Additional Financial Information

The introduction of Australian International Financial Reporting Standards (AIFRS) has had a significant effect on the 2005/06 financial result.

Details are listed below:

A. Additional Expenses

i) Depreciation	$3,500,000
ii) Goodwill impairment	$1,983,000
iii) Reversal of amortised goodwill	($ 413,000)

i) Depreciation on Buildings – in previous years our accounting policy has been to value our major land & buildings every 3 years and hence we have not depreciated our buildings. This is no longer an option under AIFRS and depreciation on buildings for the 2005/06 year totalled $3,500,000.

ii) Under AIFRS Intangible assets are not amortised but their value is tested for impairment. Due to this change the amortisation expense since the 1/7/04 has been reversed ; the 2005/06 effect of this change was to reduce expenses by $413,000.

iii) The goodwill paid for Noakes Nursing Service with a deemed cost of $2,666,000 at 1/7/04 ( Cost of $3,018,000 less Accumulated amortisation to that date) was tested for impairment. The review was performed by an outside consultant and following that review the goodwill was written down to $683,000 and an impairment expense of $1,983,000 was incurred in the 2005/06 year.

B. Revenue Received not recorded in the Income Statement for 2005/06 $2,431,000

Government Aged Care Grants Income totalling $2,430,950 had been regarded as prepaid income up until the beginning of the 2005/06 year. Under AIFRS standards, however, this was regarded as income that should have been accounted in the year when it was actually received. As this was prior to 1/7/05 the Income could not be treated as revenue in 2005/06 but was taken up as an adjustment to retained earnings.

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