Australia Post Annual Report 2008–09

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Notes to and forming part of the Financial Report for the year ended 30 June 2009 (gg) Financial guarantees Financial guarantees are initially measured at fair value. At each subsequent reporting date, they are carried at the higher of the initial fair value amount less cumulative amortisation or the amount determined under AASB 137: Provisions, Contingent Assets and Contingent Liabilities. The fair value of financial guarantee contracts discussed in note 18 has been assessed using a probability-weighted discounted cashflow approach. In order to estimate the fair value under this approach the following assumptions are made. Probability of Default (PD): This represents the likelihood of the guaranteed party defaulting over the terms of relevant agreements and is assessed based on historical default rates of companies rated by Standard & Poor’s. The range used in the model is between 0% and 5%. Loss Given Default (LGD): This represents the proportion of the exposure that is not expected to be recovered in the event of a default by the guaranteed party and is based on the result of studies into the recovery rate for unsecured debt obligations. The range used in the model is between 0% and 50%. Exposure at Default (EAD): This represents the maximum loss that the corporation is exposed to if the guaranteed party was to default. The model assumes that the guaranteed loan/facility contract is at maximum possible exposure at the time of default and hence, equates to the values disclosed in note 18. When the uncertainty associated with an assumption is sufficient to warrant consideration of a range of possible assumptions, the maximum in the range was used for valuation purposes. The value of the financial guarantee over each future year of the guarantees’ life is then equal to PD x LGD x EAD, which is discounted over the contractual term of the guarantee, to reporting date, to determine the fair value. The discount rate adopted was based on the Commonwealth government bond yield. The contractual term of the guarantee matches the underlying obligation to which it relates. 70 (hh) Contributed equity Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Australia Post Annual Report 2008–09 | Financial and statutory reports (ii) Insurance Generally, the corporation self-insures its own risks. However, with respect to catastrophic losses appropriate insurance coverage for both the corporation and its controlled entities has been arranged with general insurers. Payments on account of losses and insurance premiums paid in any year are charged against revenue for the year. Where appropriate, the controlled entities insure their other risks with general insurers. (jj) Contingent liabilities and contingent assets Contingent liabilities and contingent assets are not recognised in the balance sheet but are reported in the relevant schedules and notes. They may arise from uncertainty as to the existence of a liability or asset, or may represent an existing liability or asset in respect of which settlement is not probable or the amount cannot be reliably measured. Contingent assets are reported when settlement is probable, and contingent liabilities are recognised when settlement is not considered remote. (kk) Comparatives Where necessary, comparatives have been reclassified and repositioned for consistency with current-year disclosures.
2 Revenues and other income Revenue Rendering of services to: Related entities (1) External entities (2) 2009 $m 186.9 4,288.6 Consolidated Corporation 2008 $m 168.4 4,213.6 2009 $m 186.9 4,159.5 2008 $m 164.3 4,096.0 4,475.5 4,382.0 4,346.4 4,260.3 Sale of goods to external entities (2) 370.9 377.1 361.9 347.1 Interest income calculated using the effective interest method from: 4,846.4 4,759.1 4,708.3 4,607.4 Cash on hand and promissory notes 24.1 38.2 23.9 37.6 Loans and receivables 10.3 10.4 11.7 12.5 34.4 48.6 35.6 50.1 Dividends received or receivable from joint ventures 0.0 0.0 15.1 21.1 Total revenue Other income and gains 4,880.8 4,807.7 4,759.0 4,678.6 Rents from operating leases Other revenues and gains Other services: Related entities (government grants) (1) External entities (2) 32.4 28.0 32.9 28.4 3.2 4.3 3.2 4.3 17.0 22.5 16.3 22.4 Net gain on disposal of assets: 20.2 26.8 19.5 26.7 Land and buildings 35.6 8.3 35.6 7.5 Investment property 2.2 1.7 2.2 1.7 37.8 10.0 37.8 9.2 Change in fair value of interest rate swaps Change in fair value of investment properties Net foreign exchange gains – non-speculative Total other revenues and gains 61.3 101.2 60.3 100.3 Total other income and gains 93.7 129.2 93.2 128.7 Total income 4,974.5 4,936.9 4,852.2 4,807.3 (1) Related entities – related to the Commonwealth Government. (2) External entities – not related to the Commonwealth Government. 1.8 0.0 1.5 0.0 64.4 0.0 1.8 0.0 1.2 0.0 64.4 0.0 Australia Post Annual Report 2008–09 | Financial and statutory reports 71
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1809 2009 Australia Post Annual Rep
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Over the past 200 years, Australian
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Our business Celebrating 200 years
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For 200 years, we have developed ou
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We handled 5.3 billion items of mai
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Our business Managing Director’s
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Mail volumes m 6,000 5,000 4,000 3,
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Our business Performance against ta
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Core businesses Australia’s posta
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Core businesses Letters & associate
Page 21 and 22: Collaborative solutions across the
Page 23 and 24: Rewarding customer loyalty Australi
Page 25 and 26: Core businesses Agency services & r
Page 27 and 28: 1968 Behind the front counter of th
Page 29 and 30: Sending home comforts to the world
Page 31 and 32: Core businesses Parcels & logistics
Page 33 and 34: 1936 Transporting mail from the SS
Page 35 and 36: Expanding Business, Naturally When
Page 37 and 38: Corporate responsibility From a wor
Page 39 and 40: Corporate responsibility Highlights
Page 41 and 42: Employment by occupation % Administ
Page 43 and 44: 1950s A postie delivering mail in s
Page 45 and 46: Human Resources Committee Incorpora
Page 47 and 48: Treasury A comprehensive and pruden
Page 49 and 50: Mark Darras LLM, BA LLB, BEd Direct
Page 51 and 52: Contents - Financial and statutory
Page 53 and 54: Statements by directors for the yea
Page 55 and 56: Australia Post Annual Report 2008-0
Page 57 and 58: Balance sheet as at 30 June 2009 No
Page 59 and 60: Cashflow statement for the year end
Page 61 and 62: Schedule of contingencies as at 30
Page 63 and 64: Reference Title Nature of change to
Page 65 and 66: Where settlement of any part of the
Page 67 and 68: (iii) Translation of group companie
Page 69 and 70: (ii) Held-to-maturity investments N
Page 71: is increased to its recoverable amo
Page 75 and 76: 4 Finance costs Bonds (1) Interest
Page 77 and 78: 5 Income tax (continued) (e) Unreco
Page 79 and 80: 9 Non-current assets - trade and ot
Page 81 and 82: 11 Investments in jointly controlle
Page 83 and 84: 12 Superannuation (continued) (v) C
Page 85 and 86: 13 Analysis of property, plant & eq
Page 87 and 88: 15 Investment properties Opening ba
Page 89 and 90: 20 Provisions Current provisions An
Page 91 and 92: 22 Analysis of total equity (contin
Page 93 and 94: 24 Dividends paid Final ordinary di
Page 95 and 96: 26 Segment information (continued)
Page 97 and 98: 27 Key management personnel remuner
Page 99 and 100: 27 Key Management personnel remuner
Page 101 and 102: 28 Related parties (continued) Tran
Page 103 and 104: 29 Financial and capital risk manag
Page 111 and 112: 32 Corporate information The financ
Page 113 and 114: Auditor-General’s report - perfor
Page 115 and 116: Domestic letter service monitor for
Page 117 and 118: Survey certification for the year e
Page 119 and 120: Reserved/non-reserved services for
Page 121 and 122: Australian Postal Corporation Act 1
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Statutory reporting requirements fo
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Consultative arrangements The Stake
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Australia Post - the statistics for
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5 Mail delivery network Private hou
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9 Overall letter service performanc
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Index Australia Post Annual Report
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I (continued) interest 11, 57 inter
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Contact details Australia Post Head
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Stamp gallery 2008-09 Australia Pos
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AAT: International Polar Year 2007-
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Australia Post Annual Report 2008–09

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