APPENDIX F

ESTIMATED OUTCOME FOR DISCONTINUED AGENCIES

RHODIUM ASSET SOLUTIONS LIMITED
Objectives
Rhodium Asset Solutions Limited (Rhodium) provides fleet management services to the ACT Government, in addition to private and Australian Government agencies.  
The financial estimates presented in this chapter reflect the Government's intention to finalise the sale of Rhodium by 30 June 2007.  However, the Government does not wish to pre-empt what the financial arrangements for the company will be, as the evaluation and negotiation processes are ongoing at the time of preparation of the Budget Papers.  As a result, Rhodium's assets and liabilities have been removed to reflect the sale of the company as a going concern.  This adjustment has been reflected as an expense in Rhodium's Operating Result.  Hence, the operating loss shown for the company in 2006-07 mainly reflects this transaction, rather than an underlying loss on operations.
Estimated Employment Level
	2006-07
Est.  Outcome	2007-08
Budget	
Staffing (FTE)	32	0	

Rhodium Asset Solutions 	
Operating Statement	
  2006-07			  2006-07	   2007-08		  2008-09	  2009-10	  2010-11		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		Income								
		Revenue								
12,310		User Charges - Non ACT Government	13,255	0	-100	0	0	0		
8,915		User Charges - ACT Government	9,402	0	-100	0	0	0		
192		Interest	183	0	-100	0	0	0		
366		Other Revenue	172	0	-100	0	0	0		
21,783		Total Revenue	23,012	0	-100	0	0	0		
		Gains								
0		Total Gains	0	0	-	0	0	0		
21,783		Total Income	23,012	0	-100	0	0	0		
		Expenses								
2,155		Employee Expenses	2,208	0	-100	0	0	0		
235		Superannuation Expenses	228	0	-100	0	0	0		
2,014		Supplies and Services	3,295	0	-100	0	0	0		
4,563		Depreciation and Amortisation	4,611	0	-100	0	0	0		
5,541		Borrowing Costs	5,543	0	-100	0	0	0		
5,035		Cost of Goods Sold	5,089	0	-100	0	0	0		
2,160		Other Expenses	2,460	0	-100	0	0	0		
21,703		Total Ordinary Expenses	23,434	0	-100	0	0	0		
80		Operating Result From Ordinary Activities	-422	0	100	0	0	0		
24		Income Tax Equivalent	0	0	-	0	0	0		
0		Restructure of Rhodium	5,334	0	-	0	0	0		
56		Operating Result	-5,756	0	100	0	0	0		

Rhodium Asset Solutions 	
Balance Sheet	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/07			as at 30/6/07	as at 30/6/08	   Var	as at 30/6/09	as at 30/6/10	as at 30/6/11		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
		Current Assets								
4,573		Cash and Cash Equivalents	0	0	-	0	0	0		
4,705		Receivables	0	0	-	0	0	0		
26,418		Other	0	0	-	0	0	0		
35,696		Total Current Assets	0	0	-	0	0	0		
		Non Current Assets								
12,849		Property, Plant and Equipment	0	0	-	0	0	0		
85		Intangibles	0	0	-	0	0	0		
198		Tax Assets	0	0	-	0	0	0		
49,451		Other	0	0	-	0	0	0		
62,583		Total Non Current Assets	0	0	-	0	0	0		
98,279		TOTAL ASSETS	0	0	-	0	0	0		
		Current Liabilities								
4,038		Payables	0	0	-	0	0	0		
4,692		Interest Bearing Liabilities	0	0	-	0	0	0		
24,851		Finance Leases	0	0	-	0	0	0		
327		Employee Benefits	0	0	-	0	0	0		
28		Other Provisions	0	0	-	0	0	0		
24		Income Tax Payable	0	0	-	0	0	0		
33,960		Total Current Liabilities	0	0	-	0	0	0		
		Non Current Liabilities								
9,628		Interest Bearing Liabilities	0	0	-	0	0	0		
49,457		Finance Leases	0	0	-	0	0	0		
54		Employee Benefits	0	0	-	0	0	0		
509		Other Provisions	0	0	-	0	0	0		
59,648		Total Non Current Liabilities	0	0	-	0	0	0		
93,608		TOTAL LIABILITIES	0	0	-	0	0	0		
4,671		NET ASSETS	0	0	-	0	0	0		
		REPRESENTED BY FUNDS EMPLOYED								
4,671		Accumulated Funds	0	0	-	0	0	0		
4,671		TOTAL FUNDS EMPLOYED	0	0	-	0	0	0		

Rhodium Asset Solutions 	
Cash Flow Statement	
  2006-07			  2006-07	   2007-08		  2008-09	  2009-10	  2010-11		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		CASH FLOWS FROM OPERATING ACTIVITIES								
		Receipts								
21,882		User Charges	19,948	0	-100	0	0	0		
192		Interest Received	159	0	-100	0	0	0		
22,074		Operating Receipts	20,107	0	-100	0	0	0		
		Payments								
2,276		Related to Employees	2,361	0	-100	0	0	0		
3,117		Related to Supplies and Services	4,335	0	-100	0	0	0		
5,541		Borrowing Costs	5,171	0	-100	0	0	0		
8,569		Other	6,697	0	-100	0	0	0		
19,503		Operating Payments	18,564	0	-100	0	0	0		
2,571		NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES	1,543	0	-100	0	0	0		
		CASH FLOWS FROM INVESTING ACTIVITIES								
		Receipts								
2,545		Proceeds from Sale of Property, Plant & Equipment	2,523	0	-100	0	0	0		
2,545		Investing Receipts	2,523	0	-100	0	0	0		
		Payments								
5,700		Purchase of Property, Plant and Equipment	8,942	0	-100	0	0	0		
5,700		Investing Payments	8,942	0	-100	0	0	0		
-3,155		NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES	-6,419	0	100	0	0	0		
		CASH FLOWS FROM FINANCING ACTIVITIES								
		Receipts								
74,792		Borrowings Received	71,940	0	-100	0	0	0		
74,792		Financing Receipts	71,940	0	-100	0	0	0		
		Payments								
74,488		Repayment of Borrowings	71,128	0	-100	0	0	0		
0		Payments of Transferred Cash Balances	917	0	-100	0	0	0		
74,488		Financing Payments	72,045	0	-100	0	0	0		
304		NET CASH INFLOW/(OUTFLOW) FROM FINANCING ACTIVITIES	-105	0	100	0	0	0		
-280		NET INCREASE/(DECREASE) IN CASH HELD	-4,981	0	100	0	0	0		
4,853		CASH AT BEGINNING OF REPORTING PERIOD	4,981	0	-100	0	0	0		
4,573		CASH AT THE END OF THE REPORTING PERIOD	0	0	-	0	0	0		

Rhodium Asset Solutions 	
Statement of Changes in Equity	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/07			as at 30/6/07	as at 30/6/08	   Var	as at 30/6/09	as at 30/6/10	as at 30/6/11		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
4,615		Opening Balance	7,626	0	-100	0	0	0		
		Accumulated Funds								
0		Net Effect of a Correction of an Error	-1,870	0	100	0	0	0		
56		Operating Result for the Period	-5,756	0	100	0	0	0		
		Reserves								
56		Total Income And Expense For The Period	-7,626	0	100	0	0	0		
		Transactions Involving Equity Holders Affecting Accumulated Funds								
4,671		Closing Balance	0	0	-	0	0	0		
Notes to Budget Statements
The decrease in the 2007‑08 Budget from the 2006‑07 estimated outcome is due to the expectation that Rhodium will be sold by 30 June 2007.
Other significant variations are as follows:
Operating Statement
•	user charges – non ACT Government:  the increase of $0.945 million in the 2006‑07 estimated outcome from the original budget is due to higher than expected revenue from operations resulting from a strong leasing market and an increase in the number of novated leases.
•	user charges – ACT Government:  the increase of $0.487 million in the 2006‑07 estimated outcome from the original budget relates mainly to an increase in the number of novated leases with ACT Government employees.
•	other revenue:  the decrease of $0.194 million in the 2006‑07 estimated outcome from the original budget is mainly due to reduced revenue from the disposal of used vehicles due to market conditions.
•	supplies and services:  the increase of $1.281 million in the 2006‑07 estimated outcome from the original budget is due to the engagement of contract staff and higher professional fees relating to legal advice on the company sale process, specialist services for information technology infrastructure, financial and records management consultancy advice, and audit services.
•	restructure of Rhodium:  the $5.334 million reflects the disposal of the assets and liabilities following the planned sale of the company by 30 June 2007.
Balance Sheet
Due to the anticipated sale, Rhodium is expected to cease trading by 30 June 2007 and therefore a nil balance sheet has been reported and the proceeds accounted for as an impact reported on the Operating Statement as explained above.
Cash Flow Statement
The major variations in the 2006‑07 estimated outcome from the original budget and the 2007‑08 Budget are explained within the Operating Statement above.
Other significant variations are as follows:
•	purchase of property, plant and equipment:  the increase of $3.242 million in the 2006‑07 estimated outcome from the original budget is due to a greater focus on operating leases and the profile of equipment purchased within this category, combined with price increases throughout the year.
•	repayment of borrowings:  the decrease of $3.360 million in the 2006‑07 estimated outcome from the original budget is due to lower than expected repayments related to residual values of maturing vehicles and other leases.
•	payment of transferred cash balances:  the increase of $0.917 million in the 2006‑07 estimated outcome from the original budget reflects the removal of cash assets as part of the sale related adjustments to Rhodium’s financial statements noted above.
Statement of Changes in Equity
•	net effect of a correction of an error:  the decrease $1.870 million in the 2006‑07 estimated outcome from the original budget relates to the reduction in equity recorded following the results of audits into previous years’ account balances and the requirement under Accounting Standards to bring these results to account in the current year.