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Commonwealth Accommodation and Catering Services Ltd - Report - Year - 1984-85


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The Parliament of the Commonwealth of Australia

COM M ONW EALTH ACCOMM ODATION AND CATERING SERVICES LTD

Annual Report

1984-85

Presented 13 March 1986 Ordered to be printed 20 March 1986

Parliamentary Paper No. 69/1986

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COMMONW EALTH A C C O M M O D A TIO N & CATERING SERVICES LTD

ANNUAL REPORT 1984-85

COMMONWEALTH

ACCOMMODATION & CATERING SERVICES LTD (INCORPORATED IN VICTORIA)

ANNUAL REPORT 1984-85

AUSTRALIAN GOVERNMENT PUBLISHING SERVICE

CANBERRA 1985

©Commonwealth of Australia 1985 ISSN 0728-6805

Typeset and Printed by Pirie Printers Pty Ltd, Fyshwick, A.C.T. 2609

The Hon. T. UREN, M.P. Minister for Local Government and Administrative Services Parliament House Canberra, ACT 2600

My dear Minister,

I have pleasure in submitting the Annual Report of Commonwealth Accom­ modation & Catering Services Limited incorporating the audited accounts for the year ended 29 June 1985.

Yours sincerely,

Chairman of Directors

in

BOARD OF DIRECTORS

J.J. Maunsell (Chairman) K.A. Bourke, A.M. R.G. Cook T. Crothers

P.B. Gibson M. Horder J.M. Wark, O.B.E.

iv

CONTENTS

Chairman’s Statement 1

Directors’ Report 2

Financial Statements 11

Management 23

Offices 24

V

CHAIRMAN’S STATEMENT

Following the Government’s decision in August 1984 that the Company should remain in existence to provide accommodation and catering services on behalf of the Commonwealth, but on a more commercial basis, the Company throughout 1984-85 was consolidating its position in preparation for the more commercial environment in which it is to operate.

Migrant centre occupancy has reduced in recent years but appears now to have stabilised at about 2500 residents. However, distribution of that reduced number over nine migrant centres in 1984-85 prevented the Company’s services being provided in a cost-efficient way.

The high relative cost of operating migrant centres below maximum capacity was reported by the Company to the Minister for Local Government & Administrative Services in November 1983. The Department of Immigration & Ethnic Affairs subsequently examined options for reshaping the migrant centre

network in a way that will maximise economic efficiency while maintaining effective arrangements for the settlement of new arrivals. As a consequence of that examination it is proposed that four migrant centres will be vacated in the

current year, namely, Enterprise (Victoria); Endeavour (NSW); Mount Saint Canice (Tasmania); and Tamarind (NT). The Government also intends to build new-style centres at Pennington in Adelaide and at Wacol in Brisbane. These two centres will comprise self- contained units with their own bedrooms, kitchens and laundries.

Agreements have been negotiated with the Commonwealth in respect of the services the Company provides in migrant centres, migrant flats, ACT guest houses, food services and beverage services. The agreements will apply for three years from 1 July 1985, after which the right to operate the services will be subject

to public tendering. The Government’s direction that in future the Company compete by tender for the supply of its services to Commonwealth departments has intensified the need to ensure that, after making due allowance for various restrictions

stipulated in the agreements, optimum efficiency is achieved in all of the Company’s operations. The Company will certainly strive to meet that goal.

DIRECTORS’ REPORT 1984-85

This Annual Report of the Directors reviews the Company’s operations for 1984-85 and should be read in conjunction with the appended financial statements. The Company’s main functions are to operate food and beverage services for employees of Commonwealth Government departments in all States and the A.C.T., to provide guest house accommodation primarily for public servants in Canberra and, subject to the policies of the Department of Immigration & Ethnic Affairs, to manage migrant flats and to provide accommodation, catering and property maintenance services at centres throughout Australia for newly-arrived

migrants and such other categories of persons as the Minister for Immigration & Ethnic Affairs from time to time approves. Last year’s Report mentioned that a review of the operations of the Company by the Department of Local Government and Administrative Services had resulted in the Government deciding that the Company should operate on a more commercial basis with the terms of its arrangements with the Common­ wealth committed to formal agreements for the operation at each location.

Agreements have been negotiated which will recognise the Commonwealth’s obligations to subsidise its amenities for groups for whom it has responsibility. They will have a three-year tenure commencing 1 July 1985. The agreements will herald important fundamental changes in the Company’s financial relationship with the Commonwealth. The salient points of these agreements compared to previous arrangements in respect of each of the Company’s operations are:

FOOD SERVICES AND BEVERAGE SERVICES

The previous arrangement was that in accordance with the provisions of Finance Direction 28, the Commonwealth reimbursed the Company for certain costs incurred in operating departmental food services and beverage services. Those costs included the employer liability for long service leave, superannuation, workers’ compensation and payroll tax for food and beverage services and in addition, for beverage services, the costs of attendants’ wages and annual leave,

leave loading and sick leave. From 1 July 1985 the Company will no longer be directly reimbursed for these costs but will, instead, meet the costs of operating the 70 food services and the 54 beverage services from sales revenue and from the predetermined price agreed with the Commonwealth for each location.

CANBERRA GUEST HOUSES

The significant changes in the arrangement for the three Canberra guest houses are that from 1 July 1985 the Company will make rental payments to the Commonwealth for the right to operate each guest house and the Common­ wealth will pay the cost of some types of maintenance formerly the responsibility of the Company. The previous arrangement where in any year the Canberra guest house group made an operating surplus the Commonwealth made a

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charge equal to that surplus for interest on capital invested and use of assets, and conversely made a contribution equal to the operating deficit incurred in any year, from 1985-86 no longer applies. The rates of tariff charged to guests will, under the new agreement, continue to be determined by the Minister for Local Government & Administrative

Services.

MIGRANT CENTRES

Previously the amount received from the Commonwealth towards the cost of operating migrant centres was the difference between operating expenditures (but excluding amounts provided for doubtful debts, deferred liabilities, de­

preciation and any losses arising on disposals of fixed assets) and tariffs charged plus other revenues. The inevitable result of this arrangement over time has been a continually increasing accumulated loss to the Company from migrant centre operations.

Because of the extensive rationalisation of the number of migrant centres that the Department of Immigration & Ethnic Affairs proposes to implement during the latter part of 1985, the agreement for the Company to supply accommod­ ation, catering, property maintenance and caretaking services from 1 July 1985

provides for an interim arrangement of about 6 months during which the Com­ pany will charge the Commonwealth on a total cost recovery basis. On the expiration of the interim arrangement payments to ihe Company for its services will be based on daily occupancy levels at each centre.

MIGRANT FLATS

The financial arrangement concerning the migrant flats previously was that the Commonwealth made a charge for interest on capital invested equal to the surplus made from letting migrant flats. In any year that the letting of migrant flats resulted in a deficit being incurred the Commonwealth made a contribution to offset that deficit. The migrant flats thus operated at no profit/no loss to the

Company. The 1 July 1985 agreement appoints the Company as the Commonwealth’s managing agent for the property management of the flats. A predetermined amount in respect of each block of flats will be paid to the Company as

consideration for the services it provides.

COMBINED FINANCIAL RESULTS

The deficit for the year was $144 546 compared to a deficit of $355 172 in the previous year. Both years' financial results were adversely affected by a reduction in the amount paid by the Commonwealth for its Contribution towards food services operations.

The amount otherwise payable by the Commonwealth in accordance with the formula used in the past to decide the Company’s entitlement to Commonwealth Government Contribution was this year offset by $1 597 504 (1983-84 by $1 381 500) from accumulated Company-earned surpluses of previous years.

Had this abnormal offset not been made, the Company’s financial result for 1984-85 would have been a surplus before Income Tax of $1 452 958 instead of the reported Deficit of $144 546.

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1985 1984

Tariffs and Other Income Commonwealth Government Contribution

$

25 036 553 14 718 387

$

24 514 382 16 189 773

Total Income Less Cost of Operations

39 754 940 39 653 635 40 704 155 40 801 187

Commonwealth Government charge for interest on capital invested and use of assets 245 851 258 140

Deficit 144 546 355 172

Income tax adjustment in respect of prior years — 149 303

Deficit for the year 144 546 504 475

Food Services

On behalf of Government departments the Company operates food and beverage services in all capital cities (except Darwin) as well as at Mulwala, Lithgow and St. Marys in New South Wales and at Avalon and Bendigo in Victoria.

Financial results were:

1985 1984

Sales and Other Income Commonwealth Government Contribution

$

14 653 427 1 651 067

$

14 334 843 1 186 287

Total Income Less Cost of Operations

16 304 494 16 823 981 15 521 130 15 749 251

Deficit 519 487 228 121

No charge is made for the use of Commonwealth assets. In years prior to 1983-84 in accordance with the provisions of Finance Direction 28, the Company received a subsidy for costs not recovered through meal prices. Such costs include the employer liability for long service leave, superannuation, workers’ compensation and payroll tax. On this basis the Commonwealth Government Contribution for 1984-85 would be $3 248 571, but an amount of $1 597 504 (1983-84 being $1 381 500) being part of previous years’ surpluses earned from food services was deducted

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from that entitlement with the result that in 1984-85 a Commonwealth Govern­ ment Contribution of only $1 651 067 was received. The effect of this was to change a surplus of $1 078 017 that otherwise would have been earned, to a deficit of $519 487 as shown in the above Table of Food Services Financial Results.

Canberra Guest Houses

Canberra guest houses principally provide permanent accommodation for unmarried Commonwealth Government employees, and temporary accom­ modation for Public Service employees and their families who are on transfer or returning from overseas postings and are awaiting relocation.

The Company operated threeguest houses in Canberra throughout the year, namely Brassey House and Gowrie and Macquarie Private Hotels, which normally have an aggregate operational capacity of approximately 1250. From November 1983 until May 1985, however, the operational capacity had been temporarily reduced to 1000 because of the partial closure of Gowrie Private

Hotel, in order that extensive repairs might be made to the external brick wall cladding. The loss of operational capacity seriously curtailed the Company's ability to cater for the relatively more lucrative casual trade. This led to a lower than normal average per capita tariff being earned and had a disproportionately adverse effect on the incomes of both 1983-84 and 1984-85.

Financial results were:

1985 1984

$ $

Tariffs and Other Income 4 113 136 4 033 374

Less Cost of Operations 3 867 285 3 818 505

Commonwealth Government charge for interest on capital invested and use of assets 245 851 214 869

Migrant Centres

Migrant Centres currently provide subsidised initial accommodation for the more needy persons arriving in Australia under the Government’s immigration programs (i.e. refugees and Special Humanitarian Program entrants) and for other persons covered by migration agreements. Where spare capacity exists, other new arrivals may stay at centres at cost-recovery based tariffs.

The migrant centres also operate as a residential base for the Department of Immigration & Ethnic Affairs to provide English classes, information programs and other settlement assistance. Health screening is an important function carried out at the migrant centres.

The Company provides on behalf of the Department of Immigration & Ethnic Affairs food and accommodation, and property maintenance services at migrant centres. Migrants and refugees totalling 16,935 persons from thirty countries were

accommodated in migrant centres during the year, the largest regional grouping

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being the Indo-Chinese, comprising approximately 40% of the intake, followed by Central Americans comprising approximately 24% and East Europeans comprising approximately 23%. The average length of stay in 1984-85 was approximately 7 weeks and

occupancy at 29 June 1985 was 2,531 compared with 2,577 at 30 June 1984. In addition to migrants and refugees in excess of 5,000 non-migrant casuals from sporting and educational bodies were accommodated for varying periods of time in migrant centres.

At the year end, migrants and refugees were in residence at the following migrant centres all of which are located in metropolitan areas: New South Wales Endeavour Westbridge

Victoria Enterprise Midway/Phillip

Queensland Wacol

South Australia Pennington

Western Australia Graylarids

Tasmania Mount Saint Canice

Northern Territory Tamarind

Post-arrival settlement programs continue to be provided through the Department of Immigration & Ethnic Affairs at Eastbridge, Cabramatta and Fairy Meadow. The migrant centre network has recently been the subject of review. As a result of that review the Government decided that four centres would be vacated in 1985-86 and that new-style centres comprising self-contained units with their own kitchens and laundries will be constructed at Pennington in Adelaide and Wacol in Brisbane.

Financial Results were:

1985 1984

$ $

Tariffs and Other Income 5 181 445 4 831 306

Commonwealth Government Contribution 12 843 367 15 003 486

Total Income 18 024 812 19 834 792

Less Cost of Operations 17 649 871 19 961 843

SurplusZ(Deficit) 374 941 (127 051)

Migrant flats

The migrant flat scheme provides transitory accommodation to those migrant centre residents who have completed on-arriva! courses and who need to be assisted with subsidised accommodation before they move into the community at large.

There are 378 fully-furnished, self-contained two and three bedroom flats located in mainland cities as follows:

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Sydney Melbourne Perth Adelaide Brisbane

116 104 96 50

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Total 378

These flats are comparable in size, and standard, to those provided by State housing authorities. They are located to give convenient access to shops, schools and public transport and are reasonably near centres of employment. In January 1984, the flats policy was amended to entitle unemployed refugees to occupy flats. Unemployed refugees were effectively disqualified under the

previous policy because they could not afford the rents. The average occupancy of the flats in 1984-85 was 88.1 % compared to 89.4% in the previous year. The decline in revenue in 1984-85 was partly caused by the lower occupancy but was mainly due to a greater proportion of unemployed residents who are charged concessional rents.

Financial results were:

1985 1984

Income from rentals Commonwealth Government Contribution

$

872 264 223 953

$

930 584

Total Income Less Cost of Operations

1 096 217 1 096 217

930 584 887 313

Commonwealth Government charge for interest on capital invested and use of assets — 43 271

Personnel

A chart showing the Company’s Senior Management Organisation and a list of names of Senior Officers of the Company are at pages 22 and 23. Total employment both full and part-time employees was 1293 at 29 June 1985, compared to 1369 at 30 June 1984.

As a means of encouraging employees to identify with the Company an illustrated staff magazine entitled “Company Tidings” is published quarterly and mementos recognising length of service are presented after 10 years’ service and thereafter every five years.

38-Hour Week

On 5 March 1985, the Full Bench of the Australian Conciliation & Arbitration Commission granted a 38-hour week to wages staff employed under the

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Company’s two main Awards. The introduction of a 38-hour week for the 386 staff employed under the CACS Limited (Migrant Centres) Award and the 431 staff covered by the CACS Limited (Food Service and Cafeteria Employees) Award will increase the wages cost of employing those categories of staff by an estimated average 4.2%.

Directors

There has been no change in the composition of the Board during the year under review.

Freedom of Information

The Freedom of Information Act came into operation on 1 December 1982. An access point is provided at the Company’s Central Office (Miller Street, North Sydney) at which members of the public may, between 9.00 am and 4.30 pm, Monday to Friday (except public holidays) make enquiries on Freedom of Information matters concerning the Company, may submit formal requests for access to documents, may inspect and purchase documents made available for

inspection pursuant to Section 9 of the Freedom of Information Act, and may inspect those to which access has been granted pursuant to other sections of the Act. The officers authorised to grant or refuse access to documents in the custody of the Company are the General Manager and the Assistant General Manager.

Three requests for access to information under the Freedom of Information Act were made of the Company in the year ended 29 June 1985. Two of the requests were granted in full while one request was wholly refused as the documents to which access was sought were exempt documents under Section 43 of the F.O.I Act.

Statutory Information

The Directors of Commonwealth Accommodation & Catering Services Limited submit herewith the Statement of the Financial Position and Statement of Operations and Deficit for the financial year ended 29 June 1985. In order to comply with the provision of the Companies (Victoria) Code, the Directors report as follows:

(1) The Directors in office at the date of this report are: J. J. Maunsell (Chairman) K. A. Bourke, A.M. R.G. Cook T. Crothers P.B. Gibson

M. Horder J.M. Wark, O.B.E. (2) The principal activities of the Company during the financial year under review were the operation, for the Commonwealth of Australia, of food

services and guest houses for Commonwealth employees, and, on behalf of the Department of Immigration & Ethnic Affairs, the provision of accommodation, catering and property maintenance services at migrant centres and the management of migrant flats. (3) The amount of deficit of the Company for the financial year was $144 546. (4) The amount and particulars of material transfers to and from reserves and

provisions are as follows:

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T ransfer Charges Net change*

$ $ $

Annual Leave 1 371 715 1 550 456 - 178 741

Annual Leave Loading 237 108 258 048 - 20 940

Long Service Leave 292 006 578 145 - 286 139

Insurance 290 245 38 912 + 251 333

Depreciation of Equipment 435 388 172 037 + 263 351

Doubtful Debts 17 386 7 908 + 9 478

Income Tax — 1 218 303 - 1 218 303

Maintenance — 83 203 - 83 203

‘ Amount by which the transfer to each provision exceeded the charge.

(5) No shares or debentures were issued during the year by the Company. (6) The Company is not permitted by its Memorandum to pay dividends to its members. (7) The Directors, before the Statements of Operations and Deficit and

Financial Position were made out, took reasonable steps to ascertain what action had been taken in relation to the writing off of bad debts and the making of provisions for doubtful debts, and to cause all known bad debts to be written off and adequate provision to be made for doubtful debts. (8) At the date of this report, the Directors are not aware of any circumstances

which would render the amount written off for bad debts or the amount of the provision for doubtful debts inadequate to any substantial extent. (9) The Directors, before the Statements of Operations and Deficit and Financial Position were made out, took reasonable steps to ascertain that

any current assets, other than debtors, were shown in the accounting records at a value equal to or below the amount that they might be expected to realise in the ordinary course of business. Where applicable the values of those assets have been written down to an amount which they might be expected to realise. (10) At the date of this report, the Directors are not aware of any circumstances

which would render the values attributed to current assets in the accounts misleading. (11) At the date of this report, there does not exist: (i) any charge on the assets of the Company that has arisen since the end

of the financial year which secures the liabilities of any other person; (ii) any contingent or other liability that has arisen since the end of the financial year. (12) No contingent or other liability has become enforceable, or is likely to

become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Company to meet its obligations as and when they fall due. (13) At the date of this report, the Directors are not aware of any circumstances

not otherwise dealt with in this report or the accounts that would render any amount stated in the accounts misleading. (14) Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than a benefit included in the

aggregate amount of emoluments received or due and receivable by the

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Directors shown in the accounts, or the fixed salary of a full-time employee of the Company), by reason of a contract made by the Company with the Director or with a firm of which he is a member, or with a company in which he has a substantial financial interest. This report is made in accordance with the resolution of the Board of Directors made pursuant to Section 270(1) of the Companies (Victoria) Code.

On behalf of the Directors

Date: 1st November 1985 Director

Director

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Commonwealth Accommodation and Catering Services Limited Statement of Financial Position — 29 June 1985

Note 1985 1984

$ $ $

Capital 11 Nil Nil

Commonwealth of Australia 12 11 793 807 11 503 983

Accumulated Deficits 7 022 773 6 878 227

Funds Employed 4 771 034 4 625 756

Represented by: Fixed Assets 13 2 874 353 3 055 809

Investments 14 2 164 065 1 896 410

Current Assets: Inventories 15 941 138 934 392

Debtors 16 1 671 490 1 211 771

Liquid Funds 17 6 194 917 8 608 010

Total Current Assets 8 807 545 10 754 173

Deduct: Current Liabilities Provisions 18 2 473 967 3 887 410

Creditors 19 2 636 281 3 112 778

Total Current Liabilities 5 110 248 7 000 188

3 697 297 3 753 985

8 735 715 8 706 204

Deduct: Non-Current Liabilities 18 3 964 681 4 080 448

Employment of Funds 4 771 034 4 625 756

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Commonwealth Accommodation and Catering Services Limited Statement of Operations and Deficit for year ended 29 June 1985

Note 1985 1984

$ $

Income Tariffs and Other Income 2 25 036 553 24 514 382

Commonwealth Government Contribution 3 14 718 387 16 189 773

Total Income 39 754 940 40 704 155

Cost of Operations 4-8 39 653 635 40 801 187

Commonwealth Government charge for interest on capital invested and use of assets 9 245 851 258 140

Deficit 144 546 355 172

Income Tax Adjustment in respect of prior years — 149 303

Deficit 144 546 504 475

Accumulated Deficits brought forward from previous years 6 878 227 6 373 752

Accumulated Deficits carried forward 7 022 773 6 878 227

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Commonwealth Accommodation and Catering Services Limited Statement of Sources and Applications of Funds

1985 1984

$ $ $ $

Sources of Funds Funds from Operations Surplus/( Deficit) before income Tax (144 546) (355 172)

Add items not involving outlay of funds: Depreciation of fixed assets Loss on Disposal of fixed 435 388 408 910

assets 26 730 34 401

Provisions for - Annual Leave 1 371 715 1 521 792

- Annual Leave Loading 237 108 328 162

- Long Service Leave 292 006 724 330

- Internal Insurance 290 245 253 303

- Amenities 6 784 2 659 976 — 3 270 898

2 515 430 2 915 726

Reduction in Assets: Current Assets - Liquid Funds 2 413 093

- Debtors — 1 759 679

- Inventories — 2 413 093 185 101 1 944 780

Proceeds from sale of fixed assets 33 281 1 749

Increase in current liabilities: - Creditors Increase in liability to

— 485 989

Commonwealth Government 289 824 616 508

5 251 628 5 964 752

Applications of Funds Increase in Current Assets: Current Assets - Debtors 459 719 _

- Liquid Funds — 2 626 585

- Inventories 6 746 466 465 2 626 585

Increase in Non-Current Assets: Fixed Assets 313 944 486 222

Investments 267 655 581 599 357 297 843 519

Charges against Provisions:

1 681 203 Annual Leave 1 550 456

Annual Leave Loading 258 048 281 931

Long Service Leave 578 145 471 547

Internal Insurance 38 912 51 843

Amenities — 8 124

Maintenance 83 203 —

Income Tax 1 218 303 3 727 067 — 2 494 648

Reduction in Liabilities Current Liabilities - Creditors 476 497 —

5 251 628 5 964 752

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Commonwealth Accommodation and Catering Services Limited Notes to, and forming part of, the Financial Statements

1 Statement of Accounting Policies

To assist in an understanding of the figures presented, the following summary explains the significant accounting policies which have been adopted in the preparation of the accounts. The accounts have been prepared in accordance with conventional historical

cost principles and have not been adjusted to take account of either changes in the general purchasing power of the dollar or in the prices of specific assets. Income Tax The Company does not adopt tax effect accounting.

Valuation of Fixed Assets and Investments Fixed assets and investments have been brought to account at cost. Losses on disposal of plant and equipment in the normal course of business are taken into account in costs of operations.

Depreciation of Fixed Assets The charge for depreciation of fixed assets has been determined as follows:

(a) “A” items of equipment, viz. durable, non-fixed equipment, are depreci­ ated at the standard recommended Taxation rate. (b) Amenities equipment such as billiard tables, television sets and minor sporting equipment, are written off when purchased. These items are

purchased from the provision for amenities and are not included as assets in the Statement of Financial Position although the ownership of the assets remains with the Company. (c) Fixed asset additions are depreciated from the beginning of the financial year following the date of acquisition.

Inventories — Valuation Policy (a) “ B” items of equipment, viz. linen, soft furnishings, etc. — only unissued items are taken into stock and are valued at average cost. (b) “C” items of equipment, viz. small expendable items — only unissued

items are taken into stock and are valued at average cost. (c) “ D” items of equipment, viz. crockery and cutlery — are taken into stock and are valued at average cost. (d) Food, fuel and expense supplies — are taken into stock at cost.

Provision for Employee Benefits Provision has been made in the accounts for benefits accruing to employees in relation to such matters as annual leave, annual leave loadings and long service leave. The provisions have been allocated into current and non-current portions, the current portion relating to the amount of provisions which it is expected will be paid in the ensuing twelve months.

Retirement Benefits Benefits for employees and their dependants on retirement, disability or death are provided through employee contributory Provident Fund and Common­ wealth Superannuation Fund. In respect of those employees for whom the Company contributes to the Commonwealth Superannuation Fund, the accounts do not reflect the possibility that the Company may have some additional liability in respect of its contributions to the Fund as the extent of the additional liability (if any) has not yet been determined. The contributions made

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by the Company to the Provident Fund and to the Commonwealth Super­ annuation Fund are charged against income. Insurance With the exception of workers’ compensation, public liability and most motor vehicle insurances the Company mainly carries its own insurance. Currently the

internal insurance risk is being re-evaluated and an adjustment to the provision may result. The annual amount set aside has been charged against income, and the provision carried forward is not expected to be paid in the ensuing twelve months. Funds supporting this provision are invested in Commonwealth securities, term deposits (I.B.D.), Telecom Australia Loan and Australian Resources Development Bank.

Migrant Group The contribution by the Commonwealth of Australia towards cost of maintaining migrant families is the difference between operating expenditures (but excluding amounts provided for doubtful debts, deferred liabilities, depreciation and any

losses arising on disposals of fixed assets) and tariffs charged plus other revenues. The surplus in migrant centres as a consequence for the current year is $374 941.

Financial Arrangements with the Commonwealth of Australia. Up to the end of 1984-85, to the extent that surpluses are earned in the migrant transitory flats or guest house operations, the Company is liable for:

(a) an interest charge of 5 per cent per annum in respect of funds advanced and the value of movable equipment provided by the Government; and (b) a charge of 5 per cent per annum on the value of land, buildings and fixtures for the use of such assets made available by the Government.

Conversely, in the event of a loss being incurred in either migranttransitory flats or guest house operations up to the end of 1984-85 the Commonwealth will make a contribution to the extent of the loss provided that the amount in respect of (a) and (b) shall not exceed the amount of any operating surplus earned by those

operations.

Other Activities Activities outside the principal operations of the Company were again under­ taken on behalf of the Commonwealth of Australia and others on a “no profit —no loss” basis and are not reflected in the Statement of Operations and Deficit for the year ended 29 June 1985. The aggregate amount of those activities was $1 999 217 ($2 197 264 in 1983-84) for Child Watching Service in Migrant Centres, Caretaking of Migrant Centres, Detention Centres — Services and Australian Federal Police Academy.

Management fees totalling $34 115 ($63 123 in 1983-84) in respect of these activities were earned by the Company and are included in the Statement of Operations and Deficit.

Capital Expenditure Expenditure made in respect of migrant centre buildings — ownership of which remains with the Commonwealth of Australia was:

1985 1984

$ $

Receipts for the year 216 011 423 513

Expenditure 257 880 407 310

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1985 1984

K

2 Tariffs and Other Income

$ $

Tariff charges, sales of food and meals 8 959 155 8 797 273

Income from Investments 769 131 704 395

Sales — Food Services 14 376 381 14 003 889

Migrant Transitory Flats rentals 872 264 930 584

Kiosk rentals Administrative expenses recovered and 16 507 15 118

management fees 34 115 63 123

Bad Debts Recovered 9 000 —

25 036 553 24 514 382

3 Commonwealth Government Contribution for the operations of: Migrant Centres 12 843 367 15 003 486

Migrant Flats 223 953 —

Food Services 1 651 067 1 186 287

14 718 387 16 189 773

The Commonwealth Government Contribution for the operation of food services in accordance with the formula used in past years to decide the Company’s entitlement should have been $3 248 571 for 1984-85, however, an amount of $1 597 504 was offset representing part of surpluses earned by the Company in previous years.

Had this abnormal offset not been made, the Company's Financial Result for the 1984-85 year would be a Surplus before Income Tax of $1 452 958 instead of the reported Deficit of $144 546. COST OF OPERATIONS INCLUDES ITEMS COVERED BY 4-8.

1985 1984

4 Directors’ Emoluments $ $

Emoluments received or due and receivable by: Directors other than those engaged in the full­ time employment of the Company Directors engaged in the full-time employment of the Company or the Commonwealth of Australia

55 841 46 963

Nil received no fees Nil

5 Auditor’s Remuneration Amounts received or due and receivable by the Auditor for: Auditing of Accounts 110 800 74 320

Other service No other benefits were received by the auditor from the Company.

Nil Nil

6 Depreciation of Plant and Equipment 435 388 408 910

1985 1984

7 Loss on Disposal of Plant and Equipment $ 26 730 $

34 401

8 Bad and Doubtful Debts Bad and doubtful debts have been written off, or provided for in cost of operations, in respect of trade debtors as follows: Written off against provision for doubtful debts 7 908 23 314

Increase in provision for doubtful debts charged to Statement of Operations and Deficit 17 386 16 289

9 Commonwealth Government charge for: • use of Commonwealth Assets • interest on advance by Commonwealth of 121 886 119 488

Australia 123 965 138 652

10 Income Tax No provision for Income Tax is considered necessary for the year ended 29 June 1985 as the tax loss for the year is estimated at $445 975 after allowing for provisions for insurance and employees’ leave deductible for income tax purposes amounting to $234 488 (not deductible 1983-84 $341 063).

Based on the tax loss not brought to account at 29 June 1985 the directors estimate that the income tax benefit that will be available for deduction from income tax in future years will be $218 607. This benefit will only be obtained if:

(a) the Company derives further assessable income of a nature and of an amount sufficient to enable the benefit from the deduction for the loss to be realised; (b) the Company continues to comply with the conditions for deductibility

imposed by the law; and (c) no charges in tax legislation adversely affect the Company in realising the benefit from the deduction for the loss.

1985 1984

11 Capital The capital of the Company is limited by subscribers’ guarantee

12 Commonwealth of Australia Funds provided for capital purchases and establishment purposes 13 Fixed Assets

Plant and Equipment at cost Deduct accumulated depreciation

$ $

18 18

11 793 807 11 503 983

6 106 751 6 024 856 3 232 398 2 969 047

Written Down Value 2 874 353 3 055 809

17

1985 1984

$ $

14 Investments — at cost Telecom Australia Loan 280 000 200 000

Commonwealth Bonds and Securities Commonwealth Bank of Australia term 280 000 280 000

deposits etc 1 374 065 1 186 410

Australian Resources Development Bank 230 000 230 000

2 164 065 1 896 410

The above investments are not listed for quotation on the stock market of a stock exchange.

15 Inventories (a) “ B” Items of equipment 184 289 175 808

(b) “C” Items of equipment 107 168 85 398

(c) “ D” Items of equipment 126 832 207 775

(d) Food, fuel and expense supplies 522 849 465 411

941 138 934 392

16 Debtors Boarders and Ex-Boarders 369 631 306 818

Less: Provision for Doubtful Debts 39 350 29 872

330 281 276 946

Government Departments 498 664 105 484

U.S. Navy — 19 378

Sundry Debtors and Prepayments 842 545 809 963

1 671 490 1 211 771

17 Liquid Funds Short term deposits 5 984 809 7 789 915

Cash at bank and in transit 144 741 743 188

Wages advance bank accounts 26 650 31 850

Change Floats and other advances 25 955 31 783

Petty Cash 12 762 11 274

6 194 917 8 608 010

18

1985 1984

$ $

18 Provisions During the year amounts have been set aside to provision accounts as follows: Annual leave 1 371 715 1 521 792

Annual leave loading 237 108 328 162

Long Service leave 292 006 724 330

Equipment Depreciation 435 388 408 910

Internal Insurance 290 245 253 303

No amounts have been withdrawn from provisions for purposes other than that for which they were provided. The amounts standing to the credit of provision accounts and not deducted from assets at balance date were as follows: Income Tax — 1 218 303

Annual leave 1 521 719 1 700 460

Annual leave loading 288 043 308 983

Long Service leave 2 570 917 2 857 056

Internal Insurance 2 018 724 1 767 392

Maintenance — 83 203

Amenities 39 245 32 461

6 438 648 7 967 858

Amounts which would in the ordinary course of events be payable within twelve months 2 473 967 3 887 410

Amounts not expected to be payable within twelve months being non-current liabilities 3 964 681 4 080 448

6 438 648 7 967 858

19 Creditors Interest on Commonwealth assets - Exmouth — 30 777

Trade Creditors and accruals 2 636 281 3 082 001

2 636 281 3 112 778

STATEMENT BY DIRECTORS

In accordance with a resolution of the directors pursuant to Section 269(9) of the Companies (Victoria) Code, we state that in the opinion of the directors:

a) the attached Statement of Operations and Deficit of the Company is drawn up so as to give a true and fair view of the deficit of the Company for the year ended 29 June 1985; b) the attached Statement of Financial Position of the Company is drawn up

so as to give a true and fair view of the state of affairs of the Company as at 29 June 1985; c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due; and d) the Accounts have been prepared in accordance with the Australian

Accounting Standards.

Dated this 1st day of November, 1985.

On behalf of the directors

20

L

7 November 1985

The Directors Commonwealth Accommodation and Catering Services Limited 54 Miller Street NORTH SYDNEY NSW 2060

Dear Sirs

Auditor’s Report to the Members of Commonwealth Accommodation and Catering Services Limited

I have audited the accompanying accounts being the statement of financial position, statement of operations and deficit, statement of sources and applica­ tions of funds, notes to and forming part of the financial statements and statement by Directors of Commonwealth Accommodation and Catering

Services Limited.

In accordance with section 285 of the Companies (Victoria) Code I report that in my opinion—

(a) the accompanying accounts, which have been prepared in accordance with the policies outlined in Note 1, are properly drawn up in accordance with the Code so as to give a true and fair view of— • the state of affairs of the Company at 29 June 1985 and of the deficit of the

Company for the period 1 July 1984 to 29 June 1985; and • the other matters required by section 269 of the Code to be dealt with in the accounts; and are in accordance with Australian Accounting Standards.

(b) the accounting records and other records and the registers required by that Code to be kept by the Company have been properly kept in accordance with the provisions of that Code.

Yours faithfully

J.V. MONAGHAN Auditor-General

21

Commonwealth Accommodation and Catering Services Limited

Senior Management Organisation

■ h

k

Migrant Operation

Vic./Tas. Manager

A C T. Manager

W.A. Manager

Old Manager

N.S.W. Manager

S.A. Manager

Senior Supply Officer

Board of Directors

General Manager

Personnel Manager Finance Manager and Secretary

Operations Manager Non-migrant

Works and Maintenance Manager

Assistant General Manager

Food Services and Guest Flouse Operations

2 2

MANAGEMENT

General Manager J.C. McFarland

Assistant General Manager R. E. Ward

Central Office Senior Management E.J. Burt: Finance Manager & Secretary J. P. Lyndon: Operations Manager (Non-Migrant) H.M. Melis: Works & Maintenance Manager

S. A. Newman: Senior Supply Officer K. Ridler-Dutton: Personnel Manager

State Managers R.J. Bishop: New South Wales G. A. Gould: Victoria/Tasmania H. Hodge: Australian Capital Territory

R.H. Jackson: South Australia J. Lequertier: Queensland J.B. Wolny: Western Australia

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OFFICES AS AT JULY 1985

Registered Office: Williamson Road, Maribyrnong, Vic. 3032. Telephone: (03) 317 8935

Central Office: 54-56 Miller Street, North Sydney, N.S.W. 2060 Postal: P.O. Box 231, North Sydney, N.S.W. 2060 Telephone: (02) 929 0211 Telegrams: Hostels Sydney Telex: AA 24822

State and Territory Offices:

AUSTRALIAN CAPITAL TERRITORY 210 Northbourne Avenue, Braddon, A.C.T. 2601, Telephone: (062) 48 7344 NEW SOUTH WALES Moverly Road, South Coogee, N.S.W. 2034, Telephone: (02) 344 6000 NORTHERN TERRITORY 12 Ross Smith Avenue, Darwin, N.T. 5790, Telephone: (089) 81 9966 QUEENSLAND 167 Eagle Street, Brisbane, Old. 4000, Telephone: (07) 221 6053 SOUTH AUSTRALIA Grand Junction Road, Pennington, S.A. 5013, Telephone: (08) 47 3480 TASMANIA

Migrant Services: C/- Convent of the Good Shepherd, Mt St Canice Avenue, Sandy Bay, Tas. 7005, Telephone: (002) 25 2918 VICTORIA Williamson Road, Maribyrnong, Vic. 3032, Telephone: (03) 317 8935 WESTERN AUSTRALIA

Lantana Avenue, Graylands, W.A. 6010, Telephone: (09) 384 4663

24