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Chapter 6

Financial Overview

This chapter describes the DMO business and accounting model, and provides an assessment of the DMO financial performance in 2005–06 against budget projections.

Financial Overview

DMO's Financial Position

The Balance Sheet sets out the DMO's assets, liabilities and equity as at 30 June 2006. Its purpose is to provide a snapshot of the long-term sustainability of the organisation. Table 6.3 provides details.

Explanation of Major Variations

The reduction in equity is due primarily to asset ownership changes associated with the transfer of commercial vehicles from the DMO back to Defence (-$216.8m).

Other movements in the Balance Sheet include:

  • Assets
    • Receivables ($116.1m) – the increase is a measure of the work to be performed for Defence and other government agencies as at 30 June 2006.
  • Non-financial Assets
    • Specialist Military Equipment (-$8,314.2m) - a transfer of the asset 'Specialist Military Equipment' (assets under construction) to Defence for existing approved projects.
    • Infrastructure, plant and equipment (-$229.5m) – variation is due primarily to the transfer of commercial vehicles from DMO back to Defence (-$216.8m).
    • Intangibles (-$69.6m) – due to their transfer back to Defence.
  • Payables
    • Suppliers ($115.8m) and other Payables ($175.6m) – these are associated with activities yet to be performed for Defence and other government agencies, and outstanding payments as at 30 June 2006.
    • Assets Under Construction Payable (-$8,314.2m) – as the asset 'Specialist Military Equipment' is transferred back to Defence, this corresponding liability, which was to recognise the DMO's obligation to provide completed assets to Defence, has been removed from the Balance Sheet.
Table 6.3 Balance Sheet as at 30 June 2006
  2005–06
  Budget Estimate
$'000		 Revised Estimate
$'000		 Actual Result
$'000		 Variance(1)
$'000
ASSETS
Financial Assets
Cash 50,270 30,176 23,581 –6,595
Receivables 84,404 137,874 253,948 116,074
Total Financial Assets 134,674 168,050 277,529 109,474
Non-Financial Assets
Infrastructure, Plant & Equipment 242,727 240,525 11,018 –229,507
Intangibles 81,211 77,562 7,999 –69,563
Inventories 4,750,511 – –
Special Military Equipment – 8,314,212 – 8,314,212
Other Non-Financial Assets 595,000 602,663 898,794 296,131
Total Non-Financial Assets 5,669,449 9,234,962 917,811 –8,317,151
Total Assets 5,804,123 9,403,012 1,195,340 –8,207,672
LIABILITIES
Provisions
Employees 121,390 117,214 125,804 8,590
Total Provisions 121,390 117,214 125,804 8,590
Payables
Suppliers 591,704 624,703 740,526 115,823
Other Payables 269,369 38,816 214,465 175,649
Assets under construction Payable – 8,314,212 – –8,314,212
Total Payables 861,073 8,977,731 954,991 –8,022,740
Total Liabilities 982,463 9,094,945 1,080,795 –8,014,150
NET ASSETS 4,821,660 308,067 114,545 –193,522
EQUITY
Contributed Equity 4,821,660 308,067 105,767 –202,300
Retained Surplus or Accumulated Deficits 8,778 8,778
TOTAL EQUITY 4,821,660 308,067 114,545 –193,522

Notes

  1. The variation is between actual result as disclosed in the 2005–06 audited financial statements and the revised budget published in the Portfolio Additional Estimates Statements 2005–06.

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