Description
The stores are primarily supermarkets in nature. In addition to foodstuffs, a number of stores retail a wide variety of general merchandise such as whitegoods, drapery, manchester, furniture, auto materials and phone/power cards, as well as two stores retailing fuel.
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Financial statements
Retail Stores
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
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Financial statements Retail Stores
Page
Foreword 215
Statement of Comprehensive Income 216
Statement of Financial Position 217
Statement of Changes in Equity 218
Statement of Cash Flows 219
Notes To and Forming Part of the Financial Statements 220
Certifcate of the Department of Communities - Retail Stores 236
Independent auditor’s report 237
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Foreword
These fnancial statements cover the Department of Communities – Retail Stores.
Retail Stores is an operational unit established within the Department of Communities which is
a Queensland Government department established under the Public Service Act 2008.
The department is controlled by the State of Queensland which is the ultimate parent.
The central offce and principal place of business of the Department of Communities – Retail
Stores is:
Level 1
41 George Street
BRISBANE QLD 4000
Detail of the objectives and principal activities of the Department of Communities - Retail Stores
is included in the notes to the fnancial statements.
For information in relation to the Retail Stores’ fnancial report, please call (07) 3224 2027 or
visit the departmental internet site athttp://www.communities.qld.gov.au.
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
216
DEPARTMENT OF COMMUNITIES – RETAIL STORES
Statement of Comprehensive Income
for the year ended 30 June 2010
Note 2010 2009
$'000 $'000
Income from Continuing Operations
Revenue
Sale of goods 2 26,808 27,537
Other revenue 3 383 709
Total income from continuing operations 27,191 28,246
Expenses from Continuing Operations
Employee expenses 4 4,080 4,042
Cost of sales of inventories 5 19,035 20,115
Supplies and services 6 2,361 1,962
Depreciation and amortisation 7 1,047 780
Impairment losses (28) 6
Other expenses 8 236 219
Total expenses from continuing operations 26,731 27,124
Operating result from continuing operations 460 1,122
Other Comprehensive Income
Increase in asset revaluation surplus 17 163 56
Total other comprehensive income 163 56
Total comprehensive income 623 1,178
This Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
.
2
Department of Communities – Retail Stores
Statement of Comprehensive Income
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
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DEPARTMENT OF COMMUNITIES – RETAIL STORES
Statement of Financial Position
as at 30 June 2010
Note 2010 2009
$'000 $'000
Current Assets
Cash and cash equivalents 9 2,969 5,110
Receivables 10 378 517
Inventories 11 3,091 2,139
Other current assets 12 6 92
Total Current Assets 6,444 7,858
Non-Current Assets
Property, plant and equipment 13 21,971 14,125
Total Non-Current Assets 21,971 14,125
Total Assets 28,415 21,983
Current Liabilities
Payables 14 1,211 1,699
Other financial liabilities 15 600 -
Accrued employee benefits 16 92 17
Total Current Liabilities 1,903 1,716
NON-CURRENT LIABILITIES
Other financial liabilities 15 4,200 -
Total non-current liabilities 4,200 -
Total Liabilities 6,103 1,716
Net Assets 22,312 20,267
Equity
Contributed equity 9,852 8,430
Asset revaluation surplus 17 9,586 9,423
Accumulated surplus 2,874 2,414
Total Equity 22,312 20,267
This Statement of Financial Position should be read in conjunction with the accompanying notes.
3
Department of Communities – Retail Stores
Statement of Financial Position
as at 30 June 2010
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8DEPARTMENT OF COMMUNITIES – RETAIL STORES
Statement of Changes in Equity
for the year ended 30 June 2010
4
Accumulated
2010 2009 2010 2009 2010 2009 2010 2009
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance as at 1 July 8,430 8,430 2,414 1,292 9,423 9,367 20,267 19,089
Operating result from continuing operations - - 460 1,122 - - 460 1,122
Other comprehensive income
- Increase in asset revaluation surplus - - - - 163 56 163 56
Total comprehensive income for the year - - 460 1,122 163 56 623 1,178
Transactions with owners as owners
1,422 - - - - - 1,422 -
Balance as at 30 June 9,852 8,430 2,874 2,414 9,586 9,423 22,312 20,267
This Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Asset revaluation
surplus (note 17)
- Non appropriated equity injection
Contributed equity Total surplus
Department of Communities – Retail Stores
Statement of Changes in Equity
for the year ended 30 June 2010
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DEPARTMENT OF COMMUNITIES – RETAIL STORES
Statement of Cash Flows
for the year ended 30 June 2010
Note 2010 2009
$'000 $'000
Cash flows fromoperating activities
Inflows:
Sale of goods 26,852 27,828
GST input tax credits received from Australian Taxation Office 1,600 1,863
GST collected from customers 1,573 2,004
Other 371 739
Outflows:
Employee expenses (3,928) (4,300)
Supplies and services (2,762) (2,059)
GST paid to suppliers (1,559) (1,867)
GST remitted to Australian Taxation Office (1,585) (2,002)
Cost of inventories (19,987) (20,447)
Other (188) (202)
Net cash provided by (used in) operating activities 18 387 1,557
Cash flows frominvesting activities
Inflows:
Sales of property, plant and equipment 3 10
Outflows:
Payments for property, plant and equipment (2,531) (483)
Net cash provided by (used in) investing activities (2,528) (473)
Net increase (decrease) in cash and cash equivalents (2,141) 1,084
Cash and cash equivalents at beginning of financial year 5,110 4,026
Cash and cash equivalents at end of financial year 2,969 5,110
This Statement of Cash Flows should be read in conjunction with the accompanying notes.
.
5
Department of Communities – Retail Stores
Statement of Cash Flows
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
220
DEPARTMENT OF COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009-10
7
Objectives and Principal Activities of Department of Communities – Retail Stores
The Department of Communities operates and manages retail stores in six remote Indigenous communities.
The stores are primarily supermarkets in nature. In addition to foodstuffs, a number of stores retail a wide variety of
general merchandise such as whitegoods, drapery, manchester, furniture, auto materials and phone/power cards, as
well as two stores retailing fuel.
The stores are located in the communities of:
? Doomadgee
? Kowanyama
? Pormpuraaw
? Lockhart River
? Palm Island
? Woorabinda
? Aurukun (managed on behalf of the Aurukun Shire Council until February 2009).
The Retail Stores are the primary supplier of supermarket services within each of the communities, however a number
of smaller retailing outlets do exist in some of the communities.
The objectives of the Retail Stores are as follows:
? Operate with financial viability without subsidy from the Government.
? Provide a wide range of quality food, drinks and variety products at the lowest possible prices whilst maintaining
operating capacity.
? Modernise store buildings, infrastructure and plant and equipment required for retail operations.
? Provide employment and training opportunities for indigenous persons within the respective communities.
All trading surpluses generated from trading operations are retained by Retail Stores.
These statements are independently audited by the Auditor-General of Queensland.
1. Summary of significant accounting policies
a) Statement of compliance
The financial statements are general purpose financial statements, and have been prepared on a voluntary basis to
meet possible information needs of the public, in particular the members of communities reliant on their services. The
financial statements are prepared in accordance with Australian Accounting Standards and Interpretations. In addition,
the financial statements comply with Treasury's Minimum Reporting Requirements for the year ending 30 June 2010,
and other authoritative pronouncements.
With respect to compliance with Australian Accounting Standards and Interpretations, the department has applied those
requirements applicable to not-for-profit entities. Except where stated, the historical cost convention is used.
b) The reporting entity
The financial statements include the value of all income, expenses, assets, liabilities and equity of Retail Stores only, as
it is not a legal or reporting entity and does not control any other entities.
c) Sales
Rendering of services
Revenue from rendering services is recognised when the stage of completion of the transaction at the reporting date
can be measured reliably and the cost of rendering those services can be measured reliably.
Sales of goods
Revenue is recognised from the sale of goods when the significant risks and rewards of ownership control transfer to
the purchaser and can be measured reliably.
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements 2009-10
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DEPARTMENT OF COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009-10
8
d) Cash and cash equivalents
For the purposes of the Statement of Financial Position and the Statement of Cash Flows, cash assets include cash on
hand, all cash and cheques receipted but not banked as at reporting date as well as deposits at call with financial
institutions.
e) Receivables
Receivables are recognised at the amount due at the time of sales of goods or services at agreed purchase/contract
price. Settlement of these amounts is required within 30 days from invoice date. The collectability of receivables is
periodically assessed with adequate provision being made for impairment. All known bad debts were written-off as at
the reporting date.
Refer to note 10 and note 21 for further information on receivables.
f) Inventories
Inventories held for sale are valued at the lower of cost and net realisable value.
Cost is assigned on a weighted average basis and includes expenditure incurred in acquiring the inventories and
bringing them to their existing condition, except for training costs which are expensed as incurred.
Net realisable value is determined on the basis of Retail Stores’ normal selling pattern.
Any cost associated with marketing, selling and distribution are deducted to determine net realisable value.
g) Acquisitions of assets
Actual cost is used for the initial recording of all asset acquisitions. Cost is determined as the value given as
consideration plus costs incidental to the acquisition, including all other costs incurred in getting the assets ready for
use.
Where assets are received free of charge from another Queensland department (whether as a result of a machinery-of-
Government change or other involuntary transfer), the acquisition cost is recognised as the gross carrying amount in the
books of the transferor immediately prior to the transfer together with any accumulated depreciation.
Assets acquired at no cost or for nominal consideration, other than from an involuntary transfer from another
Queensland Government entity, are recognised at their fair value at date of acquisition in accordance with AASB 116
Property, Plant and Equipment.
h) Property, plant and equipment
Items of property, plant and equipment with a cost or other value equal to or in excess of the following thresholds are
recognised for financial reporting purposes in the year of acquisition:
Buildings $10,000
Land $1
Plant and equipment $5,000
Items with a lesser value are expensed in the year of acquisition.
Land improvements undertaken by Retail Stores are included with Buildings.
No land is reported for Retail Stores as it is subject to a Deed of Grant in Trust.
i) Depreciation of property, plant and equipment
Buildings and plant and equipment are depreciated on a straight line basis, so as to progressively allocate the carrying
amount of such depreciable assets over their estimated remaining useful lives to Retail Stores. The remaining useful
lives of all buildings, plant and equipment are reviewed annually.
Assets under construction (works in progress) are not depreciated until they reach service delivery capacity. Service
delivery capacity relates to when construction is complete and the asset is first put to use or is installed ready for use in
accordance with its intended application.
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements 2009-10
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
222
DEPARTMENT OF COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009-10
9
i) Depreciation of property, plant and equipment (continued)
Any subsequent expenditure that increases the originally assessed capacity or service potential of an asset is
capitalised and the new depreciable amount is depreciated over the remaining useful life of the asset to Retail Stores.
The depreciable amount of improvements is allocated systematically over the estimated useful lives of the
improvements.
For each class of depreciable asset, the following depreciation rates were used:
Class Rate %
Buildings 2 - 3
Plant and equipment 7 - 33
j) Revaluations of property, plant and equipment
Buildings are measured at fair value in accordance with AASB 116 Property, Plant and Equipment and Queensland
Treasury’s Non-Current Asset Policies for the Queensland Public Sector. Buildings are comprehensively revalued at
least once every five years with interim revaluations, using appropriate indices, being otherwise performed on an annual
basis where there has been a material variation in the index. The cost of buildings acquired or constructed during the
financial year has been judged by management of Retail Stores to materially represent their fair value at the end of the
reporting period.
Plant and equipment is measured at cost in accordance with Treasury's Non-Current Asset Policies.
Any revaluation increment arising on the revaluation of an asset is credited to the asset revaluation surplus of the
appropriate class, except to the extent to which it reverses a revaluation decrement for the class previously recognised
as an expense. A decrease in the carrying amount on revaluation is charged as an expense, to the extent it exceeds the
balance, if any, in the revaluation reserve relating to that class.
On revaluation, accumulated depreciation is restated proportionately with the change in the carrying amount of the asset
and any change in the estimate of remaining useful life.
Separately identified components of assets are measured on the same basis as the assets to which they relate.
k) Impairment of Non-current assets
All non-current physical assets are assessed for indicators of impairment on an annual basis. If an indicator of possible
impairment exists, Retail Stores determines the asset's recoverable amount. An impairment loss is recorded where the
asset’s carrying amount materially exceeds the recoverable amount.
The asset’s recoverable amount is determined as the higher of the asset’s fair value less costs to sell and depreciated
replacement cost.
An impairment loss is recognised immediately in the Statement of Comprehensive Income, unless the asset is carried at
a revalued amount. When the asset is measured at a revalued amount, the impairment loss is offset against the asset
revaluation surplus of the relevant class to the extent available.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate
of its recoverable amount, but the increased carrying amount cannot exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is
recognised as income, unless the asset is carried at a revalued amount, in which case the reversal of the impairment
loss is treated as a revaluation increase.
l) Payables
Trade creditors are recognised upon receipt of the goods or services ordered and are measured at the agreed
purchase/contract price. Amounts owing are unsecured and are settled according to agreed vendors’ terms.
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements 2009-10
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DEPARTMENT OF COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009-10
10
m) Other financial liabilities
Repayable advances are recognised as other financial liabilities and held at amortised cost.
n) Employee benefits
Employer superannuation contributions, annual leave levies and long service leave levies are regarded as employee
benefits.
Payroll tax and workers’ compensation insurance are a consequence of employing employees, but are not counted in
an employee’s total remuneration package. They are not employee benefits and are recognised separately as
employee related expenses.
Wages and salaries
Wages and salaries due, but unpaid at reporting date, are recognised in the Statement of Financial Position. For unpaid
entitlements expected to be paid within 12 months, the liabilities are recognised at their undiscounted values.
Annual leave
The Queensland Government’s Annual Leave Central Scheme (ALCS) became operational on 30 June 2008 for
departments, commercialised business units and shared service providers. Under this scheme, a levy is made on Retail
Stores to cover the cost of employees' annual leave (including leave loading and on-costs). The levies are expensed in
the period in which they are payable. Amounts paid to employees for annual leave are claimed from the scheme
quarterly in arrears.
From 30 June 2008, no provision for annual leave will be recognised in Retail Stores financial statements as the liability
is held on a whole-of-Government basis and reported in those financial statements pursuant to AASB 1049 Whole of
Government and General Government Sector Financial Reporting.
Sick leave
Prior history indicates that, on average, sick leave taken each reporting period is less than the entitlement accrued.
Retail Stores has made the judgement that this is expected to continue in future periods. Accordingly, it is unlikely that
existing accumulated entitlements will be used by employees and no liability for unused sick leave entitlements is
recognised. As sick leave is non-vesting, an expense is recognised for this leave as it is taken.
Superannuation
Employer contributions for superannuation are paid to QSuper, the superannuation plan for Queensland Government
employees, at rates determined by the Treasurer on advice from the State Actuary. Contributions are expensed in the
period in which they are paid or payable. Retail Stores’ obligation is limited to its required fortnightly contribution to
QSuper.
No liability is recognised for accruing superannuation benefits in these financial statements as this liability is held on a
whole-of-Government basis and reported in the whole-of-Government financial statements pursuant to AASB 1049
Whole of Government and General Government Sector Financial Reporting.
Long service leave
Under the Queensland Government’s long service leave scheme, a levy is made on Retail Stores to cover the cost of
employees’ long service leave. This levy is expensed in the period in which it is payable. Amounts paid to employees for
long service leave are claimed from the scheme quarterly in arrears.
No provision for long service leave is recognised in these financial statements, as this liability is held on a whole-of-
Government basis and reported in those financial statements pursuant to AASB 1049 Whole of Government and
General Government Sector Financial Reporting.
o) Insurance
The Retail Stores’ non-current physical assets and other risks are insured through the Queensland Government
Insurance Fund, with premiums paid on a risk assessment basis. In addition, Retail Stores pays premiums to
WorkCover Queensland in respect of its obligations for employee compensation.
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements 2009-10
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224
DEPARTMENT OF COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009-10
11
p) Taxation
Retail Stores is a State body as defined under the Income Tax Assessment Act 1936, and is exempt from Australian
Government taxation except for Fringe Benefits Tax (FBT) and Goods and Services Tax (GST). As such, input tax
credits receivable from and GST payable to the Australian Taxation Office (ATO), along with FBT, are recognised and
accrued.
Income, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is
not recoverable as an input tax credit from the ATO. In these circumstances, the GST is recognised as part of the cost
of acquisition of the asset or as part of the item of expense.
All receivables and payables are stated with the amount of GST included, provided the related invoices are dated on or
before the reporting date. Other receivables and payables resulting from accrued income and expenses are not reported
inclusive of GST (if any is applicable).
Cash flows are included in the Statement of Cash Flows on a gross basis. The GST components of cash flows arising
from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating
cash flows.
q) Issuance of Financial Statements
The financial report is authorised for issue by the Director-General and Chief Finance Officer of the Department of
Communities at the date of signing the Management Certificate.
r) Rounding and Comparatives
All figures in these statements are in Australian dollars and have been rounded to the nearest $1,000 or, where that
amount is less than $500, to zero, unless disclosure of the full amount is specifically required.
Comparative information has been restated where necessary to be consistent with disclosures in the current reporting
period.
s) New and Revised Accounting Standards
Retail Stores did not voluntarily change any of its accounting policies during 2009-10.
Those new and amended Australian accounting standards that were applicable for the first time in the 2009-10 financial
year and that had a significant impact on Retail Stores’ financial statements are as follows:
Retail Stores complied with the revised AASB 101 Presentation of Financial Statements as from 2009-10. This revised
standard does not have any measurement or recognition implications. Pursuant to the change of terminology used in
the revised AASB 101, the Balance Sheet is now re-named to the Statement of Financial Position, and the Cash Flow
Statement has now been re-named to Statement of Cash Flows. The former Income Statement has been replaced by a
Statement of Comprehensive Income. In line with the new concept of 'comprehensive income', the bottom of this new
statement contains certain transactions that previously were detailed in the Statement of Changes in Equity (refer to the
items under the sub-heading Other Comprehensive Income in the new Statement of Comprehensive Income). The
Statement of Changes in Equity now only includes details of transactions with owners in their capacity as owners, in
addition to the total comprehensive income for the relevant components of equity.
Retail Stores is not permitted to early adopt a new or amended accounting standard ahead of the specified
commencement date unless approval is obtained from the Treasury Department. Consequently, Retail Stores has not
applied any Australian accounting standards and interpretations that have been issued but are not yet effective. Retail
Stores applies standards and interpretations in accordance with their respective commencement dates.
At the date of authorisation of the financial report, the only significant impacts of new or amended Australian accounting
standards with future commencement dates are as set out below.
All other Australian accounting standards and interpretations with future commencement dates are either not applicable
to Retail Store’s activities, or have no material impact on Retail Stores.
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements 2009-10
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DEPARTMENT OF COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
2010 2009
$’000 $’000
2 Sale of goods
Doomadgee 7,506 7,288
Kowanyama 3,964 4,199
Lockhart River 4,050 4,090
Palm Island 6,450 6,941
Pormpuraaw 3,279 3,377
Woorabinda 1,559 1,642
Total 26,808 27,537
3 Other Revenue
Interest revenue 107 148
Management fee - 490
Other 276 71
Total 383 709
4 Employee expenses
Employee benefits
Wages and salaries 3,488 3,468
Employer superannuation contributions 327 301
Long service leave levy 60 60
Other employee benefits 11 23
Employee related expenses
Payroll tax 172 169
Workers compensation premium 21 20
Other employee related expenses 1 1
Total 4,080 4,042
2010 2009
Number of employees 63 62
The number of employees, includes both full-time employees and part-time employees measured
on a full-time equivalent basis is:
12
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
226
DEPARTMENT OF COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
2010 2009
$’000 $’000
5 Cost of sales of inventories
Doomadgee 5,247 5,308
Kowanyama 3,026 3,266
Lockhart River 3,119 3,071
Palm Island 4,756 5,143
Pormpuraaw 2,269 2,495
Woorabinda 1,089 1,159
Suppliers rebate (471) (327)
Total 19,035 20,115
6 Supplies and services
Electricity 506 405
Repairs and maintenance 390 525
Professional and technical fees 461 148
Operating lease rentals 207 180
Administration costs 247 164
Computer operating costs 74 89
Telecommunications 134 136
Travel 221 183
Marketing and public relations 7 22
Minor plant and equipment 80 87
Other 34 23
Total 2,361 1,962
7 Depreciation and amortisation
Depreciation and amortisation incurred in respect of:
Buildings 674 550
Plant and equipment 373 230
Total 1,047 780
13
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
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DEPARTMENT OF COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
2010 2009
$’000 $’000
14
8 Other expenses
Insurance premiums - Queensland Government Insurance Fund 65 58
Net losses on disposal of property, plant and equipment 47 15
External audit fees * 67 104
Donations and gifts 49 34
Bank fees 8 8
Total 236 219
* Total external audit fees relating to 2009-10 financial year are estimated to be $55,000 (2008-09:
$60,000). There are no non-audit services included in these amounts.
9 Cash and cash equivalents
Cash at bank 2,306 4,611
Cash on hand 663 499
Total 2,969 5,110
10 Receivables
Trade and other debtors 287 360
Less: provision for impairment (15) (44)
272 316
GST input tax credits receivable 138 179
GST payable (118) (130)
Net GST receivable 20 49
Annual leave reimbursements 42 90
Interest receivable 38 26
Long service leave reimbursements 6 36
Total 378 517
Movements in the allowance of provision of impairment
Balance at beginning of the year 44 38
Amounts written off during the year (1) -
Provision re-assessment (28) 6
Balance at the end of the year 15 44
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
228
DEPARTMENT OF COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
2010 2009
$’000 $’000
11 Inventories
Inventory held for sale 3,113 2,441
Less: provision for stock obsolescence * (22) (302)
Total 3,091 2,139
* Decrease in provision for obsolescence was due to Retail Stores management determining
that the previous provision, which was based on a percentage of total inventory held, was
excessive in the current operating environment. A comprehensive assessment performed
during the year identified that obsolete stock was limited to the variety and clothing lines. The
provision has been adjusted to reflect management’s current assessment of obsolete stock in
these stock lines.
12 Other current assets
Prepayments 6 92
Total 6 92
13 Property, plant and equipment
Buildings
At fair value 30,009 23,250
Less: Accumulated depreciation (11,019) (10,222)
18,990 13,028
Plant and equipment
At cost 5,256 3,375
Less accumulated depreciation (2,358) (2,449)
Less accumulated impairment losses - -
2,898 926
Capital works in progress
At cost 83 171
83 171
Total 21,971 14,125
Subsequent to initial acquisition, buildings are revalued to fair value in accordance with AASB 116
Property, Plant and Equipment and Queensland Treasury’s -‘Non-Current Asset Policies for the
Queensland Public Sector’.
The fair value of buildings are comprehensively revalued at least once every five years with interim
valuations, using appropriate indices, being otherwise performed on an annual basis. A
comprehensive independent revaluation was last performed as at 30 June 2007 by the
Department of Natural Resources and Water based on depreciated replacement cost as the
approximate fair value.
15
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
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Key priority areas Financial enablers Business processes People and learning Financial statements Appendices Index
DEPARTMENT COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009-10
13 Property, plant and equipment (continued)
Property, plant and equipment reconciliation
Plant and Capital works
Buildings equipment in progress Total
$'000 $'000 $'000 $'000
Carrying amount at 1 July 2008 13,428 828 142 14,398
Acquisitions 7 330 139 476
Transfers between classes 87 23 (110) -
Disposals - (25) - (25)
Revaluation increments 56 - - 56
Impairment losses recognised in operating surplus/deficit - - - -
Depreciation (550) (230) - (780)
Carrying amount at 30 June 2009 13,028 926 171 14,125
Carrying amount at 1 July 2009 13,028 926 171 14,125
Acquisitions 6,219 1,986 575 8,780
Transfers between classes 254 409 (663) -
Disposals - (50) - (50)
Revaluation increments 163 - - 163
Impairment losses recognised in operating surplus/deficit - - - -
Depreciation (674) (373) - (1,047)
Carrying amount at 30 June 2010 18,990 2,898 83 21,971
Retail Stores has property, plant and equipment with an original cost of $871,356 (2009: $1,351,907) and a written down value of zero still being used in the
provision of services. Based on historical and projected asset replacement programs Retail Stores will replace the majority of these assets over the next
five years.
16
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements 2009-10
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
230
DEPARTMENT COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
2010 2009
$’000 $’000
17
14 Payables
Trade creditors and accruals 1,060 1,467
Other 151 232
Total 1,211 1,699
15 Other financial liabilities
Current
Advance payable 600 -
Total 600 -
Non-Current
Advance payable 4,200 -
Total 4,200 -
The cost of constructing Retail Stores buildings paid for by the Department of Communities has
been recognised in the financial statements as an advance payable. The advance is interest free
and is repayable over an eight year term.
16 Accrued employee benefits
Annual leave levy payable 63 (10)
Salaries and wages payable 14 13
Long service leave levy payable 15 14
Total 92 17
17 Asset revaluation surplus
Buildings
$'000
Carrying amount at 1 July 2008 9,367
Net revaluation increments 56
Carrying amount 30 June 2009 9,423
Carrying amount at 1 July 2009 9,423
Net revaluation increments 163
Carrying amount at 30 June 2010 9,586
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
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DEPARTMENT COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
2010 2009
$’000 $’000
18
18 Reconciliation of operating result to net cash from operating activities
Operating result 460 1,122
Non-cash items:
Depreciation and amortisation expense 1,047 780
Loss on disposal of non-current assets 49 18
Gain on disposal of non-current assets (2) (2)
Impairment losses (28) 6
Advance received (4,800) -
Change in assets and liabilities:
(Increase) decrease in receivables 140 195
(Increase) decrease in inventories (952) (332)
(Increase) decrease in prepayments 86 (80)
Increase (decrease) in payables (487) (17)
Increase (decrease) in other financial liabilities 4,800 -
Increase (decrease) in accrued employee benefits 74 (133)
Net cash from operating activities 387 1,557
19 Commitments for expenditure
Capital expenditure commitments
Buildings
- Within 12 months 20 5,401
- 12 months or longer and not longer than five years - -
- Later than 5 years - -
Total 20 5,401
Plant and equipment
- Within 12 months 55 1,616
- 12 months or longer and not longer than five years - -
- Later than 5 years - -
Total 55 1,616
Material classes of expenditure commitments inclusive of anticipated GST, contracted for at
reporting date but not recognised are payable as follows:
20 Contingent assets and liabilities
As at 30 June 2010, Retail Stores did not have any contingent assets or liabilities.
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
232
DEPARTMENT COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
19
21 Financial instruments
(a) Categorisation of financial instruments
Retail Stores has the following categories of financial assets and financial liabilities:
Category Note 2010 2009
$'000 $'000
Financial assets
Cash 9 2,969 5,110
Receivables 10 378 517
Total 3,347 5,627
Financial liabilities
Payables 14 1,211 1,699
Other financial liabilities 15 4,800 -
Accrued employee benefits 16 92 17
Total 6,103 1,716
In addition to the explanations set out in the remainder of this note, note 1 includes information on the
accounting policies relating to all financial assets and liabilities.
Retail Stores does not enter into financial instruments for speculative purposes.
(b) Financial risk management
Retail Stores' activities expose it to a variety of financial risks - interest rate risk, credit risk, liquidity risk
and market risk.
Retail Stores measures risk exposure using a variety of methods as follows:
• Credit risk - ageing analysis, earnings at risk
• Liquidity risk - sensitivity analysis
• Market risk - interest rate sensitivity analysis
(c) Credit risk exposure
Credit risk exposure refers to the situation where Retail Stores may incur financial loss as a result of
another party to a financial instrument failing to discharge their obligation.
The maximum exposure to credit risk at balance date in relation to each class of recognised financial
asset is the gross carrying amount of those assets inclusive of any provisions for impairment.
No financial assets or financial liabilities have been offset and presented net in the Statement of
Financial Position.
The following information represents the Retail Stores' maximum exposure to credit risk based on
contractual amounts net of any allowances:
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
233
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DEPARTMENT COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
20
21 Financial instruments (continued)
(c) Credit risk exposure (continued)
Category Note 2010 2009
$'000 $'000
Financial assets
Cash 9 2,969 5,110
Receivables 10 378 517
Total 3,347 5,627
Retail Stores manages credit risk through the use of credit management strategy. This strategy
aims to reduce the exposure to credit default by ensuring that Retail Stores invests in secure
assets and monitors all funds owed on a timely basis. Exposure to credit risk is monitored on an
ongoing basis.
The method for calculating any provisional impairment for risk is based on past experience,
current and expected changes in economic conditions and changes in client credit ratings. The
recognised impairment loss is shown in the Statement of Comprehensive Income.
Ageing of past due but not impaired as well as impaired financial assets are disclosed in the
following tables:
2010 Financial Asset Past Due But Not Impaired
30 Days 30 - 60 Days 61 - 90 Days Total
$'000 $'000 $'000 $'000
Financial Assets
25 10 28 63
Total 25 10 28 63
2009 Financial Asset Past Due But Not Impaired
30 Days 30 - 60 Days 61 - 90 Days Total
$'000 $'000 $'000 $'000
Financial Assets
49 19 4 72
Total 49 19 4 72
Overdue
Receivables
Overdue
Receivables
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
234
DEPARTMENT COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
21 Financial Instruments (continued)
(c) Credit risk exposure (continued)
2010 Individually Impaired Financial Assets
30 Days 30 - 60 Days 61 - 90 Days Total
$'000 $'000 $'000 $'000
Financial Assets
- 15 15
Total - - 15 15
2009 Individually Impaired Financial Assets
30 Days 30 - 60 Days 61 - 90 Days Total
$'000 $'000 $'000 $'000
Financial Assets
- 12 32 44
Total - 12 32 44
Overdue
Receivables
Overdue
Receivables
(d) Market risk
Interest rate sensitivity analysis
The following table summarises the sensitivity of Retail Store's financial assets and liabilities which are
subject to interest rate risk, showing the effects of a plus or minus movement of 2% (2009 2%) on profit
and equity:
Retail Stores does not undertake any hedging in relation to interest risk and manages its risk as per
the liquidity risk management strategy.
Retail Stores market risk relating to financial instruments is to cash deposited in interest bearing
acounts.
Amount Profit Equity Profit Equity
$000 $000 $000 $000 $000
Financial Assets
Cash at bank 2,306 46 46 (46) (46)
Overall effect on profit and equity 46 46 (46) (46)
Amount Profit Equity Profit Equity
$000 $000 $000 $000 $000
Financial Assets
Cash at bank 4,611 92 92 (92) (92)
Overall effect on profit and equity 92 92 (92) (92)
+ 2%
-2 %
2009
Interest rate risk
-2 %
2010
Interest rate risk
+ 2%
21
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
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DEPARTMENT COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
22
21 Financial instruments (continued)
(e) Liquidity risk
Liquidity risk refers to the situation where Retail Stores may encounter difficulty in meeting obligations
associated with financial liabilities.
Retail Stores manages liquidity risk through the use of a liquidity management strategy. The strategy
aims to reduce the exposure to liquidity risk by ensuring Retail Stores has sufficient funds available
to meet employee and supplier obligations as they fall due. This is achieved by ensuring the minimum
levels of cash are held within the various bank accounts so as to match the expected duration of the
various employee and supplier liabilities.
The following table sets out the liquidity risk of financial liabilities held by Retail Stores. It represents the
contractual maturity of financial liabilities, calculated based on cash flows relating to the repayment
of the principal amount outstanding at balance date.
Total
5 years
Note $'000 $'000 $'000 $'000
Financial Liabilities
Payables
14 1,211 - - 1,211
Other financial liabilities
15 600 2,400 1,800 4,800
Accrued employee benefits
16 92 - - 92
Total 1,903 2,400 1,800 6,103
Total
5 years
Note $'000 $'000 $'000 $'000
Financial Liabilities
Payables
14 1,699 - - 1,699
Accrued employee benefits
16 17 - - 17
Total 1,716 - - 1,716
2009 Payable in
2010 Payable in
(f) Fair value
The fair value of financial assets and liabilities must be estimated for recognition and measurement and
for note disclosure purposes.
The fair value of financial assets and liabilities is determined as the carrying amount of cash, cash
equivalents, receivables and payables (all financial assets and financial liabilities). Financial assets
and liabilities are not offset.
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
236
Certifcate of the Department of Communities – Retail Stores
These general purpose fnancial statements have been prepared pursuant to Section 62(1)
of the Financial Accountability Act 2009 (the Act), relevant sections of the Financial and
Performance Management Standard 2009 and other prescribed requirements. In accordance
with Section 62(1)(b) of the Act, we certify that in our opinion:
(i) the prescribed requirements for establishing and keeping the accounts have been complied
with in all material respects and
(ii) the statements have been drawn up to present a true and fair view, in accordance with
prescribed accounting standards, of the transactions of Retail Stores for the fnancial year
ended 30 June 2010, and of the fnancial position of the Retail Stores at the end of that
period.
Ian Fulton BCom CPA
Chief Finance Offcer
Department Of Communities
25/08/2010
Linda A Apelt BEd, G.Dip.C, M.Ed.St
Director-General
Department Of Communities
25/08/2010 25/08/2010
25/08/2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
237
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INDEPENDENT AUDITOR’S REPORT
To the Accountable Offcer of the Department of Communities
Matters Relating to the Electronic Presentation of the Audited Financial Report
The auditor’s report relates to the fnancial report of Retail Stores for the fnancial year ended
30 June 2010 included on Department of Communities’ website. The Accountable Offcer
is responsible for the integrity of the Department of Communities’ website. I have not been
engaged to report on the integrity of the Department of Communities’ website. The auditor’s
report refers only to the statements named below. It does not provide an opinion on any other
information which may have been hyperlinked to/from these statements. If users of the fnancial
report are concerned with the inherent risks arising from electronic data communications
they are advised to refer to the hard copy of the audited fnancial report, available from the
Department of Communities, to confrm the information included in the audited fnancial report
presented on this website.
Report on the Financial Report
I have audited the accompanying fnancial report of Retail Stores, which comprises the
statement of fnancial position as at 30 June 2010, statement of changes in equity, statement of
cash fows and statement of comprehensive income for the year ended on that date, a summary
of signifcant accounting policies, other explanatory notes and the certifcates given by the Chief
Finance Offcer and the Director-General.
The Accountable Offcer’s Responsibility for the Financial Report
The Accountable Offcer is responsible for the preparation and fair presentation of the fnancial
report in accordance with prescribed accounting requirements identifed in the Financial
Accountability Act 2009 and the Financial and Performance Management Standard 2009,
including compliance with Australian Accounting Standards (including the Australian Accounting
Interpretations). This responsibility includes establishing and maintaining internal controls
relevant to the preparation and fair presentation of the fnancial report that is free from material
misstatement, whether due to fraud or error; selecting and applying appropriate accounting
policies; and making accounting estimates that are reasonable in the circumstances.
Auditor’s Responsibility
My responsibility is to express an opinion on the fnancial report based on the audit. The audit
was conducted in accordance with the Auditor-General of Queensland Auditing Standards,
which incorporate the Australian Auditing Standards. These auditing standards require
compliance with relevant ethical requirements relating to audit engagements and that the audit
is planned and performed to obtain reasonable assurance whether the fnancial report is free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the fnancial report. The procedures selected depend on the auditor’s judgement,
including the assessment of risks of material misstatement in the fnancial report, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control
Department of Communities | 2009–10 Annual Report
238
relevant to the entity’s preparation and fair presentation of the fnancial report in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity’s internal control, other than in
expressing an opinion on compliance with prescribed requirements. An audit also includes
evaluating the appropriateness of accounting policies and the reasonableness of accounting
estimates made by the Accountable Offcer, as well as evaluating the overall presentation of
the fnancial report and any mandatory fnancial reporting requirements as approved by the
Treasurer for application in Queensland.
I believe that the audit evidence obtained is suffcient and appropriate to provide a basis for my
audit opinion.
Independence
The Auditor-General Act 2009 promotes the independence of the Auditor-General and all
authorised auditors. The Auditor-General is the auditor of all Queensland public sector entities
and can only be removed by Parliament.
The Auditor-General may conduct an audit in any way considered appropriate and is not subject
to direction by any person about the way in which audit powers are to be exercised. The Auditor-
General has for the purposes of conducting an audit, access to all documents and property and
can report to Parliament matters which in the Auditor-General’s opinion are signifcant.
Auditor’s Opinion
In accordance with s.40 of the Auditor-General Act 2009 –
(a) I have received all the information and explanations which I have required; and
(b) in my opinion –
(i) the prescribed requirements in respect of the establishment and keeping of accounts have
been complied with in all material respects; and
(i) the fnancial report has been drawn up so as to present a true and fair view, in accordance
with the prescribed accounting standards of the transactions of Retail Stores for the fnancial
year 1 July 2009 to 30 June 2010 and of the fnancial position as at the end of that year.
doc_475060055.pdf
The stores are primarily supermarkets in nature. In addition to foodstuffs, a number of stores retail a wide variety of general merchandise such as whitegoods, drapery, manchester, furniture, auto materials and phone/power cards, as well as two stores retailing fuel.
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Financial statements
Retail Stores
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
214
Financial statements Retail Stores
Page
Foreword 215
Statement of Comprehensive Income 216
Statement of Financial Position 217
Statement of Changes in Equity 218
Statement of Cash Flows 219
Notes To and Forming Part of the Financial Statements 220
Certifcate of the Department of Communities - Retail Stores 236
Independent auditor’s report 237
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
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Foreword
These fnancial statements cover the Department of Communities – Retail Stores.
Retail Stores is an operational unit established within the Department of Communities which is
a Queensland Government department established under the Public Service Act 2008.
The department is controlled by the State of Queensland which is the ultimate parent.
The central offce and principal place of business of the Department of Communities – Retail
Stores is:
Level 1
41 George Street
BRISBANE QLD 4000
Detail of the objectives and principal activities of the Department of Communities - Retail Stores
is included in the notes to the fnancial statements.
For information in relation to the Retail Stores’ fnancial report, please call (07) 3224 2027 or
visit the departmental internet site athttp://www.communities.qld.gov.au.
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
216
DEPARTMENT OF COMMUNITIES – RETAIL STORES
Statement of Comprehensive Income
for the year ended 30 June 2010
Note 2010 2009
$'000 $'000
Income from Continuing Operations
Revenue
Sale of goods 2 26,808 27,537
Other revenue 3 383 709
Total income from continuing operations 27,191 28,246
Expenses from Continuing Operations
Employee expenses 4 4,080 4,042
Cost of sales of inventories 5 19,035 20,115
Supplies and services 6 2,361 1,962
Depreciation and amortisation 7 1,047 780
Impairment losses (28) 6
Other expenses 8 236 219
Total expenses from continuing operations 26,731 27,124
Operating result from continuing operations 460 1,122
Other Comprehensive Income
Increase in asset revaluation surplus 17 163 56
Total other comprehensive income 163 56
Total comprehensive income 623 1,178
This Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
.
2
Department of Communities – Retail Stores
Statement of Comprehensive Income
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
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DEPARTMENT OF COMMUNITIES – RETAIL STORES
Statement of Financial Position
as at 30 June 2010
Note 2010 2009
$'000 $'000
Current Assets
Cash and cash equivalents 9 2,969 5,110
Receivables 10 378 517
Inventories 11 3,091 2,139
Other current assets 12 6 92
Total Current Assets 6,444 7,858
Non-Current Assets
Property, plant and equipment 13 21,971 14,125
Total Non-Current Assets 21,971 14,125
Total Assets 28,415 21,983
Current Liabilities
Payables 14 1,211 1,699
Other financial liabilities 15 600 -
Accrued employee benefits 16 92 17
Total Current Liabilities 1,903 1,716
NON-CURRENT LIABILITIES
Other financial liabilities 15 4,200 -
Total non-current liabilities 4,200 -
Total Liabilities 6,103 1,716
Net Assets 22,312 20,267
Equity
Contributed equity 9,852 8,430
Asset revaluation surplus 17 9,586 9,423
Accumulated surplus 2,874 2,414
Total Equity 22,312 20,267
This Statement of Financial Position should be read in conjunction with the accompanying notes.
3
Department of Communities – Retail Stores
Statement of Financial Position
as at 30 June 2010
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8DEPARTMENT OF COMMUNITIES – RETAIL STORES
Statement of Changes in Equity
for the year ended 30 June 2010
4
Accumulated
2010 2009 2010 2009 2010 2009 2010 2009
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance as at 1 July 8,430 8,430 2,414 1,292 9,423 9,367 20,267 19,089
Operating result from continuing operations - - 460 1,122 - - 460 1,122
Other comprehensive income
- Increase in asset revaluation surplus - - - - 163 56 163 56
Total comprehensive income for the year - - 460 1,122 163 56 623 1,178
Transactions with owners as owners
1,422 - - - - - 1,422 -
Balance as at 30 June 9,852 8,430 2,874 2,414 9,586 9,423 22,312 20,267
This Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Asset revaluation
surplus (note 17)
- Non appropriated equity injection
Contributed equity Total surplus
Department of Communities – Retail Stores
Statement of Changes in Equity
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
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DEPARTMENT OF COMMUNITIES – RETAIL STORES
Statement of Cash Flows
for the year ended 30 June 2010
Note 2010 2009
$'000 $'000
Cash flows fromoperating activities
Inflows:
Sale of goods 26,852 27,828
GST input tax credits received from Australian Taxation Office 1,600 1,863
GST collected from customers 1,573 2,004
Other 371 739
Outflows:
Employee expenses (3,928) (4,300)
Supplies and services (2,762) (2,059)
GST paid to suppliers (1,559) (1,867)
GST remitted to Australian Taxation Office (1,585) (2,002)
Cost of inventories (19,987) (20,447)
Other (188) (202)
Net cash provided by (used in) operating activities 18 387 1,557
Cash flows frominvesting activities
Inflows:
Sales of property, plant and equipment 3 10
Outflows:
Payments for property, plant and equipment (2,531) (483)
Net cash provided by (used in) investing activities (2,528) (473)
Net increase (decrease) in cash and cash equivalents (2,141) 1,084
Cash and cash equivalents at beginning of financial year 5,110 4,026
Cash and cash equivalents at end of financial year 2,969 5,110
This Statement of Cash Flows should be read in conjunction with the accompanying notes.
.
5
Department of Communities – Retail Stores
Statement of Cash Flows
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
220
DEPARTMENT OF COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009-10
7
Objectives and Principal Activities of Department of Communities – Retail Stores
The Department of Communities operates and manages retail stores in six remote Indigenous communities.
The stores are primarily supermarkets in nature. In addition to foodstuffs, a number of stores retail a wide variety of
general merchandise such as whitegoods, drapery, manchester, furniture, auto materials and phone/power cards, as
well as two stores retailing fuel.
The stores are located in the communities of:
? Doomadgee
? Kowanyama
? Pormpuraaw
? Lockhart River
? Palm Island
? Woorabinda
? Aurukun (managed on behalf of the Aurukun Shire Council until February 2009).
The Retail Stores are the primary supplier of supermarket services within each of the communities, however a number
of smaller retailing outlets do exist in some of the communities.
The objectives of the Retail Stores are as follows:
? Operate with financial viability without subsidy from the Government.
? Provide a wide range of quality food, drinks and variety products at the lowest possible prices whilst maintaining
operating capacity.
? Modernise store buildings, infrastructure and plant and equipment required for retail operations.
? Provide employment and training opportunities for indigenous persons within the respective communities.
All trading surpluses generated from trading operations are retained by Retail Stores.
These statements are independently audited by the Auditor-General of Queensland.
1. Summary of significant accounting policies
a) Statement of compliance
The financial statements are general purpose financial statements, and have been prepared on a voluntary basis to
meet possible information needs of the public, in particular the members of communities reliant on their services. The
financial statements are prepared in accordance with Australian Accounting Standards and Interpretations. In addition,
the financial statements comply with Treasury's Minimum Reporting Requirements for the year ending 30 June 2010,
and other authoritative pronouncements.
With respect to compliance with Australian Accounting Standards and Interpretations, the department has applied those
requirements applicable to not-for-profit entities. Except where stated, the historical cost convention is used.
b) The reporting entity
The financial statements include the value of all income, expenses, assets, liabilities and equity of Retail Stores only, as
it is not a legal or reporting entity and does not control any other entities.
c) Sales
Rendering of services
Revenue from rendering services is recognised when the stage of completion of the transaction at the reporting date
can be measured reliably and the cost of rendering those services can be measured reliably.
Sales of goods
Revenue is recognised from the sale of goods when the significant risks and rewards of ownership control transfer to
the purchaser and can be measured reliably.
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements 2009-10
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DEPARTMENT OF COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009-10
8
d) Cash and cash equivalents
For the purposes of the Statement of Financial Position and the Statement of Cash Flows, cash assets include cash on
hand, all cash and cheques receipted but not banked as at reporting date as well as deposits at call with financial
institutions.
e) Receivables
Receivables are recognised at the amount due at the time of sales of goods or services at agreed purchase/contract
price. Settlement of these amounts is required within 30 days from invoice date. The collectability of receivables is
periodically assessed with adequate provision being made for impairment. All known bad debts were written-off as at
the reporting date.
Refer to note 10 and note 21 for further information on receivables.
f) Inventories
Inventories held for sale are valued at the lower of cost and net realisable value.
Cost is assigned on a weighted average basis and includes expenditure incurred in acquiring the inventories and
bringing them to their existing condition, except for training costs which are expensed as incurred.
Net realisable value is determined on the basis of Retail Stores’ normal selling pattern.
Any cost associated with marketing, selling and distribution are deducted to determine net realisable value.
g) Acquisitions of assets
Actual cost is used for the initial recording of all asset acquisitions. Cost is determined as the value given as
consideration plus costs incidental to the acquisition, including all other costs incurred in getting the assets ready for
use.
Where assets are received free of charge from another Queensland department (whether as a result of a machinery-of-
Government change or other involuntary transfer), the acquisition cost is recognised as the gross carrying amount in the
books of the transferor immediately prior to the transfer together with any accumulated depreciation.
Assets acquired at no cost or for nominal consideration, other than from an involuntary transfer from another
Queensland Government entity, are recognised at their fair value at date of acquisition in accordance with AASB 116
Property, Plant and Equipment.
h) Property, plant and equipment
Items of property, plant and equipment with a cost or other value equal to or in excess of the following thresholds are
recognised for financial reporting purposes in the year of acquisition:
Buildings $10,000
Land $1
Plant and equipment $5,000
Items with a lesser value are expensed in the year of acquisition.
Land improvements undertaken by Retail Stores are included with Buildings.
No land is reported for Retail Stores as it is subject to a Deed of Grant in Trust.
i) Depreciation of property, plant and equipment
Buildings and plant and equipment are depreciated on a straight line basis, so as to progressively allocate the carrying
amount of such depreciable assets over their estimated remaining useful lives to Retail Stores. The remaining useful
lives of all buildings, plant and equipment are reviewed annually.
Assets under construction (works in progress) are not depreciated until they reach service delivery capacity. Service
delivery capacity relates to when construction is complete and the asset is first put to use or is installed ready for use in
accordance with its intended application.
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements 2009-10
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
222
DEPARTMENT OF COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009-10
9
i) Depreciation of property, plant and equipment (continued)
Any subsequent expenditure that increases the originally assessed capacity or service potential of an asset is
capitalised and the new depreciable amount is depreciated over the remaining useful life of the asset to Retail Stores.
The depreciable amount of improvements is allocated systematically over the estimated useful lives of the
improvements.
For each class of depreciable asset, the following depreciation rates were used:
Class Rate %
Buildings 2 - 3
Plant and equipment 7 - 33
j) Revaluations of property, plant and equipment
Buildings are measured at fair value in accordance with AASB 116 Property, Plant and Equipment and Queensland
Treasury’s Non-Current Asset Policies for the Queensland Public Sector. Buildings are comprehensively revalued at
least once every five years with interim revaluations, using appropriate indices, being otherwise performed on an annual
basis where there has been a material variation in the index. The cost of buildings acquired or constructed during the
financial year has been judged by management of Retail Stores to materially represent their fair value at the end of the
reporting period.
Plant and equipment is measured at cost in accordance with Treasury's Non-Current Asset Policies.
Any revaluation increment arising on the revaluation of an asset is credited to the asset revaluation surplus of the
appropriate class, except to the extent to which it reverses a revaluation decrement for the class previously recognised
as an expense. A decrease in the carrying amount on revaluation is charged as an expense, to the extent it exceeds the
balance, if any, in the revaluation reserve relating to that class.
On revaluation, accumulated depreciation is restated proportionately with the change in the carrying amount of the asset
and any change in the estimate of remaining useful life.
Separately identified components of assets are measured on the same basis as the assets to which they relate.
k) Impairment of Non-current assets
All non-current physical assets are assessed for indicators of impairment on an annual basis. If an indicator of possible
impairment exists, Retail Stores determines the asset's recoverable amount. An impairment loss is recorded where the
asset’s carrying amount materially exceeds the recoverable amount.
The asset’s recoverable amount is determined as the higher of the asset’s fair value less costs to sell and depreciated
replacement cost.
An impairment loss is recognised immediately in the Statement of Comprehensive Income, unless the asset is carried at
a revalued amount. When the asset is measured at a revalued amount, the impairment loss is offset against the asset
revaluation surplus of the relevant class to the extent available.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate
of its recoverable amount, but the increased carrying amount cannot exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is
recognised as income, unless the asset is carried at a revalued amount, in which case the reversal of the impairment
loss is treated as a revaluation increase.
l) Payables
Trade creditors are recognised upon receipt of the goods or services ordered and are measured at the agreed
purchase/contract price. Amounts owing are unsecured and are settled according to agreed vendors’ terms.
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements 2009-10
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DEPARTMENT OF COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009-10
10
m) Other financial liabilities
Repayable advances are recognised as other financial liabilities and held at amortised cost.
n) Employee benefits
Employer superannuation contributions, annual leave levies and long service leave levies are regarded as employee
benefits.
Payroll tax and workers’ compensation insurance are a consequence of employing employees, but are not counted in
an employee’s total remuneration package. They are not employee benefits and are recognised separately as
employee related expenses.
Wages and salaries
Wages and salaries due, but unpaid at reporting date, are recognised in the Statement of Financial Position. For unpaid
entitlements expected to be paid within 12 months, the liabilities are recognised at their undiscounted values.
Annual leave
The Queensland Government’s Annual Leave Central Scheme (ALCS) became operational on 30 June 2008 for
departments, commercialised business units and shared service providers. Under this scheme, a levy is made on Retail
Stores to cover the cost of employees' annual leave (including leave loading and on-costs). The levies are expensed in
the period in which they are payable. Amounts paid to employees for annual leave are claimed from the scheme
quarterly in arrears.
From 30 June 2008, no provision for annual leave will be recognised in Retail Stores financial statements as the liability
is held on a whole-of-Government basis and reported in those financial statements pursuant to AASB 1049 Whole of
Government and General Government Sector Financial Reporting.
Sick leave
Prior history indicates that, on average, sick leave taken each reporting period is less than the entitlement accrued.
Retail Stores has made the judgement that this is expected to continue in future periods. Accordingly, it is unlikely that
existing accumulated entitlements will be used by employees and no liability for unused sick leave entitlements is
recognised. As sick leave is non-vesting, an expense is recognised for this leave as it is taken.
Superannuation
Employer contributions for superannuation are paid to QSuper, the superannuation plan for Queensland Government
employees, at rates determined by the Treasurer on advice from the State Actuary. Contributions are expensed in the
period in which they are paid or payable. Retail Stores’ obligation is limited to its required fortnightly contribution to
QSuper.
No liability is recognised for accruing superannuation benefits in these financial statements as this liability is held on a
whole-of-Government basis and reported in the whole-of-Government financial statements pursuant to AASB 1049
Whole of Government and General Government Sector Financial Reporting.
Long service leave
Under the Queensland Government’s long service leave scheme, a levy is made on Retail Stores to cover the cost of
employees’ long service leave. This levy is expensed in the period in which it is payable. Amounts paid to employees for
long service leave are claimed from the scheme quarterly in arrears.
No provision for long service leave is recognised in these financial statements, as this liability is held on a whole-of-
Government basis and reported in those financial statements pursuant to AASB 1049 Whole of Government and
General Government Sector Financial Reporting.
o) Insurance
The Retail Stores’ non-current physical assets and other risks are insured through the Queensland Government
Insurance Fund, with premiums paid on a risk assessment basis. In addition, Retail Stores pays premiums to
WorkCover Queensland in respect of its obligations for employee compensation.
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements 2009-10
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
224
DEPARTMENT OF COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009-10
11
p) Taxation
Retail Stores is a State body as defined under the Income Tax Assessment Act 1936, and is exempt from Australian
Government taxation except for Fringe Benefits Tax (FBT) and Goods and Services Tax (GST). As such, input tax
credits receivable from and GST payable to the Australian Taxation Office (ATO), along with FBT, are recognised and
accrued.
Income, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is
not recoverable as an input tax credit from the ATO. In these circumstances, the GST is recognised as part of the cost
of acquisition of the asset or as part of the item of expense.
All receivables and payables are stated with the amount of GST included, provided the related invoices are dated on or
before the reporting date. Other receivables and payables resulting from accrued income and expenses are not reported
inclusive of GST (if any is applicable).
Cash flows are included in the Statement of Cash Flows on a gross basis. The GST components of cash flows arising
from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating
cash flows.
q) Issuance of Financial Statements
The financial report is authorised for issue by the Director-General and Chief Finance Officer of the Department of
Communities at the date of signing the Management Certificate.
r) Rounding and Comparatives
All figures in these statements are in Australian dollars and have been rounded to the nearest $1,000 or, where that
amount is less than $500, to zero, unless disclosure of the full amount is specifically required.
Comparative information has been restated where necessary to be consistent with disclosures in the current reporting
period.
s) New and Revised Accounting Standards
Retail Stores did not voluntarily change any of its accounting policies during 2009-10.
Those new and amended Australian accounting standards that were applicable for the first time in the 2009-10 financial
year and that had a significant impact on Retail Stores’ financial statements are as follows:
Retail Stores complied with the revised AASB 101 Presentation of Financial Statements as from 2009-10. This revised
standard does not have any measurement or recognition implications. Pursuant to the change of terminology used in
the revised AASB 101, the Balance Sheet is now re-named to the Statement of Financial Position, and the Cash Flow
Statement has now been re-named to Statement of Cash Flows. The former Income Statement has been replaced by a
Statement of Comprehensive Income. In line with the new concept of 'comprehensive income', the bottom of this new
statement contains certain transactions that previously were detailed in the Statement of Changes in Equity (refer to the
items under the sub-heading Other Comprehensive Income in the new Statement of Comprehensive Income). The
Statement of Changes in Equity now only includes details of transactions with owners in their capacity as owners, in
addition to the total comprehensive income for the relevant components of equity.
Retail Stores is not permitted to early adopt a new or amended accounting standard ahead of the specified
commencement date unless approval is obtained from the Treasury Department. Consequently, Retail Stores has not
applied any Australian accounting standards and interpretations that have been issued but are not yet effective. Retail
Stores applies standards and interpretations in accordance with their respective commencement dates.
At the date of authorisation of the financial report, the only significant impacts of new or amended Australian accounting
standards with future commencement dates are as set out below.
All other Australian accounting standards and interpretations with future commencement dates are either not applicable
to Retail Store’s activities, or have no material impact on Retail Stores.
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements 2009-10
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
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DEPARTMENT OF COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
2010 2009
$’000 $’000
2 Sale of goods
Doomadgee 7,506 7,288
Kowanyama 3,964 4,199
Lockhart River 4,050 4,090
Palm Island 6,450 6,941
Pormpuraaw 3,279 3,377
Woorabinda 1,559 1,642
Total 26,808 27,537
3 Other Revenue
Interest revenue 107 148
Management fee - 490
Other 276 71
Total 383 709
4 Employee expenses
Employee benefits
Wages and salaries 3,488 3,468
Employer superannuation contributions 327 301
Long service leave levy 60 60
Other employee benefits 11 23
Employee related expenses
Payroll tax 172 169
Workers compensation premium 21 20
Other employee related expenses 1 1
Total 4,080 4,042
2010 2009
Number of employees 63 62
The number of employees, includes both full-time employees and part-time employees measured
on a full-time equivalent basis is:
12
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
226
DEPARTMENT OF COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
2010 2009
$’000 $’000
5 Cost of sales of inventories
Doomadgee 5,247 5,308
Kowanyama 3,026 3,266
Lockhart River 3,119 3,071
Palm Island 4,756 5,143
Pormpuraaw 2,269 2,495
Woorabinda 1,089 1,159
Suppliers rebate (471) (327)
Total 19,035 20,115
6 Supplies and services
Electricity 506 405
Repairs and maintenance 390 525
Professional and technical fees 461 148
Operating lease rentals 207 180
Administration costs 247 164
Computer operating costs 74 89
Telecommunications 134 136
Travel 221 183
Marketing and public relations 7 22
Minor plant and equipment 80 87
Other 34 23
Total 2,361 1,962
7 Depreciation and amortisation
Depreciation and amortisation incurred in respect of:
Buildings 674 550
Plant and equipment 373 230
Total 1,047 780
13
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
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DEPARTMENT OF COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
2010 2009
$’000 $’000
14
8 Other expenses
Insurance premiums - Queensland Government Insurance Fund 65 58
Net losses on disposal of property, plant and equipment 47 15
External audit fees * 67 104
Donations and gifts 49 34
Bank fees 8 8
Total 236 219
* Total external audit fees relating to 2009-10 financial year are estimated to be $55,000 (2008-09:
$60,000). There are no non-audit services included in these amounts.
9 Cash and cash equivalents
Cash at bank 2,306 4,611
Cash on hand 663 499
Total 2,969 5,110
10 Receivables
Trade and other debtors 287 360
Less: provision for impairment (15) (44)
272 316
GST input tax credits receivable 138 179
GST payable (118) (130)
Net GST receivable 20 49
Annual leave reimbursements 42 90
Interest receivable 38 26
Long service leave reimbursements 6 36
Total 378 517
Movements in the allowance of provision of impairment
Balance at beginning of the year 44 38
Amounts written off during the year (1) -
Provision re-assessment (28) 6
Balance at the end of the year 15 44
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
228
DEPARTMENT OF COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
2010 2009
$’000 $’000
11 Inventories
Inventory held for sale 3,113 2,441
Less: provision for stock obsolescence * (22) (302)
Total 3,091 2,139
* Decrease in provision for obsolescence was due to Retail Stores management determining
that the previous provision, which was based on a percentage of total inventory held, was
excessive in the current operating environment. A comprehensive assessment performed
during the year identified that obsolete stock was limited to the variety and clothing lines. The
provision has been adjusted to reflect management’s current assessment of obsolete stock in
these stock lines.
12 Other current assets
Prepayments 6 92
Total 6 92
13 Property, plant and equipment
Buildings
At fair value 30,009 23,250
Less: Accumulated depreciation (11,019) (10,222)
18,990 13,028
Plant and equipment
At cost 5,256 3,375
Less accumulated depreciation (2,358) (2,449)
Less accumulated impairment losses - -
2,898 926
Capital works in progress
At cost 83 171
83 171
Total 21,971 14,125
Subsequent to initial acquisition, buildings are revalued to fair value in accordance with AASB 116
Property, Plant and Equipment and Queensland Treasury’s -‘Non-Current Asset Policies for the
Queensland Public Sector’.
The fair value of buildings are comprehensively revalued at least once every five years with interim
valuations, using appropriate indices, being otherwise performed on an annual basis. A
comprehensive independent revaluation was last performed as at 30 June 2007 by the
Department of Natural Resources and Water based on depreciated replacement cost as the
approximate fair value.
15
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
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Key priority areas Financial enablers Business processes People and learning Financial statements Appendices Index
DEPARTMENT COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2009-10
13 Property, plant and equipment (continued)
Property, plant and equipment reconciliation
Plant and Capital works
Buildings equipment in progress Total
$'000 $'000 $'000 $'000
Carrying amount at 1 July 2008 13,428 828 142 14,398
Acquisitions 7 330 139 476
Transfers between classes 87 23 (110) -
Disposals - (25) - (25)
Revaluation increments 56 - - 56
Impairment losses recognised in operating surplus/deficit - - - -
Depreciation (550) (230) - (780)
Carrying amount at 30 June 2009 13,028 926 171 14,125
Carrying amount at 1 July 2009 13,028 926 171 14,125
Acquisitions 6,219 1,986 575 8,780
Transfers between classes 254 409 (663) -
Disposals - (50) - (50)
Revaluation increments 163 - - 163
Impairment losses recognised in operating surplus/deficit - - - -
Depreciation (674) (373) - (1,047)
Carrying amount at 30 June 2010 18,990 2,898 83 21,971
Retail Stores has property, plant and equipment with an original cost of $871,356 (2009: $1,351,907) and a written down value of zero still being used in the
provision of services. Based on historical and projected asset replacement programs Retail Stores will replace the majority of these assets over the next
five years.
16
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements 2009-10
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
230
DEPARTMENT COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
2010 2009
$’000 $’000
17
14 Payables
Trade creditors and accruals 1,060 1,467
Other 151 232
Total 1,211 1,699
15 Other financial liabilities
Current
Advance payable 600 -
Total 600 -
Non-Current
Advance payable 4,200 -
Total 4,200 -
The cost of constructing Retail Stores buildings paid for by the Department of Communities has
been recognised in the financial statements as an advance payable. The advance is interest free
and is repayable over an eight year term.
16 Accrued employee benefits
Annual leave levy payable 63 (10)
Salaries and wages payable 14 13
Long service leave levy payable 15 14
Total 92 17
17 Asset revaluation surplus
Buildings
$'000
Carrying amount at 1 July 2008 9,367
Net revaluation increments 56
Carrying amount 30 June 2009 9,423
Carrying amount at 1 July 2009 9,423
Net revaluation increments 163
Carrying amount at 30 June 2010 9,586
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
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DEPARTMENT COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
2010 2009
$’000 $’000
18
18 Reconciliation of operating result to net cash from operating activities
Operating result 460 1,122
Non-cash items:
Depreciation and amortisation expense 1,047 780
Loss on disposal of non-current assets 49 18
Gain on disposal of non-current assets (2) (2)
Impairment losses (28) 6
Advance received (4,800) -
Change in assets and liabilities:
(Increase) decrease in receivables 140 195
(Increase) decrease in inventories (952) (332)
(Increase) decrease in prepayments 86 (80)
Increase (decrease) in payables (487) (17)
Increase (decrease) in other financial liabilities 4,800 -
Increase (decrease) in accrued employee benefits 74 (133)
Net cash from operating activities 387 1,557
19 Commitments for expenditure
Capital expenditure commitments
Buildings
- Within 12 months 20 5,401
- 12 months or longer and not longer than five years - -
- Later than 5 years - -
Total 20 5,401
Plant and equipment
- Within 12 months 55 1,616
- 12 months or longer and not longer than five years - -
- Later than 5 years - -
Total 55 1,616
Material classes of expenditure commitments inclusive of anticipated GST, contracted for at
reporting date but not recognised are payable as follows:
20 Contingent assets and liabilities
As at 30 June 2010, Retail Stores did not have any contingent assets or liabilities.
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
232
DEPARTMENT COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
19
21 Financial instruments
(a) Categorisation of financial instruments
Retail Stores has the following categories of financial assets and financial liabilities:
Category Note 2010 2009
$'000 $'000
Financial assets
Cash 9 2,969 5,110
Receivables 10 378 517
Total 3,347 5,627
Financial liabilities
Payables 14 1,211 1,699
Other financial liabilities 15 4,800 -
Accrued employee benefits 16 92 17
Total 6,103 1,716
In addition to the explanations set out in the remainder of this note, note 1 includes information on the
accounting policies relating to all financial assets and liabilities.
Retail Stores does not enter into financial instruments for speculative purposes.
(b) Financial risk management
Retail Stores' activities expose it to a variety of financial risks - interest rate risk, credit risk, liquidity risk
and market risk.
Retail Stores measures risk exposure using a variety of methods as follows:
• Credit risk - ageing analysis, earnings at risk
• Liquidity risk - sensitivity analysis
• Market risk - interest rate sensitivity analysis
(c) Credit risk exposure
Credit risk exposure refers to the situation where Retail Stores may incur financial loss as a result of
another party to a financial instrument failing to discharge their obligation.
The maximum exposure to credit risk at balance date in relation to each class of recognised financial
asset is the gross carrying amount of those assets inclusive of any provisions for impairment.
No financial assets or financial liabilities have been offset and presented net in the Statement of
Financial Position.
The following information represents the Retail Stores' maximum exposure to credit risk based on
contractual amounts net of any allowances:
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
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DEPARTMENT COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
20
21 Financial instruments (continued)
(c) Credit risk exposure (continued)
Category Note 2010 2009
$'000 $'000
Financial assets
Cash 9 2,969 5,110
Receivables 10 378 517
Total 3,347 5,627
Retail Stores manages credit risk through the use of credit management strategy. This strategy
aims to reduce the exposure to credit default by ensuring that Retail Stores invests in secure
assets and monitors all funds owed on a timely basis. Exposure to credit risk is monitored on an
ongoing basis.
The method for calculating any provisional impairment for risk is based on past experience,
current and expected changes in economic conditions and changes in client credit ratings. The
recognised impairment loss is shown in the Statement of Comprehensive Income.
Ageing of past due but not impaired as well as impaired financial assets are disclosed in the
following tables:
2010 Financial Asset Past Due But Not Impaired
30 Days 30 - 60 Days 61 - 90 Days Total
$'000 $'000 $'000 $'000
Financial Assets
25 10 28 63
Total 25 10 28 63
2009 Financial Asset Past Due But Not Impaired
30 Days 30 - 60 Days 61 - 90 Days Total
$'000 $'000 $'000 $'000
Financial Assets
49 19 4 72
Total 49 19 4 72
Overdue
Receivables
Overdue
Receivables
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
234
DEPARTMENT COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
21 Financial Instruments (continued)
(c) Credit risk exposure (continued)
2010 Individually Impaired Financial Assets
30 Days 30 - 60 Days 61 - 90 Days Total
$'000 $'000 $'000 $'000
Financial Assets
- 15 15
Total - - 15 15
2009 Individually Impaired Financial Assets
30 Days 30 - 60 Days 61 - 90 Days Total
$'000 $'000 $'000 $'000
Financial Assets
- 12 32 44
Total - 12 32 44
Overdue
Receivables
Overdue
Receivables
(d) Market risk
Interest rate sensitivity analysis
The following table summarises the sensitivity of Retail Store's financial assets and liabilities which are
subject to interest rate risk, showing the effects of a plus or minus movement of 2% (2009 2%) on profit
and equity:
Retail Stores does not undertake any hedging in relation to interest risk and manages its risk as per
the liquidity risk management strategy.
Retail Stores market risk relating to financial instruments is to cash deposited in interest bearing
acounts.
Amount Profit Equity Profit Equity
$000 $000 $000 $000 $000
Financial Assets
Cash at bank 2,306 46 46 (46) (46)
Overall effect on profit and equity 46 46 (46) (46)
Amount Profit Equity Profit Equity
$000 $000 $000 $000 $000
Financial Assets
Cash at bank 4,611 92 92 (92) (92)
Overall effect on profit and equity 92 92 (92) (92)
+ 2%
-2 %
2009
Interest rate risk
-2 %
2010
Interest rate risk
+ 2%
21
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
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DEPARTMENT COMMUNITIES – RETAIL STORES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2010
22
21 Financial instruments (continued)
(e) Liquidity risk
Liquidity risk refers to the situation where Retail Stores may encounter difficulty in meeting obligations
associated with financial liabilities.
Retail Stores manages liquidity risk through the use of a liquidity management strategy. The strategy
aims to reduce the exposure to liquidity risk by ensuring Retail Stores has sufficient funds available
to meet employee and supplier obligations as they fall due. This is achieved by ensuring the minimum
levels of cash are held within the various bank accounts so as to match the expected duration of the
various employee and supplier liabilities.
The following table sets out the liquidity risk of financial liabilities held by Retail Stores. It represents the
contractual maturity of financial liabilities, calculated based on cash flows relating to the repayment
of the principal amount outstanding at balance date.
Total
5 years
Note $'000 $'000 $'000 $'000
Financial Liabilities
Payables
14 1,211 - - 1,211
Other financial liabilities
15 600 2,400 1,800 4,800
Accrued employee benefits
16 92 - - 92
Total 1,903 2,400 1,800 6,103
Total
5 years
Note $'000 $'000 $'000 $'000
Financial Liabilities
Payables
14 1,699 - - 1,699
Accrued employee benefits
16 17 - - 17
Total 1,716 - - 1,716
2009 Payable in
2010 Payable in
(f) Fair value
The fair value of financial assets and liabilities must be estimated for recognition and measurement and
for note disclosure purposes.
The fair value of financial assets and liabilities is determined as the carrying amount of cash, cash
equivalents, receivables and payables (all financial assets and financial liabilities). Financial assets
and liabilities are not offset.
Department of Communities – Retail Stores
Notes to and forming part of the fnancial statements
for the year ended 30 June 2010
Department of Communities | 2009–10 Annual Report Department of Communities | 2009–10 Annual Report
236
Certifcate of the Department of Communities – Retail Stores
These general purpose fnancial statements have been prepared pursuant to Section 62(1)
of the Financial Accountability Act 2009 (the Act), relevant sections of the Financial and
Performance Management Standard 2009 and other prescribed requirements. In accordance
with Section 62(1)(b) of the Act, we certify that in our opinion:
(i) the prescribed requirements for establishing and keeping the accounts have been complied
with in all material respects and
(ii) the statements have been drawn up to present a true and fair view, in accordance with
prescribed accounting standards, of the transactions of Retail Stores for the fnancial year
ended 30 June 2010, and of the fnancial position of the Retail Stores at the end of that
period.
Ian Fulton BCom CPA
Chief Finance Offcer
Department Of Communities
25/08/2010
Linda A Apelt BEd, G.Dip.C, M.Ed.St
Director-General
Department Of Communities
25/08/2010 25/08/2010
25/08/2010
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237
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INDEPENDENT AUDITOR’S REPORT
To the Accountable Offcer of the Department of Communities
Matters Relating to the Electronic Presentation of the Audited Financial Report
The auditor’s report relates to the fnancial report of Retail Stores for the fnancial year ended
30 June 2010 included on Department of Communities’ website. The Accountable Offcer
is responsible for the integrity of the Department of Communities’ website. I have not been
engaged to report on the integrity of the Department of Communities’ website. The auditor’s
report refers only to the statements named below. It does not provide an opinion on any other
information which may have been hyperlinked to/from these statements. If users of the fnancial
report are concerned with the inherent risks arising from electronic data communications
they are advised to refer to the hard copy of the audited fnancial report, available from the
Department of Communities, to confrm the information included in the audited fnancial report
presented on this website.
Report on the Financial Report
I have audited the accompanying fnancial report of Retail Stores, which comprises the
statement of fnancial position as at 30 June 2010, statement of changes in equity, statement of
cash fows and statement of comprehensive income for the year ended on that date, a summary
of signifcant accounting policies, other explanatory notes and the certifcates given by the Chief
Finance Offcer and the Director-General.
The Accountable Offcer’s Responsibility for the Financial Report
The Accountable Offcer is responsible for the preparation and fair presentation of the fnancial
report in accordance with prescribed accounting requirements identifed in the Financial
Accountability Act 2009 and the Financial and Performance Management Standard 2009,
including compliance with Australian Accounting Standards (including the Australian Accounting
Interpretations). This responsibility includes establishing and maintaining internal controls
relevant to the preparation and fair presentation of the fnancial report that is free from material
misstatement, whether due to fraud or error; selecting and applying appropriate accounting
policies; and making accounting estimates that are reasonable in the circumstances.
Auditor’s Responsibility
My responsibility is to express an opinion on the fnancial report based on the audit. The audit
was conducted in accordance with the Auditor-General of Queensland Auditing Standards,
which incorporate the Australian Auditing Standards. These auditing standards require
compliance with relevant ethical requirements relating to audit engagements and that the audit
is planned and performed to obtain reasonable assurance whether the fnancial report is free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the fnancial report. The procedures selected depend on the auditor’s judgement,
including the assessment of risks of material misstatement in the fnancial report, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control
Department of Communities | 2009–10 Annual Report
238
relevant to the entity’s preparation and fair presentation of the fnancial report in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity’s internal control, other than in
expressing an opinion on compliance with prescribed requirements. An audit also includes
evaluating the appropriateness of accounting policies and the reasonableness of accounting
estimates made by the Accountable Offcer, as well as evaluating the overall presentation of
the fnancial report and any mandatory fnancial reporting requirements as approved by the
Treasurer for application in Queensland.
I believe that the audit evidence obtained is suffcient and appropriate to provide a basis for my
audit opinion.
Independence
The Auditor-General Act 2009 promotes the independence of the Auditor-General and all
authorised auditors. The Auditor-General is the auditor of all Queensland public sector entities
and can only be removed by Parliament.
The Auditor-General may conduct an audit in any way considered appropriate and is not subject
to direction by any person about the way in which audit powers are to be exercised. The Auditor-
General has for the purposes of conducting an audit, access to all documents and property and
can report to Parliament matters which in the Auditor-General’s opinion are signifcant.
Auditor’s Opinion
In accordance with s.40 of the Auditor-General Act 2009 –
(a) I have received all the information and explanations which I have required; and
(b) in my opinion –
(i) the prescribed requirements in respect of the establishment and keeping of accounts have
been complied with in all material respects; and
(i) the fnancial report has been drawn up so as to present a true and fair view, in accordance
with the prescribed accounting standards of the transactions of Retail Stores for the fnancial
year 1 July 2009 to 30 June 2010 and of the fnancial position as at the end of that year.
doc_475060055.pdf