Appendix 1: Financial Statements

Federal Court of Australia Annual Report 2011-2012

Independent auditor's report

To the Attorney-General

I have audited the accompanying financial statements of the Federal Court of Australia for the year ended 30 June 2012, which comprise a Statement by the Registrar and Chief Finance Officer; Statement of Comprehensive income; Balance Sheet; Statement of Changes in Equity; Cash Flow Statement; Schedule of Commitments; Schedule of Contingencies; Administered Schedule of Comprehensive Income; Administered Schedule of Assets and Liabilities; Administered Reconciliation Schedule; Administered Cash Flow Statement; Schedule of Administered Commitments; Schedule of Administered Contingencies and Notes to and forming part of the Financial Statements, including a Summary of Significant Accounting Policies.

Registrar's Responsibility for the Financial Statements

The Registrar of the Federal Court of Australia is responsible tin the preparation of the financial statements that give a true and fair view in accordance with the Finance Minister's Orders made under the Financial Management and Accountability Act 1997, including the Australian Accounting Standards, and for such internal control as is necessary to enable the preparation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

My responsibility is to express an opinion on the financial statements based on my audit. I have 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 perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Federal Cowl of Australia's preparation of the financial statements that give a true and fair view in order to design audit procedures that re appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Federal Court of Australia's internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the Registrar of the Federal Court of Australia, as well as evaluating the overall presentation of the financial statements.

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 requirement of the Australian accounting profession.

Opinion

In my opinion, the financial statements of the Federal Court of Australia:
(a) have been prepared in accordance with the Finance Minister's Orders made under the Financial Management and Accountability Act 1997, including Australian Accounting Standards; and

(b) give a true and fair view of the matters required by the Finance Minister's Orders including the Federal Court of Australia's financial position as at 30 June 2012 and of its financial performance and cash flows for the year then ended.

Australian National Audit Office

Kristian Gage
Audit Principal

Delegate of the Auditor-General

Canberra
4 September 2012


 

Statement by the Registrar and Chief Financial Officer

In our opinion, the attached financial statements for the year ended 30 June 2012 are based on properly maintained financial records and give a true and fair view of the matters required by the Finance Minister's Orders made under the Financial Management and Accountability Act 1997. as amended.

Signed                                                          Signed
Warwick Soden                                           Peter Bowen
Registrar and Chief Executive Officer            Chief Finance Officer
3 September 2012                                        3 September 2012


Statement of comprehensive income

For the period ended 30 June 2012

 

NOTES

2012
$'000

2011
$'000

 

 

 

 

EXPENSES

 

 

 

Judge benefits

2A

30,126

27,420

Employee benefits

2A

32,100

31,410

Suppliers

2B

49,892

45,221

Depreciation and amortisation

2C

3,148

2,845

Finance costs

2D

85

18

Write-down and impairment of assets

2E

11

5,113

Loss on sale of assets

2F

3

Other payments to FMC

2G

387

Contribution to FMC

2H

2,561

Total Expenses

 

115,362

114,978

 

 

 

 

Less:
OWN-SOURCE INCOME

 

 

 

Own-source revenue

 

 

 

Sale of goods and rendering of services

3A

4,566

2,532

Total own-source revenue

 

4,566

2,532

 

 

 

 

Gains

 

 

 

Sale of assets

2F

Other gains

3B

20,420

15,754

Total gains

 

20,420

15,754

Total own-source income

 

24,986

18,286

 

 

 

 

Net cost of services

 

90,376

96,692

 

 

 

 

Revenue from Government

3C

86,116

88,325

(Deficit) attributable to the Australian Government

 

(4,260)

 (8,367)

 

 

 

 

OTHER COMPREHENSIVE INCOME

 

 

 

Changes in asset revaluation surplus

 

295

Total comprehensive income

 

295

Total comprehensive income (Loss) attributable
to the Australian Government

 

(4,260)

(8,072)

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

 

Balance sheet

As at 30 June 2012

 

NOTES

2012
$'000

2011
$'000

 

 

 

 

ASSETS

 

 

 

Financial Assets

 

 

 

Cash and cash equivalents

4A

1,353

810

Trade and other receivables

4B

30,846

29,591

Total financial assets

 

32,199

30,401

 

 

 

 

Non-Financial Assets

 

 

 

Land and buildings

5A

11,590

12,273

Infrastructure, plant and equipment

5B

6,530

5,845

Intangibles

5C

2,611

1,596

Other non-financial assets

5E

543

1,825

Total non-financial assets

 

21,274

21,539

Total Assets

 

53,473

51,940

 

 

 

 

LIABILITIES

 

 

 

Payables

 

 

 

Suppliers

6A

(1,185)

(940)

Other Payables

6B

(1,349)

(915)

Total payables

 

(2,534)

(1,855)

 

 

 

 

Interest Bearing Liabilities

 

 

 

Leases

7

(1,183)

(735)

Total interest bearing liabilities

 

(1,183)

(735)

 

 

 

 

Provisions

 

 

 

Judge and employee provisions

8

(17,069)

(15,805)

Total provisions

 

(17,069)

(15,805)

Total Liabilities

 

(20,786)

(18,395)

Net Assets

 

32,687

33,545

 

 

 

 

EQUITY

 

 

 

Contributed equity

 

19,727

16,325

Reserves

 

1,584

1,584

Retained surplus

 

11,376

15,636

Total Equity

 

32,687

33,545

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

 

Statement of changes in equity

For the period ended 30 June 2012

 

Retained
Earnings

Asset Revaluation
Surplus

Contributed
Equity/Capital

Total Equity

 

2012
$'000

2011
$'000

2012
$'000

2011
$'000

2012
$'000

2011
$'000

2012
$'000

2011
$'000

 

 

 

 

 

 

 

 

 

Opening balance

15,636

24,003

1,584

1,289

16,325

9,719

33,545

35,011

Comprehensive Income

 

 

 

 

 

 

 

 

Other Comprehensive Income

295

295

(Deficit) for period

(4,260)

(8,367)

(4,260)

(8,367)

Total comprehensive income

(4,260)

(8,367)

295

(4,260)

(8,072)

 

Contributions by owners

 

 

 

 

 

 

 

 

Equity Injection – Appropriations

360

360

Departmental Capital Budget

3,402

6,246

3,402

6,246

Sub-total transactions
with owners

3,402

6,606

3,402

6,606

Closing balance as
at 30 June

11,376

15,636

1,584

1,584

19,727

16,325

32,687

33,545

Closing balance attributable to the Australian Government

11,376

15,636

1,584

1,584

19,727

16,325

32,687

33,545

 

 

 

 

 

 

 

 

 

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

 

Cash flow statement

For the period ended 30 June 2012

 

NOTES

2012
$'000

2011
$'000

 

 

 

 

OPERATING ACTIVITIES

 

 

 

Cash received

 

 

 

Goods and services

 

4,344

 1,812

Appropriations

 

89,160

96,035

Refunds credited

 

43

26

Net GST received

 

189

190

Total cash received

 

93,736

98,063

 

 

 

 

Cash used

 

 

 

Judges and employees

 

(49,796)

(49,556)

Suppliers

 

(39,021)

(46,577)

Borrowing costs

 

(85)

(18)

Section 31 receipts transferred to OPA

 

(4,170)

(1,613)

Total cash used

 

(93,072)

(97,764)

Net cash from operating activities

9

664

299

 

 

 

 

INVESTING ACTIVITIES

 

 

 

Cash received

 

 

 

Proceeds from sales of property, plant and equipment

 

2

 19

Total cash received

 

2

 19

 

 

 

 

Cash used

 

 

 

Purchase of property, plant and equipment

 

(2,047)

(3,854)

Purchase of intangibles

 

(1,354)

(313)

Total cash used

 

(3,401)

(4,167)

Net cash (used by) investing activities

 

(3,399)

(4,148)

 

 

 

 

FINANCING ACTIVITIES

 

 

 

Cash received

 

 

 

Appropriations – contributed equity

 

3,602

4,195

Total cash received

 

3,602

4,195

 

 

 

 

Cash used

 

 

 

Payment of finance lease liabilities

 

(324)

(123)

Total cash used

 

(324)

(123)

Net cash from financing activities

 

3,278

 4,072

 

 

 

 

Net increase in cash held

 

543

223

Cash at the beginning of the reporting period

 

810

587

Cash at the end of the reporting period

4A

1,353

810

 

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

 

Schedule of commitments

As at 30 June 2012

 

NOTES

2012
$'000

2011
$'000

 

 

 

 

BY TYPE

 

 

 

Commitments receivable

 

 

 

Net GST recoverable on commitments

 

2,473

17,116

Total commitments receivable

 

2,473

17,116

 

 

 

 

Commitments payable

 

 

 

Capital commitments

 

 

 

Property, plant and equipment1

 

(1,045)

(139)

Total capital commitments

 

(1,045)

(139)

 

 

 

 

Other commitments

 

 

 

Operating leases2

 

(24,110)

(187,323)

Other3

 

(2,042)

(817)

Total other commitments

 

(26,152)

(188,140)

Net commitments by type

 

(24,724)

(171,163)

 

 

 

 

BY MATURITY

 

 

 

Commitments receivable

 

 

 

One year or less

 

567

1,686

From one to five years

 

1,906

6,536

Over five years

 

8,894

Total commitments receivable

 

2,473

17,116

 

 

 

 

Capital commitments

 

 

 

One year or less

 

(1,045)

(139)

Total capital commitments

 

(1,045)

(139)

 

 

 

 

Operating lease commitments

 

 

 

One year or less

 

(4,851)

(17,591)

From one to five years

 

(19,259)

(71,896)

Over five years

 

(97,836)

Total operating lease commitments

 

(24,110)

(187,323)

 

 

 

 

Other commitments

 

 

 

One year or less

 

(340)

(817)

From one to five years

 

(1,702)

Total other commitments

 

(2,042)

 (817)

Net Commitments by Maturity

 

(24,724)

(171,163)

NB: Commitments are GST inclusive where relevant.

1. Plant and equipment commitments are primarily contracts for the purchase of furniture and fittings.

Nature of leases/General description

2.Operating leases included are effectively non-cancellable and comprise:

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. In the Northern Territory, space is leased from the Northern Territory Government.

The arrangements for the Court's leases in the Commonwealth Law Courts building have changed from 1 July 2012. The Court will no longer be responsible for lease payments in the special purpose portion of these buildings. This portion includes courtrooms and judicial accommodation. This has led to a significant reduction in the commitment of the Court for operating lease payments.

Agreements for the 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 2013. These vehicles are leased under individual operating leases.

3. Other commitments – The Court has entered into commitments for the provision of information technology and library goods and services.

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

 

Schedule of contingencies

As at 30 June 2012

There were no contingent losses or gains as at 30 June 2012 (2011: nil).

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

 

Schedule of administered items

For the period ended 30 June 2012

 

NOTES

2012
$'000

2011
$'000

 

 

 

 

ADMINISTERED SCHEDULE OF COMPREHENSIVE INCOME

for the period ended 30 June 2012

 

 

 

 

 

 

 

EXPENSES

 

 

 

Fees and fines – provision for doubtful debts

13

(310)

(98)

Total expenses administered on behalf of Government

 

(310)

(98)

 

 

 

 

LESS:

 

 

 

OWN SOURCE INCOME

 

 

 

Own-Source Revenue

 

 

 

Non Taxation Revenue

 

 

 

Fees (filing and hearing fees)

14

10,446

10,514

Fines

14

536

2,032

Other revenue

14

79

 43

Total non-taxation revenue

 

11,061

12,589

 

 

 

 

Total own-source revenue administered on behalf of Government

 

11,061

12,589

Net cost of (contribution by) services

 

(10,751)

(12,491)

 

 

 

 

OTHER COMPREHENSIVE INCOME

 

Total comprehensive income

 

10,751

12,491

       

ASSETS

 

 

 

Financial assets

 

 

 

Cash and cash equivalents

15A

30

23

Receivables

15B

539

803

Total assets administered on behalf of Government

 

569

826

       

LIABILITIES

 

 

 

Payables

 

 

 

Refunds of fees

16A

1

Total payables

 

1

Total liabilities administered on behalf of Government

 

1

 

 

 

 

Net assets

 

569

825

       

Opening net administered assets

 

825

409

Plus: Administered income

 

11,061

12,589

Less: Administered expenses

 

(310)

(98)

Administered transfers to/from Australian Government:

 

 

 

Administered assets and liabilities appropriations

 

315

350

Transfers to OPA

 

(11,322)

(12,424)

Closing net administered assets

 

569

825

       

OPERATING ACTIVITIES

 

 

 

Cash received

 

 

 

Fees

 

10,694

10,304

Fines

 

536

2,059

Other

 

79

 44

Total cash received

 

11,309

12,407

 

 

 

 

Cash used

 

 

 

Refund of court fees and fines

 

(295)

(350)

Total cash used

 

(295)

(350)

Net cash flows from operating activities

 

11,014

12,057

 

 

 

 

Net Increase in cash held

17

11,014

12,057

 

 

 

 

Cash at the beginning of the reporting period

 

23

40

Cash from Official Public Account for:

 

 

 

– Appropriations

 

315

350

 

 

315

350

 

 

 

 

 Cash to Official Public Account

 

(11,322)

(12,424)

 

 

(11,322)

(12,424)

 

 

 

 

Cash at the end of the reporting period

17

30

23

 

 

 

 

 

 

 

 

SCHEDULE OF ADMINISTERED COMMITMENTS

 

 

 

as at 30 June 2012

 

 

 

There were no Administered commitments as at 30 June 2012. (2011: nil)

 

 

 

 

 

 

 

SCHEDULE OF ADMINISTERED CONTINGENCIES

 

 

 

as at 30 June 2012

 

 

 

There were no Administered contingent losses or gains as at
30 June 2012. (2011: nil)

 

 

 

       

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

 

Notes to and forming part of the financial statements

For the period ended 30 June 2012

Note 1: Summary of Significant Accounting Policies

Note 2: Operating Expenses

Note 3: Income

Note 4: Financial Assets

Note 5: Non-Financial Assets

Note 6: Payables

Note 7: Interest Bearing Liabilities

Note 8: Provisions

Note 9: Cash Flow Reconciliation

Note 10: Executive Remuneration

Note 11: Remuneration of Auditors

Note 12: Financial Instruments

Note 13: Income Administered on Behalf of Government

Note 14: Expenses Administered on Behalf of Government

Note 15: Assets Administered on Behalf of Government

Note 16: Liabilities Administered on Behalf of Government

Note 17: Administered Reconciliation Table

Note 18: Administered Financial Instruments

Note 19: Appropriations

Note 20: Special Accounts

Note 21: Compliance with Statutory Conditions for Payments from the Consolidated Revenue Fund

Note 22: Compensation and Debt Relief

Note 23: Reporting of Outcomes

Note 24: Comprehensive Income (Loss) attributable to the Court

 

Note 1: Summary of significant accounting policies

1.1 Objectives of the Court

The Federal Court of Australia is an Australian Government controlled entity. The Court is a not for profit entity. 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 is structured to meet one Outcome:

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.

The Court's activities contributing toward this outcome are classified as either departmental or administered. Departmental activities involve the use of assets, liabilities, revenue and expenses controlled or incurred by the Court in its own right. Administered activities involve the management or oversight by the Court, on behalf of the Government, of items controlled or incurred by the Government.

The Court conducts the following administered activity on behalf of the Government: The collection of fees and fines.

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

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

  • Finance Minister's Orders (or FMOs), for reporting periods ending on or after 1 July 2011; and
  • Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accrual basis and is in accordance with the historical cost convention, except for certain assets at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.

The financial statements are presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified.

Unless alternative treatment is specifically required by an Accounting Standard or the FMOs, assets and liabilities are recognised in the balance sheet when and only when it is probable that future economic benefits will flow to the Court and the amounts of assets or liabilities can be reliably measured. However, assets and liabilities arising under executor contracts are not recognised unless required by an Accounting Standard. Liabilities and assets that are unrecognised are reported in the Schedule of Commitments and the Schedule of Contingencies.

Unless alternative treatment is specifically required by an accounting standard, revenues and expenses are recognised in the Statement of Comprehensive Income 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 departmental items.

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 Changes in Australian Accounting Standards

Adoption of new Australian Accounting Standard requirements

No accounting standard has been adopted earlier than the application date as stated in the standard. No new accounting standards, amendments to standards and interpretations issued by the Australian accounting standards Board that are applicable in the current period have had a material financial affect on the Court.

Future Australian Accounting Standard requirements

New standards, amendments to standards, and interpretations that are applicable to future periods have been issued by the Australian Accounting Standards Board. It is estimated that adopting these pronouncements, when effective, will have no material impact on future reporting periods.

1.5 Revenue

Revenue from the sale of goods is recognised when:

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

b) the entity retains no managerial involvement or effective control over the goods;

c) the revenue and transaction costs incurred can be reliably measured; and

d) it is probable that the economic benefits associated with the transaction will flow to the Court.

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:

a)
The amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and

b) The probable economic benefits associated with the transaction will flow to the Court.

Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at the balance date. Allowances are made when collection of the debt is no longer probable.

Revenue from Government

Amounts appropriated for departmental outputs appropriations for the year (adjusted for any formal additions and reductions) are recognised as revenue when the Court gains control of the appropriation, except for certain amounts that relate to activities which are reciprocal in nature, in which case revenue has been recognised only when it has been earned. Appropriations receivable are recognised at their nominal amounts.

1.6 Gains

Resources Received Free of Charge

Resources received free of charge are recognised as gains when, and only when, a fair value can
be reliably determined and the services would have been purchased if they had not been donated.
Use of these resources is recognised as an expense.

Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Government entity as a consequence of a restructure of administrative arrangements.

Resources received free of charge are recognised as either revenue or gains depending on their nature.

Sale of Assets

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

Equity Injections

Amounts appropriated which are designated as 'equity injections' (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.

Other Distributions to owners

The FMO require that distributions to owners be debited to contributed equity unless it is in the nature
of a dividend.

1.8 Judge and Employee Benefits

Liabilities for 'short-term employee benefits' (as defined in AASB 119 Employee Benefits) and termination benefits due within twelve months of balance date are measured at their nominal amounts.

The nominal amount is calculated with regard to the rates expected to be paid on settlement
of the liability.

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

Leave

The liability for employee benefits includes provision for 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 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.

The leave liabilities are calculated on the basis of employees' remuneration at the estimated salary rates that applied at the time the leave is taken. 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.

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). Some staff members elect to have contributions made to another superannuation fund of their choice.

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. This liability is reported by the Department
of Finance and Deregulation as an administered item.

The Court makes employer contributions to the employee superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government of the superannuation entitlements of the Court's employees. The Court accounts for the contributions as if they were contributions to defined contribution plans. For those staff members who have elected to have contributions made to a scheme of their choice, the Court makes payments of the amount required under Commonwealth legislation.

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

Judges' Pension

Under the Judges' Pension 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 Pension 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 $11,112,406 (2010-11: $9,754,417). 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. An operating lease is a lease that is not a finance lease. In operating leases, the lessor effectively retains substantially all such risks and benefits.

Where a non-current asset is acquired by means of a finance lease, the asset is capitalised at either the fair value of the lease property or, if lower, the present value of minimum lease payments at the inception of the contract 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 which is representative of the pattern
of benefits derived from the leased assets.

1.10 Cash

Cash means notes and coins held and any deposits in bank accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value. Cash is recognised at its nominal amount.

1.11 Financial Assets

Loans and receivables

Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. The Court does not have any loans at the balance sheet date.

Impairment of financial assets

Financial assets are assessed for impairment at each balance date.

  • Financial assets carried at cost – If there is objective evidence that an impairment loss has been incurred, the amount of the impairment loss is the difference between the carrying amount of the asset and the present value of the estimated future cash flows discounted at the current market rate for similar assets.

1.12 Financial Liabilities

Supplier and other payables

Supplier and other payables are recognised at nominal cost. Liabilities are recognised to the extent that the goods or services have been received, irrespective of having been invoiced.

1.13 Contingent Liabilities and Contingent Assets

Contingent liabilities and contingent assets are not recognised in the balance sheet but are reported in the relevant schedules and notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.

1.14 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.

1.15 Property, Plant and Equipment

Asset Recognition Threshold

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

Revaluations

Fair values for each class of asset are determined as shown below:

Asset class Fair value measured at:

Buildings Market selling price

Leasehold improvements Depreciated replacement cost

Plant & Equipment Market selling price

Following initial recognition at cost, buildings, infrastructure, plant and equipment are carried at fair value less accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not differ materially from the assets' fair values as at the reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets.

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the asset revaluation reserve except to the extent that it reverses a previous revaluation decrement of the same asset class previously recognised in the surplus / (deficit). Revaluation decrements for a class of assets are recognised directly through the Income Statement except to the extent that they reverse a previous revaluation increment for that class.

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

Depreciation

Depreciable property plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the Court using, in all cases, 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 (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

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

  2012 2011
Leasehold improvements 10 years or Lease term 10 years or Lease term
Plant and equipment – excluding library materials 3 to 250 years 3 to 250 years
Plant and equipment – library materials 5 to 10 years 5 to 40 years

Impairment

All assets are assessed for impairment at 30 June. 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.

Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal.

1.16 Intangibles

The Court's intangibles comprise externally and internally developed software for internal use.
These assets are carried at cost less accumulated amortisation and accumulated impairment loss.

Software is amortised on a straight line basis over its anticipated useful life of 5 years (2010-11: 5 years).

All software assets were assessed for indications of impairment at 30 June 2012.

1.17 Taxation

The Court is exempt from all forms of taxation except fringe benefits tax (FBT) 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 from the Australia Taxation Office; and
  • for receivables and payables.

1.18 Resources Provided Free of Charge

For the period 1 July 2011 to 30 June 2012, the Court provided $8.855m worth of resources free of charge to the Federal Magistrates Court. (2011: $8.760m).

1.19 Reporting of Administered Activities

Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the administered schedules and related notes.

Except where stated below, administered items are accounted for on the same basis and using the same policies as the Court, including the application of Australian Accounting Standards.

Administered Cash Transfers to and from Official Public Account

Revenue collected by the Court for use by the Government rather than the Court is administered revenue. Collections are transferred to the Official Public Account maintained by the Department of Finance and Deregulation. 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 schedule of administered cash flows and in the administered reconciliation schedule.

Revenue

All administered revenues are revenues relating to the course of ordinary activities performed by the Court on behalf of the Australian Government.

Fees are charged for services provided by the Court to litigants under the Federal Court Regulations.

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 the end of the reporting period. Impairment allowances are made when collectability 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.

1.20 Events After the Reporting Period

The Court has assumed responsibility for administering the National Native Title Tribunal from 1 July 2012. The Court has transferred in assets and liabilities of the NNTT to its balance sheet as at that date.

The event occurred after the end of the reporting period and has no effect on the financial statements for the year ended 30 June 2012.

 

Note 2: Expenses

 

2012
$'000

2011
$'000

NOTE 2A: Judge and Employee benefits

 

 

Judge remuneration

19,014

17,665

Judge notional superannuation

11,112

9,755

 

30,126

27,420

Employee wage & salaries

27,704

27,256

Employee superannuation

4,146

3,721

Employee separation and redundancies

250

433

 

32,100

31,410

 

 

 

Total judge and employee benefits

62,226

58,830

 

 

 

Note 2B: Suppliers

 

 

Goods and Services

 

 

Property operating costs

7,219

7,050

Library purchases

2,898

2,729

Information technology expenditure

3,502

2,951

Travel expenditure

3,768

3,076

Contractors and consultants

1,777

1,554

Other goods and services

3,073

3,003

Total goods and services

22,237

20,363

 

 

 

Goods and services are made up of:

 

 

Provision of goods – external parties

2,001

1,965

Rendering of services – related entities

1,130

1,374

Rendering of services – external parties

19,106

17,024

Total goods and services

22,237

20,363

 

 

 

Other supplier expenses

 

 

Operating lease rentals:

 

 

Minimum Lease Payments

27,460

24,646

Workers compensation premiums

195

212

Total other supplier expenses

27,655

24,858

Total supplier expenses

49,892

45,221

 

 

 

 

2012
$'000

2011
$'000

Note 2C: Depreciation and Amortisation

 

 

Depreciation:

 

 

Buildings

1,641

1,497

Property, plant and equipment1

804

900

Total depreciation

2,445

2,397

Amortisation:

 

 

Intangibles:

 

 

Computer Software

340

321

Leased plant and equipment

363

127

Total amortisation

703

448

Total depreciation and amortisation

3,148

2,845

     

NOTE 2A: Judge and Employee benefits

 

 

Judge remuneration

19,014

17,665

Judge notional superannuation

11,112

9,755

 

30,126

27,420

Employee wage & salaries

27,704

27,256

Employee superannuation

4,146

3,721

Employee separation and redundancies

250

433

 

32,100

31,410

 

 

 

Total judge and employee benefits

62,226

58,830

 

 

 

Note 2B: Suppliers

 

 

Goods and Services

 

 

Property operating costs

7,219

7,050

Library purchases

2,898

2,729

Information technology expenditure

3,502

2,951

Travel expenditure

3,768

3,076

Contractors and consultants

1,777

1,554

Other goods and services

3,073

3,003

Total goods and services

22,237

20,363

 

 

 

Goods and services are made up of:

 

 

Provision of goods – external parties

2,001

1,965

Rendering of services – related entities

1,130

1,374

Rendering of services – external parties

19,106

17,024

Total goods and services

22,237

20,363

 

 

 

Other supplier expenses

 

 

Operating lease rentals:

 

 

Minimum Lease Payments

27,460

24,646

Workers compensation premiums

195

212

Total other supplier expenses

27,655

24,858

Total supplier expenses

49,892

45,221

 

 

 

 

2012
$'000

2011
$'000

Note 2C: Depreciation and Amortisation

 

 

Depreciation:

 

 

Buildings

1,641

1,497

Property, plant and equipment1

804

900

Total depreciation

2,445

2,397

Amortisation:

 

 

Intangibles:

 

 

Computer Software

340

321

Leased plant and equipment

363

127

Total amortisation

703

448

Total depreciation and amortisation

3,148

2,845

1. Depreciation expenses for finance leases were included in the line 'Leased plant and equipment' above.

Note 2D: Finance costs

 

 

Finance leases

85

18

Total finance costs

85

18

 

 

 

Note 2E Write-down and impairment of assets

 

 

Financial assets

 

 

Doubtful Debts Expense

5

Non-financial assets

 

 

Impairment of plant & equipment

6

5,113

Total write-down and impairment of assets

11

5,113

 

 

 

Note 2F: Sale of Assets

 

 

Infrastructure, plant and equipment:

 

 

Proceeds from sale

2

18

Carrying value of assets sold

2

21

Net gain(loss) from sale of assets

 (3)

 

 

 

Note 2G Other payments to FMC

 

 

Other

387

Total other payments to FMC

387

 

 

 

Note 2H Contribution to FMC

 

 

Contribution to FMC

2,561

Total contribution to FMC

 2,561

 

This contribution relates to appropriations that were given to the Federal Court of Australia on the assumption that the Federal Magistrates Court of Australia would cease operation as a prescribed agency from 1 January 2010. However, as this did not happen, the funding received by the Federal Court has been contributed back to the Federal M

Note 3: Income

Own-Source Revenue

 

2012
$'000

2011
$'000

Note 3A: Sale of goods and rendering of services

 

 

 

 

 

Rendering of services – related entities

1,250

 1,216

Rendering of services – external entities

3,316

1,316

Total sale of goods and rendering of services

4,566

 2,532

 

 

 

Gains

 

2012
$'000

2011
$'000

Note 3B: Other gains

 

 

 

 

 

Liabilities assumed by other agencies

11,112

9,755

Resources received free of charge

9,308

5,999

 

20,420

15,754

 

 

 

Resources received free of charge includes an amount of $9,197,990 (2010-11: $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.

Revenue From Government

 

2012
$'000

2011
$'000

Note 3C: Revenue from Government

 

 

Appropriations:

 

 

Departmental appropriations

86,116

88,325

Total revenue from Government

86,116

88,325

 

Note 4: Financial assets

 

2012
$'000

2011
$'000

Note 4A: Cash and cash equivalents

 

 

Cash on hand or on deposit

1,353

810

Total cash and cash equivalents

1,353

810

 

 

 

Note 4B: Trade and other receivables

 

 

Goods and services – external parties

913

385

Appropriations receivable:

 

 

for existing programs – operating

27,507

26,160

for existing programs – capital

2,211

2,411

accrued appropriations

221

GST receivable from the Australian Taxation Office

220

414

Total trade and other receivables (gross)

30,851

29,591

Less impairment allowance account

 

 

Goods and Services

5

 –

Total trade and other receivables (net)

30,846

29,591

 

 

 

Receivables are aged as follows:

 

 

Not overdue

30,647

29,463

Overdue by:

 

 

Less than 30 days

190

 73

30 to 60 days

2

39

61 to 90 days

1

4

More than 90 days

11

 12

 

204

 128

Total receivables (gross)

30,851

29,591

     
All receivables are current. Credit terms are net 30 days (2011: 30 days).    
     

Reconciliation of the impairment allowance account:

 

 

Opening balance

Amounts written off

Increase recognised in net surplus

5

Closing balance

5

The impairment allowance is all aged over 90 days.

 

Note 5: Non-financial assets

 

2012
$'000

2011
$'000

Note 5A: Land and buildings

 

 

Leasehold improvements

 

 

Fair value

13,552

12,594

Accumulated depreciation

(1,962)

(321)

Total leasehold improvements

11,590

12,273

Total land and buildings

11,590

12,273

No indications of impairment were found for land and buildings

 

 

 

 

 

Note 5B: Property, plant and equipment

 

 

Property, plant and equipment

 

 

Fair value

8,290

6,801

Accumulated depreciation

(1,760)

(956)

Total property, plant and equipment

6,530

 5,845

 

 

 

All revaluations are conducted in accordance with the valuation policy stated in Note 1.
In 2010-11, formal valuations were conducted by an independent valuer, the Australian Valuation Office.

No indications of impairment were found for infrastructure, plant and equipment.

 

 

 

Note 5C: Intangible Assets

 

 

Computer software at cost

 

 

Internally developed – in progress

866

442

Internally developed – in use

2,026

1,301

Purchased – in use

1,013

2,085

Total Computer Software

3,905

3,828

Accumulated amortisation

(1,294)

(2,232)

Total intangibles (non-current)

2,611

1,596

No indication of impairment was found for intangibles.

 

 

Note 5D: Analysis of infrastructure, property, plant, and equipment

TABLE A – Reconciliation of the opening and closing balances of property, plant, and equipment (2011-12)

ITEM

LEASEHOLD,
IMPROVEMENT – TOTAL
 LAND AND BUILDINGS
$'000

Property,
plant and equipment
$'000

Computer
Software – Intangibles
$'000

TOTAL
$'000

As at 1 July 2011

 

 

 

 

Gross book value

12,594

6,801

3,828

23,223

Accumulated depreciation/amortisation

(321)

(956)

(2,232)

(3,509)

Net book value 1 July 2011

12,273

 5,845

1,596

19,714

Additions:

 

 

 

 

By purchase

958

1,088

1,355

3,401

By purchase – finance lease

772

772

Depreciation/amortisation expense

(1,641)

(1,167)

(340)

(3,148)

Disposals:

 

 

 

 

Other disposals

(8)

(8)

Net Book value 30 June 2012

11,590

6,530

2,611

20,731

Net book value as of 30 June 2012 represented by:

Gross book value

13,552

8,290

3,905

25,747

Accumulated depreciation/amortisation

(1,962)

(1,760)

(1,294)

(5,016)

 

11,590

6,530

2,611

20,731

TABLE A – Reconciliation of the opening and closing balances of property, plant, and equipment (2010-11)

ITEM

LEASEHOLD,
IMPROVEMENT – TOTAL
 LAND AND BUILDINGS
$'000

Infrastructure,
plant and equipment
$'000

Computer
Software – Intangibles
$'000

TOTAL
$'000

As at 1 July 2010

 

 

 

 

Gross book value

 14,937

13,956

3,582

32,475

Accumulated depreciation/amortisation

(3,427)

(4,630)

(1,961)

(10,018)

Net book value 1 July 2010

11,510

 9,326

1,621

22,457

Additions:

 

 

 

 

By purchase

3,135

719

313

4,167

By purchase – finance lease

775

775

Revaluations and impairment recognised in other comprehensive income

312

(17)

295

Impairment recognised in the operating statement

(3,904)

(3,904)

Depreciation/amortisation expense

(1,497)

(1,027)

(321)

(2,845)

Disposals:

 

 

 

 

Other disposals

(1,187)

(27)

(16)

(1,230)

Net book value 30 June 2011

12,273

 5,845

1,596

19,714

Net book value as of 30 June 2011 represented by:

Gross book value

12,594

6,801

3,828

23,223

Accumulated depreciation/amortisation

(321)

(956)

(2,232)

(3,509)

 

12,273

5,845

1,596

19,714

 

 

2012
$'000

2011
$'000

Note 5E: Other non-financial assets

 

 

Prepayments

543

1,825

Total other non-financial assets

543

1,825

Total other non-financial assets are expected to be recovered in:

 

 

No more than 12 months

534

1,793

Total other non-financial assets

534

1,793

More than 12 months

9

32

Total other non-financial assets

9

32

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

 

Note 6: Payables

 

2012
$'000

2011
$'000

Note 6A: Suppliers

 

 

Trade creditors and accruals

(808)

(886)

Deferred Revenue

(377)

(54)

Total supplier payables

(1,185)

(940)

All supplier payables are expected to be settled within 12 months

 

 

Settlement is usually made net 30 days.

 

 

 

 

 

Note 6B: Other Payables

 

 

Salaries and wages

(724)

(606)

Superannuation

(625)

(309)

Total other payables

(1,349)

(915)

All other payables are expected to be settled within 12 months.

 

 

 

Note 7: Interest bearing liabilities

 

2012
$'000

2011
$'000

Note 7: Leases

 

 

Finance leases

(1,183)

(735)

Total finance leases

(1,183)

(735)

Payable:

 

 

Within one year:

 

 

Minimum lease payments

(447)

 (231)

Deduct: future finance charges

72

45

 

 

 

In one to five years:

 

 

Minimum lease payments

(871)

(606)

Deduct: future finance charges

63

57

 

 

 

Finance leases recognised on the balance sheet

(1,183)

(735)

Finance leases are for certain major IT equipment assets and some office equipment. The leases are non-cancellable and for fixed terms averaging four years, with a maximum of five years. The interest rate implicit in the leases averaged 4.39% (2011: 5.14%). The leased assets secure the lease liabilities. The Court guarantees the residual values of all assets leased. There are no contingent rentals.

 

Note 8: Provisions

 

2012
$'000

2011
$'000

Note 8A: Judge & Employee provisions

 

 

Long Leave (Judges)

(9,764)

(9,425)

Leave

(7,305)

(6,380)

Total judge and employee provisions

(17,069)

(15,805)

Employee provisions are expected to be settled in:

 

 

No more than 12 months

(3,531)

 (4,055)

More than 12 months

(13,538)

(11,750)

Total judge and employee provisions

(17,069)

(15,805)

 

Note 9: cash flow reconciliation

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

2012
$'000

2011
$'000

Report cash and cash equivalents as per:

 

 

Cash Flow Statement

1,353

810

Balance Sheet

1,353

810

Difference

Reconciliation of net cost of services to net cash
from operating activities:

 

 

Net cost of services

(90,376)

(96,692)

Add revenue from Government

86,116

88,325

Adjustments for non-cash items

 

 

Depreciation/amortisation

3,148

2,845

Net write down of non-financial assets

6

5,113

(Gain)/Loss on disposal of assets

3

Changes in assets/liabilities

 

 

(Increase)/decrease in net operating receivables

(1,455)

6,511

(Increase)/decrease in prepayments

1,282

(146)

Increase/(decrease) in suppliers payables

245

 (5,054)

Increase/(decrease) in judge and employee provisions

1,264

(491)

Increase/(decrease) in other liabilities

434

(115)

Net cash from/(used by) operating activities

664

299

 

 

 

Note 10: Senior Executive Remuneration

 

 

Note 10A: Senior Executive remuneration expense for the reporting period

 

 

2012
$'000

2011
$'000

Short term employee benefits:

 

 

Salary (including annual leave taken)

2,501,796

2,408,600

Annual Leave accrued

181,019

174,061

Motor Vehicle and other allowances

110,283

104,702

Total Short-term employee benefits

2,793,098

 2,687,363

Post-employment benefits:

 

 

Superannuation

334,842

318,259

Total Post-employment benefits

334,842

318,259

Other long term benefits

 

 

Long service leave

58,248

56,010

Total other long term benefits

58,248

56,010

Total employment benefits

3,186,188

3,061,632


Note 10A excludes acting arrangements and part-year service where total remuneration expensed for a senior executive was less than $150,000.

Note 10B: Average Annual Reportable Remuneration Paid to Substantive Senior Executives During the Reporting Period

2012

 

 

 

 

 

 

 

 

 

 

 

2011

 

 

 

 

 

 

 

No.of
senior executives

Reportable
salary
$

Contributed Superannuation
$

Reportable Allowances
$

TOTAL
$

 

No.of
senior executives

Reportable
salary
$

Contributed Superannuation
$

Reportable Allowances
$

TOTAL
$

Total remuneration
(including part-time arrangements):

 

 

 

 

 

Total remuneration
(including part-time arrangements):

 

 

 

 

 

$210,000 to $239,999

3

197,940

25,726

223,666

$210,000 to $239,999

4

198,280

26,726

225,006

$240,000 to $269,999

2

220,902

29,094

249,996

$240,000 to $269,999

3

228,814

30,630

259,444

$270,000 to $299,999

5

248,448

32,385

280,833

$270,000 to $299,999

3

239,305

31,863

271,168

$360,000 to $389,999

1

274,883

37,555

59,334

371,772

$330,000 to $359,999

1

274,430

31,293

41,395

347,118

Total

11

 

 

 

 

Total

11

 

 

 

 

Notes:

1. This table reports substantive senior executives who received remuneration during the reporting period. Each row is an averaged figure based on headcount for individuals in the band.

2.'Reportable salary' includes the following:

a) gross payments; and

b) reportable fringe benefits (at the net amount prior to 'grossing up' to account for tax benefits)

3. The 'contributed superannuation' amount is the average actual superannuation contributions paid to senior executives in that reportable remuneration band during
the reporting period, including any sacrificed amounts, as per the individuals' payslips.

4. 'Reportable allowances' are the average actual allowances paid as per the 'total allowances' line on individuals' payment summaries.

5. No bonuses were paid to senior executives of the Court in 2011-12 or 2010-11.

6. Various salary sacrifice arrangements were available to senior executives including superannuation, motor vehicle and expense payment fringe benefits. Salary sacrifice benefits are reported in the 'reportable salary' column, excluding salary sacrificed superannuation, which is reported in the 'contributed superannuation' column.

 

Note 10c Other Highly paid Staff

2012

 

 

 

 

 

 

 

 

 

 

2011

 

 

 

 

 

 

Average Annual Reportable Remuneration

No.of
Staff

Reportable
salary
$

Contributed Superannuation
$

Reportable Allowances
$

TOTAL
$

Average Annual Reportable Remuneration

No.of
Staff

Reportable
salary
$

Contributed Superannuation
$

Reportable Allowances
$

TOTAL
$

Total remuneration
(including part-time arrangements):

 

 

 

 

 

Total remuneration
(including part-time arrangements):

 

 

 

 

 

$150,000 to $179,999

20

139,664

21,651

10,309

171,624

 

 

 

 

 

 

 

 

 

 

 

 

$150,000 to $189,999

20

132,003

19,682

520

152,205

$180,000 to $209,999

1

158,295

21,717

180,012

 

 

 

 

 

 

Total

21

 

 

 

 

 

20

 

 

 

 

Notes:
1. This table reports staff:

a) who were employed by the Court during the reporting period;

b) whose reportable remuneration was $150,000 or more for the financial period; and

c) were not required to be disclosed in Tables A or B

Each row is an averaged figure based on headcount for individuals in the band.

 

2. 'Reportable salary' includes the following:

a) gross payments; and

b) reportable fringe benefits (at the net amount prior to 'grossing up' to account for tax benefits)

3. The 'contributed superannuation' amount is the average actual superannuation contributions paid to senior executives in that reportable remuneration band during
the reporting period, including any sacrificed amounts, as per the individuals' payslips.

4. 'Reportable allowances' are the average actual allowances paid as per the 'total allowances' line on individuals' payment summaries.

5. No bonuses were paid to these staff members of the Court in 2011-12 or 2010-11.

6.
Various salary sacrifice arrangements were available to senior executives including superannuation, motor vehicle and expense payment fringe benefits. Salary sacrifice benefits are reported in the 'reportable salary' column, excluding salary sacrificed superannuation, which is reported in the 'contributed superannuation' column.

 

Note 11: Remuneration of auditors

 

2012
$'000

2011
$'000

Financial statement audit services are provided free of charge
to the Court by the Australian National Audit Office (ANAO).

 

 

The fair value of the services provided was:

104,000

108,000

 

 

 

Note 12: Financial Instruments

 

 

 

 

 

 

2012
$'000

2011
$'000

Note 12A Categories of financial instruments

 

 

Loans and receivables

 

 

Loans and receivables

 

 

Cash on hand or on deposit

1,353

810

Trade receivables

913

385

Carrying amount of financial assets

2,266

 1,195

 

 

 

Financial Liabilities

 

 

At amortised cost:

 

 

Finance leases

(1,183)

(735)

Trade creditors

(1,185)

(940)

Carrying amount of financial liabilities

(2,368)

(1,675)

 

Note 12B Fair value of financial instruments

 

Carrying amount
2012
$'000

Fair Value
2012
$'000

Carrying amount
2011
$'000

Fair value
2011
$'000

FINANCIAL LIABILITIES

 

 

 

 

Other Liabilities

 

 

 

 

Finance leases

(1,183)

(1,183)

(735)

(735)

Total

(1,183)

(1,183)

(735)

(735)


Fair value for Finance leases which was determined for disclosure purposes was calculated based on the present value of future principal and interest cash flows, discounted at 4.39% at the reporting date. (2011 5.14%)

Note 12C Credit Risk

The Court is exposed to minimal credit risk as loans and receivables are cash and trade receivables.
The maximum exposure to credit risk is the risk that arises from potential default of a debtor.
This amount is equal to the total amount of trade receivables (2012: $913,000 and 2011: $385,000).
The Court has assessed the risk of default on payment and has allocated $5,000 in 2012 (2011: nil)
to an impairment allowance account.

The Court manages its credit risk by undertaking background and credit checks prior to allowing a debtor relationship. In addition, the Court has policies and procedures that are to be applied by employees who perform debt recovery duties.

The Court holds no collateral to mitigate credit risk.

Credit quality of financial instruments not past due or individually determined as impaired.

 

Not Past Due Nor Impaired
2012
$'000

Not Past Due Nor Impaired
2011
$'000

 Past Due
or Impaired
2012
$'000

Past Due
or Impaired
2011
$'000

Loans and receivables

 

 

 

 

Cash

1,353

810

Trade receivables

709

257

204

128

Total

2,062

1,067

204

128

 

Ageing of financial assets that are past due but not impaired for 2012

 

0 to 30 days
$'000

31 to 60 days
$'000

 61 to 90 days
$'000

90+ days
$'000

Total
$'000

Loans and receivables

 

 

 

 

 

Trade receivables

190

2

1

11

204

Total

190

2

1

11

204

 

Ageing of financial assets that are past due but not impaired for 2011

 

0 to 30 days
$'000

31 to 60 days
$'000

 61 to 90 days
$'000

90+ days
$'000

Total
$'000

Loans and receivables

 

 

 

 

 

Trade receivables

73

39

4

12

128

Total

 73

39

4

 12

128

 

Note 12D Liquidity Risk

The Court's financial liabilities are payables, loans from government, finance leases and other interest bearing liabilities. The exposure to liquidity risk is based on the notion that the Court will encounter difficulty in meeting its obligations associated with financial liabilities. This is highly unlikely as the Court is appropriated funding from the Australian Government and the Court manages its budgeted funds to ensure it has adequate funds to meet payments as they fall due. In addition, the Court has policies in place to ensure timely payments were made when due and has no past experience of default.

Maturities for non-derivative financial liabilities 2012

 

Within 1 year 2012
$'000

 1 to 5 years 2012
$'000

total
2012
$'000

Other liabilities

 

 

 

Payables – Suppliers

1,185

1,185

Finance leases

375

808

1,183

Total

1,560

808

2,368

 

Maturities for non-derivative financial liabilities 2011

 

Within 1 year 2011
$'000

 1 to 5 years 2011
$'000

total
2011
$'000

Other liabilities

 

 

 

Payables – Suppliers

940

940

Finance leases

186

549

735

Total

1,126

549

1,675

This note also applies to the Court's administered financial instruments and is therefore not reproduced at Note 18.

Note 12E Market risk

The Court holds basic financial instruments that do not expose the Court to certain market risks.
The Court is not exposed to currency risk or other price risk.

Interest Rate Risk

The only interest-bearing item on the balance sheet is the 'Finance lease'. All bear interest at a fixed interest rate and will not fluctuate due to changes in the market interest rate.

Note 13: Administered – expenses

 

2012
$'000

2011
$'000

Expenses

 

 

Fees and fines – provision for doubtful debts

310

98

Total expenses administered on behalf of government

310

98

Note 14: Administered – Income

 

 

 

 

 

Non-Taxation Revenue

 

 

Fees (filing and hearing fees)

10,446

10,514

Fines

536

2,032

Other

79

 43

Total revenue administered on behalf of government

11,061

12,589

Note 15: Administered –Financial Assets

 

 

 

 

 

 

2012
$'000

2011
$'000

Note 15A: Cash and cash equivalents

 

 

Cash on hand or on deposit

30

23

Total cash and cash equivalents

30

23

 

 

 

Note 15B: Receivables

 

 

Fees (filing and hearing fees)

868

901

Less: Impairment allowance account

(329)

(98)

Total receivables (net)

539

803

All receivables are expected to be recovered within 12 months.

 

 

 

 

 

Receivables are aged as follows:

 

 

Not overdue

183

 247

Overdue by:

 

 

– Less than 30 days

198

211

– 30 to 60 days

95

88

– 60 to 90 days

63

38

– More than 90 days

329

 317

Total receivables (gross)

868

901

The total of the impairment allowance is aged over 90 days.

 

 

 

 

 

Receivables are with entities external to the Australian Government. Credit terms are net 30 days
(2011: 30 days).

 

2012
$'000

2011
$'000

Reconciliation of the impairment allowance account:

 

 

 

Opening balance

98

22

Increase/decrease recognised in net surplus

310

98

Amounts written off

(79)

(22)

Closing balance

329

98

 

Note 16: Administered – payables

 

2012
$'000

2011
$'000

Note 16A: suppliers

 

 

Refund of fees payable

1

Total suppliers

1

 

Note 17: Administered – cash flow reconciliation

 

2012
$'000

2011
$'000

Reconciliation of cash and cash equivalents as per Administered Schedule of Assets
and Liabilities to Administered Cash Flow Statement

Cash and cash equivalents as per:

 

 

Schedule of administered cash flows

30

23

Schedule of administered assets and liabilities

30

23

Difference

Reconciliation of net cost of services to net cash from
operating activities:

 

 

 

Net cost of services

10,751

12,491

 

 

 

Changes in assets/liabilities

 

 

(Increase)/decrease in net receivables

264

(434)

Increase/(decrease) in suppliers payables

(1)

Net cash from operating activities

11,014

12,057

 

Note 18: Administered financial instruments

 

2012
$'000

2011
$'000

Note 18A Categories of financial instruments

 

 

Financial Assets

 

 

Loans and receivables

 

 

Cash

30

23

Trade receivables

539

803

Carrying amount of financial assets

569

826

Note 18B Credit Risk

 

 

The administered activities of the Court are not exposed to a high level of credit risk as the majority of
financial assets are receivables. The Court has policies and procedures that guide employees who perform
debt recovery functions.

 

 

 

The maximum exposure to credit risk is outlined in the table below.

 

 

Financial Assets

 

 

Loans and Receivables

 

 

Receivables

868

901

Total

868

901

The Court has assessed the risk of default on payment and has allocated the following amounts to an allowance for doubtful debts account:


Receivables $328,614 in 2012 (2011: $98,310)

 

 

 

Credit quality of financial instruments not past due or individually determined as impaired

 

Not Past Due Nor Impaired
2012
$'000

Not Past Due Nor Impaired
2011
$'000

 Past Due
or Impaired
2012
$'000

Past Due
or Impaired
2011
$'000

Loans and receivables

 

 

 

 

Cash

30

23

Trade receivables

183

247

685

654

Total

213

270

685

654

 

Ageing of financial assets that are past due but not impaired for 2012

 

0 to 30 days
$'000

31 to 60 days
$'000

 61 to 90 days
$'000

90+ days
$'000

Total
$'000

Loans and receivables

 

 

 

 

 

Trade receivables

198

95

63

329

685

Total

198

95

63

329

685

 

Ageing of financial assets that are past due but not impaired for 2011

 

0 to 30 days
$'000

31 to 60 days
$'000

 61 to 90 days
$'000

90+ days
$'000

Total
$'000

Loans and receivables

 

 

 

 

 

Trade receivables

211

88

38

317

654

Total

211

88

38

317

654

 

Note 19: Appropriations

Table A: Annual Appropriations ('Recoverable GST exclusive')

 

2012 Appropriations

Appropriation
applied
in 2012
(current and
prior years)

 

 

Appropriation Act

FMA Act

Total appropriation

$'000

 

 

Annual Appropriation

$'000

Appropriations

reduced (a)

Section 30

$'000

Section 31

$'000

Variance

$'000

DEPARTMENTAL

Ordinary Annual Services

89,739

43

4,344

94,126

(92,539)

1,587

Other Services

 

 

 

 

 

 

 

Equity

(88)

(88)

Total departmental

89,739

43

4,344

94,126

(92,627)

1,499

Notes:
(a): Appropriations reduced under Appropriation Act (No 1) 2011-12: section 10. Departmental appropriations do not lapse at year end. However, the responsible minister may decide that part or all of an appropriation is not required and request that the Finance Minister reduce that appropriation. The reduction in the appropriation is effected by the Finance Minister's determination and is disallowable by Parliament.

 

 

2011 Appropriations

Appropriation
applied in 2012 (current and prior years)

 

 

Appropriation Act

FMA Act

Total appropriation

$'000

 

 

Annual Appropriation

$'000

Appropriations

reduced (a)

Section 30

$'000

Section 31

$'000

Variance

$'000

DEPARTMENTAL

Ordinary Annual Services

99,800

(1,707)

26

1,812

99,931

(101,782)

(1,851)

Other Services

 

 

 

 

 

 

 

Equity

360

 

360

(272)

88

Total departmental

100,160

(1,707)

26

1,812

100,291

(102,054)

(1,763)

 

Notes:
(a): Appropriations reduced under Appropriation Act (No 1) 2010-11: section 10. Departmental appropriations do not lapse at year end. However, the responsible minister may decide that part or all of an appropriation is not required and request that the Finance Minister reduce that appropriation. The reduction in the appropriation is effected by the Finance Minister's determination and is disallowable by Parliament. In 2011 there was a reduction in departmental appropriation in accordance with a determination by the Finance Minister.

Table B: Departmental Capital Budgets ('Recoverable GST exclusive')

 

2012 Capital Budget Appropriations

Capital Budget Appropriations
applied in 2012 (current and
prior years)
$'000

Variance
$'000

 

Appropriation Act

Total
Capital Budget
 Appropriations
$'000

 

Annual
Capital
Budget
$'000

Appropriations
reduced

Payments for
non-financial assets2
$000

DEPARTMENTAL

 

 

 

 

 

Ordinary Annual
Services

 

 

 

 

 

Departmental Capital

Budget1

3,402

3,402

(3,637)

(235)



Notes:
1. Departmental Capital Budgets are appropriated through Appropriation Acts (No. 1,3,5). They form part of ordinary annual services, and are not separately identified in the Appropriation Acts. For more information on ordinary annual services appropriations, please see Table A: Annual appropriations.

2. Payments made on non-financial assets include purchase of assets, expenditure on assets which have been capitalised, and the capital repayment component of finance leases.

 

2011 Capital Budget Appropriations

Capital Budget Appropriations
applied in 2012 (current and
prior years)
$'000

Variance
$'000

 

Appropriation Act

Total
Capital Budget
 Appropriations
$'000

 

Annual Capital Budget
$'000

Appropriations
reduced

Payments for
non-financial assets2
$000

DEPARTMENTAL

         

Ordinary Annual
Services

         

Departmental Capital

Budget1

6,246

 

6,246

(4,018)

2,228

Notes:
1.Departmental Capital Budgets are appropriated through Appropriation Acts (No. 1,3,5). They form part of ordinary annual services, and are not separately identified in the Appropriation Acts. For more information on ordinary annual services appropriations, please see Table A: Annual appropriations.

2.Payments made on non-financial assets include purchase of assets, expenditure on assets which have been capitalised, and the capital repayment component of finance leases.

Table C: Unspent Departmental Annual Appropriations ('Recoverable GST exclusive')

 

2012
$'000

2011
$'000

Authority

 

 

Appropriation Act (No 4) 2005-06

1

Appropriation Act (No 1) 2010-11

1,844

28,482

Appropriation Act (No 2) 2010-11

88

Appropriation Act (No 1) 2011-12

27,041

Appropriation Act (No 3) 2011-12

832

Total

29,717

28,571

 

Note 20: Special accounts and fma act section 39

Note 20A: Special Accounts (Recoverable GST exclusive)

 

Other Trust
Moneys Account1

Federal Court of Australia Litigants Fund2

 

2012
$'000

2011
$'000

2012
$'000

2011
$'000

Balance brought forward

19

19

4,325

29,132

Increases:

 

 

 

 

Other receipts

623

646

38,210

8,217

Total increases

623

646

38,210

8,217

Available for payments

642

665

42,535

37,349

Decreases:

 

 

 

 

Special Public Money

 

 

 

 

Payments made to others

630

646

40,277

33,024

Total special public money decreases

630

646

40,277

33,024

Total decreases

630

646

40,277

33,024

Total balance carried to the next period

12

19

2,258

4,325

1. Establishing Instrument: Financial Management and Accountability Act, 1997, section 20
Purpose: For expenditure of moneys temporarily held on trust or otherwise for the benefit of a person other than the Commonwealth.

2. Establishing Instrument: Financial Management and Accountability Act, 1997, section 20
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.

Note 20B: Investments made under Section 39 of the FMA Act (Recoverable GST exclusive)

2012

Balance brought forward from previous period
$'000

Investments made $'000

Investmentincome $'000

Transactional charges $'000

Investments realised $'000

Total balance carried to the next period
$'000

Federal Court of Australia Litigants Fund

25,607

2,027

1,460

2

22,981

6,111

Total

25,607

2,027

1,460

2

22,981

6,111

Moneys held in the special account are invested in interest-bearing bank accounts by order of a judge of the Federal Court of Australia.

 

 

 

 

 

 

 

2011

Balance brought forward from previous
period
$'000

Investments made $'000

Investmentincome $'000

Transactional charges $'000

Investments realised $'000

Total balance carried to the next period
$'000

Federal Court of Australia Litigants Fund

31,262

33,258

2,310

1

41,222

25,607

Total

31,262

33,258

2,310

1

41,222

25,607

Moneys held in the special account are invested in interest-bearing bank accounts by order of a judge of the Federal Court of Australia.

 

 

 

Note 21: Compliance with statutory conditions for payments from the consolidated revenue fund

Section 83 of the Constitution provides that no amount may be paid out of the Consolidated Revenue Fund except under an appropriation made by law. The Department of Finance and Deregulation provided information to all agencies in 2011 regarding the need for risk assessments in relation to compliance with statutory conditions on payments from special appropriations, including special accounts.

During 2011-12, the Court developed a plan to review exposure of risks of not complying with statutory conditions on payments from appropriations. The plan involved:

  • identifying each special appropriation and special account; and
  • determining the risk of non-compliance by assessing the difficulty of administering the statutory conditions and assessing the extent to which existing payment systems and processes satisfy those conditions. This risk was determined to be low.
  • The Court identified 2 accounts involving statutory conditions for payment, comprising 2 special accounts.
  • The work conducted has identified no issues of non-compliance with Section 83.

Note 22: Compensation and debt relief

 

2012

2011

No Act of Grace expenses were incurred during the reporting period under
sub-section 33(1) of the Financial Management and Accountability Act 1997. (2011: nil)

No waivers of amounts owing to the Australian Government were made pursuant to subsection 34(1) of the Financial Management and Accountability Act 1997 (2011: nil)

No payments were provided under the Compensation for Detriment caused by Defective Administration (CDDA) Scheme during the reporting period (2011: nil)

No ex-gratia payments were provided for during the reporting period (2011: nil)

No payments were provided in special circumstances relating to APS employment pursuant to section 73 of the Public Service Act 1999 (PS Act) during the reporting period (2011: nil)

 

 

 

 

2012
$

2011
$

Administered

 

 

No Act of Grace expenses were incurred during the reporting period under sub-section 33(1) of the Financial Management and Accountability Act 1997.
(2011: nil)

No payments were waived during the reporting period under subsection 34(1) of the Financial Management and Accountability Act 1997. (2011: nil).

1,121 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 of Australia Regulations 2004. (2011: 1,306)

1,623,802

1,819,777

 

 

 

 

Note 23: Reporting of outcomes

Note 23A: 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

2012
$'000

2011
$'000

Expenses

 

 

Administered

310

98

Departmental

115,362

114,978

Total

115,672

115,076

Income from non-government sector

 

 

Administered

11,061

12,589

Departmental

3,316

1,316

Total

14,377

13,905

Other own-source income

 

 

Administered

Departmental

1,250

1,216

Total

1,250

1,216

Net cost/(contribution) of outcome delivery

100,045

99,955

 

 

 

Note 23B: Major Classes of Departmental Expenses, Income, Assets and Liabilities by Outcome

 

 

 

 

Outcome 1

2012
$'000

2011
$'000

Departmental expenses

 

 

Judges and Employees

62,226

58,830

Suppliers

49,892

45,221

Depreciation and Amortisation

3,148

2,845

Finance costs

85

18

Other Expenses

11

5,116

FMC Transfer

-

2,948

Total

115,362

114,978

Departmental income

 

 

Income from government

106,536

104,079

Sale of goods and services

4,566

2,532

Total

111,102

106,611

Departmental assets

 

 

Cash and cash equivalents

1,353

810

Trade and other receivables

30,846

29,591

Property, plant and equipment

18,120

18,118

Intangibles

2,611

1,596

Other non-financial assets

543

1,825

Total

53,473

51,940

Departmental liabilities

 

 

Suppliers

1,185

940

Leases

1,183

 735

Judge and employee provisions

17,069

15,805

Other payables

1,349

915

Total

20,786

18,395

 

 

 


Note 23C: Major Classes of Departmental Expenses, Income, Assets and Liabilities by Outcome

 

Outcome 1

2012
$'000

2011
$'000

Administered expenses

 

 

Doubtful debts expense

310

98

Total

310

98

Administered income

 

 

Non-taxation revenue

11,061

12,589

Total

11,061

12,589

Administered assets

 

 

Cash and cash equivalents

30

23

Trade and other receivables

539

803

Total

569

826

Administered liabilities

 

 

Refund of fees payable

-

1

Total

-

1

 

Note 24: Comprehensive income (loss) attributable to the court

 

 

2012
$'000

2011
$'000

Total Comprehensive Income attributable to the Court

 

 

Total comprehensive income (loss)

(4,260)

(8,072)

Plus non-appropriated expenses

 

 

Depreciation and amortisation expenses

3,148

2,845

Total comprehensive income (loss) attributable to the Court

(1,112)

(5,227)

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