Notes 8 to 16

​DEPARTMENT OF AGRICULTURE, FISHERIES AND FORESTRY
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

for the period ended 30 June 2012

Note 8. Interest Bearing Liabilities


2012 2011

$'000 $'000
Note 8A: Leases

Finance leases  3 393  4 264
Total finance leases  3 393  4 264

Payable:


Within one year:

Minimum lease payments  2 151  2 248
Deduct: future finance charges ( 243) ( 329)
In one to five years:

Minimum lease payments  1 590  2 527
Deduct: future finance charges ( 105) ( 182)
Finance leases recognised on the balance sheet  3 393  4 264

Finance leases are for computer equipment provided under an outsourced IT service contract. The leases are for periods of four years. The department does not guarantee the residual value of the leased assets. The interest rate implicit in the lease averaged 6.00% (2011: 6.00%). There are no contingent rentals.

Note 8B: Other Interest Bearing Liabilities

Other  11 574  12 738
Total other interest bearing liabilities  11 574 12 738

Other interest bearing liabilities are expected to be settled in:


No more than 12 months  1 230  1 230
More than 12 months  10 344  11 508
Total other interest bearing liabilities  11 574 12 738

Note 9. Provisions


2012 2011

$'000 $'000
Note 9A: Employee Provisions

Leave  134 796  118 341
Separations and redundancies  3 224 354
Other 457 -
Total employee provisions  138 477  118 695

Employee provisions are expected to be settled in:


No more than 12 months  118 641  97 044
More than 12 months  19 836  21 651
Total employee provisions  138 477  118 695

Note 9B: Other Provisions


Provision for restoration obligations  3 886  3 571
Provision for operating lease - Straightlining  17 139  15 147
Total other provisions  21 025 18 718



Other provisions are expected to be settled in:

No more than 12 months  2 842  1 404
More than 12 months  18 183  17 314
Total other provisions  21 025 18 718


Provision
for
restoration
Operating
lease provision
Total

$’000 $’000 $’000
Carrying amount 1 July 2011  3 571  15 147  18 718
Additional provisions made 147  2 969  3 116
Amounts used - ( 977) ( 977)
Unwinding of discount or change in discount rate 168 - 168
Closing balance 2012  3 886  17 139  21 025

The department currently has 34 (2011: 31) agreements for the lease of premises which have provisions requiring the premises to be restored to their original condition at the conclusion of the lease. The department has made a provision to reflect the present value of this obligation.

Note 10. Restructuring

At 30 June 2012, the department had no restructuring disclosures.

At 30 June 2011, the department made the following disclosures:

As a result of a restructuring of administrative arrangements, the department relinquished responsibility for the following functions:

  • The food industry policy function transferred on 8 November 2010 to the Department of Innovation, Industry, Science and Research.

The administrative functions associated with the Queensland Fisheries Joint Authority, the Western Australian Fisheries joint Authority, the Northern Territory Fisheries Joint Authority and the Torres Strait Protected Zone Joint Authority transferred on 25 October 2010 to the Australian Fisheries Management Authority.

There were no assets and liabilities transferred to the Department of Innovation, Industry, Science and Research by the department during the 2010-11 financial year.

There were no assets and liabilities transferred to the Australian Fisheries Management Authority by the department during the 2010-11 financial year.

Administered Restructuring

As a result of a restructuring of administrative arrangements, the department relinquished responsibility for the following functions:

  • The Regional Food Producer’s Innovation and Productivity Program transferred on 8 November 2010 to the Department of Innovation, Industry, Science and Research.

There were no assets and liabilities transferred to the Department of Innovation, Industry, Science and Research by the department during the 2010-11 financial year.

Note 11. Cash Flow Reconciliation


2012 2011

$'000 $'000
Reconciliation of cash and cash equivalents as per Balance Sheet to Cash Flow Statement


Cash and cash equivalents as per:


Cash flow statement  3 432  6 242
Balance sheet  3 432  6 242
Difference - -

Reconciliation of net cost of services to net cash from operating activities:

Net cost of services ( 370 025) ( 343 137)
Add revenue from Government  327 536  353 995
Less interest on investing activities ( 980) ( 1 110)

Adjustments for non-cash items


Gain on derecognition of financial liability 10 ( 269)
Gain on derecognition of make good liability - ( 150)
Net gains from sale of assets ( 1) ( 18)
Finance costs on investing activities 440 522
Depreciation and amortisation  14 770  13 832
Net write-down of assets  2 153 851
Departmental capital budget ( 6 371) -
Other expenses not requiring cash ( 235) ( 150)

Changes in assets / liabilities


(Increase) / decrease in net receivables  5 168 ( 16 901)
Increase in inventories ( 222) ( 1 471)
Decrease in other financial assets 580  1 163
(Increase) / decrease in other non-financial assets ( 1 454) 489
Increase in employee provisions  19 782  4 742
Increase / (decrease) in supplier payables ( 3 088)  1 511
Increase / (decrease) in other payables  14 311 ( 571)
Increase in other provisions  2 307  2 515
Net cash from operating activities  4 681 15 843

Note 12. Contingent Assets and Liabilities

Quantifiable Contingencies

There are no quantifiable contingent assets or liabilities (2011: Nil).

Unquantifiable Contingencies

At 30 June 2012, the department was pursuing a number of legal claims for damages / costs. The department is expecting to succeed in claims against a variety of parties, although the cases are continuing. It is not possible to estimate the amounts of any eventual payments which might be recovered in relation to these claims.

Significant Remote Contingencies

At 30 June 2012, the department was involved in a number of legal claims for damages / costs as defendant or plaintiff. Insufficient progress or information for each of the respective claims prevents further commentary as to outcome or amount.

At 30 June 2012, the department was a stakeholder in the Cooperative Research Centre for National Plant Biosecurity. This agreement ended 30 June 2012, and a similar agreement was entered into where the department is a stakeholder in the Plant Biosecurity Cooperative Research Centre. The conditions of the agreement are such that should one of the stakeholders withdraw from the agreement, the other stakeholders will contribute in equal portions the withdrawn stakeholder’s contribution. The agreement runs for a period of 5 years with the department’s exposure reducing annually. The liability is considered to be a remote contingency as it is uncertain as to whether the department will be required to make further contributions.

The department has provided a number of indemnities pursuant to various contracts. These indemnities are remote in nature.

There were no bank guarantees held by the department at 30 June 2012 (2011: 3).

Note 13. Senior Executive Remuneration

Note 13A: Senior Executive Remuneration Expense for the Reporting Period


2012 2011

$ $
Short-term employee benefits:

Salary 16 013 005 15 185 871
Annual leave accrued 1 261 397 1 188 135
Performance bonuses - -
Motor vehicle and other allowances 2 924 542 2 171 614
Total short-term employee benefits  20 198 944  18 545 620

Post-employment benefits:


Superannuation 2 825 150 2 592 758
Total post-employment benefits  2 825 150  2 592 758

Other long-term benefits:


Long-service leave  405 419  381 869
Total other long-term benefits 405 419 381 869

Termination benefits
 420 999  163 625
Total employment benefits  23 850 512  21 683 872

Notes:

  1. Note 13A was prepared on an accrual basis.
  2. Note 13A excludes acting arrangements and part-year services where total remuneration expensed for a senior executive was less than $150 000.

Note 13B: Average Annual Remuneration Packages and Bonus Paid for Substantive Senior Executives as at the end of the Reporting Period


2012
Average annual reportable remuneration1 Senior
executives
Reportable
salary2
Contributed
superannuation3
Reportable
allowances4
Bonus paid5 Total

No. $ $ $ $ $
Total remuneration (including part-time arrangements):





less than $150,000 31 64,083 13,771  -  -  77 854
$150,000 to $179,999 8 123,937 37,999  -  -  161 936
$180,000 to $209,999 31 165,844 29,325  - 90  195 259
$210,000 to $239,999 21 186,014 34,951  -  -  220 965
$240,000 to $269,999 10 211,031 45,394  -  -  256 425
$270,000 to $299,999 3 231,101 49,727  -  -  280 828
$300,000 to $329,999 1 287,393 18,583  -  -  305 976
$330,000 to $359,999 3 303,435 49,094  -  -  352 529
$540,000 to $569,999 1 408,408 133,597  -  -  542 005
Total 109




Notes:

1 This table reports substantive senior executives who received remuneration during the reporting period. Each row is an averaged figure based on headcount for individuals in the band.

2 'Reportable salary' includes the following:

  1. gross payments (less any bonuses paid, which are separated out and disclosed in the 'bonus paid' column);
  2. reportable fringe benefits (at the net amount prior to 'grossing up' to account for tax benefits); and
  3. exempt foreign employment income.

3 The 'contributed superannuation' amount is the average actual superannuation contributions paid to staff in that reportable remuneration band during the reporting period, including any salary sacrificed amounts, as per individuals’ payment summaries.

4 'Reportable allowances' are the average actual allowances paid as per the 'total allowances' line on individuals' payment summaries.

5 ' Bonus paid' represents average actual bonuses paid during the reporting period in that reportable remuneration band. The 'bonus paid' within a particular band may vary between financial years due to various factors such as individuals commencing with or leaving the entity during the financials year.

6 Various salary sacrifice arrangements were available to senior executives including superannuation, motor vehicle and expense payment fringe benefits. Salary sacrifice benefits are reported in the 'reportable salary' column, excluding salary sacrificed superannuation, which is reported in the 'contributed superannuation' column.


2011
Average annual reportable remuneration1 Senior executives Reportable salary2 Contributed superannuation3 Reportable allowances4 Bonus paid5 Total

No. $ $ $ $ $
Total remuneration (including part-time arrangements):





less than $150,000 27  69 452  11 660 - 168  81 280
$150,000 to $179,999 10  141 629  27 613 - -  169 242
$180,000 to $209,999 45  168 087  27 157 - 44  195 288
$210,000 to $239,999 13  186 756  33 264 - -  220 020
$240,000 to $269,999 9  197 855  57 949 - -  255 804
$270,000 to $299,999 1  212 362  69 730 - -  282 092
$300,000 to $329,999 1  277 016  46 939 - -  323 955
$330,000 to $359,999 1  290 506  47 124 - -  337 630
$480,000 to $509,999 1  373 221  129 561 - -  502 782
Total 108




Notes:

1 This table reports substantive senior executives who received remuneration during the reporting period. Each row is an averaged figure based on headcount for individuals in the band.

2 'Reportable salary' includes the following:

  1. gross payments (less any bonuses paid, which are separated out and disclosed in the 'bonus paid' column);
  2. reportable fringe benefits (at the net amount prior to 'grossing up' to account for tax benefits); and
  3. exempt foreign employment income.

3 The 'contributed superannuation' amount is the average actual superannuation contributions paid to staff in that reportable remuneration band during the reporting period, including any salary sacrificed amounts, as per individuals’ payment summaries.

4 'Reportable allowances' are the average actual allowances paid as per the 'total allowances' line on individuals' payment summaries.

5 ' Bonus paid' represents average actual bonuses paid during the reporting period in that reportable remuneration band. The 'bonus paid' within a particular band may vary between financial years due to various factors such as individuals commencing with or leaving the entity during the financials year.

6 Various salary sacrifice arrangements were available to senior executives including superannuation, motor vehicle and expense payment fringe benefits. Salary sacrifice benefits are reported in the 'reportable salary' column, excluding salary sacrificed superannuation, which is reported in the 'contributed superannuation' column.

Note 13C: Other Highly Paid Staff


2012
Average annual reportable remuneration1 Staff Reportable salary2 Contributed superannuation3 Reportable allowances4 Bonus paid5 Total

No. $ $ $ $ $
Total remuneration (including part-time arrangements):





$150,000 to $179,999 45  137 665  21 812 - 561  160 038
$180,000 to $209,999 10  166 277  19 187 - -  185 464
$240,000 to $269,999 1  224 953  18 758 - -  243 711
Total 56




Notes:

1 This table reports staff:

  1. who were employed by the department during the reporting period;
  2. whose reportable remuneration was $150,000 or more for the financial period; and
  3. were not required to be disclosed in Tables A, B or director disclosures.

Each row is an averaged figure based on headcount for individuals in the band.

2 'Reportable salary' includes the following:

  1. gross payments (less any bonuses paid, which are separated out and disclosed in the 'bonus paid' column);
  2. reportable fringe benefits (at the net amount prior to 'grossing up' to account for tax benefits); and
  3. exempt foreign employment income.

3 The 'contributed superannuation' amount is the average actual superannuation contributions paid to staff in that reportable remuneration band during the reporting period, including any salary sacrificed amounts, as per individuals' payment summaries.

4 'Reportable allowances' are the average actual allowances paid as per the 'total allowances' line on individuals' payment summaries.

5 ' Bonus paid' represents average actual bonuses paid during the reporting period in that reportable remuneration band. The 'bonus paid' within a particular band may vary between financial years due to various factors such as individuals commencing with or leaving the entity during the financials year.

6 Various salary sacrifice arrangements were available to senior executives including superannuation, motor vehicle and expense payment fringe benefits. Salary sacrifice benefits are reported in the 'reportable salary' column, excluding salary sacrificed superannuation, which is reported in the 'contributed superannuation' column.


2011
Average annual reportable remuneration1 Staff Reportable salary2 Contributed superannuation3 Reportable allowances4 Bonus paid5 Total

No. $ $ $ $ $
Total remuneration (including part-time arrangements):





$150,000 to $179,999 29  135 575  22 363 57 717  158 712
$180,000 to $209,999 1  159 696  20 787 - -  180 483
Total 30




Notes:

1 This table reports staff:

  1. who were employed by the department during the reporting period;
  2. whose reportable remuneration was $150,000 or more for the financial period; and
  3. were not required to be disclosed in Tables A, B or director disclosures.

Each row is an averaged figure based on headcount for individuals in the band.

2 'Reportable salary' includes the following:

  1. gross payments (less any bonuses paid, which are separated out and disclosed in the 'bonus paid' column);
  2. reportable fringe benefits (at the net amount prior to 'grossing up' to account for tax benefits); and
  3. exempt foreign employment income.

3 The 'contributed superannuation' amount is the average actual superannuation contributions paid to staff in that reportable remuneration band during the reporting period, including any salary sacrificed amounts, as per individuals' payment summaries.

4 'Reportable allowances' are the average actual allowances paid as per the 'total allowances' line on individuals' payment summaries.

5 ' Bonus paid' represents average actual bonuses paid during the reporting period in that reportable remuneration band. The 'bonus paid' within a particular band may vary between financial years due to various factors such as individuals commencing with or leaving the entity during the financials year.

6 Various salary sacrifice arrangements were available to senior executives including superannuation, motor vehicle and expense payment fringe benefits. Salary sacrifice benefits are reported in the 'reportable salary' column, excluding salary sacrificed superannuation, which is reported in the 'contributed superannuation' column.

Note 14. Remuneration of Auditors


2012 2011

$'000 $'000
Financial statement audit services were provided free of charge to the department by the Australian National Audit Office (ANAO).


The fair value of the services provided:


Financial Statement Audit Services 495 598
Total fair value of services provided 495 598

No other services were provided by the Auditor-General.

In 2011–12 effective 29 February 2012, the Finance Minister abolished the business operations of the National Residue Survey and the Australian Quarantine Inspection Service for financial statements reporting purposes. Only one set of financial statements is now required to be prepared and audited by the ANAO.

Note 15. Financial Instruments


2012 2011

$'000 $'000
Note 15A: Categories of Financial Instruments

Financial Assets

Held-to-maturity:

Negotiable securities - certificates of deposit  15 000  17 000
Cash and cash equivalents  3 432  6 242
Total  18 432   23 242

Receivables:


Trade receivables  20 029  14 141
Total  20 029   14 141

Carrying amount of financial assets
 38 461   37 383

Financial Liabilities


At amortised cost:

Trade creditors  5 024  8 089
Finance leases  3 393  4 264
Total  8 417   12 353

Carrying amount of financial liabilities
 8 417   12 353
Note 15B: Net Income and Expense from Financial Assets

Held-to-maturity

Interest revenue 980  1 110
Net gain held-to-maturity   980   1 110

Receivables


Interest revenue 285   256
Net gain receivables   285    256

Net gain from financial assets
 1 265   1 366

The net income from financial assets not at fair value from profit and loss is $1 205 000 (2011 $1 366 000).

Note 15C: Net Income and Expense from Financial Liabilities


Financial liabilities - at amortised cost

Interest expense 272   348
Net gain financial liabilities - at amortised cost   272    348

Net gain from financial liabilities
  272    348

The net expense from financial liabilities not at fair value from profit and loss is $272 000 (2011: $ 348 000).

Note 15D: Fair Value of Financial Instruments





Carrying Fair Carrying Fair

amount value amount value

2012 2012 2011 2011

$'000 $'000 $'000 $'000
Financial Liabilities



Finance Leases  3 393  3 393  4 264  4 264
Total  3 393  3 393   4 264   4 264

Financial assets

The net value of all monetary financial assets approximates their carrying amounts.

Financial liabilities

The net fair value of all monetary financial liabilities is approximated by their carrying amounts. Trade creditors and accruals are recognised when a present obligation to another party is entered into and the amount of the liability can be reliably measured. Finance leases are recognised at the present value of the minimum lease payments at the beginning of the lease. The discount rate is the incremental borrowing rate.

AASB 7 Financial Instruments: Disclosures introduced a three-level hierarchy for making fair value measurements. All of the department's financial instruments are disclosed as level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities.

Note 15E: Credit Risk

The department is exposed to minimal credit risk as receivables are cash and trade receivables. The maximum exposure to credit risk is the risk that arises from potential default of a debtor. This amount is equal to the total amount of the trade receivables (2012: $20 029 000 and 2011: $14 141 000). The department has assessed the risk of the default on payment and has allocated $667 000 in 2012 ($661 000 in 2011) to an impairment allowance account.

The department has policies and procedures providing guidance to employees on debt recovery techniques.

The following table illustrates the entity's gross exposure to credit risk, excluding any collateral or credit enhancements.





2012 2011




$'000 $'000
Financial assets




Negotiable securities - certificate of deposit  

15 000 17 000
Cash and cash equivalents


3 432 6 242
Trade receivables


20 029 14 141
Total


38 461 37 383

Financial liabilities





Trade creditors


5 024 8 089
Finance leases


3 393 4 264
Total


8 417 12 353

Credit quality of financial instruments not past due or individually determined as impaired



Not past due nor impaired Not past due nor impaired Past due or impaired Past due or impaired


2012 2011 2012 2011


$'000 $'000 $'000 $'000
Negotiable securities - certificate of deposit 15 000 17 000 - -
Cash and cash equivalents
3 432 6 242 - -
Trade receivables
11 521 9 790 8 508 4 351
Total
29 953 33 032 8 508 4 351

Ageing of financial assets that were past due but not impaired for 2012



0 to 30 31 to 60 61 to 90 90+

days days days days Total

$'000 $'000 $'000 $'000 $'000
Trade receivables 5 826 1 045 537 1 100 8 508
Total 5 826 1 045 537 1 100 8 508

Ageing of financial assets that were past due but not impaired for 2011




0 to 30 31 to 60 61 to 90 90+

days days days days Total

$'000 $'000 $'000 $'000 $'000
Trade receivables 2 108 667 231 684 3 690
Total 2 108 667 231 684 3 690

Note 15F: Liquidity Risk

The financial liabilities of the department are trade creditors and finance leases. The exposure to liquidity risk is based on the notion that the department will encounter difficulty in meeting its obligations associated with financial liabilities. This is highly unlikely due to appropriation funding and mechanisms available to the department, and internal policies and procedures put in place to ensure there are appropriate resources to meet financial obligations.

The department is appropriated funding from the Australian Government. The department manages its budget to ensure it has adequate funds to meet payments as they fall due. In addition, the department has policies in place to ensure timely payments are made when due and has no past experience of default.

Maturities for non-derivative financial liabilities 2012




On Within 1 1 to 2 2 to 5 > 5

demand year years years years Total

$'000 $'000 $'000 $'000 $'000 $'000
Trade creditors  -  5 024 - - -  5 024
Finance leases  -  1 908  1 485 - -  3 393
Total -  6 932  1 485 - -  8 417

Maturities for non-derivative financial liabilities 2011





On Within 1 1 to 2 2 to 5 > 5

demand year years years years Total

$'000 $'000 $'000 $'000 $'000 $'000
Trade creditors -  8 089 - - -  8 089
Finance leases -  1 919  2 345 - -  4 264
Total -   10 008   2 345 - -   12 353

Note 15G: Market Risk

The department holds basic financial instruments that do not expose the department to certain market risks. The department is not exposed to 'currency risk' or 'other price risk'.

The only interest-bearing items on the balance sheet are negotiable securities - certificates of deposit and finance leases. All bear interest at a fixed interest rate and will not fluctuate due to changes in the market interest rate.

Note 16. Financial Assets Reconciliation



2012 2011


$'000 $'000
Financial assets Notes


Total financial assets as per balance sheet

 185 271  195 829
Less: non-financial instrument components


Appropriation receivable 5B  134 254  146 975
Other receivables 5B  5 941  4 270
Impairment allowance account 5B (  667) (  661)
Accrued revenue and interest 5D  7 282  7 862
Total non-financial instrument components
 146 810  158 446
Total financial assets as per financial instruments note 15A  38 461  37 383
Last reviewed: 4 November 2019
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