Annual Report for 2006/07 - Metro Tasmania

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18(s) Prior period correctionRecognition of deferred tax balancesCorrection of prior period errors are reported in accordance with Accounting Standard AASB 108 – Accounting Policies, Changesin Accounting Estimates and Errors. In accordance with this standard, correction of prior period amounts shall be undertakenretrospectively in the first financial report authorised for issue after their discovery.The Company is required to recognise the measurement and disclosure of amounts of elements of financial statements as if a priorperiod error had never occurred.Nature of prior period correctionAs at 30 June 2005, the Company did not recognise any deferred tax assets and deferred tax liabilities as required by AccountingStandard AASB 112 Income Taxes on the basis that the company was a “not for profit” entity and as a consequence its intentionwas not to generate profits that would be subject to tax . Metro’s contract with the Tasmanian Government is based on a“breakeven” financial outcome each year.On reconsidering AASB 112 and the reasons for not recognising deferred tax balances previously, the directors now believe thatthe company should have recognised deferred tax assets and deferred tax liabilities. AASB 112 is a sector-neutral standard, andon this basis it applies to both for-profit and not-for-profit entities. In addition, AASB 112 stipulates that the consideration of currentand future tax consequences of assets and liabilities should be based on the taxable profits (losses) of the entity. The company’sassessment of these factors in the prior year’s was focussed on accounting profit (losses). Further, on transition to A-IFRS on 1 July2004, the test for recognising deferred tax balances changed from “virtually certain” to “probable” which is a less stringent test. Areview and reconsideration of information and facts that were available on transition has indicated that there was sufficient evidenceto indicate that the company should have recognised its deferred tax balances.In accordance with AASB 108 – Accounting Policies, Changes in Accounting Estimates and Errors, the company elected to correctthe oversight as at the date of transition to A-IFRS, being 1 July 2004, by restating the opening balances of assets, liabilities andequity for the 30 June 2006 financial year.The effects are:1 July 2004The recognition of tax balances by including deferred tax assets of $9,571,000 and deferred tax liabilities of $4,175,000. This alsoresulted in an increase in retained profits of $6,576,000 and a decrease in the asset revaluation reserve of $1,180,000.30 June 2005The recognition of the movement in deferred tax balances with an increase to deferred tax assets of $1,148,000, a decrease tothe deferred tax liabilities of $249,000, an increase to the asset revaluation reserve of $99,000, an increase in retained profit of$1,298,000, an increase to income tax expense recognised in the income statement of $211,000 and an increase to income taxbenefit recognised in equity of $635,000.Notes to the Financial Statements30 June 2006The recognition of the movement in deferred tax balances with a decrease to deferred tax assets of $943,000, a decrease tothe deferred tax liabilities of $118,000, an decrease to the asset revaluation reserve of $215,000, a decrease in retained profitof $610,000, an increase to income tax expense recognised in the income statement of $46,000 and an increase to income taxexpense recognised in equity of $547,000.
4. Revenue(a) Revenue from traffic operationsConsolidatedCompany2007 2006 2007 2006$000’s $000’s $000’s $000’sService contracts 26,607 25,130 26,607 25,130Ticket fares 9,943 9,490 9,943 9,490(b) Revenue from other operating income36,550 34,620 36,550 34,620Profit on disposal of property, plant and equipment 181 58 181 58Advertising income 309 322 309 322Rental income 48 50 48 50Other income 220 189 220 189(c) Financial income758 619 758 619Interest income 890 660 890 660890 660 890 660Total income 38,198 35,899 38,198 35,8995. Expenses(a) Expenses from traffic operationsConsolidatedCompany2007 2006 2007 2006$000’s $000’s $000’s $000’sFuel 4,225 4,133 4,225 4,133Employee and related expense 19,532 17,901 19,532 17,90Depreciation and amortisation expenses 2,614 2,640 2,614 2,640Other expenses 1,828 2,337 1,828 2,337(b) Expenses from engineering and maintenance services28,199 27,011 28,199 27,011Maintenance expense 2,826 2,630 2,826 2,630Employee and related expense 1,875 1,967 1,875 1,967Depreciation and amortisation expenses 63 48 63 48Other expenses 77 127 77 127(c) Expenses from administration and general4,841 4,772 4,841 4,772Employee and related expense 2,160 1,818 2,160 1,818Depreciation and amortisation expenses 373 343 373 343Other expenses 2,143 1,752 2,143 1,752(d) Financial expenses4,676 3,913 4,676 3,913Interest expense 175 173 175 173175 173 175 173Total expenses 37,891 35,869 37,891 35,869Notes to the Financial Statements19
Page 2 and 3: IntroductionThe Principal objective
Page 4 and 5: Chairperson’s ReviewChairperson
Page 6: Chief Executive Officer’s ReviewI
Page 9 and 10: Table 5 - Number of Buses in Servic
Page 11 and 12: Auditor’s independence declaratio
Page 13 and 14: Balance SheetAs at 30 June 200Conso
Page 15 and 16: Cash Flow StatementFor the year end
Page 17 and 18: 3. Significant Accounting Policies(
Page 19: Retirement benefitsDefined benefit
Page 23 and 24: 2007 ConsolidatedCategory Opening R
Page 25 and 26: Balance atBalance at1 Jul 2006 30 J
Page 27 and 28: 19. Retained Profits/ (Losses) Cons
Page 29 and 30: 2007Average effective Floating Less
Page 31 and 32: Balance sheet results as at 30 June
Page 33 and 34: Defined Benefit Obligations inclusi
Page 35 and 36: 30 June 2007 30 June 2006Expected R
Page 37 and 38: Funding and contribution informatio
Page 39 and 40: Providing safe, reliable and qualit

Annual Report for 2006/07 - Metro Tasmania

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