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Financial Statements Year Ended 30 June 2004

PricewaterhouseCoopers
Level 1
25 National Circuit
FORREST ACT 2603

Postal Address:
GPO Box 447
CANBERRA CITY ACT 2601

Phone (02) 6271 3000
Fax (02) 6271 3999

Independent review report to the board members of the Australian Maritime Safety Authority on the National Plan to Combat Pollution of the Sea by Oil and other Noxious and Hazardous Substances

Statement

Based on our review, which is not an audit, we have not become aware of any matter that makes use believe that the attached financial report of the National Plan to Combat Pollution of Sea by Oil and other Noxious and Hazardous Substances ("the National Plan"), is not presented fairly in accordance with the accounting policies described in Note 1 to the financial statements.

This statement must be read in conjunction with the rest of our review report.

Scope and summary of our role

The financial report - directors and management's responsibility and content

The financial report, being a special purpose report, comprises the statement of financial position, statement of financial performance, statement of cash flows and accompanying notes to the financial statements.

The preparation of the financial report for the year ended 30 June 2004 is the responsibility of the directors and management of the Australian Maritime Safety Authority ("the Authority"). This includes the responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for accounting policies and accounting estimates inherent in the financial report.

Review approach

We conducted an independent review of the financial report in order for the Authority to distribute the financial report to members of the National Plan Management Committee. Our review was conducted in accordance with Australian Auditing Standards applicable to review engagements. Our review did not involve an analysis of the prudence of business decisions made by the directors or management.

This review was preformed in order to state whether, on the basis of the procedures described, anything has come to our attention that would indicate that the financial report does not present fairly a view in accordance with the accounting policies described in Note 1 to the financial statements. The review procedures performed were limited primarily to:

• inquiries of the Authority's personnel of certain internal controls, transactions and individual items
• analytical procedures applied to financial data.

These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than that given in an audit. We have not performed an audit, and accordingly, we do not express an audit opinion.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our review was not designed to provide assurance on internal controls.

Independence

In conducting our review, we followed applicable independence requirements of Australian professional ethical pronouncements.

In addition to our review work, we were engaged to undertake other services for the Authority. In our opinion the provision of these services has not impaired our independence.

 

PricewaterhouseCoopers
Hugh Somerville
Partner

Canberra
20 October 2004

Statement of Financial Performance

For the year ended 30 June 2004

				2004		2003
		Note		$		$
Revenue
	Protection of the Sea Levy			4,313,167		3,887,572
	Equipment Hire			202,115		145,773
	Incident Recovery	3		20,183		62,898
	Interest			102,026		107,960
	Profit on sale of assets			-		-
	Other Revenue			33,374		8,568
Total Revenue		4		4,680,865		4,212,771
Expenses
	Staff Costs	5		758,601		712,534
	Travel and Transport			225,454		211,693
	Materials and Service	6		1,024,512		1,053,169
	Communications Expenses			34,953		44,060
	Occupancy Costs	7		186,361		128,370
	Administrative Expense			99,914		108,853
	Overheads	8		551,352		714,056
	Depreciation and amortisation			885,573		1,418,001
	Incident Costs	3		3,039		134,420
	Loss on sale of assets			426,479		3,988
	Write down of assets			-		-
Total Expenses				4,196,238		4,529,144
Operating Surplus/(deficit)				484,627		(316,373)
Accumulated surpluses at start of financial year				(9,634)		327,037
Asset transfers		19		22,206		(26,713)
Aggregate of amounts transferred from reserves		19		30,173		6,415
Accumulated surpluses at end of financial year		19		527,372		(9,634)

The above statement of Financial Performance should be read in conjunction with the notes to the financial statements set out in the following pages.

Statement of Financial Position

for the year ended 30 June 2004

	Note	2004		2003
		$		$
CURRENT ASSETS
Cash	9	3,604,803		2,303,137
Receivables	10	186,963		193,054
Inventories	11	-		-
Other	12	99,752		9,664
TOTAL CURRENT ASSETS		3,891,518		2,505,855
NON CURRENT ASSETS
Property, Plant & Equipment	13	4,891,864		5,966,310
Intangibles	14	69,179		128,926
TOTAL NON CURRENT ASSETS		4,961,043		6,095,236
TOTAL ASSETS		8,852,561		8,601,091
CURRENT LIABILITIES
Creditors	15	501,746		602,443
Employee Entitlements	16	876		26,243
TOTAL CURRENT LIABILITIES		502,622		628,686
NON CURRENT LIABILITIES
Employee Entitlements	16	196,948		169,443
TOTAL NON CURRENT LIABILITIES		196,948		169,443
TOTAL LIABILITIES		699,570		798,129
NET ASSETS		8,152,991		7,802,962
EQUITY
Accumulated surpluses/(deficits)	19	527,372		(9,634)
Reserves	19	7,625,619		7,812,596
TOTAL EQUITY		8,152,991		7,802,962

The above statement of Financial Position should be read in conjunction with the notes to the financial statements set out in the following pages.

Statement of Cash Flow

for the year ended 30 June 2004

	Note	2004		2003
		$		$
OPERATING ACTIVITIES
Cash received
Levies, fees and charges received		4,503,404		4,048,862
Interest received		102,026		107,960
Incident costs reimbursed		30,183		62,898
GST recovered from taxation authority		221,377		210,711
TOTAL CASH RECEIVED		4,865,989		4,430.431
Cash used
Cash paid to employees and suppliers		(3,211,621)		(2,968,939)
TOTAL CASH USED		(3,211,621)		(2,968,939)
Net cash from operating activities	17	1,645,368		1,461,492
INVESTING ACTIVITIES
Cash received
Proceeds from disposal of equipment		-		-
TOTAL CASH RECEIVED		-		-
Cash used
Payments for property, plant and equipment		(343,702)		(933,545)
TOTAL CASH USED		(343,702)		(933,545)
Net cash used by investing activities		(343,702)		(933,545)
Net increase (decrease) in cash held		1,301,666		527,947
Cash at the beginning of the reporting period		2,303,137		1,775,190
Cash at the end of the reporting period		3,604,803		2,303,137
Cash as per Statement of Financial Position		3,604,803		2,303,137

The above statement of Cash Flows should be read in conjunction with the notes to the financial statements set out in the following pages.

Notes to the Financial Statements

For the year ended 30 June 2004

Note 1 Statement of Significant Accounting Policies

1.1 Basis of Accounting

The financial report is a special purpose financial report which has been prepared on a full accrual accounting basis, in accordance with Accounting Standards, Urgent Issues Group Consensus Views and other authoritative pronouncements of the Australian Accounting Standards Board. Except for certain assets which, as noted, are at valuation, the financial statements are prepared in accordance with the historical cost convention. Unless otherwise stated the accounting policies adopted are consistent with those of the previous year.

The financial statements have been extracted from the books and records of the Australian Maritime Safety Authority, and they represent the Authority's income and expenditure, and assets and liabilities in managing the National Plan. They do not include the income, expenses, assets or liabilities of third parties involved in National Plan activities.

1.2 Revenue

All material revenues described in this note are revenues relating to the core operating activities of the National Plan.

The major appropriation revenue for the National Plan relates to maritime infrastructure charges and includes levies received by the Commonwealth under the Protection of the Sea (Shipping Levy) Act 1981 and through the recovery of pollution incident costs from offending parties.

Revenues are recognised to the extent they have been received by the National Plan or are entitled to be received by the National Plan at year end.

1.3 Property, plant and equipment

Property, plant and equipment are stated at carrying amounts not exceeding their recoverable values. In assessing recoverable amounts, the relevant cashflows have not been discounted to their present values.

Depreciation

Depreciation is calculated on a straight line basis to write off the net cost or re-valued amount of each item of Property, Plan and Equipment (excluding land and investments properties) over its expected useful life. Estimates of remaining useful lives are made on a regular basis for all assets, with annual reassessments for major items. The expected useful lives are as follows:

	2004	2003
Furniture and fittings	4 - 10 years	4 - 10 years
Plant and equipment	3 - 30 years	3 - 30 years
Office and computer equipment	3 - 16 years	3 - 16 years
Vessels and amphibians	10 - 20 years	10 - 20 years
Vehicles	6 - 12 years	6 - 12 years

Where items of plant and equipment have separately identifiable components which are subject to regular replacement, those components are assigned useful lives distinct from the item of plant and equipment to which they relate.

Acquisition of Assets

All acquisitions of assets are accounted for at cost. Cost is determined as the fair value of the assets at date of acquisition plus costs incidental to the acquisition.

Valuations

Infrastructure, plant and equipment are carried at valuation. Revaluations undertaken up to 30 June 2003 were done on a deprival basis; revaluations since that date are at fair value. Australian Accounting Standards AASB 1041 Revaluation of Non-Current Assets requires this change in accounting policy.

The financial effect for 2003-2004 of this change of policy relates to those assets to be recognised at fair value at 30 June 2004. The financial effect of the change is given by the difference between the carrying amount at 30 June 2003 of these assets and their fair values as at 1 July 2003. The financial effect by class is as follows:

Asset class	adjustment	contra account
Land	0	Asset Revaluation Reserve
Buildings	$(303)	Asset Revaluation Reserve
Vessels	$(156,501)	Asset Revaluation Reserve
Aids to Navigation	0	Asset Revaluation Reserve

Total financial effect was to net debit to the asset revaluation reserve of $156,804.18

Accounting Standard AAS 6 Accounting Policies requires, where practicable, presentation of the information that would have been disclosed in the 2002-2003 Statements had the new accounting policy always been applied. It is impracticable to present this information.

Vessels and amphibian assets were revalued in the 2000-2001 financial year. Plant and equipment, office and computer equipment, furniture and fittings and vehicles were revalued in the 2002-2003 financial year.

Assets in each class acquired after the commencement of a progressive revaluation cycle are not captured by the progressive revaluation then in progress.

Conduct

All valuations are conducted by an independent qualified valuer.

Disposal of revalued assets

The gain or loss on disposal of revalued assets is calculated as the difference between the carrying amount of the asset at the time of disposal and the proceeds on disposal and is included in the results in the year of disposal.

Any related revaluation increment standing in the asset revaluation reserve at the time of disposal is transferred back to accumulated results.

1.4 Intangibles

The carrying amount of each non-current intangible asset is reviewed to determine whether it is in excess of the asset's recoverable amount. If any excess exists as at the reporting date, the asset is written down to its recoverable amount immediately. In assessing recoverable amounts, the relevant cash flows, including the expected cash inflows from future appropriations by the Parliament, have been discounted to their present value.

No write-down to recoverable amounts has been made in 2003-2004.

Intangible assets are amortised on a straight-line basis over their anticipated useful lives, which are between 3 and 15 years.

1.5 Inventories

Inventories are managed stores which are stated at the lower of cost and net realisable value. Inventories are expected to be used within twelve months. The value is adjusted to accommodate a provision for slow moving stock. These items are not held for resale and are valued at weighted average cost.

1.6 Liability for Employee Entitlements

Wages and salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting date are recognised in other creditors in respect of employees' services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for sick leave are recognised when the leave is taken and measured at the rates paid or payable.

Long service leave

The liability for long service leave expected to be settled within 12 months of the reporting date is recognised in the provision for employee benefits and is measured in accordance with above. The liability for long service expected to be settled more than 12 months from the reporting date is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reported date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

Employee benefit on-costs

Employee benefit on-costs, including superannuation, are recognised and included in employee benefit liabilities and costs when the employee benefits to which they relate are recognised as liabilities.

1.7 Receivables

All trade debtors are recognised as the amount receivable as they are due for settlement. All receivables are recognised at the nominal amounts due less any provision for bad and doubtful debts. Credit terms are usually 30 days. (2003: 30 days)

Bad debts are written off during the year in which they are identified. A provision is raised for doubtful debts based on a review of outstanding accounts at year end.

1.8 Trade Creditors

Creditors and accruals represent liabilities for goods and services provided prior to the end of the financial year and which are unpaid. The amounts are unsecured and usually paid within 30 days of recognition.

1.9 Reclassification of comparatives

Where necessary, comparative figures have been adjusted to conform with changes in presentation in these financial statements.

Note 2 Contingencies

In the normal course of operations, the Authority is responsible for the provision of funds necessary to meet the clean up costs arising from ship sourced marine pollution, and in all circumstances the Authority is responsible in accordance with the National Plan Inter-Governmental Agreement for making appropriate efforts to recover the costs of any such incidents. In the event that the funds are insufficient to meet these costs, funding could be provided on an as needs basis from the Commonwealth.

Note 3 Incident Costs and Recoveries

The decrease in incident recoveries reflects the decrease in the number of significant pollution incidents compared with the previous financial year. The majority of incidents costs have been recovered from the parties at fault.

Incident costs recorded in the Statement of Financial Performance do not include the salaries, wages and associated costs incurred. These are incorporated in the staff costs. However, as these costs are considered to be a cost attributable to incidents, they are included in incident recoveries as appropriate.

Note 4 Revenue

		2004	2003
		$	$
Rendering of services		4,578,839	4,101,811
Interest		102,026	107,960
		4,680,865	4,212,771

Note 5 Staff costs

Staff costs also include the proportion AMSA's staff costs attributable to National Plan activities and staff costs associated with pollution incidents. Staff costs attributable to pollution incidents are recovered through incident recoveries.

Note 6 Materials and services

In the financial year ended 30 June 2004, materials and services expense included an adjustment to the provision made for slow moving dispersant stock. (refer note 11)

Note 7 Occupancy costs

Occupancy costs include storage costs of equipment and accommodation costs of National Plan staff.

Note 8 Overheads

Overheads are the estimated share of the Authority's corporate and head office costs attributable to National Plan activities. This includes the proportion of actual expenditure for the Board, Executive, Internal Audit and the Corporate Services Division.

Note 9 Cash

		2004	2003
		$	$
Cash		3,604,803	2,303,137
		3,604,803	2,303,137

Note 10 Receivables

		2004	2003
		$	$
Trade debtors		17,828	81,818
less Provision for doubtful debts		-	-
		17,828	81,818
Other debtors		133,051	23,808
GST receivable		36,084	87,428
		186,963	193,054

Note 11 Inventory

		2004	2003
		$	$
Oil dispersant stocks		107,953	898,902
Provision for slow moving stocks		(107,953)	(898,902)
		-	-

Note 12 Other

		2004	2003
		$	$
Prepayments		99,752	9,664
		99,752	9,664

Note 13 Property, plant and equipment

		2004	2003
Plant and equipment:		$	$
- independent valuation 2000		1,00,348	2,534,891
Accumulated depreciation		(411,937)	(1,545,543)
		688,411	989,348
- independent valuation 2003		6,979,738	7,411,230
Accumulated depreciation		(4,197,961)	(4,010,068)
		2,781,777	3,401,162
- cost		794,305	1,935,244
Accumulated depreciation		(296,556)	(1,487,904)
		497,749	447,340
Total plant and equipment		3,967,937	4,837,850

		2004	2003
Office and computer equipment:		$	$
- independent valuation 2000		15,213	15,213
Accumulated depreciation		(15,213)	(15,213)
		-	-
- independent valuation 2003		90,363	88,437
Accumulated depreciation		(81,326)	(72,352)
		9,037	16,085
- cost		22,067	-
Accumulated depreciation		(7,356)	-
Total office and computer equipment		23,748	16,085

		2004	2003
Furniture and fittings:		$	$
- independent valuation 2000		-	-
Accumulated depreciation		-	-
		-	-
- independent valuation 2003		79,540	54,850
Accumulated depreciation		(45,587)	(28,761)
		33,953	26,089
- cost		-	-
Accumulated depreciation		-	-
Total furniture and fittings		33,953	26,089

		2004	2003
Vehicles:		$	$
- independent valuation 2003		396,800	396,800
Accumulated depreciation		(392,303)	(332.015)
		4,497	64,785
- cost		-	-
Accumulated depreciation		-	-
Total vehicles		4,497	64,785

		2004	2003
Vessels and amphibians:		$	$
- independent valuation 2004		4,805,000	1,459,488
Accumulated depreciation		(3,980,592)	(437,987)
		824,408	1,021,501
- cost		-	-
Accumulated depreciation		-	-
Total vessels and amphibians		824,408	1,021,501

Capital works in progress		37,321	-
Total property, plant and equipment		4,891,864	5,966,310

Note 14 Intangibles

		2004	2003
		$	$
Computer software		355,855	343,615
Accumulated amortisation		(286,676)	(214,689)
		69,179	128,926

Note 15 Creditors

		2004	2003
		$	$
Trade creditors		365,481	287,197
Salaries and wages		51,973	64,076
Annual leave		84,292	84,852
Other creditors		0	166,318
		501,746	602,443

Note 16 Employee Entitlements

		2004	2003
		$	$
Current
Long service leave		876	26,243
		876	26,243
Non Current
Long service leave		196,948	169,443
		196,948	169,443

Note 17 Reconciliation of operating surplus/(deficit) to net cashflows from operating activities

		2004	2003
		$	$
Operating surplus/(deficit)		484,627	(316,373)
Depreciation		885,573	1,418,001
Asset write downs		-	-
Loss on disposal of non-current assets		426,479	3,988
Profit on disposal of non-current assets		-	-
GST Recovered on payments of non-current assets		31,246	84,868
Changes in assets and liabilities
(Increase)decrease in trade debtors		6,092	(9,523)
(Increase)decrease in inventories		-	-
(Increase)decrease in prepayments		(90,088)	813
(Decrease)increase in trade creditors and other creditors		(88.034)	266,634
(Decrease)increase in employee liabilities		(10,525)	13,084
Net cash flows from operating activities		1,645,369	1,461,492
Balance per cash flow statement		1,645,369	1,461,492

Note 18 Commitments for Expenditure

Operating Leases
Commitments for the acquisition of plant and equipment contracted for at the reporting date but not recognised as a liabilities, payable:

		2004	2003
		$	$
Within one year		8,527	206,708
Later than one year but not later than five years		-	-
Total Operating Lease commitments		8,527	206,708

Capital Commitments
Commitments for minimum lease payment in relation to non-cancelable operating leases are payable as follows:

		2004	2003
		$	$
Within one year		108,466	63,663
Later than one year but not later than five years		196,227	138,049
Total Capital commitments		304,693	201,712

Other Commitments
Commitments for expenditure in relation to purchase orders that have been made and are payable as follows:

		2004	2003
		$	$
Within one year		913	1,940
Total Other commitments		913	1,940

Note 19 Equity

Item	Accumulated surpluses $'000	Asset revaluation reserve $'000	Total reserves $'000	TOTAL EQUITY $'000
Balance 1 July 2003	(9,634)	7,812,596	7,812,596	7,802,962
Surplus/(deficit)	484,627	-	-	484,627
Asset Transfers	22,206	-	-	22,206
Net revaluation increment/(decrement)	-	(158,804)	(158,804)	(158,804)
Transfers to/(from) reserves	30,173	(30,173)	(30,173)	-
Balance 30 June 2004	527,372	7,625,619	7,625,619	8,152,991

Accumulated surpluses

The accumulated surpluses represent the equity of the National Plan used to fund the working capital costs of the National Plan and to purchase property, plant and equipment assets to deliver a response capability. As such, the accumulated surpluses can only be realised as cash upon cessation of the National Plan.

Asset revaluation reserve

The National Plan property, plant and equipment assets were revalued in accordance with Australian Accounting Standard AASB 1041 Revaluation of Non-Current Assets which requires the value of non current assets to be reassessed on a progressive basis.

Revaluations undertaken up to 30 June 2002 were done on a deprival basis; revaluations since that date are at a fair value. AASB 1041 requires this change in accounting policy.

The asset revaluation reserve represents the net increase in asset values between book values and the revalued amounts upon revaluation and as such cannot be realised as cash until the sale of the assets.

Asset Transfers

Asset transfers represent the movement of assets between departments of AMSA at their written down value, for no cost.

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