Letter to the Minister - territorystories.nt.gov.au · to the Department of Business, Economic and...

1Annual Report 2005-2006

Land Development Corporation

16 October 2006

The Hon Kon Vatskalis MLA

Minister for Business and Economic Development

Parliament House

DARWIN NT 0800

Dear Minister

I have pleasure in presenting you with this third Annual Report of the Land Development Corporation. The report describes the

activities and operations of the Corporation for the year ending 30 June 2006 in accordance with section 28 of the Public Sector

Employment and Management Act and section 32 of the Land Development Corporation Act.

In doing so I advise that, to the best of my knowledge and belief, the system of internal control provides reasonable assurance that:

(a) proper records of all transactions affecting the Corporation are kept and that employees under my control observe the provisions

of the Financial Management Act, the Financial Management Regulations and Treasurer’s Directions;

(b) procedures within the Corporation are such that they afford a proper internal control and a current description of such procedures

is recorded in the accounting and property manual which has been prepared in accordance with the requirements of the

Financial Management Act;

(c) there is no indication of fraud, malpractice, major breach of legislation or delegation, major error in or omission from the

accounts and records;

(d) in accordance with the requirements of section 15 of the Financial Management Act, the internal audit capacity available to the

Agency is adequate and the results of internal audits have been reported to me;

(e) the fi nancial statements included in the Report have been prepared from proper accounts and records and are in accordance with

Treasurer’s Directions where appropriate; and

(f) all Employment Instructions issued by the Commissioner for Public Employment have been satisfi ed.

MIKE BURGESS

Chief Executive Offi cer

Letter to the Minister



Our Role 3

Our Vision 3

Our Objectives 4

Our Priorities 4

Chairmans Report 5

Chief Executive Offi cer’s Report 6

Corporate Governance 7

Advisory Board 8

Performance in detail 10

Review of Output Structure 12

Performance Reporting –

Quality and timeliness of services 13

Financial Statement Overview 14

Certifi cation of the Financial Statements 16

Operating Statement 17

Balance Sheet 18

Statement of Changes in Equity 19

Cash Flow Statement 20

Notes to the Financial Statements 21

Contact Details 37

Table of Contents



The Land Development Corporation was established on

1 July 2003 to develop and manage Northern Territory

Government-owned land that has been identifi ed for industry

development. It is a commercially-driven Statutory Authority

created to support economic growth through the strategic

provision of industrial land.

The Corporation is overseen by a fi ve member Advisory

Board which comprises four representatives from the private

sector who are appointed by the Minister. The fi fth member is

the Chief Executive of the Department of Business, Economic

and Regional Development.

Its principal current focus is to develop and manage the

Darwin Business Park which is a purpose-built industrial estate

at East Arm. The Corporation is also involved in the early

panning stages for other strategic industrial areas throughout

the Northern Territory.

These industrial estates provide serviced land for businesses

that want to capitalise on the opportunities provided by major

developments and projects such as the:

AustralAsia Railway;

East Arm Port and container terminal;

development of Timor Sea oil and gas;

gas-based manufacturing and processing; and

Defence deployment in the Northern Territory.

Our Vision

To provide industrial land that will facilitate economic growth

in the Northern Territory, for the benefi t of all Territorians.

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Our Role



to ensure the Northern Territory's strategic industrial land

needs are met, when and where required;

to be responsive to industry's short and long term

requirements with acquisition terms suited to

market conditions;

to be resourced to initiate, undertake, facilitate and/or

manage new developments;

to build strong links with other business and development

agencies to provide comprehensive project support;

to optimise returns on the Corporation’s property

assets; and

to be ethical, open and accountable to the people of the

Northern Territory.

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Our Objectives

Our Priorities

to complete the development of the Darwin Business

Park by securing investment commitment to the East Arm

Freight Logistics Precinct;

to plan for the development of the Wickham Industrial

Estate at Middle Arm;

to plan for the development of the Defence Support Hub;

to deliver appropriate land and infrastructure to industry;

to develop innovative land transaction models; and

to establish the brand and profi le of the Land

Development Corporation and Darwin Business Park.

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Chairman’s Report

The Land Development Corporation (the Corporation) was established on 1July 2003 to ensure that the present and future industrial

land needs of the Northern Territory are able to be met.

We continue to focus our attention on Darwin’s East Arm peninsula to meet the establishment and growth requirements of the

expanding East Arm Port and the adjacent rail facilities. The strategic nature of the location and the suitability of various types of

development in this region on a precinct-by-precinct basis have been taken into account in order to optimise the land use.

The Corporation has a signifi cant role in enhancing the Northern Territory’s economic development strategies, and much of its

energies are therefore focused on working with various agencies to create an attractive investment environment for local, interstate and

international developers and investors.

I believe there are exciting times ahead of us, with the development of Timor Sea gas reserves for liquefi ed natural gas manufacture

onshore at Wickham Point, onshore power generation, downstream gas-based manufacturing (possibly linking into the national

grid), the provision of new and long-term support services for Australian Defence Force platforms in the Territory, and a signifi cant

broadening of the Territory’s industrial base.

In order to provide suitable land for business to capitalise on all these excellent opportunities, the Corporation has undertaken

investigations and concept master planning in anticipation of the emerging requirements of business.

We have examined alternative delivery models and how similar agencies in other jurisdictions have delivered desirable outcomes from

strategic land holdings.

I wish to thank Board members for their continued efforts and commitment to achieving strategic outcomes during the past year, and I

look forward to the challenging times ahead.

STEVE MARGETIC



The past year has been both challenging and successful, with the Land Development Corporation continuing to meet its initial challenge

of bridging the gap between the government and private sector in the development of land for industrial use. The Corporation’s move

to the Department of Business, Economic and Regional Development better refl ects the Corporation’s contribution to the Territory’s

investment attraction and economic development strategies.

Highlights this year include:

the reservation, option and subsequent commitment to the purchase or long term lease of several parcels of land within and

adjacent to the Darwin Business Park. These sales and leases will be fi nalised after the current reporting year and will see three

new freight and distribution centres established within the Darwin Business Park;

the sale of a substantial parcel of surplus Crown Land at East Arm that will allow a diversifi ed business group to establish a Territory

base with a number of distinct business units able to collocate on the site;

a land agreement and a project facilitation agreement to allow Darwin Clean Fuels to conduct feasibility studies and front end

engineering design (FEED) for a proposed $450 million condensate processing facility within the emerging fuel precinct surrounding

the joint-user Darwin Industry Fuel Terminal;

the relocation of roads and other services to facilitate a site for the $77 million biodiesel facility for Natural Fuels Australia, the

construction of which is currently well advanced;

strategic input to master planning of areas at East Arm adjacent to the Darwin Business Park to allow for the development of sites

to accommodate manufacturing and other specialised uses;

participation in and contribution to working parties investigating outcomes for an industrial park incorporating a Defence Support

Hub adjacent to Robertson Barracks, a maritime industrial precinct, a classifi ed goods storage precinct, waste treatment facilities,

bulk materials facilities, and a replacement recreation boat ramp at East Arm; and

the appointment of local real estate agents Knight Frank to undertake marketing of the Darwin Business Park for an 18-month term.

I greatly appreciate the support of the team and the leadership of the Board, whose members bring high-level experience, skills and

commitment to the tasks. The Corporation looks forward to delivering increased and successful outcomes for the economy of the

Northern Territory.

MIKE BURGESS

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Chief Executive Offi cer’s Report



The Land Development Corporation operates under the

Land Development Corporation Act 2003 and through an

Advisory Board, and from 11 July 2005 reports to the Minister

for Business and Economic Development.

Functions of the Corporation

The functions of the Corporation are:

to develop the land of the Corporation for use by

industrial businesses;

to promote the land of the Corporation for use by

industrial businesses;

to provide services, facilities and general assistance to

facilitate the establishment and conduct of industry on the

land of the Corporation; and

to carry out or facilitate other activities associated with

the management of the Corporation’s land and its

use by industrial businesses, including commercial and

recreational activities and activities relating to heritage and

environmental conservation.

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Powers of the Corporation

The Corporation has power to:

negotiate and enter into contracts, agreements, schemes

and arrangements;

purchase, lease or otherwise acquire and hold real or

personal property;

sell, grant leases of or otherwise dispose of real or

personal property;

acquire, hold and dispose of rights, privileges, permits,

licences and authorities;

occupy, use, control and manage land or a building;

erect buildings and construct wharves, roads, railways,

pipelines, bridges or other facilities;

purchase, lease or hire plant, machinery, equipment or

other things for the purpose of conducting its functions;

impose and collect fees and charges for or in respect of

use of its land or a facility on that land;

accept, hold and enforce undertakings, indemnities, bonds

or securities protecting it against loss;

regulate and prohibit the conduct of persons on its land

and set the conditions on which persons may enter or be

excluded from a part or parts of its land;

regulate and prohibit the presence, use and removal of

vehicles and animals on its land or a part of its land;

employ or engage staff, engage consultants and appoint

agents and legal representatives;

charge for work, services, goods and information done,

supplied or published by the Corporation and for

admission onto its land; and

perform any other functions imposed on it under this Act.

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Corporate Governance



Steve Margetic

Chair

Steve Margetic is Managing Director of the Territory’s largest

privately owned building contractor, Sitzler Bros, and is a past

President of the Territory Construction Association.

A Fellow of the Australian Institute of Company Directors, he

has been a Director of Master Builders Australia (MBA) Inc

and Chairman of MBA Inc National Contracts Committee.

Steve has more than 20 years experience in property

development in the Territory and over that period has been

instrumental in the development of a number of large retail

shopping centres, along with a broad range of commercial and

industrial developments.

Margaret Michaels Deputy Chair

Margaret Michaels is a Partner at Clayton Utz in Darwin.

Her practice spans both the corporate and litigation areas.

She has a long history of acting in large commercial disputes,

requiring case management expertise and the ability to

manage and deal with a large number of documents and

witnesses. Margaret also handles banking recovery work,

corporate and personal insolvency, trade practices and

equitable relief.

Margaret has experience in advising the Northern Territory

Government in commercial, litigious, administrative and public

law areas. Her expertise includes construction, energy and

resources, litigation and dispute resolution, major projects, power

and utilities, transport and logistics, and government services.

The Advisory Board was established to bring outside expertise

to the Corporation, to provide advice on its activities and the

manner in which it carries out those activities and, in particular,

to ensure it operates with commercial acumen.

Four private sector members were appointed by the Minister

for a period of three years, commencing on 8 January 2004.

Mr Mike Burgess, Chief Executive of the Department of

Business, Economic and Regional Development (DBERD),

was appointed as CEO of the Corporation from 11 July 2005

and as the fi fth Member of the Advisory Board, succeeding

Ms Sarah Butterworth who was appointed CEO and Board

Member from 1 July 2004.

Advisory Board



Philip Duval

Member

Philip Duval is the Managing Director of Realty Solutions

Australia Pty Ltd, an Adelaide-based specialist independent

property consulting fi rm he formed after some 21 years

(10 as Managing Director) with CB Richard Ellis (SA) Pty

Ltd. He holds valuation and town planning qualifi cations and

has extensive experience in major commercial and industrial

projects. He has undertaken recent assignments for the SA

Government’s Land Management Corporation, Department

of Environment and Heritage, Adelaide Airport Ltd, and Port

Adelaide Maritime Corporation.

Marek Petrovs Member

Marek Petrovs is a Melbourne-based property consultant

providing advice to both the public and private sectors within

Australia and overseas. He has held the positions of Deputy

Chair, NSW Growth Centres Commission and Chairman of

the former Urban and Regional Land Corporation of Victoria,

which has now been merged with the Docklands Authority

to become VicUrban. Marek has facilitated national forums of

the Victorian, South Australian, New South Wales, Australian

Capital Territory and Western Australian land corporations.

He is a non-Executive Director of Austcorp Group Limited,

Quotable Value Australia Pty Limited and Tourism Hotels and

Leisure Limited.

Mike BurgessMember/CEO

Mike Burgess joined the Department of Business, Industry

and Resource Development (DBIRD) in May 2004 as Chief

Executive and became Chief Executive of the Department

of Business, Economic and Regional Development (DBERD)

on its establishment on 11 July 2005. He has previously held

senior positions in the Northern Territory Government,

including Deputy Chief Executive in the Department of the

Chief Minister.

Mike has served on the Boards of various NT Government

agencies and other institutions, including the Savannas CRC,

the NT Research and Innovation Board, The Arafura Timor

Research Facility, the Tourism NT Advisory Board, the Darwin

Port Corporation, the Major Events Company and the

Conservation Land Corporation. He holds a Bachelor of

Civil Engineering.

Advisory Board



Darwin Business Park:

sold a 3.42 ha allotment to Wagner Properties, for a

proposed regional depot and concrete batching plant;

negotiated land sale contracts over fi ve parcels.

These parcels have a combined land area of nine hectares

and total sale price in the order of $5.5m;

negotiated a new 20 year land lease with Vopak Terminal

Darwin over Section 5783 allowing the development

of a biodiesel facility by Natural Fuels Australia and the

expansion of Vopak’s bulk liquid storage capabilities;

Toll Holdings, which purchased land for a $10 million

freight and distribution centre in 2004, announced plans

for a 4600 square metre addition to its facility;

facilitated the development of Vopak’s $55 million

Darwin industry fuel terminal which began operations in

September 2005;

facilitated Darwin Clean Fuels’ proposal to construct a

$450 million condensate processing facility to produce

high quality transport fuels. The company lodged a Notice

of Intent with the NT Government in February 2006 to

build and operate the plant; and

began formulating development covenants and guidelines.

The covenants will ensure owners and tenants maintain

a high standard of construction design and the land is

developed within an acceptable timeframe.

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Defence Support Hub:

identifi ed 60 hectares of land adjacent to Robertson

Barracks for the development of a new Defence Support

Hub and industrial park. The development is expected to

enable prime contractors and related small businesses to

establish strategic industry clusters to deliver support to

Defence platforms based in the Top End.

Targeting investors:

appointed Knight Frank NT on an 18 month contract to

market land on behalf of the Corporation;

established a Potential User Database that lists likely

investors and end-users. The information can be used

for direct marketing activities by the Land Development

Corporation and its marketing agents, Knight Frank NT;

commissioned an Industrial Land Supply Study that

identifi es available public and private industrial land

and forecasts future requirements. The study will be

completed by October 2006;

supported a major update of the draft East Arm Strategic

Land Use plan, which assesses future land and essential

service infrastructure requirements for East Arm. The plan

is expected to be fi nalised in 2006; and

developed a new marketing plan that is tailored to

maximise opportunities to link in with other government

departments’ marketing activities with a similar target

audience, such as international roadshows and expos.

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Performance in detail



Facilitating business:

worked with Northern Territory Treasury to develop a

range of funding models to enable private sector equity to

be fully utilised;

formalised guidelines with NT Treasury for project specifi c

funding models;

sold a substantial parcel of surplus Crown Land at

East Arm that will allow a diversifi ed business group

to establish a Territory base with a number of distinct

business units able to collocate on the site; and

relocated roads and other services to facilitate a site for

the $77 million biodiesel facility for Natural Fuels Australia.

Performance Measures

2005-06Estimate

2005-06Actuals

2006-07Estimate

Industrial Land Development

Quantity

Number of Land sales 3 1 4

Tenancies managed 9 10 11

Quality

Stakeholder survey Nm 95%

Timeliness

Rents collected on time 95% 95%

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Performance in detail



In 2006 Tourism NT, the Land Development Corporation

and the Department of Business, Economic Regional

Development undertook a joint review of the Working

for Outcomes Framework and associated performance

measures. The objective was to review and improve

performance measures.

Local consultants Stanton Partners assisted in developing the

new framework and measures.

At the beginning of 2005-06, the Land Development

Corporation had the one output group (Industrial Land

Development). Its continuation was supported during

the Review.

In the original budget for 2005-06 there was a performance

measure “capacity to provide policy advice”. This essentially

describes the budget allocation for the work unit. While

this type of measure for a policy unit is acceptable, better

measures are possible and its use here has been discontinued.

The “policy capacity” measure has been replaced by the

“number of land sales”.

The performance measures Tenancies managed (Quantity),

Stakeholder Survey (Quality) and Rents collected on time

(Timeliness) have remained.

The advantages of the new structure are that it:

improves alignment between corporate goals,

key performance indicators, outputs and

performance measures;

improves consistency in reporting across business

functions within DBERD, Tourism NT and the

Land Development Corporation;

limits overlap and duplication in cross-functional reporting

between Divisions and functions;

provides a mechanism which can be used to report to a

range of stakeholders, including Treasury;

provides greater accountability, which directly links

business functions to output groups to government

outcomes; and

involved comprehensive consultation across a number

of internal and external stakeholders to ratify the

new output reporting structure and to redevelop

performance measures.

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Review of Output Structure



The objective of stakeholder surveys is to independently

measure and evaluate customer satisfaction with the quality

and timeliness of the Corporation’s services as an element of

measuring and reporting performance under the Working for

Outcomes framework.

The principal objective of the framework is to provide a

better basis for resource allocation to programs delivered by

Government agencies. This is achieved by:

identifying, measuring and reporting the services and

goods provided by agencies;

focusing on the delivery of government outputs

within approved programs and measurement of

output performance;

clearly defi ning links between Corporation outputs and

government outcomes, and

providing full cost information for outputs.

The survey:

determines how the Corporation is performing against

the established quality and timeliness measures from the

perspective of its customers and stakeholders;

identifi es trends over time, and

identifi es any need to modify the established measures

and targets for future surveys, specifying

appropriate modifi cations.

This current fi nancial year no survey has been conducted.

This decision was taken in conjunction with Treasury who

also advised that they did not require quarterly reporting

of performance measures during 2005-06. Data will be

incorporated into the Annual Report.

Stakeholder surveys will commence in 2006-07.

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Performance Reporting Quality and timeliness of service



Land Development Corporation For the Year Ended 30 June 2006

The Land Development Corporation (LDC) is a

commercially driven statutory authority established on

1 July 2003 to develop and manage Northern Territory

Government – owned land identifi ed for industry

development. The fi nancial statements provide information

about the fi nancial performance, fi nancial position and cash

fl ows of the Agency.

Operating Statement - Overview of Performance

The Agency recorded a net surplus of $266 000 at

30 June 2006 compared to a surplus of $365 000 for the year

ended 30 June 2005. Although Total Income was higher for

the current year due to an increase in Output Revenue and

Rental Income a lower surplus was realised as a result of a

corresponding increase in total expenditure for the year.

The improved performance against a budgeted defi cit of

$289 000 is attributable to increased Rental Income and

lower than budgeted operating expenses as a result of

delays in recorded expenditure against major projects and

repairs and maintenance.

Total operating revenue for the year was $2.366 million.

This comprised Output revenue of $1.445 million, Agency

revenue of $921 000, including notional revenue of $53 000

for services provided free of charge from the Department of

Corporate and Information Services (DCIS).

Total operating expenses for the year was $2.1 million.

This included Employee Expenses of $507 000 and

Administrative Expenditure of $1.593 million. Included in

the Administrative expenditure is an amount of $61 000

representing DCIS notional service charges.

Balance Sheet - Overview of Position

The net asset position of the Agency as at 30 June 2006 is

$66. 313 million. This compares to the net asset position as

at 30 June 2005 of $51.182 million. The overall improvement

of $15.131 million is mainly due to an increase in Property

Plant and Equipment as a result of an Infrastructure Transfer

from the Department of Planning and Infrastructure valued at

$15.044 million.

Statement of Changes in Equity

The Balance of Equity at 30 June 2006 is $66. 313 million.

This balance refl ects the net equity position after taking into

account movement in the capital accounts attributable to the

infrastructure transfer of $15.044 million, an Equity withdrawal

of $179 000 and the operating surplus of $266 000.

Financial Statement Overview



Cash Flow Statement

The Cash Balance as at 30 June 2006 is $2.187 million.

This is an improvement on the prior year balance due to

increased land sales in the 2006 year.

This exceeds the budgeted cash balance of $1.410 million

for the year ended 30 June 2006 by $777 000. This variance

is due to increased Rental Income receipts and lower than

budgeted operating expenses as a result of delays in recorded

expenditure against major projects and repairs and maintenance.

Key Financial Data

2006 $’000

2005 $’000

Operating Statement

Total Revenue 2 366 1 648

Total Expenses 2 100 1 301

Net Surplus/(Defi cit) 266 347

2006 $’000

2005 $’000

Balance Sheet

Total Assets 66 605 51 267

Total Liabilities 292 85

(Equity) 66 313 51 182

Financial Statement Overview




Financial Report

CERTIFICATION OF THE FINANCIAL STATEMENTS

We certify that the attached fi nancial statements for the Land Development Corporation have been prepared from proper accounts

and records in accordance with the prescribed format, the Financial Management Act and Treasurer’s Directions.

We further state that the information set out in the Operating Statement, Balance Sheet, Statement of Changes in Equity, Cash Flow

Statement, and notes to and forming part of the fi nancial statements, presents fairly the fi nancial performance and cash fl ows for the

year ended 30 June 2006 and the fi nancial position on that date.

At the time of signing, we are not aware of any circumstances that would render the particulars included in the fi nancial statements

misleading or inaccurate.

MIKE BURGESS TRACEY SCOTT

Chief Executive Chief Financial Offi cer

31 August 2006 31August 2006



NOTE Industrial Land Development

2006$’000

2005$’000

INCOME

Output Revenue 1,445 1,280

Sales of Goods and Services 536 179

Goods and Services Received Free of Charge 4 53 43

Gain on Disposal of Assets 5 285 36

Other Asset Revenue - 298

Other Income 47 (188)

TOTAL INCOME 2,366 1,648

EXPENSES

Employee Expenses 21 507 414

Administrative Expenses

Purchases of Goods and Services 6 1,349 737

Repairs and Maintenance 142 48

Depreciation and Amortisation 9 41 41

Other Administrative Expenses (1) 61 43

TOTAL EXPENSES 2,100 1,283

NET SURPLUS/(DEFICIT) 13 266 365

This Operating Statement by Output Group is to be read in conjunction with the notes to the fi nancial statements.

(1) Includes DCIS FOC service charges.


Operating Statement For the year ended 30 June 2006



NOTE2006$’000

2005$’000

ASSETS

Current Assets

Cash and Deposits 7 2,187 878

Receivables 8 65 37

Total Current Assets 2,252 915

Non-Current Assets

Receivables 8 - -

Property, Plant and Equipment 9 64,353 50,352

Total Non-Current Assets 64,353 50,352

TOTAL ASSETS 66,605 51,267

LIABILITIES

Current Liabilities

Deposits Held 12 9 14

Payables 10 214 4

Provisions 11 60 59

Total Current Liabilities 283 77

Non-Current Liabilities

Provisions 11 9 8

Total Non-Current Liabilities 9 8

TOTAL LIABILITIES 292 85

NET ASSETS 66,313 51,182

EQUITY 13

Capital 64,970 50,105

Reserves 819 819

Accumulated Funds 524 258

TOTAL EQUITY 66,313 51,182

The balance sheet is to be read in conjunction with the notes to the fi nancial statements.


Balance Sheet Asat 30 June 2006



NOTE2006$’000

2005$’000

BALANCE OF EQUITY AT 1 JULY 21 51,182 44,268

Capital 13

Balance at 1 July 50,105 44,375

Equity Injections 15,044 11,430

Equity Withdrawals (179) (5,700)

Balance at 30 June 64,970 50,105

Reserves 13

Balance at 1 July 819 0

Increase in Asset Revaluation Reserves 0 819

Balance at 30 June 819 819

Accumulated Funds 13

Balance at 1 July 258 (107)

Surplus for the Period 21 266 365

Balance at 30 June 524 258

BALANCE OF EQUITY AT 30 JUNE 66,313 51,182

This Statement of Changes in Equity is to be read in conjunction with the notes to the fi nancial statements.


Statement of Changes in EquityFor the year ended 30 June 2006



NOTE2006$’000

2005$’000

CASH FLOWS FROM OPERATING ACTIVITIES

Operating Receipts

Taxes Received GST - 27

Output Revenue Received 1,445 1,280

Receipts from Sales of Goods and Services 745 452

Other Operating Receipts - (188)

Total Operating Receipts 2,190 1,571

Operating Payments

Payments to Employees (503) (382)

Payments for Goods and Services (1,482) (768)

Community Service Obligations Superannuation contribution - (28)

GST payments on Purchases - (51)

Total Operating Payments (1,985) (1,229)

Net cash from/(used in) Operating Activities 14 205 342

CASH FLOWS FROM INVESTING ACTIVITIES

Investing Receipts

Proceeds from Asset Sales 5 1,287 152

Repayment of Advances - 223

Total Investing Receipts 1,287 375

Net cash from/(used in) Investing Activities 14 1,287 375

CASH FLOWS FROM FINANCING ACTIVITIES

Financing Receipts

Deposits Received (4) (29)

Total Financing Receipts (4) (29)

Financing Payments

Equity Withdrawals 13 (179) (5,700)

Total Financing Payments (179) (5,700)

Net cash from/(used in) Financing Activities (183) (5,729)

Net increase/(decrease) in Cash Held 1,309 (5,012)

Cash at Beginning of Financial Year 878 5,890

CASH AT END OF FINANCIAL YEAR 7 2,187 878

The statement of cash fl ows is to be read in conjunction with the notes to the fi nancial statements.


Cash Flow Statement For the year ended 30 June 2006



Index of Notes to the Financial Statements

1 Objectives and Funding

2 Statement of Signifi cant Accounting Policies

3 Operating Statement by Output Group

INCOME

4 Goods and Services Received Free of Charge

5 Gain on Disposal of Assets

EXPENSES

6 Purchases of Goods and Services

ASSETS

7 Cash and Deposits

8 Receivables

9 Property, Plant and Equipment

LIABILITIES

10 Payables

11 Provisions

12 Other Liabilities

EQUITY

13 Equity

OTHER DISCLOSURES

14 Notes to the Cash Flow Statement

15 Financial Instruments

16 Commitments

17 Contingent Liabilities And Contingent Assets

18 Events Subsequent To Balance Date

19 Accountable Offi cer’s Trust Account

20 Write-offs, Postponements and Waivers

21 Impact of Adopting Australian Equivalents to

International Financial Reporting Standards (IFRS)

22 Impact of Adopting Australian Equivalents to

International Financial Reporting Standards (IFRS)


Notes to the Financial Statements For the year ended 30 June 2006



1 Objectives and Funding

The Land Development Corporation established on

1 July 2003 is a commercially-oriented land developer.

The Corporation’s role is to position the Northern

Territory and its industries to take advantage of any major

industrial projects. Its main focus initially is to develop and

manage the industrial estate at East Arm referred to as

the Darwin Buisness Park, followed by the development

of estates at Middle Arm and Glyde Point. It will work

to provide quick access to appropriately developed land,

allowing business to focus on their core activities.

The Corporation is predominantly funded by parliament

appropriations and some revenue from commercial

rent. In the process of reporting on the Corporation

as a single entity, all intra Corporation transactions and

balances have been eliminated.

2 Statement of Signifi cant Accounting Policies

(a) Basis of Accounting

The fi nancial statements have been prepared in

accordance with the requirements of the Financial

Management Act and related Treasurer’s Directions.

The Financial Management Act requires the Land

Development Corporation to prepare fi nancial

statements for the year ended 30 June based on the

form determined by the Treasurer. The form of Agency

fi nancial statements is to include:

(i) a Certifi cation of the Financial Statements;

(ii) an Operating Statement;

(iii) a Balance Sheet;

(iv) a Statement of Changes in Equity;

(v) a Cash Flow Statement; and

(vi) applicable explanatory notes to the fi nancial

statements.

The form of Agency fi nancial statements is consistent

with the accrual budget format and the requirements

of Australian Accounting Standards, including

AASB 101, AASB 107 and AAS 29. The format also

requires additional disclosures specifi c to Territory

Government entities.

The fi nancial statements have been prepared using the

accrual basis of accounting, which recognises the effect of

fi nancial transactions and events when they occur, rather

than when cash is paid out or received. As part of the

preparation of the fi nancial statements, all intra Agency

transactions and balances have been eliminated. Except

where stated, the fi nancial statements have also been

prepared in accordance with the historical cost convention.

This is the Land Development Corporation’s fi rst fi nancial

report prepared following the adoption of Australian

equivalents to International Financial Reporting Standards

(IFRS). The adoption of Australian equivalents to IFRS

has resulted in minor adjustments to the Corporation’s

fi nancial statements. Further information in relation to

the Corporation’s adoption of Australian equivalents

to IFRS may be found in note 21 - Impact of Adopting

Australian Equivalents to IFRS.





(d) Presentation and Rounding of Amounts

Amounts in the fi nancial statements and notes to the

fi nancial statements are presented in Australian

dollars and have been founded to the nearest

thousand dollars, with amounts of $500 or less being

rounded down to zero.

(e) Changes in Accounting Policies

There have been no changes to accounting policies

adopted in 2005-06 as a result of management

decisions. Any changes to accounting policies that have

been required as a result of the adoption of Australian

equivalents to IFRS.

(f) Goods and Services Tax

Income, expenses and assets are recognised net of the

amount of Goods and Services Tax (GST), except where

the amount of GST incurred on a purchase of goods and

services is not recoverable from the Australian Tax Offi ce

(ATO). In these circumstances the GST is recognised as

part of the cost of acquisition of the asset or as part of

the expense.

Receivables and payables are stated with the amount of

GST included. The net amount of GST recoverable from,

or payable to, the ATO is included as part of receivables

or payables in the Balance Sheet.

Cash fl ows are included in the Cash Flow Statement

on a gross basis. The GST components of cash fl ows

arising from investing and fi nancing activities which are

recoverable from, or payable to, the ATO are classifi ed as

operating cash fl ows. Commitments and contingencies

are disclosed net of the amount of GST recoverable or

payable unless otherwise specifi ed.

(g) Income Recognition

Income encompasses both revenue and gains.

Income is recognised at the fair value of the consideration

received, exclusive of the amount of goods and services

tax (GST). Exchanges of goods or services of the same

nature and value without any cash consideration being

exchanged are not recognised as income.

(b) Agency and Territory Items

The fi nancial statements of the Land Development

Corporation include income, expenses, assets, liabilities

and equity over which the Corporation has control

(Agency items). Certain items, while managed by the

Agency, are controlled and recorded by the Territory

rather than the Agency (Territory items). Territory items

are recognised and recorded in the Central Holding

Authority as discussed below.

Central Holding Authority

The Central Holding Authority is the ‘parent body’ that

represents the Government’s ownership interest in

Government controlled entities.

The Central Holding Authority also records all Territory

items, such as income, expenses, assets and liabilities

controlled by the Government and managed by Agencies

on behalf of the Government. The main Territory item

is Territory income, which includes taxation and royalty

revenue, Commonwealth general purpose funding (such

as GST revenue), fi nes, and statutory fees and charges.

This Corporation does not manage any Territory Items.

The Central Holding Authority also holds certain

Territory assets not assigned to Agencies as well as

certain Territory liabilities that are not practical or

effective to assign to individual Agencies such as unfunded

superannuation and long service leave.

(c) Comparatives

Where necessary, comparative information for the

2004-05 fi nancial year has been reclassifi ed to provide

consistency with current year disclosures.

In accordance with AASB 1: First Time Adoption of

Australian Equivalents to IFRS, comparative information,

with the exception of that relating to fi nancial

instruments, has been adjusted for the adoption

of Australian equivalents to IFRS. Where changes

to fi nancial instruments are required as a result of

the adoption of Australian equivalents to IFRS, any

adjustments will occur as at 1 July 2005 (the 2005-06

fi nancial year).





Output Revenue

Output revenue represents Government funding for

Agency operations and is calculated as the net cost of

Agency outputs after taking into account funding from

Agency income. The net cost of Agency outputs for

Output Appropriation purposes does not include any

allowance for major non-cash costs such as depreciation.

Revenue in respect of this funding is recognised in the

period in which the Agency gains control of the funds.

Grants and Other Contributions

Grants, donations, gifts and other non-reciprocal

contributions are recognised as revenue when the

Agency obtains control over the assets comprising the

contributions. Control is normally obtained upon receipt.

Contributions are recognised at their fair value.

Contributions of services are only recognised when a fair

value can be reliably determined and the services would

be purchased if not donated.

Sale of Goods

Revenue from the sale of goods is recognised (net of

returns, discounts and allowances) when control of the

goods passes to the customer and specifi ed conditions

associated with the sale have been satisfi ed.

Rendering of Services

Revenue from rendering services is recognised on a stage

of completion basis.

Interest Revenue

Interest revenue is recognised as it accrues, taking into

account the effective yield on the fi nancial asset.

Disposal of Assets

A gain or loss on disposal of assets is included as a gain

or loss on the date control of the asset passes to the

buyer, usually when an unconditional contract of sale is

signed. The gain or loss on disposal is calculated as the

difference between the carrying amount of the asset at

the time of disposal and the net proceeds on disposal.

Refer also to note 5.

Contributions of Assets

Contributions of assets and contributions to assist in the

acquisition of assets, being non-reciprocal transfers, are

recognised, unless otherwise determined by Government,

as gains when the Agency obtains control of the asset

or contribution. Contributions are recognised at the fair

value received or receivable.

(h) Repairs and Maintenance Expenses

Funding is received for repairs and maintenance works

associated with Agency assets as part of Output Revenue.

Costs associated with repairs and maintenance works on

Agency assets are expensed as incurred.

(i) Interest Expenses

Interest expenses include interest and fi nance lease

charges. Interest expenses are expensed in the period in

which they are incurred.

(j) Cash and Deposits

For the purposes of the Balance Sheet and the Cash

Flow Statement, cash includes cash on hand, cash

at bank and cash equivalents. Cash equivalents are

highly liquid short-term investments that are readily

convertible to cash. Cash at bank includes monies held

in the Accountable Offi cer’s Trust Account (AOTA) that

are ultimately payable to the benefi cial owner – refer

also to note 19.

(k) Inventories

General inventories are all inventories other than those

held for distribution and are carried at the lower of cost

and net realisable value. Cost of inventories includes all

costs associated with bringing the inventories to their

present location and condition. When inventories are

acquired at no or nominal consideration, the cost will be

the current replacement cost at date of acquisition.

Inventories held for distribution are those inventories

distributed at no or nominal consideration, and are carried

at the lower of cost and current replacement cost.





Construction (Work in Progress)

As part of Working for Outcomes, the Department of

Planning and Infrastructure is responsible for managing

general government capital works projects on a whole

of Government basis. Therefore appropriation for most

Corporation capital works is provided directly to the

Department of Planning and Infrastructure and the cost

of construction work in progress is recognised as an asset

of that Department. Once completed, capital works

assets are transferred to the Corporation.

Revaluations

Subsequent to initial recognition, assets belonging to the

following classes of non-current assets are revalued with

suffi cient regularity to ensure that the carrying amount of

these assets does not differ materially from their fair value

at reporting date:

· Land;

· Buildings;

· Infrastructure Assets;

· Heritage and Cultural Assets;

· Biological Assets; and

· Intangibles.

Fair value is the amount for which an asset could be

exchanged, or liability settled, between knowledgeable,

willing parties in an arms length transaction. Other

classes of non-current assets are not subject to

revaluation and are measured at cost.

The unique nature of some of the heritage and cultural

assets may preclude reliable measurement. Such assets

have not been recognised in the fi nancial statements.

(l) Receivables

Receivables include accounts receivable and other

receivables and are recognised at fair value less any

allowance for uncollectible amounts. The collectibility of

receivables is reviewed regularly, and part of this process

is to assess, at reporting date, whether an allowance for

doubtful debts is required.

Accounts receivable are generally settled within 30 days and

other receivables within 30 days.

(m) Property, Plant and Equipment

Acquisitions

All items of property, plant and equipment with a cost, or

other value, equal to or greater than $5,000 are recognised

in the year of acquisition and depreciated as outlined

below. Items of property, plant and equipment below the

$5,000 threshold are expensed in the year of acquisition.

The construction cost of property, plant and equipment

includes the cost of materials and direct labour, and an

appropriate proportion of fi xed and variable overheads.

Complex Assets

Major items of plant and equipment comprising a number

of components that have different useful lives, are

accounted for as separate assets. The components may

be replaced during the useful life of the complex asset.

Subsequent Additional Costs

Costs incurred on property, plant and equipment

subsequent to initial acquisition are capitalised when

it is probable that future economic benefi ts in excess

of the originally assessed performance of the asset will

fl ow to the Agency in future years. Where these costs

represent separate components of a complex asset, they

are accounted for as separate assets and are separately

depreciated over their expected useful lives.





Depreciation and Amortisation

Items of property, plant and equipment, including

buildings but excluding land, have limited useful lives

and are depreciated or amortised using the straight-line

method over their estimated useful lives.

Amortisation applies in relation to intangible

non-current assets with limited useful lives and is

calculated and accounted for in a similar manner to

depreciation.

The estimated useful lives for each class of asset are

in accordance with the Treasurer’s Directions and are

determined as follows:

2006 2005

Buildings 10 - 50 Years 20 - 50 Years

Infrastructure Assets 8 - 50 Years 8 - 50 Years

Plant and Equipment 5 - 15 Years 4 - 15 Years

Leased Plant and Equipment Over term of lease Over term of lease

Assets are depreciated or amortised from the date of acquisition or from the time an asset is completed and held ready for use.

Assets Held for Sale

Assets held for sale consist of those assets which

management has determined are available for immediate

sale in their present condition, and their sale is highly

probably within the next twelve months.

These assets are measured at the lower of the asset’s

carrying amount and fair value less costs to sell. These

assets are not depreciated. Non-current assets held for

sale have been recognised on the face of the fi nancial

statements as current assets.

Impairment of Assets

An asset is said to be impaired when the asset’s carrying

amount exceeds its recoverable amount.

Non-current physical and intangible Agency assets are

assessed for indicators of impairment on an annual basis. If

an indicator of impairment exists, the Agency determines the

asset’s recoverable amount. The asset’s recoverable amount

is determined as the higher of the asset’s depreciated

replacement cost and fair value less costs to sell. Any

amount by which the asset’s carrying amount exceeds the

recoverable amount is recorded as an impairment loss.

Impairment losses are recognised in the Operating

Statement unless the asset is carried at a revalued amount.

Where the asset is measured at a revalued amount, the

impairment loss is offset against the Asset Revaluation

Reserve for that class of asset to the extent that an

available balance exists in the Asset Revaluation Reserve.

In certain situations, an impairment loss may subsequently

be reversed. Where an impairment loss is subsequently

reversed, the carrying amount of the asset is increased

to the revised estimate of its recoverable amount. A

reversal of an impairment loss is recognised in the

Operating Statement as income, unless the asset

is carried at a revalued amount, in which case the

impairment reversal results in an increase in the Asset

Revaluation Reserve. Note 15 provides additional

information in relation to the Asset Revaluation Reserve.

(n) Leased Assets

Leases under which the Agency assumes substantially

all the risks and rewards of ownership of an asset are

classifi ed as fi nance leases. Other leases are classifi ed

as operating leases.





Finance Leases

Finance leases are capitalised. A leased asset and a lease

liability equal to the present value of the minimum lease

payments are recognised at the inception of the lease.

Lease payments are allocated between the principal

component of the lease liability and the interest expense.

Operating Leases

Operating lease payments made at regular intervals

throughout the term are expensed when the payments

are due, except where an alternative basis is more

representative of the pattern of benefi ts to be derived

from the leased property.

(o) Payables

Liabilities for accounts payable and other amounts

payable are carried at cost which is the fair value of the

consideration to be paid in the future for goods and

services received, whether or not billed to the Agency.

Accounts payable are normally settled within 30 days.

(p) Employee Benefi ts

Provision is made for employee benefi ts accumulated

as a result of employees rendering services up to the

reporting date. These benefi ts include wages and

salaries and recreation leave. Liabilities arising in respect

of wages and salaries and recreation leave and other

employee benefi t liabilities that fall due within twelve

months of reporting date are classifi ed as current

liabilities and are measured at amounts expected to

be paid. Non-current employee benefi t liabilities that

fall due after twelve months of the reporting date

are measured at present value, calculated using the

Government long term bond rate.

No provision is made for sick leave, which is

non-vesting, as the anticipated pattern of future sick

leave to be taken is less than the entitlement accruing

in each reporting period.

Employee benefi t expenses are recognised on a net basis

in respect of the following categories:

· wages and salaries, non-monetary benefi ts,

recreation leave, sick leave and other leave

entitlements; and

· other types of employee benefi ts.

As part of the introduction of Working for Outcomes,

the Central Holding Authority assumed the long service

leave liabilities of Government Agencies, including the Land

Development Corporation and as such no long service

leave liability is recognised in Agency fi nancial statements.

(q) Superannuation

Employees’ superannuation entitlements are provided

through the:

· NT Government and Public Authorities

Superannuation Scheme (NTGPASS);

· non-government employee nominated schemes

for those employees commencing on or after

10 August 1999.

The Agency makes superannuation contributions on

behalf of its employees to the Central Holding Authority

or non-government employee nominated schemes.

Superannuation liabilities related to government

superannuation schemes are held by the Central Holding

Authority and as such are not recognised in Agency

fi nancial statements.

(r) Contributions by and Distributions to Government

The Agency may receive contributions from Government

where the Government is acting as owner of the

Agency. Conversely, the Agency may make distributions

to Government. In accordance with the Financial

Management Act and Treasurer’s Directions, certain types

of contributions and distributions, including those relating

to administrative restructures, have been designated as

contributions by, and distributions to, Government.

These designated contributions and distributions are

treated by the Agency as adjustments to equity.

The Statement of Changes in Equity and note 13 provide

additional information in relation to contributions by, and

distributions to, Government.

(s) Commitments

Disclosures in relation to capital and other commitments,

including lease commitments are shown at note 18 and

are consistent with the requirements contained in AASB

101, AASB 117 and AAS 29.

Commitments are those contracted as at 30 June where the

amount of the future commitment can be reliably measured.





3 OPERATING STATEMENT BY OUTPUT GROUP

NOTE Industrial Land Development

2006$’000

2005$’000

INCOME

Output Revenue 1,445 1,280

Sales of Goods and Services 536 179

Goods and Services Received Free of Charge 4 53 43

Gain on Disposal of Assets 5 285 36

Other Asset Revenue - 298

Other Income 47 (188)

TOTAL INCOME 2,366 1,648

EXPENSES

Employee Expenses 21 507 414

Administrative Expenses

Purchases of Goods and Services 6 1,349 737

Repairs and Maintenance 142 48

Depreciation and Amortisation 9 41 41

Other Administrative Expenses (1) 61 43

TOTAL EXPENSES 2,100 1,283

NET SURPLUS/(DEFICIT) 13 266 365

This Operating Statement by Output Group is to be read in conjunction with the notes to the fi nancial statements.

(1) Includes DCIS FOC service charges.





2006$’000

2005$’000

4 GOODS AND SERVICES RECEIVED FREE OF CHARGECorporate and Information Services 53 43

53 43

5 GAIN ON DISPOSAL OF ASSETSNet proceeds from the disposal of non-current assets 1,287 152

Less: Carrying value of non-current assets disposed (1,002) (116)

Gain on the disposal of non-current assets 285 36

6 PURCHASES OF GOODS AND SERVICESThe net surplus/(defi cit) has been arrived at after charging the following expenses:

Goods and Services Expenses:

Consultants (1) 468 6

Advertising (2) 3 -

Marketing and Promotion (3) 54 38

Document Production 3 4

Legal Expenses (4) 22 14

Recruitment (5) - 7

Training and Study 4 7

Offi cial Duty Fares 5 5

Travelling Allowance 1 1

(1) Includes marketing, promotion and IT consultants.

(2) Does not include recruitment advertising or marketing and promotion advertising.

(3) Includes advertising for marketing and promotion but excludes marketing and promotion consultants’ expenses,

which are incorporated in the consultants’ category.

(4) Includes legal fees, claim and settlement costs.

(5) Includes recruitment related advertising costs.

7 CASH AND DEPOSITSCash on Hand 1 1

Cash at Bank 2,186 877

2,187 878





2006$’000

2005$’000

8 RECEIVABLESCurrent

Accounts Receivable 41 37

Less: Allowance for Doubtful Accounts Receivable 6 -

47 37

GST Receivables 18 -

Total Receivables 65 37

9 PROPERTY, PLANT AND EQUIPMENT

Land

At fair value 47,668 48,670

47,668 48,670

Buildings

At fair value 2,503 2,503

Less: Accumulated depreciation (862) (821)

1,641 1,682

Infrastructure

At fair value 15,044 -

Less: Accumulated depreciation - -

15,044 0

Total Property, Plant and Equipment 64,353 50,352

Property, Plant and Equipment Valuations

An independent valuation of land and buildings was undertaken by the Australian Valuation Offi ce (AVO as at 30 June 2005.

The fair value of these assets was determined based on any existing restrictions on asset use. Where reliable market values were

not available, the fair value of Agency assets was based on their depreciated replacement cost.

Impairment of Property, Plant and Equipment

Agency property, plant and equipment assets were assessed for impairment as at 30 June 2006. No impairment adjustments

were required as a result of this review.





9 PROPERTY, PLANT AND EQUIPMENT (Continued)

Property, Plant and Equipment Reconciliations

A reconciliation of the carrying amount of property, plant and equipment at the beginning and end of 2005-06 is set out below:

Land

$’000

Buildings

$’000

Infrastructure

$’000

Construction

(Work in

Progress)

$’000

Total

$’000

Carrying amount as at 1 July 2005 48,670 1,682 - - 50,352

Disposals (1,002) - - - (1,002)

Depreciation and Amortisation - (41) - - (41)

Additions from Asset - - 15,044 - 15,044

Carrying Amount as at 30 June 2006 47,668 1,641 15,044 0 64,353

Property, Plant and Equipment Reconciliations

A reconciliation of the carrying amount of property, plant and equipment at the beginning and end of 2004-05 is set out below:

Land

$’000

Buildings

$’000

Infrastructure

$’000

Construction

(Work in

Progress)

$’000

Total

$’000

Carrying amount as at 1 July 2004 36,640 1,322 - 35 37,997

Disposals (35) (81) - - (116)

Depreciation and Amortisation - (41) - - (41)

Additions/(Disposals) from Asset 11,728 - - (35) 11,693

Revaluation Increments 337 482 - - 819

Carrying Amount as at 30 June 2005 48,670 1,682 0 0 50,352





2006$’000

2005$’000

10 PAYABLES

Accounts Payable 90 1

Accrued Expenses 124 3

214 4

11 PROVISIONS

Current

Employee Benefi ts

Recreation Leave 42 38

Leave Loading 6 6

Other Current Provisions

Other Provisions 12 15

60 59

Non-Current

Employee Benefi ts

Recreation Leave 9 8

Total Provisions 69 67

The Corporation employed 5 employees as at 30 June 2006 (5 employees as at 30 June 2005).

12 OTHER LIABILITIESCurrent

Deposits Held 9 14

9 14

13 EQUITYEquity represents the residual interest in the net assets of the Corporation. The Government’s ownership interest in the Land

Development Corporation is held in the Central Holding Authority as described in note 2(b).

Capital

Balance as at 1 July 50,105 44,375

Equity Injections

Equity Transfers In 15,044 11,430

Equity Withdrawals

Equity Transfers Out (179) (5,700)

Balance as at 30 June 64,970 50,105





NOTE 2006$’000

2005$’000

13 EQUITY (Continued)Reserves

(i) Movements in the Asset Revaluation Reserve

Balance as at 1 July 819 -

Increment - Land - 337

Increment - Buildings - 482

Balance as at 30 June 819 819

Accumulated Funds

Balance as at 1 July 258 (107)

Surplus for the Period 21 266 365

Balance as at 30 June 524 258

14 NOTES TO THE CASH FLOW STATEMENTS

Reconciliation of Cash

The total of Agency Cash and Deposits of $ 2,187 recorded in the Balance Sheet is

consistent with that recorded as ‘cash’ in the Cash Flow Statement.

Reconciliation of Net Surplus/(Defi cit) to Net Cash From Operating Activities

Net Operating Surplus 266 347

Non-Cash Items:

Depreciation and Amortisation 41 41

Asset Write-Offs/Write-Downs - 35

(Gain) on Disposal of Assets (285) (36)

Other Asset Revenue - (298)

Changes in Assets and Liabilities:

Decrease/(Increase) in Receivables (28) 250

(Decrease)/Increase in Payables 209 (16)

Increase in Provision for Employee Benefi ts 5 15

(Decrease)/Increase in Other Provisions (3) 4

Net Cash From Operating Activities 205 342





15 FINANCIAL INSTRUMENTS

A fi nancial instrument is a contract that gives rise to a

fi nancial asset of one entity and a fi nancial liability or

equity instrument of another entity. Financial instruments

held by the Corporation include cash and deposits,

receivables, payables and fi nance leases. The Corporation

has limited exposure to fi nancial risks as discussed below.

discussed below.

(a) Credit Risk

The Agency has limited credit risk exposure (risk of

default). In respect of any dealings with organisations

external to Government, the Agency has adopted a

policy of only dealing with credit worthy organisations

and obtaining suffi cient collateral or other security where

appropriate, as a means of mitigating the risk of fi nancial

loss from defaults.

The carrying amount of fi nancial assets recorded in the

fi nancial statements, net of any allowances for losses,

represents the Agency’s maximum exposure to credit risk

without taking account of the value of any collateral or

other security obtained.

(b) Net Fair Value

The carrying amount of fi nancial assets and fi nancial

liabilities recorded in the fi nancial statements

approximates their respective net fair values.

Where differences exist, these are not material.

(c) Interest Rate Risk

The Corporation is not exposed to interest rate risk as

the fi nancial assets and liabilities are non-interest bearing

and does not earn interest on its cash balances.





2006$’000

2005$’000

16 COMMITMENTS

(i) Operating Lease Commitments

The Corporation leases property under non-cancellable operating leases expiring from 1 to 5 years. Leases generally provide

the Corporation with a right of renewal at which time all lease terms are renegotiated. The Corporation also leases items of

plant and equipment under non-cancellable operating leases. Future operating lease commitments not recognised as liabilities

are payable as follows:

Within one year 5 4

Later than one year and not later than fi ve years 7 6

Later than fi ve years - -

12 10

17 CONTINGENT LIABILITIES AND CONTINGENT ASSETSa) Contingent liabilities

The Corporation maintains a register of contingent liabilities. Information is reviewed, updated and

annually reported to NT Treasury for inclusion in whole of government reporting. Contingent

liabilities are not reported in the Corporation annual fi nancial reports as they are not expected to

exceed the materiality threshold.

b) Contingent assets

The Corporation had no contingent assets as at 30 June 2006 (30 June 2005 nil).

18 EVENTS SUBSEQUENT TO BALANCE DATENo events have arisen between the end of the fi nancial year and the date of this report that require adjustment to, or disclosure

in these fi nancial statements.

19 ACCOUNTABLE OFFICER’S TRUST ACCOUNT

In accordance with section 7 of the Financial Management Act, an Accountable Offi cer’s Trust Account has

been established for the receipt of money to be held in trust. A summary of activity is shown below:

Nature of Trust Money Opening

Balance

1 July 2005

Receipts Payments Closing

Balance

30 June 2006

Bond Money 8 2 (1) 9

8 2 (1) 9





2006$’000

No. of Trans.

2005$’000

No. of Trans

20 WRITE OFFS, POSTPONEMENTS AND WAIVERSWrite offs, waivers and postponements under the

Financial Management Act

Represented by:

Amounts written off, waived and postponed by Delegates

Irrecoverable amounts payable to the Territory or the Corporation

written off

1 2 - -

Total written off, waived and postponed by Delegates 1 2 0 0

Amounts written off, waived and postponed by the Treasurer

Irrecoverable amounts payable to the Territory or the Corporation

written off

6 1 - -

Total written off, waived and postponed by the Treasurer 6 1 0 0

Total Write Offs, Postponements and Waivers 7 3 0 0

21 IMPACT OF ADOPTING AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

As discussed at note 2(b), this is the fi rst fi nancial report prepared following the adoption of Australian equivalents to International

Financial Reporting Standards (IFRS). The transition to IFRS has only resulted in minor adjustments to the Corporation’s fi nancial

performance and fi nancial position as discussed in greater detail below. The Corporation’s cash fl ows were not impacted.

In accordance with AASB 1, the Corporation was required to separately adjust 1 July 2004 opening balances and 2004-05

comparative fi nancial information as summarised below.

Impact Summary Pre-IFRS$’000

Impact$’000

IFRS$’000

$’000 $’000

1 July 2004 Net Assets 44,268 - 44,268

1 July 2004 Equity 44,268 - 44,268

30 June 2005 Surplus / (Defi cit) 347 18 365

30 June 2005 Net Assets 51,164 18 51,182

30 June 2005 Equity 51,164 18 51,182

- The Corporation employee benefi t liabilities that are not expected to be paid within 12 months are now required to be

recognised as non-current liabilities and measured at present value. As a result of this change, $11K of recreation leave liabilities

were reclassifi ed from current to non-current as at 1 July 2004 (with an additional $7K reclassifi ed as at 30 June 2005). Measuring

the non-current portion of these liabilities at present value resulted in a $18K reduction in non-current recreation leave liabilities

being charged to equity as at 1 July 2004 (with an additional $18 K charged to the Operating Statement as at 30 June 2005).





Street Address:

Section 3165 (11) Export Drive

Darwin Business Park

East Arm, Northern Territory

Postal Address:

PMB 588 Berrimah

NT 0828

Telephone:

+61 8 8922 0633

Facsimile:

+61 8 8922 0620

Email:

[email protected]

Web: www.ldc.nt.gov.au

Chairman: Steve Margetic

Chief Executive: Mike Burgess

General Manager: Trevor Dalton

Contact details Land Development Corporation

Letter to the Minister - territorystories.nt.gov.au · to the Department of Business, Economic and...

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Transcript of Letter to the Minister - territorystories.nt.gov.au · to the Department of Business, Economic and...