APPENDIX 1

Financial statements

 

FEDERAL COURT OF AUSTRALIA INCOME STATEMENT   for the year ended 30 June 2006
				2006		2005
			Notes	$’000		$’000
INCOME
Revenue
Revenues from Government			3A	81,126		73,204
Goods and services			3B	2,472		2,401
Interest			3C	614		490
Total revenue				84,212		76,095
Gains
Net gains from disposal of assets			3D	18		12
Other gains			3E	13,380		12,256
Total gains				13,398		12,268
TOTAL INCOME				97,610		88,363
EXPENSES
Judges and employees			4A	48,687		46,340
Suppliers			4B	41,205		37,896
Depreciation and amortisation			4C	2,485		2,157
Finance costs			4D	60		30
Write-down of assets			4E	264		8
Value of assets sold			3D	-		41
TOTAL EXPENSES				92,701		86,472
OPERATING RESULT				4,909		1,891

 

 

 

 

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

 

FEDERAL COURT OF AUSTRALIA BALANCE SHEET   as at 30 June 2006
				2006		2005
			Notes	$’000		$’000
ASSETS
Financial Assets
Cash			5A	348		1,761
Receivables			5B	32,800		13,985
Total Financial Assets				33,148		15,746
Non-Financial Assets
Land and buildings			6A	5,620		4,055
Infrastructure, plant and equipment			6B	10,907		8,746
Intangibles			6C	444		579
Other non-financial assets			6E	5,492		19,157
Total Non-Financial Assets				22,463		32,537
TOTAL ASSETS				55,611		48,283
LIABILITIES
Payables
Suppliers			7	404		616
Total Payables				404		616
Interest Bearing Liabilities
Leases			8A	1,411		621
Other interest bearing liabilities			8B	-		139
Total Interest Bearing Liabilities				1,411		760
Provisions
Judges and employees			9	15,728		15,119
Total Provisions				15,728		15,119
TOTAL LIABILITIES				17,543		16,495
NET ASSETS				38,068		31,788
EQUITY
Contributed equity				7,914		6,543
Reserves				1,614		1,614
Retained Surpluses				28,540		23,631
TOTAL EQUITY				38,068		31,788
Current assets				36,634		29,397
Non-current assets				18,977		18,886
Current liabilities				15,930		15,382
Non-current liabilities				1,613		1,113

 

 

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

 

FEDERAL COURT OF AUSTRALIA STATEMENT OF CASH FLOWS   for the year ended 30 June 2006
										2006		2005
					Notes				$’000			$’000
OPERATING ACTIVITIES
Cash received
Goods and services									2,059			2,589
Appropriations									64,200			72,400
Refund Credits									3,500			-
GST received from ATO									3,557			3,240
Total cash received									73,316			78,229
Cash used
Judges and employees									(41,662)			(40,157)
Suppliers									(24,290)			(34,420)
GST paid to ATO									(3,766)			(3,359)
Financing costs									(60)			(30)
Total cash used									(69,778)			(77,966)
Net cash from operating activities					10				3,538			263
INVESTING ACTIVITIES
Cash received
Proceeds from sales of property, plant and equipment									14			12
Total cash received									14			12
Cash used
Purchase of property, plant and equipment									(4,888)			(2,350)
Purchase of intangibles									(77)			(189)
Total cash used									(4,965)			(2,539)
Net cash (used by) investing activities									(4,951)			(2,527)
FINANCING ACTIVITIES
Cash received
Appropriations – contributed equity									-			1,908
Total cash received									-			1,908
Net cash from financing activities									-			1,908
Net increase or (decrease) in cash held									(1,413)			(356)
Cash at the beginning of the reporting period									1,761			2,117
Cash at the end of the reporting period					5A				348			1,761

 

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

 

FEDERAL COURT OF AUSTRALIA STATEMENT of CHANGES in EQUITY   for the year ended 30 June 2006

 

	Accumulated Results			Asset Revaluation Reserves		Contributed Equity/Capital		Total Equity
	2006		2005	2006	2005	2006	2005	2006	2005
	$’000		$’000	$’000	$’000	$’000	$’000	$’000	$’000
Opening Balance	23,631		23,764	1,614	1,245	6,543	4,635	31,788	29,644
Income and Expense
Revaluation adjustment	-	(2,025)		-	369	-	-	-	(1,656)
Subtotal income and expenses recognised directly in equity	23,631		21,739	1,614	1,614	6,543	4,635	31,788	27,988
Net Operating Result	4,909		1,891	-	-	-	-	4,909	1,891
Total income and expenses recognised directly in equity	28,540		23,631	1,614	1,614	6,543	4,635	36,697	29,879
Transactions with Owners
Appropriation (equity injection)	-		-	-	-	1,371	1,908	1,371	1,908
Closing balance at 30 June	28,540		23,631	1,614	1,614	7,914	6,543	38,068	31,788

 

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

 

FEDERAL COURT OF AUSTRALIA SCHEDULE OF COMMITMENTS   as at 30 June 2006
							2006		2005
							$’000		$’000
BY TYPE
Capital commitments
Infrastructure, plant and equipment							7		515
Total capital commitments							7		515
Other commitments
Operating leases1							175,327		166,387
Other2							4,155		3,473
Total other commitments							179,482		169,860
Commitments receivable							(16,317)		(15,489)
Net commitments by type							163,172		154,886
BY MATURITY
Capital commitments
One year or less							7		515
Total capital commitments							7		515
Operating lease commitments
One year or less							22,035		20,178
From one to five years							67,647		63,799
Over five years							89,800		85,883
Total operating lease commitments							179,482		169,860
Commitments receivable							(16,317)		(15,489)
Net commitments by maturity							163,172		154,886

 

NB: Commitments are GST inclusive where relevant.

¹ Operating leases included are effectively non-cancellable and comprise:

 

Nature of Lease	General description of leasing arrangement
Leases for judicial and other accommodation	These commitments are mainly for rental of special purpose court buildings which are occupied by the Court’s registries.  The court buildings are owned by the Commonwealth of Australia, except for the New South Wales court building, which is owned by Law Courts Limited, a joint venture between the NSW State and Commonwealth Governments.  There are no formal lease agreements executed which detail future payments.  However, the rental amounts have been reliably measured and disclosed as they are the amounts expected to be payable under the arrangement with the Commonwealth and State Governments.
Provision of motor vehicles to judges and senior officers	The Court leases motor vehicles from Lease Plan under the terms of a contract that is operative until January 2010.
2 Other commitments	The Court has entered into commitments for the provision of information technology goods and services.

 

 

SCHEDULE OF CONTINGENCIES

 

as at 30 June 2006

There were no contingent losses or gains as at 30 June 2006.

 

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

 

FEDERAL COURT OF AUSTRALIA SCHEDULE OF ADMINISTERED ITEMS
		2006		2005
	Notes	$’000		$’000
Income Administered on Behalf of Government
for the year ended 30 June 2006
Revenue
Fees (filing and hearing fees)	15	6,167		5,220
Fines	15	43		1,646
Other	15	86		148
Total Income Administered on Behalf of Government		6,296		7,014
Expenses Administered on Behalf of Government
for the year ended 30 June 2006
Refund of fees and fines	16	89		65
Fees and fines – provision for doubtful debts	16	-		58
Total Expenses Administered on Behalf of Government		89		123
Assets Administered on Behalf of Government
as at 30 June 2006
Financial Assets
Cash	17A	19		30
Receivables	17B	372		333
Total Assets Administered on Behalf of Government		391		363
Current Assets		391		363
Non-current Assets		-		-
Current Liabilities		-		-
Non-current Liabilities		-		-

 

 

The above schedule should be read in conjunction with the accompanying notes

 

FEDERAL COURT OF AUSTRALIA SCHEDULE OF ADMINISTERED ITEMS
		2006		2005
	Notes	$’000		$’000
Administered Cash Flow
for the year ended 30 June 2006
Operating Activities
Cash Received
Fees and Fines		6,172		6,598
Cash from Official Public Account		90		62
Other		86		148
Total Cash Received		6,348		6,808
Cash Used
Refund of court fees and fines		89		65
Cash to Official Public Account		6,270		6,751
Total Cash Used		6,359		6,816
Net Cash from/(Used in) Operating Activities		(11)		(8)
Net Increase/(Decrease) in Cash Held		(11)		(8)
Cash at the beginning of the reporting period		30		38
Cash at End of Reporting Period	17A	19		30
Administered Contingencies as at 30 June 2006
There were no Administered contingent losses or gains as at 30 June 2006.

 

 

The above schedule should be read in conjunction with the accompanying notes

 

FEDERAL COURT OF AUSTRALIA NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Note 1:	Summary of Significant Accounting Policies
Note 2:	The impact of the transition to AEIFRS from previous AGAAP
Note 3:	Income
Note 4:	Operating Expenses
Note 5:	Financial Assets
Note 6:	Non-Financial Assets
Note 7:	Payables
Note 8:	Interest Bearing Liabilities
Note 9:	Provisions
Note 10:	Cash Flow Reconciliation
Note 11:	Executive Remuneration
Note 12:	Remuneration of Auditors
Note 13:	Average Staffing Levels
Note 14:	Financial Instruments
Note 15:	Income Administered on Behalf of Government
Note 16:	Expenses Administered on Behalf of Government
Note 17:	Assets Administered on Behalf of Government
Note 18:	Administered Reconciliation Table
Note 19:	Administered Financial Instruments
Note 20:	Appropriations
Note 21:	Special Accounts
Note 22:	Comcare Account
Note 23:	Compensation and Debt Relief
Note 24:	Reporting of Outcomes

FEDERAL COURT OF AUSTRALIA

Note 1:            Summary of Significant Accounting Policies           

1.1       Objectives of the Court

The Federal Court of Australia is an Australian Public Service organisation.  The objectives of the Court are to:

·         decide disputes according to law promptly, courteously and effectively; and in so doing to interpret the statutory law and develop the general law of the Commonwealth, so as to fulfil the role of a court exercising the judicial power of the Commonwealth under the Constitution;

·         provide an effective registry service to the community; and

·         manage the resources allotted by Parliament efficiently.

 

The Court has one Output and one Outcome, detailed below.

 

To apply and uphold the rule of law to deliver remedies and enforce rights and in so doing, contribute to the social and economic development and well-being of all Australians. 

 

The continued existence of the Court in its present form and with its present programs is dependent on Government policy and on continuing appropriations by Parliament for the Court’s administration and programs.

 

1.2       Basis of Preparation of the Financial Statements

The financial statements are required by section 49 of the Financial Management and Accountability Act 1997 and are a general-purpose financial report. 

 

The statements have been prepared in accordance with:

·         Finance Minister’s Orders (or FMO’s, being the Financial Management and Accountability Orders (Financial Statements for reporting periods ending on or after 1 July 2005));

·         Australian Accounting Standards issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period; and

·         Interpretations issued by the AASB and Urgent Issues Group that apply for the reporting period.

 

This is the first financial report to be prepared under Australian Equivalents to International Financial Reporting Standards (AEIFRS).  The impacts of adopting AEIFRS are disclosed in Note 2.

 

The Income Statement and Balance Sheet are prepared on an accrual basis and are in accordance with historical cost convention, except for certain assets, which are at fair value or amortised cost.  Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.

 

The financial report is presented in Australian dollars and values are rounded to the nearest thousand dollars unless disclosure of the full amount is specifically required.

 

Unless alternative treatment is specifically required by an accounting standard, assets and liabilities are recognised in the Balance Sheet when and only when it is probable that future economic benefits will flow and the amounts of assets or liabilities can be reliably measured.  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.

 

Unless alternative treatment is specifically required by an accounting standard, revenues and expenses are recognised in the Income Statement only when the flow or consumption or loss of economic benefits has occurred and can be reliably measured.

 

Administered revenues, expenses, assets and liabilities and cash flows reported in the Schedule of Administered Items and related notes are accounted for on the same basis and using the same policies as for the Court except where stated in Note 1.23.

FEDERAL COURT OF AUSTRALIA

1.3       Significant Accounting Judgements 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       Statement of Compliance

 

The financial report complies with Australian Accounting Standards, which include Australian Equivalents to International Financial Reporting Standards (AEIFRS).  The AASB has issued amendments to existing standards, which are not effective at the reporting date.  The Court intends to adopt all standards upon their application date.  As at the reporting date, there is no expected effect from application of these standards.

 

1.5          Revenue

 

The revenues described in this note and Note 1.23 are revenues relating to the core operating activities of the Court, whether in its own right or on behalf of the Commonwealth.  Details of revenue amounts are given in Note 3 and Note 15.

 

Revenues from Government

 

Amounts appropriated for Departmental outputs appropriations for the year (adjusted for any formal additions and reductions) are recognised as revenue, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned.

Appropriations receivable are recognised at their nominal amounts.

 

Other Revenue

 

Revenue from the sale of goods is recognised when:

·         risks and rewards of ownership have been transferred to the buyer;

·         seller retains no managerial involvement nor effective control over the goods;

·         revenue and costs incurred for the transaction can be reliably measured; and

·         it is probable that the economic benefits associated with the transition will flow to the entity.

 

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:

·         amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and

·         probable economic benefits with the transaction have flowed to the entity.

 

Receivables for goods and services are recognised at the nominal amounts due less any provision for bad and doubtful debts.  Debts are reviewed at balance date.  Provision is made when collection of the debt is no longer probable.

 

Interest revenue is recognised using the effective interest method as set out in AASB 139.

 

1.6          Gains

Resources Received Free of Charge

Services received free of charge are recognised 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 these resources is recognised as an expense.

 

Contributions of assets at no cost of acquisition or for nominal consideration are recognised at their fair value when the asset qualifies for recognition.

FEDERAL COURT OF AUSTRALIA

 

Other Gains

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

 

1.7       Transactions with the Government as Owner

 

Amounts appropriated which are designated as ‘equity injections’ for a year (less any savings offered up in Portfolio Additional Estimates Statements) are recognised directly in Contributed Equity.

 

1.8       Judges and Employee Benefits

 

As required by the FMO’s, the Court has adopted AASB 119 Employee Benefits, as issued in December 2004, early.

 

Liabilities for services rendered by Judges and employees are recognised at the reporting date to the extent that they have not been settled. 

 

Liabilities for ‘short-term employee benefits’ (as defined in AASB 119) and termination benefits due within twelve months of balance date are measured at their nominal amounts.  The nominal amount is calculated at the rates expected to be paid on settlement of the liability. 

 

All other employee benefit liabilities are measured as the present value of the estimated future cash outflows to be made in respect of services provided by employees at the reporting date.

 

Leave

 

The liability for employee benefits includes annual leave and long service leave.  No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of the Court is estimated to be less than the annual entitlement for sick leave. 

 

The leave liabilities are based on the employees’ remuneration.  This includes the Court’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 long service leave provision is based on the Court's estimated liability at balance date.  Court staff employed under the Public Service Act accrue 3 months long service leave after 10 years service, and proportionally thereafter.  The estimate of the present liability takes into account attrition rates and pay increases through promotion and inflation.  Judges accrue 6 months long leave after 5 years of service.  In recognition of the nature of Judges' tenure, a provision is accrued from the first year of service.

Superannuation

Staff of the Court 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 Commonwealth.  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.

 

The Court makes employer contributions to the Australian Government at rates determined by an actuary to be sufficient to meet the cost to the Government of the superannuation entitlements of the Court’s employees. 

 

The liability for superannuation recognised as at 30 June represents outstanding contributions for the final fortnight of the year.

FEDERAL COURT OF AUSTRALIA

 

Judges’ Pension

Under the Judges' Pensions Act 1968, Federal Court Judges are entitled to a non-contributory pension upon retirement after 6 years service.  Where entitlements are not available under the Judges’ Pensions Act 1968, entitlements are available under the Superannuation (Productivity Benefit) Act 1988.  As the liability for these pension payments is assumed by the Australian Government, the Court has not recognised a liability for unfunded superannuation liability.  The Court does, however, recognise an expense and a corresponding revenue item, “Liabilities assumed by other agencies", in respect of the notional amount of the employer contributions to Judges’ pensions for the reporting period amounting to $7,283,979 (2004-05: $6,523,910).  The contribution rate has been provided by the Australian Government Actuary.

 

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 benefits incidental to ownership of leased non-current assets.  In operating leases, the lessor effectively retains substantially all such risks and benefits.

 

Where a non-current asset is acquired by means of a finance lease, the asset is capitalised at the lower of the fair value of the lease property or the present value of minimum lease payments at the beginning of the lease term and a liability recognised at the same time and for the same amount.  The discount rate used is the interest rate implicit in the lease.  Leased assets are amortised over the period of the lease.  Lease payments are allocated between the principal component and the interest expense.

 

Operating lease payments are expensed on a straight line basis unless another systematic approach is more representative of the pattern of benefits derived from the leased assets.

 

1.10     Borrowing Costs

All borrowing costs are expensed as incurred.

 

1.11     Cash

Cash means notes and coins held and any deposits held at call with a bank or financial institution.  Cash is recognised at its nominal amount.

 

1.12     Financial Risk Management

 

The Court’s activities expose it to normal commercial financial risk.  As a result of the nature of the Court’s business and internal and Australian Government policies managing financial risk, the Court’s exposure is considered to be low.

 

1.13     Derecognition of Financial Assets and Liabilities

 

As prescribed in the FMO, the Court has applied the option in AASB 1 of adopting AASB 132 and 139 from 1 July 2005 rather than 1 July 2004.

 

Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire or the asset is transferred to another entity.  In the case of a transfer to another entity, the risks and rewards of ownership must be transferred.

 

Financial liabilities are derecognised when the obligation under the contract is discharged, cancelled or expires.

 

For the comparative year, financial assets were derecognised when the contractual right to receive cash no longer existed.  Financial liabilities were derecognised when the contractual obligation to pay cash no longer existed.

FEDERAL COURT OF AUSTRALIA

1.14     Impairment of Financial Assets

 

As prescribed in the FMO the Court has applied the option in AASB 1 of adopting AASB 132 and 139 from 1 July 2005 rather than 1 July 2004.

 

Financial assets are assessed for impairment at each balance date.

 

Financial Assets held at Amortised Cost

 

If there is objective evidence that an impairment loss has occurred for loans and receivables, the amount of 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 loss is recognised in the income statement.

 

Comparative Year

 

The above policy was not applied for the comparative year.  For receivables, amounts were recognised at original invoice amount less a provision for doubtful debts when collection of the full amount was no longer probable.  Bad debts were written off as incurred.

 

Other financial assets carried at cost which were not held to generate net cash inflows, were assessed for indicators of impairment.  Where such indicators were found to exist, the recoverable amount of the assets was estimated and compared to the assets carrying amount and, if less, reduced to the carrying amount.  The reduction was shown as an impairment loss.

 

1.15     Interest Bearing Loans and Borrowings

 

Government loans are carried at the balance yet to be repaid.  Interest is expensed as it accrues.

 

1.16     Trade Creditors

 

Trade creditors and accruals are recognised at the amounts at which the liabilities will be settled.  Liabilities are recognised to the extent that the goods or services have been received irrespective of having been invoiced.

 

1.17     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 revenues at their fair value at the date of acquisition.

 

1.18        Property, Plant and Equipment (PP&E)

 

Asset Recognition Threshold

 

Purchases of property, plant and equipment are recognised initially at cost in the Balance Sheet, except for purchases of:

·         assets other than information technology equipment costing less than $2,000; and

·         information technology equipment costing less than $1,500;

 

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.

FEDERAL COURT OF AUSTRALIA

 

Revaluations

 

Basis

 

Buildings, infrastructure, plant and equipment are carried at fair value.  They are revalued with sufficient frequency such that the carrying amount of each asset class is not materially different, at reporting date, from its fair value.  The frequency of valuations depends upon the volatility of movements in market values for the revalued assets. Valuations are done as at 30 June.

 

Fair values for each class of asset are:

 

Asset class	Fair value measured at:
Buildings	Market selling price
Leasehold improvements	Depreciated replacement cost
Plant & Equipment	Market selling price

 

Valuation adjustments are done by classes.  Valuation increments are credited to equity under the asset revaluation reserve except to the extent that it reverses a previous valuation decrement of the same asset class previously recognised through the Income Statement. 

 

Valuation decrements for a class of assets are recognised directly through the Income Statement except to the extent that they reverse a previous valuation increment for that class.

 

Any accumulated depreciation as at the valuation date is offset against the gross carrying amount of the asset and the net amount restated to the revalued amount.

 

Depreciation and amortisation

 

Depreciable property plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the Court using the straight-line method of depreciation.  Leasehold improvements are depreciated over the lesser of the estimated useful life of the improvements or the unexpired period of the lease.

 

Depreciation rates, residual values and methods are reviewed at each reporting date. Necessary adjustments are recognised in the current and future reporting periods, as appropriate. 

 

Depreciation and amortisation rates for each class of depreciable asset are based on the following useful lives:

 

	2006		2005
Leasehold improvements	10 years or Lease term		10 years or Lease term
Plant and equipment – excluding library materials	3 to 10 years		4 to 10 years
Plant and equipment – library materials	5 to 40 years		5 to 40  years

 

Impairment

 

All assets were assessed for impairment at 30 June 2006.  Where indications of impairment exist, the asset’s recoverable amount is estimated and an adjustment made if the asset’s recoverable amount is less that 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 Court were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

FEDERAL COURT OF AUSTRALIA

 

1.19     Intangibles

 

The Court’s intangibles comprise externally developed software for internal use.  These assets are carried at cost.

 

Software is amortised on a straight line basis over its anticipated useful life of 5 years (2004-05: 5 years).

 

All software assets are assessed for indications of impairment at 30 June.

 

1.20     Taxation

 

The Court is exempt from all forms of taxation except fringe benefits tax and goods and services tax (GST).

 

Revenues, expenses and assets are recognised net of GST:

 

·         except where the amount of GST incurred is not recoverable; and

·         except for receivables and payables.

 

1.21     Resources provided free of charge

 

Federal Magistrates Court

 

The Court provides resources free of charge to the Federal Magistrates Court (FMC) in accordance with sections 90, 92 and 99 of the Federal Magistrates Act 1999.  Resources provided free of charge include:

 

·         Court staff performing work on behalf of the FMC; and

·         accommodation, including access to the Court's courtrooms.

 

The estimated cost of resources provided free of charge by the Court to the FMC during 2005-06 was $7,936,932 (2004-05: $5,323,427).

 

Industrial Relations Court of Australia

 

Schedule 16 of the Workplace Relations and Other Legislation Amendment Act 1996 (WROLA), provided for the jurisdiction previously exercised by the Industrial Relations Court of Australia (IRC) to be transferred to the Court on 26 May 1997. 

 

The IRC continues to have jurisdiction over certain matters where a substantive hearing in the proceedings had commenced, or where hearings had been completed before the transfer date.  Schedule 16 of the Workplace Relations and Other Legislation Amendment Act 1996 provides that the Chief Justice of the Court may arrange with the Chief Justice of the IRC for staff, facilities and any other necessary support to be made available to the IRC.

 

The estimated cost of resources provided free of charge by the Court to the IRC during 2005-06 was $1,730 (2004-05 $2,414).

 

In 2005-06 all outstanding matters were finalised by the IRC.

 

1.22     Insurance

 

The Court is insured for risks through the Government’s insurable risk managed fund, ‘Comcover’.  Workers compensation for Court employees is insured though Comcare Australia.  The Chief Justice and Judges of the Court are provided for by the Judges’ Pensions Act 1968 and Act of Grace provisions.
FEDERAL COURT OF AUSTRALIA

 

 

1.23        Reporting of Administered Activities

 

Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the Schedule of Administered Items and related Notes.

 

Except where stated below, administered items are accounted for on the same basis and using the same policies as the Court.

 

Administered Cash Transfers to and from Official Public Account

 

Revenue collected by the Court for the Government rather than the Court is Administered Revenue.  Collections are transferred to the Official Public Account (OPA) maintained by the Department of Finance and Administration.  Conversely, cash is drawn from the OPA to make payments under Parliamentary appropriation on behalf of Government.  These transfers to and from the OPA are adjustments to the administered cash held by the Court on behalf of the Government and reported as such in the Statement of Cash Flows in the Schedule of Administered Items and in the Administered Reconciliation Table in Note 18.  Thus, the Schedule of Administered Items reflects the Government’s transitions, through the Court, with parties outside the Government.

 

Revenues

 

All administered revenues are revenues relating to the core operating activities performed by the Court on behalf of the Commonwealth.

 

Revenue from fees is recognised at the time the services are performed.  The services are performed at the same time as, or within two days of, the fees becoming due and payable.  It is recognised at its nominal amount due less any provision for bad or doubtful debts.  Collectability of debts is reviewed at balance date.  Provisions are made when collection of the debt is judged to be less rather than more likely.  Revenue from fines is recognised in the period in which the invoice for the fine is raised.

 

 

Note 2:            The impact of the transition to AEIFRS from previous AGAAP

 

There are no adjustments to the Court’s Departmental or Administered assets and liabilities due to the transition to AEIFRS.

FEDERAL COURT OF AUSTRALIA

2006 $’000

2005 $’000

Note 3:            Income

 

Revenues

 

Note 3A:                Revenues from Government

Appropriations for outputs	81,126		73,204
Total revenues from Government	81,126		73,204

 

Note 3B:                 Goods and Services

Services	2,472		2,401
Total sales of services	2,472		2,401
Rendering of services to:
Related entities	2,065		2,193
External entities	407		208
Total rendering of services	2,472		2,401

Note 3C:                 Interest Revenue

Interest on deposits	614		490
Gains

Note 3D:                Net Gains (Loss) from Sale of Assets

Infrastructure, plant and equipment:
Proceeds from disposal	14		12
Net book value of assets disposed	4		(41)
Net gain/(loss) from disposal of infrastructure, plant and equipment	18		(29)

Note 3E:                 Other Gains

Liabilities assumed by other agencies	7,284		6,524
Resources received free of charge	6,096		5,732
	13,380		12,256

 

Resources received free of charge includes an amount of $5,547,582 (2004-05: $5,547,582) in respect of rent and outgoings associated with the accommodation occupied by the Court in the Law Courts Building located in Sydney, New South Wales.  This building is owned by Law Courts Limited, a joint venture between the NSW State and Commonwealth Governments.

Note 4:            Operating Expenses

 

Note 4A:                Judges and Employee Expenses

Remuneration	38,157		36,332
Superannuation	10,392		9,567
Separation and redundancies	138		441
Total employee expenses	48,687		46,340

Note 4B:                 Supplier Expenses

Provision of goods - external entities	3,096		2,780
Rendering of services - related entities	1,591		1,713
Rendering of services - external entities	15,335		10,295
Operating lease rentals*	20,940		22,870
Workers compensation premiums	243		268
Total supplier expenses	41,205		37,926

* These comprise minimum lease payments only.

FEDERAL COURT OF AUSTRALIA

2006 $’000

2005 $’000

 

Note 4C:                 Depreciation and Amortisation

Depreciation
Leasehold improvements	1,048		952
Plant and equipment	770		731
Total Depreciation	1,818		1,683
Amortisation
Intangibles – computer software	212		278
Leased plant and equipment	455		196
	667		474
Total depreciation and amortisation	2,485		2,157

 

 

Note 4D:                Finance Costs

Leases	60		30
Total finance costs expense	60		30

 

 

Note 4E:                 Write down of Assets

Non-financial assets
Plant & equipment	264		8
Total write-down of assets	264		8

 

Note 5:            Financial Assets

 

 

Note 5A:                Cash

Departmental (other than special accounts)	348		1,761
Total cash and cash equivalents	348		1,761

 

 

Note 5B:                 Receivables

Goods and services	536		66
GST receivable from the Australian Taxation Office	563		515
Appropriations receivable:
- for existing outputs	31,701		13,404
Total receivables (net)	32,800		13,985
All receivables are current assets.  Credit terms are net 30 days (2005: 30 days).

 

Receivables (gross) are aged as follows:
Current Overdue by:	32,741		13,924
Less than 30 days	7		8
30 to 60 days	1		2
61 to 90 days	0		4
More than 90 days	51		47
	59		61
Total receivables (gross)	32,800		13,985

FEDERAL COURT OF AUSTRALIA

2006 $’000

2005 $’000

Note 6:            Non-Financial Assets

 

Note 6A:                Land and Buildings

Leasehold improvements
– at cost	-		954
– accumulated amortisation	-		(65)
	-		889
– fair value	7,265		4,053
– accumulated amortisation	(1,645)		(887)
	5,620		3,166
Total Land and Buildings (non-current)	5,620		4,055

 

 

Note 6B:                 Infrastructure, Plant and Equipment

Infrastructure, plant and equipment
– at cost	-		2,041
– accumulated depreciation	-		(241)
	-		1,800
– fair value	13,015		7,623
– accumulated depreciation	(2,108)		(677)
	10,907		6,946
Total Infrastructure, Plant and Equipment  (non-current)	10,907		8,746

Plant and equipment under finance leases is subject to revaluation.  The carrying amount is included in the valuation figures above and is separately disclosed in Table B below.

 

All revaluations are conducted in accordance with the valuation policy stated in Note 1.  In 2004-05, the formal valuations were conducted by an independent valuer (Australian Valuation Office). 

 

 

Note 6C:                 Intangible Assets
Computer software	2,135		2,058
– accumulated amortisation	(1,691)		(1,479)
	444		579
Total Intangibles (non-current)	444		579

FEDERAL COURT OF AUSTRALIA

 

Note 6D:                                Analysis of Property, Plant, Equipment and Intangibles

 

TABLE A - Reconciliation of the opening and closing balances of property, plant, equipment and

      intangibles

 

Item	Leasehold improvement – Total land and buildings $’000	Infrastructure, plant and equipment   $’000	Computer Software – Intangibles $’000	Total     $’000
As at 1 July 2005
Gross book value	5,007	9,665	2,058	16,730
Accumulated depreciation/amortisation	(952)	(919)	(1,479)	(3,350)
Opening Net Book Value	4,055	8,746	579	13,380
Additions:
by purchase	2,876	3,393	77	6,346
Depreciation/amortisation expense	(1,048)	(1,224)	(213)	(2,485)
Disposals:
Other disposals	(263)	(7)	-	(270)
As at 30 June 2006
Gross book value	7,265	13,015	2,135	22,415
Accumulated depreciation/amortisation	(1,645)	(2,108)	(1,691)	(5,444)
Closing Net book value	5,620	10,907	444	16,971

 

 

 

Note 6D:                                Analysis of Property, Plant, Equipment and Intangibles

 

TABLE B – Property, Plant, Equipment held under Finance Lease

 

Item	Leasehold improvement – Total land and buildings $’000	Total plant and equipment $’000
As at 30 June 2006
Gross value	-	2,022
Accumulated depreciation/amortisation	-	(650)
Net book value	-	1,372
As at 30 June 2005
Gross value	-	798
Accumulated depreciation/amortisation	-	(196)
Net book value	-	602

 

 

 

Note 6D:                                Analysis of Property, Plant, Equipment and Intangibles

 

TABLE C – Property, Plant, Equipment under construction

 

Item	Leasehold improvement – Total land and buildings $’000	Total plant and equipment $’000
Carrying amount at 30 June 2006	-	782
Carrying amount at 30 June 2005	-	235

FEDERAL COURT OF AUSTRALIA

2006 $’000

2005 $’000

 

Note 6E:                 Other Non-Financial Assets

 

Prepayments

5,492

19,157

All other non-financial assets are current assets.

 

Note 7:            Payables

 

 

Trade creditors	404		401
Sundry creditors	-		215
Total supplier payables	404		616
Supplier payables are represented by:
Current	404		616
Total supplier payables	404		616

 

Settlement is usually made net 30 days.

 

Note 8:            Interest Bearing Liabilities

 

Note 8A:                                Leases

 

Finance lease commitments

Payable:

 

Within one year
Minimum lease payments	700		279
Deduct: future finance charges	(63)		(30)
	637		249
In one to five years
Minimum lease payments	812		392
Deduct: future finance charges	(38)		(20)
	774		372
Finance lease recognised in balance sheet	1,411		621

Finance leases exist in relation to certain major IT equipment assets and some office equipment.  The leases are non-cancellable and for fixed terms averaging three years, with a maximum of five years.  The interest rate implicit in the leases averaged 5.39% (2005: 5.25%).  The leased assets secure the lease liabilities.  The Court guarantees the residual values of all assets leased.  There are no contingent rentals.

 

 

Note 8B:                 Other Interest Bearing Liabilities

 

 

Lease incentives	-		139
Other interest bearing liabilities are represented by:
Current	-		139
Total other interest bearing liabilities	-		139

FEDERAL COURT OF AUSTRALIA

2006 $’000

2005 $’000

Note 9:            Provisions

 

Salaries and wages	203		97
Leave	14,566		14,071
Superannuation	768		750
Fringe Benefits Tax	191		201
Total Provisions	15,728		15,119
Current Non-current	14,889 839		14,378 741
Total Provisions	15,728		15,119

 

Note 10:          Cash Flow Reconciliation

 

Reconciliation of cash per Income Statement to Statement of Cash Flows
Cash at year end per Statement of Cash Flows Balance Sheet items comprising above cash: 'Financial Assets - Cash'	348 348		1,761 1,761
Reconciliation of operating result to net cash from operating activities:
Operating result	4,909			1,891
Depreciation/amortisation	2,485			2,157
Net write down of non-financial assets	264			8
(Gain/)Loss on disposal of assets	(18)			29
(Increase)/decrease in net receivables	(18,815)			(906)
(Increase)/decrease in prepayments	13,665			(3,067)
Increase/(decrease) in suppliers payables	(212)			430
Increase/(decrease) in judge and employee provisions	609			(75)
Increase/(decrease) in other liabilities	651			(204)
Net cash from operating activities	3,538			263

The variation in prepayments relates to the cessation of contractual arrangements for property management services.

Note 11:          Executive Remuneration

 

	2006		2005
The number of senior executives who received or were due to receive total remuneration of $130,000 or more:
$130,000 to $144,999	-		1
$145,000 to $159,999	1		-
$160,000 to $174,999	1		1
$175,000 to $189,999	4		1
$190,000 to $204,999	2		4
$205,000 to $219,999	1		3
$220,000 to $234,999	2		1
$235,000 to $249,999	-		1
$265,000 to $279,000	1		-
Total	12		13

FEDERAL COURT OF AUSTRALIA

	2006		2005
The aggregate amount of total remuneration of executives shown above:	$2,391,069		$2,398,840
The aggregate amount of separation and redundancy/termination benefit payments during the year to executives shown above:	$3,627		$169,530

 

Note 12:          Remuneration of Auditors

 

	2006			2005
Financial statement audit services are provided free of charge to the Court.    The fair value of audit services provided was:	$76,000			$72,000
The audit fees for the IRC are borne by the Court and have been included in the amounts disclosed in this note.  No other services were provided by the Auditor-General during the financial year.

 

 

Note 13:          Average Staffing Levels

 

	2006		2005
The average staffing levels for the Federal Court during the year were:	351		346

 

Note 14:          Financial Instruments

 

Note 14A:              Interest Rate Risk

 

Financial Instrument	Note	Floating Interest Rate		Non-Interest Bearing						Total			Weighted Average Effective Interest Rate
		2006 $’000	2005 $’000	2006 $’000			2005 $’000			2006 $’000		2005 $’000	2006 %	2005 %
Financial Assets
Cash at bank	5A	348	1,761	-			-			348		1,761	2	2
Receivables for goods and services (gross)	5B	-	-	32,800			13,985			32,800		13,985	n/a	n/a
Total		348	1,761	32,800			13,985			33,148		15,746
Total Assets										33,148		15,746
Financial Liabilities
Trade creditors	7	-	-	404			616			404		616	n/a	n/a
Finance lease liabilities	8A	1,411	621	-			-			1,411		621	5.22	5.21
Lease incentives	8B	-	-	-			139			-		139	n/a	n/a
Total		1,411	621	404			755			1,815		1,376
Total Liabilities										1,815		1,376

FEDERAL COURT OF AUSTRALIA

 

The net fair values of cash, investments and non-interest-bearing financial assets approximate their carrying amounts.  The net fair values for finance lease liabilities, lease incentives and trade creditors are approximated by their carrying amounts.

 

Credit Risk Exposures

The Court’s maximum exposures to credit risk at reporting date in relation to each class of recognised financial assets is the carrying amount of those assets as indicated in the Balance Sheet.

 

The Court has no significant exposures to any concentrations of credit risk.

 

All figures for credit risk referred to do not take into account the value of any collateral or to other security.

 

This note also applies to the Court’s administered financial instruments and is therefore not reproduced at Note 19.

 

 

Note 15:	Income Administered on Behalf of Government
		2006		2005
		$’000		$’000
Fees (filing and hearing fees)		6,167		5,220
Fines		43		1,646
Other		86		148
Total Revenues Administered on Behalf of Government		6,296		7,014
Note 16:	Expenses Administered on Behalf of Government
Note 16:         Other
Refund of fees and fines		89		65
Fees and fines – provision for doubtful debts		-		58
Total Expenses Administered on Behalf of Government		89		123
Note 17:	Assets Administered on Behalf of Government
Note 17A:         Cash and cash equivalents
Administered bank account		19		30
Note 17B:         Receivables
Fees (filing and hearing fees)		416		427
Credit terms are net 30 days (2005: 30 days).
Less: Allowance for doubtful debts		(44)		(94)
Total Receivables (net)		372		333

FEDERAL COURT OF AUSTRALIA

							2006						2005
							$’000						$’000
Receivables (gross) are aged as follows:
Current							101						-
Overdue by:
- Less than 30 days							95						110
- 30 to 60 days							79						78
- 60 to 90 days							23						54
- More than 90 days							118						185
Total Receivables (gross)							416						427
Total Assets Administered on Behalf of Government							391						363
Note 18:	Administered Reconciliation Table
Opening administered assets less administered liabilities as at 1 July							363						161
Plus:  Administered revenues							6,296						7,014
Less:  Administered expenses							(89)						(123)
Appropriation transfers from OPA							90						62
Transfers to OPA							(6,269)						(6,751)
Closing administered assets less administered liabilities as at 30 June							391						363
Note 19:          Administered Financial Instruments
Administered Interest Rate Risk
Financial Instrument		Notes	Non-Interest Bearing			Total					Weighted Average
			2006 $’000	2005 $’000		2006 $’000			2005 $’000		2006 %			2005 %
Financial Assets
Cash		17A	19	30		19			30		n/a			n/a
Receivables (gross)		17B	372	333		372			333		n/a			n/a
Total			391	363		391			363
Total Assets						391			363
The net fair values of cash and non-interest-bearing monetary financial assets approximate their carrying amounts.

FEDERAL COURT OF AUSTRALIA

Note 20:          Appropriations

Note 20A:              Acquittal of Authority to Draw Cash from the Consolidated Revenue Fund for Ordinary Annual Services Appropriations

 

Particulars	Departmental Outputs
	2006 $	2005 $
Balance carried from previous period	13,839,300	14,717,000
Unspent receipts from 1999-2004 where no s31 agreement was in place	-	1,325,700
Unspent prior year appropriations – ineffective s31	-	7,782,996
Adjusted Balance carried for previous period	13,839,300	5,608,304
Appropriation Act (No.1)	79,428,000	68,735,000
Appropriation Act (No.3)	1,698,000	4,469,000
Departmental adjustments by the Finance Minister (Appropriation Acts)	1,325,700	-
Comcover receipts (Appropriation Act s13)	4,548	33,411
Adjustment of appropriations on change of entity function (FMA s32)	-	-
Refunds credited (FMA s30)	3,500,000	-
Appropriation reduced by section 9 determinations (current year)	-	-
Sub-total Annual Appropriation	85,956,248	73,237,411
Appropriations to take account of recoverable GST (FMA s30A)	3,557,000	3,240,000
Annotations to ‘net appropriations’ (FMA s31)	2,068,992	592,405
Year ended variation – s31	-	9,798,958
Total appropriations available for payments	105,421,540	92,477,078
Cash payments made during the year (GST inclusive)	74,743,540	78,637,778
Appropriations credited to special Accounts (excluding GST)	-	-
Balance of Authority to Draw Cash from the CRF for Ordinary Annual Services Appropriations	30,678,000	13,839,300
Represented by:
Cash at bank and on hand	348,000	1,761,000
Receivable – departmental appropriations	30,330,000	10,752,600
Receipts from periods of no s31 agreement in years 1999-2005 not currently available	-	1,325,700
Total	30,678,000	13,839,300

 

 

Note 20B:               Acquittal of Authority to Draw Cash from the Consolidated Revenue Fund for Other than Ordinary Annual Services Appropriations

 

	Non-operating				Total
	Equity		Previous Years’ Outputs
	2006 $	2005 $	2006 $	2005 $	2006 $	2005 $
Balance carried forward from previous period	-	50,000	-	267,000	-	317,000
Appropriation Act (No.4)	1,371,000	1,908,000	-	-	1,371,000	1,908,000
Total appropriations available for payments	1,371,000	1,958,000	-	267,000	1,371,000	2,225,000
Cash payments made during the year (GST inclusive)	-	1,958,000	-	267,000	-	2,225,000
Balance of Authority to Draw Cash from the Consolidated Revenue Fund for Other Than Ordinary Annual Services Appropriations	1,371,000	-	-	-	1,371,000	-

FEDERAL COURT OF AUSTRALIA

Note 21:          Special Accounts

 

Other Trust Moneys Account 2006 2005   $ $ Legal Authority:  Financial Management and Accountability Act 1997; s 20   Purpose:   for expenditure of moneys temporarily held on trust or otherwise for the benefit of a person other than the Commonwealth.  This account is interest bearing. Balance carried from previous year 38,782 54,470 Receipts during 2005/06 1,047,261 29,868 Available for payments 1,086,043 84,338 Payments made during 2005/06 1,038,420 45,556 Balance carried to next year 47,623 38,782 Represented by:     Cash – held by the Court 47,623 38,782 Total 47,623 38,782     Services for other Governments & Non-agency bodies 2006 2005   $ $ Legal authority:  Financial Management and Accountability Act, 1997, s 20   Purpose:   for expenditure in connection with services performed on behalf of other Governments and bodies that are not FMA agencies.  This account is interest bearing. Balance carried from previous year 10,398 10,398 Receipts during 2005/06 - - Available for payments 10,398 10,398 Payments made during 2005/06 - - Balance carried to next year 10,398 10,398 Represented by:     Cash – held by the Court 10,398 10,398 Total 10,398 10,398

 

 

Federal Court of Australia Litigant’s Fund	2006	2005
	$	$
Legal Authority:  Financial Management and Accountability Act, 1997, s20   Purpose:  to hold private moneys for litigants pending acceptance of moneys paid into Court by litigants; security for costs or pursuant to an order of a Federal Court Judge.  This account is non-interest bearing.
Balance carried from previous year	1,199,753	797,165
Receipts during 2005/06	2,466,458	1,583,997
Available for payments	3,666,211	2,381,162
Payments made during 2005/06	1,994,568	1,181,409
Balance carried to next year	1,671,643	1,199,753
Represented by:
Cash – held by the Court	1,671,643	1,199,753
Total	1,671,643	1,199,753

FEDERAL COURT OF AUSTRALIA

 

Federal Court of Australia Litigant’s Fund	2006	2005
	$	$
Legal authority: Financial Management and Accountability Act, 1997, s39   Purpose:   to invest private moneys paid by litigants pursuant to an order of a Federal Court Judge, pending an order for payment out by a Federal Court Judge.  This account is interest bearing.
Balance carried from previous year	1,674,832	1,734,235
Receipts during 2005/06	15,548,065	1,362,959
Available for payments	17,222,897	3,097,194
Payments made during 2005/06	4,823,185	1,422,362
Balance carried to next year	12,399,712	1,674,832
Represented by:
Cash – held by the Court	12,399,712	1,674,832
Total	12,399,712	1,674,832

Note 22:          Comcare Account

Comcare account 2006 2005   $ $ This account holds monies advanced to the Court by COMCARE to distribute compensation payments made in accordance with the Safety Rehabilitation and Compensation Act 1998.  Where the Court makes payments against accrued sick leave entitlements pending determination of an employee’s claim, permission is obtained in writing from each individual to allow the Court to recover the payments from the monies in the account.   Balance carried from previous year - - Receipts during 2005/06 4,548 33,411 Available for payments 4,548 33,411 Payments made during 2005/06 (3,766) (33,411) Balance carried to next year 782 - Represented by:     Cash – held by the Court 782 - Total 782 -

Note 23:          Compensation and Debt Relief

		2006		2005
Administered		$		$
No Act of Grace payments were made during the financial year 2005-06 under sub-section 33(1) of the Financial Management and Accountability Act 1997.		-		-
No payments were waived during the financial year 2005-06 under subsection 34(1) of the Financial Management and Accountability Act 1997.		-		-
3,183 exemptions and waivers of amounts owing to the Commonwealth were made pursuant to sub-regulations 2(4)(a-c), 2A(2)(e-g), 2AA(2)(f-h) of the Federal Court Act 1976 (2005: 2,566).		2,812,085		2,257,196

Departmental

 

No payments were made under the ‘Defective Administration Scheme’ during the financial year 2005-06.

FEDERAL COURT OF AUSTRALIA

 

Note 24:          Reporting of Outcomes

 

Note 24A:              Net Cost of Outcome Delivery

 

The Court has one Output and Outcome:

 

To apply and uphold the rule of law to deliver remedies and enforce rights and in so doing, contribute to the social and economic development and well-being of all Australians.

 

Outcome 1	Outcome 1
	2006 $’000	2005 $’000
Administered expenses	89	123
Departmental expenses	92,701	86,472
Total expenses	92,790	86,595
Costs recovered from provision of goods and services to the non-government sector
Administered	-	-
Departmental	-	-
Total costs recovered	-	-
Other external revenues
Administered	6,296	7,014
Total Administered	6,296	7,014
Departmental
Other	614	490
Goods and services revenue from Related Entities	2,490	2,413
Total Departmental	3,104	2,903
Total other external revenues	9,400	9,917
Net cost/(contribution) of outcome	83,390	76,678

 

 

Note 24B:               Major Classes of Departmental Revenues and Expenses by Outputs

 

Outcome 1	Outcome 1
	2006 $’000	2005 $’000
Departmental Expenses
Judges and employees	48,687	46,340
Suppliers	41,205	37,926
Depreciation and amortisation	2,485	2,157
Finance costs	60	30
Other expenses	264	49
Total departmental expenses	92,701	86,472
Funded by:
Revenues from government	94,506	85,460
Sale of goods and services	2,490	2,413
Other non-taxation revenues	614	490
Total departmental revenues	97,610	88,363

 

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