest rate and foreign currency fluctuations. Such derivative financia l instrumems
are recognised at fair value. Derivatives are carried as assets when their fair value is positive and as liabilities when
their fair value is negative.
Any gains or losses arising from changes in the fair value of derivatives, except for those that qualify as cash flow
hedges, are taken directly to net profit or loss for the period/year.
The fair value of for.vard currency contracts is calculated by reference to current for.vard exchange rates for
contracts with similar maturity profiles. The fair value of interest rate swap contracts is detennined by reference to
market value for similar instruments.
For purposes of hedge accounting, hedges are classified as:
(i) fair value hedges when they hedge the exposure to changes in the fair value of a recognised asset or liability; or
(ii) cash flow hedges when they hedge exposure to variability in cash flows that is attributable either to a particular
risk associated with a recognised asset or liabi lity or to a forecast transaction.
A hedge of the foreign currency risk of a firm commitment is accounted for as a cash flow hedge.
At the inception of a hedge re la tionship, the Corporation formally designates and documents the hedge relationship
to which the Corporation wishes to apply hedge accounting and the risk management objective and strategy for
undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item or
transaction, the nature of the risk being hedged and how the Corporation will assess the hedging instrument's
effectiveness in offsetting the exposure to changes in the hedged item's fair values or cash flows attributable to the
hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash
flows and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the
financial report ing periods for which they were designated.
Hedges that meet the strict criteria for hedge accounting are accounted for as follows:
(i) Fair value hedges
Fair value hedges are hedges of the Corporation's exposure to changes in the fair value of a recognised asset or
liability or an unrecognised fi rm commitment, or an identified portion of such an asset, liability or firm commitment,
that is attributable to a particular risk and could affect profit or loss. For fair value hedges, the carrying amount of
the hedged item is adj usted for gains and losses attributable to the risk being hedged, the derivative is remeasurcd to
fair value and gains and losses from both are taken to profit or loss.
When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the
fair value of the fim1 commitment attributable to the hedged risk is recognised as an asset or liability with a
corresponding gain or loss recognised in profit or loss. The changes in the fair value of the hedging instrument are
also recognised in profit or loss.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD 1 JULY 2010 TO 3 DECEMBER 2010
(I) Derivative Fina ncial Instruments and Hedging (continued)
The Corporation discontinues Hti r value hedge accounting if the hedging instrument expires or is sold, terminated or
exercised, the hedge no longer meets the criteria for hedge accounting or the Corporation revokes the designation.
Any adjustment to the carrying amount of a hedged financial instrument for which the effective interest method is
used is amortised to profit or loss. Amortisation may begin as soon as an adjustment exists and shall begin no later
than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged
(ii) Cash flow hedges
Cash flow hedges are hedges of the Corporation' s exposure to variability in cash flows that is attributable to a
particular risk associated with a recognised asset or liability or a highly probable forecast transaction and that could
affect profit or loss. The effective portion of the gain or loss on the hedging instrument is recognised directly in
equity, while the ineffective portion is recognised in profit or loss.
Amounts taken to equity are transferred to the statement of comprehensive income when the hedged transaction
affects profit or loss, such as when hedged income or expenses are recognised or when a forecast sale or purchase
occurs.
If a forecast transaction is no longer expected to occur, amounts previously recognised in equity are transferred to
the statement of comprehensive income. If the hedging instrument expires or is sold, tem1inated or exercised without
replacement or rollover, or if its designation as a hedge is revoked, amounts previously recognised in equity remain
in equity until the forecast transactions occurs. If the related transaction is not expected to occur, the amount is taken
to the statement of comprehensive income.
(m) Derecognition of Financial Assets and Liabilities
Financial assets are derecognised when the contractual rights to the cash fl ows from the financial assets expire or the
asset is transferred to another entity. In the case of a transfer to another entity, it is necessary that the risks and
rewards of ownership are also transferred.
Financial liabilities are derecognised when the obligation under the contract is discharged, cancelled or expired.
(n) Contingent Liabilities and Contingent Assets
Contingent liabilit ies 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
existing liability or asset in respect of which settlement is not probable or the amount cannot be reliably measured.
Contingent assets arc reported when settlement is probable, and contingent liabilities are recognised when settlement
is greater than remote.
(o) Rounding
15
Amounts in the financial report have been rounded to the nearest thousand dollars, or in certain cases, to the nearest
dollar.
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD 1 JULY 2010 TO 3 DECEMBER 2010
For the For the year
16
2 INTEREST REVENUE Deposits
3 INCOME TAX
(a) Income tax expense
The major components of income tax expense arc:
Current income tax
Current income tax charge
Recoupment of previous year tax losses not brought to account
Deferred income fltx
Relating to the origination and reversal of temporary differences
Timing differences not recognised
Tax expense recognised in the statement of comprehensive income
(b) Numerical reconci liation between aggregate tax expense
recognised in the statement of comprehensive income and tax
expense calculated 1>er t he statutory income Htx rate
A n:conciliation between tax expense and the product of
accounting profit before income tax multiplied by the
Corporation·s applicable income t:Lx rate is as follows:
Accounting profit before income tax
At the Corporation ' s statutory income tax rate of 30%
(30 June 20 I 0: 30%)
per iod from
I July 2010 to
3 December 2010
$
$000
91
6 1
(61)
184
55
ended
30 June
2010
$
$000
227
11 2
( 11 2)
I I
( II)
411
123
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD 1 JULY 2010 TO
3 DECEMBER 2010
3 INCOME TAX (continued)
Non-assessable interest income
Recoupment of previous year tax losses not brought to account
Prior tax losses brought lo account
Adjuslmenls re lating lo prior year deferred tax balances
Timing differences not brought to account
Tax Expense
(c) Tax Losses
For the
period from
I J u ly 2010 to
3 December
2010
$
(55)
For the
year
ended
30 June
2010
$
(1 12)
(II )
The Corpomtion has accumulated tax losses for which no deferred lax asset has been recognised of $17,767.379
(30 June 20 10: $ 17.969,945). The deferred tax asset associated with the loss wi ll only be rc:alised in the tulure in
the event of suflicient taxable profits being available to utilise the losscs, subject to loss recoupment rules.
4 DIVIDEND PAID AND PROPOSED
Declared and paid dur ing the period/year
Dividends on statutory capital
Unfranked dividend
5 CASH AND CASH EQUIVALENTS Cash at bank and on hand
Short-tenn deposits
For t he
period from
I July 2010 to
3 December
2010
s 2010
$000
41 1
3,805
For the
year
ended
30 June
2010
s 2010
$000
403
I l l
4.028
3,805 4. 139
Cash at bank earns interest at floating rates. Short-term deposits are lor a period of sixty days and earn interest at
the respective.: short-teml deposit mtes.
17
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD 1 JULY 2010 TO 3 DECEMBER 2010
6 RECEIVABLES (CURRENT) 3 December 2010 30 Junt: 20 10
$
Accrued Interest
Fee caming guarantee at Htir value
$
40
65
105
The Corporation earned a fee from an arrangement where it has guanmteed certain thi rd party obligations. The
contmctual term of the guarantee matches the underlying obligation to which it relates. The Corporation notes the
finalUond holder redeemed all Bonds it held on 30 September 2010.
7 PAYABLES (CURRENT) Suppliers
Accrued audit fees
Accrued interest payable
8 OTHER CURRENT LIABILITIES Financial guarantee
127
20
147
65
·n1e Corporation earned a fcc from an arrangement where it has guaranteed certain third party obligations. The
contractual tenn of the guarantee matches the underlying obligation to which it relates. The Corporation notes the
final Hond holder redeemed all Bonds it held on 30 September 2010.
9 EQUITY CONTRIBUTED
Statutory Capital*
Less Uncalled Capital
Paid up Capital
Paid up capital at the beginning of the linancial period/year
Return of Capital
Paid up capital at the end of the linancial period/year• •
200,000
{182,339}
17,661
17,661
(3,000)
14,661
200.000
( 182.339}
17.661
17,661
(3.000)
14.661
• Th~ Australta11 f11d1" try Oe•·efopment Corporal/oil Act 1970 provides for t>aymcnt of S200 million to the Corpormion as its capital. This Slahltory capital is similnr to the issued capital of a company The unpaid :unount is payable to the Corporation out of money appropriated by the Parliament for the I)U'l>OSc. in such instalments as the Minister for Finance and Deregulation dctenuines The appropriation is a special appr011nation under section 24(4) of the A1"trolum fmlusrry V.:•·clopmenr CorJlQralttJII Act 1970 In accordance with the fMOs it has been d1scloscd in the Department of Finance and Deregulation's linancoal statements
" Due to the ' 'csting out of the Corporation's interest in rloc Austral ian Submarine Corporation by Ministerial Direction on 7 December 2000 for no consideration. the Co'l>Omtion, in the process of winding down its residual activities, is unlikely to be able to rcr>ay all the balance of share capital (currently S 14.661 m).
18
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD 1 JULY 2010 TO 3 DECEMBER 2010
10 ACCUMULATED LOSSES Accumulated losses at the beginning of the period/year
Net profit attributable to the Australian Government
Dividend paid
Accumulated losses at the end of the period/year
11 CASH FLOW RECONCILIATION
(a) Reconciliation of Cash per Balance Sheet to Statement of Casb Flows
Cash at period/year end per statement of cash fl ows
Cash at the end of the financial period/year as shown in the balance siH.:et
(b) Reconciliation of Net Profit to Net Cash
from Operating Activities
Net Profit
Adjustme/l{s for:
Fair value revaluation of the Cashllow Matching
Portfolio
Net dccrease/( increase) in assets:
Receivables
Net increase/(decrease) in liabilities:
Payabli.:s
Other liabilities
Net Cash From Operating Activities
12 CONTINGENT LIABILITIES
For guarantees and credit risk facilities:
- Paper Bond Ltd
For the
period from
I July2010to
3 Decem ber
2010
$
(10,629)
184
(4 11 )
(10,856)
3,805
3,805
184
105
(147)
(65)
77
For the
year
ended
30 June
2010
$
(10,637)
4 11
(403)
(10,629)
4, 139
4.1 39
411
(5)
182
(4)
(2 15)
369
75.000
The amount shown above as net exposure in relation to guarantee and credit risk ntcilities represented the
balance of contingent liabilities a ncr allowing for the proportion of such risks which have been syndicated
to banks.
19
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD 1 JULY 2010 TO 3 DECEMBER 2010
13 AUDITORS' REMUNERATION The cost of fi nnncial statl!m~:n t nudit services provided to
thl! Corporation were:
Ernst & Young - financial statement audit
Australian National Audit Omce- linancial statement audit
For the
period from
I July2010to
3 December
2010
$
10,900
4,600
For the
year
ended
30 June
2010
$
14.000
2.970
15,500 16.970
No other services were provided by Ernst & Young or the
Australian National Audit Oflicc.
14 RELATED PARTY INFORMATION
Mem bers of the Boa•·d
Ooard members holding office during the period I July 20 I 0 to 3 December 20 I 0 were:
D J Yarra (Chairman)
C J Plowman
S Hall (Chief Executive)
Ultimate Controlling Entity
The Commonwealth of Australia is the ultimate controll ing entity of the Australian Industry Development Corporation,
established under the Auslra/ianlnduslly Developmenl Corpora/ion Acl 1970.
15 EVENTS OCCURRING AFTER BALANCE DATE
No maner or circumstance has arisen since 3 December 2010 that has significantly or will significantly affect the
operations of the Corporation, the results of those operations or the state of affairs of the Corporation in subsequent
financial years.
20
STATEMENT BY BOARD MEMBERS FOR THE PERIOD FROM 1 .JULY 2010
TO 3 DECEMBER 2010
In the opinion of the Board members of Corporation:
(a) the SPR set out on pages I to 20 is drawn up so as to show fairly the state of affairs of the Corporation as at 3
December 20 I 0 and the results and cash flows for the period from I July 20 I 0 to 3 December 20 10 of the
Corporation;
(b) the Financial Statements give a true and fair view of the matters required by the Finance Minister's Orders made
under the Commonwealth Authorities and Companies Act 1997 for the period from 1 July 2010 to 3 December 20 I 0;
(c) the Financial Statements have been prepared based on properly maintained financial records;
(d) the Corporation is not a going concern at the date of this statement as it is intended to close down the Corporation on
the signing of this SPR; and
(e) the financial statements have been drawn up in accordance with the Guidelines for Financial Statements of
Commonwealth Agencies and Authorities and applicable Accounting Standards and other mandatory professional
reporting requirements.
Signed in accordance with a resolution of the Board members.
D J Yarra
Chairman
Canberra, 12 January 20 II
21
11111111111111111111111111111"""' ill ERNST & YOUNG 121 Marcus Clarke Street Canberra ACT 2600 Australia GPO Box 281 Canberra ACT 2601
Tel: +61 2 6267 3888 Fax: +61 2 6246 1500 www.ey.com/au
Independent auditor's report to the shareholder of Australian Investment Development Corporation
We have audited the accompanying special purpose financial report which has been prepared on a liquidation basis of Australian Investment Development Corporation (the "Corporation") which comprises the balance sheet as at 3 December 2010, and the statement of comprehensive income, statement of changes in equity, schedu le of commitments, schedule of contingencies, and statement of cash flows for the period from 1 July 2010 to 3 December 2010, a summary of significant accounting policies, other explanatory notes and the cha irman and chief executive's report.
Board Members' Responsibility for the Financial Report
The board members of the Corporation are responsible for the preparation of the financial report which has been prepared on a liquidation basis and have determined that the accounting policies described in Note 1 to the financial statements, which form part of the financial report, are appropriate to meet the needs of the shareholder and the board members. The board members are also responsible for such controls as they determine are necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on the financial report which has been prepared on a liquidation basis based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on our judgment, inc luding the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the entity's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal contro ls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the board members, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our aud it opinion.
Independence
In conducting our audit we have complied with t he independence requirements of the Austra lian professional accounting bodies.
Liability limited by a scheme approved under Professional Standards Legislation
11111111111111111111111111111'"'"' a/ ERNST & YOUNG
Opinion
In our opinion the financial report - which has been prepared on a liquidation basis- presents fairly, in al l material respects, the financial position of Australian Investment Development Corporation as of 3 December 2010 and its financial performance, and its cash flows for the period from 1 July 2010 to 3 December 2010 in accordance with the accounting policies described in Note 1 to the financial statements.
Basis of Accounting
Without modifying our opinion, we draw attention to Note 1 to the special purpose financial report which describes the basis of accounting. The special purpose financ ial report which has been prepared on a liquidation basis is prepared to assist Australian Investment Development Corporation to meet the financial reporting requirements of the board members and the shareholder. As a result the special purpose financial report which has been prepared on a liquidation basis may not be suitable for another purpose. Our report is intended solely for Australian Investment Development Corporation and the Minister and shou ld not be distributed to parties other than Australian Investment Development Corporation and the Minister.
E§:~:ng J-d~ Canberra 12 January 2011
Australian National
Audit OfficE
INDEPENDENT AUDITOR'S REPORT
To the Minister for Finance and Deregulation
I have audited the accompanying financial report, being a special purpose financial report, which has been prepared on a liquidation basis, of the Australian Industry Development Corporation, comprising the Balance Sheet as at 3 December 2010, the Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the period ended on that date, Schedule of Commitments, Schedule of Contingencies, Notes to the Financial Statements including a Summary of Significant Accounting Policies, and the Statement by Board Members.
The Board Members' Responsibility for the Financial Report
The Board Members of the Australian Industry Development Corporation are responsible for the preparation and fair presentation of the financial report, which has been prepared on a liquidation basis, and have determined that the accounting policies described in Note 1 to the financial statements, which form part of the financial report, are appropriate to meet the requirements of the Minister and Board Members. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditor's Responsibility
My responsibility is to express an opinion on the financial report, which has been prepared on a liquidation basis, based on my audit. No opinion is expressed as to whether the accounting policies used, as described in Note 1, are appropriate to meet the needs of the Minister. I conducted my audit in accordance with the Australian National Audit Office Auditing Standards, which incorporate the Australian Auditing Standards. These Auditing Standards require that I comply with relevant ethical requirements relating to audit engagements and plan and perfonn the audit to obtain reasonable assurance whether the financial repmi is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Corporation's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
GPO Box 707 CANBERRA ACT 2601 19 National Circuit BARTON ACT Phone (02) 6203 7300 Fax (02) 6203 7777
the effectiveness of the Corporation's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board Members, as well as evaluating the overall presentation of the financial report.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
Independence
In conducting my audit, I have followed the independence requirements of the Australian National Audit Office, which incorporate the requirements of the Australian accounting profession.
Auditor's Opinion
In my opinion the financial report, which has been prepared on a liquidation basis, presents fairly, in all material respects, the financial position of the Australian Industry Development Corporation as at 3 December 2010 and of its financial performance and its cash flows for the year then ended in accordance with the accounting policies described in Note 1 to the financial statements.
Basis of Accounting and Restriction on Distribution and Use
Without modifying my opinion, I draw your attention to Note 1 to the financial report, which describes the basis of accounting. The financial report, which has been prepared on a liquidation basis, has been prepared for the distribution to the Minister for the purpose of fulfilling the Board Members ' financial reporting responsibilities as part of their wind down activities. As a result, the financial report may not be suitable for another purpose. I disclaim any assumption of responsibility for the reliance on this report or on the financial report to which it relates to any person other than the Minister, or for any purpose other than that for which it was prepared.
Australian National Audit Office
Carla Jago
Executive Director
Delegate of the Auditor-General
Canberra
12 January 2011