Chapter 4: Financial performance—Annual Report 2014–15

Summary of financial performance

Tables 16 and 17 provide an overview of APVMA financial performance for 2014–15. Full details are in the audited financial statements on the following pages.

Income

Our total income for this financial year was $29.741 million (Table 16), an increase of $1.466 million (5.18 per cent) from the previous year. This increase is largely due to the lower than normal result in 2013–14 when $2.0 million was returned to the budget as part of the Better Regulations reform funding agreement.

Table 16: Income 2014–15
Income source Income ($'000) %
Receipts from industry    
    Application fees 5 554 18.68
    Levies 16 263 54.68
    Annual fees (renewal fees) 4 703 15.81
    Other receipts from industry 1 921 6.46
Parliamentary appropriation 743 2.50
Other revenue 557 1.87
Total income 29 741 100.00

Expenditure

Total operating expenses for 2014–15 were $33.204 million (Table 17), an increase of $1.207 million (3.77 per cent) from the previous year.

Table 17: Expenditure, 2014–15 (including comparison with Portfolio Budget Statement)
  2014–15 actual expenditure
($'000)
% of expenditure 2014–15 budget
(per PBS) ($'000)
Employee benefits 22 113 66.60 21 063
Supplier expenses 9 861 29.70 10 012
Depreciation 1 203 3.62 1 107
Other 27 0.08
Total expenditure 33 204 100.00 32 182

– = nil; PBS = Portfolio Budget Statement

Further details on the comparison of the APVMA's actual results for 2014–15 with the budget can be found in note 18 of the audited financial statements.

Introduction of the PGPA Act

The PGPA Act was introduced on 1 July 2014, replacing both the FMA Act and the Commonwealth Authorities and Companies Act 1997. The APVMA was one of a small number of government entities that was reclassified from an FMA Act agency to a corporate Commonwealth entity. This reclassification resulted in a change to the way the APVMA accounts for industry fees and charges. This category of income is now recorded when money is received rather than when it was earned.

2014–15 result and equity balance

The APVMA recorded a net operating deficit of $3.463 million for 2014–15. However, following the reclassification to a corporate Commonwealth entity, the APVMA was required to account for an additional $5.155 million as an equity injection, being industry fees and charges treated as unearned income in 2013–14. This inclusion of the equity injection lead to an overall result of a $1.692 million surplus.

The equity balance at 30 June 2015 was $10.490 million.

Audit results

The APVMA achieved an unqualified audit result, and there were no adverse findings.

Financial reserve

Revenue can vary significantly from year to year as a result of fluctuations in sales of pesticides and veterinary medicines, because of changing environmental conditions. To manage this, the APVMA aims to hold a financial reserve (which forms part of equity).

The financial reserve is based on three months of operating expenses and is currently set at $7.0 million.

Advertising and market research

No advertising or market research was conducted during 2014–15.

Consultancies

In 2014–15, 23 new consultancy contracts were entered into, involving total actual expenditure (including capitalisation) of $440 000. In addition, 28 ongoing consultancy contracts were active this year, involving total actual expenditure of $802 000.

Selection processes are described in terms drawn from the Commonwealth procurement guidelines. 'Direct sourcing' refers to a selection process in which neither a tender nor a panel was used. In these situations, multiple quotes were obtained, with the number of quotes depending on the value of the procurement. APVMA Finance Procedure 4, 'Purchasing', outlines the number of quotes required:

  • Purchase of goods/services to $2000 One quote
  • Purchase of goods/services $2001 to $10 000 Two written quotes
  • Purchase of goods/services $10 001 to $80 000 Three written quotes
  • Purchase of goods/services $80 000 and over Tender

Exemptions to these requirements may be approved in some circumstances.

Independent Auditor's report

Independent auditor's report

 

Statement by CEO and CFO

Statement by CEO and CFO

Financial statements

Australian Pesticides and Veterinary Medicines Authority
       
STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 June 2015
       
    2015 2014
  Notes $'000 $'000
NET COST OF SERVICE      
Expenses      
Employee benefits 3A 22 113 21 441
Suppliers 3B 9 861 9 691
Depreciation and amortisation 3C 1 203 841
Finance costs   17 16
Losses from asset sales 3D 10 8
Total Expenses   33 204 31 997
       
       
Own-Source Income      
       
Own-source revenue      
Other revenue 4A 557 324
Total own-source revenue   557 324
Total Own-Source Income   557 324
       
Net Cost of Services      
    32 647 31 673
       
Revenue from Government 4B 29 184 27 951
       
Surplus/(Deficit) Attributable to the Australian Government   (3 463) (3 722)
       
OTHER COMPREHENSIVE INCOME      
Items not subject to subsequent reclassification to profit and loss      
Equity injection following restructure to a corporate Commonwealth entity   5 155 -
Total other comprehensive income   5 155 -
Total Comprehensive Income/(Loss) Attributable to the Australian Government 1 692 (3 722)
       
The above statement should be read in conjunction with the accompanying notes.

 

Australian Pesticides and Veterinary Medicines Authority
       
STATEMENT OF FINANCIAL POSITION
as at 30 June 2015
       
    2015 2014
  Notes $'000 $'000
ASSETS      
Financial Assets      
Cash and cash equivalents 6A 1 289 13 633
Trade and other receivables 6B 13 666 563
Total financial assets   14 955 14 196
Non-Financial Assets      
Land and buildings 7A,C 1 769 2 121
Property, plant and equipment 7B,C 761 845
Intangibles 7D,E 4 292 3 062
Other non-financial assets 7F 283 306
Total non-financial assets   7 105 6 334
       
Total Assets   22 060 20 530
       
LIABILITIES      
Payables      
Suppliers 8A 3 848 3 900
Other payables 8B 1 689 1 642
Total payables   5 537 5 542
       
Provisions      
Employee provisions 9A 5 578 5 752
Other provisions 9B 455 438
Total provisions   6 033 6 190
       
Total Liabilities   11 570 11 732
       
Net Assets   10 490 8 798
       
EQUITY      
Contributed equity   5 528 373
Reserves   1 123 1 123
Retained surplus   3 839 7 302
Total Equity   10 490 8 798
       
The above statement should be read in conjunction with the accompanying notes.

 

Australian Pesticides and Veterinary Medicines Authority
                 
STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2015
                 
    Asset    
  Retained Revaluation Contributed Total
  Earnings Reserves Equity/capital Equity
  2015 2014 2015 2014 2015 2014 2015 2014
  $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Opening Balance                
Balance carried forward from previous period 7 302 11 024 1 123 1 123 373 373 8 798 12 520
Adjusted opening balance 7 302 11 024 1 123 1 123 373 373 8 798 12 520
Comprehensive income                
Surplus/(Loss) for the period (3 463) (3 722) - - - - (3 463) (3 722)
Other comprehensive income - - - - 5 155 - 5 155 -
Total comprehensive income (3 463) (3 722) - - 5 155 - 1 692 (3 722)
Closing Balance at 30 June 3 839 7 302 1 123 1 123 5 528 373 10 490 8 798
                 
The above statement should be read in conjunction with the accompanying notes.

 

Australian Pesticides and Veterinary Medicines Authority
       
CASH FLOW STATEMENT
for the year ended 30 June 2015
       
    2015 2014
  Notes $'000 $'000
OPERATING ACTIVITIES      
Cash received      
Appropriation   743 29 974
Agricultural and Veterinary Chemicals (Administration) Act 1992 contribution   34 390 -
Net GST received   980 867
Interest received   17 -
Other cash received   593 125
Total cash received   36 723 30 966
Cash used      
Employees   22 531 21 159
Suppliers   11 105 9 528
Total cash used   33 636 30 687
Net cash flows from operating activities 10 3 087 279
INVESTING ACTIVITIES      
Cash received      
Proceeds from sales of property, plant and equipment, and intangibles   3 2
Total cash received   3 2
Cash used      
Purchase of property, plant and equipment, and intangibles   2 010 2 138
Total cash used   2 010 2 138
Net cash flows from or (used by) investing activities   (2 007) (2 136)
FINANCING ACTIVITIES      
Cash used      
Closing of the APVMA special account on 1 July 2014   13 424 -
Total cash used   13 424 -
Net cash flows from or (used by) financing activities   (13 424) -
       
Net increase or (decrease) in cash held   (12 344) (1 857)
       
Cash and cash equivalents at the beginning of the reporting period   13 633 15 490
       
Cash and cash equivalents at the end of the reporting period 6A 1 289 13 633
       
The above statement should be read in conjunction with the accompanying notes.

 

Australian Pesticides and Veterinary Medicines Authority
     
SCHEDULE OF COMMITMENTS
as at 30 June 2015
     
  2015 2014
BY TYPE $'000 $'000
Commitments receivable    
GST recoverable on commitments (827) (935)
Total commitments receivable (827) (935)
     
Commitments payable    
     
Other commitments    
Operating leases1 8 192 9 560
Other commitments2 2 794 2 800
Total other commitments 10 986 12 360
Net commitments by type 10 159 11 425
     
     
BY MATURITY
Commitments receivable    
One year or less (210) (182)
From one to five years (568) (554)
Over five years (49) (199)
Total commitments receivable (827) (935)
     
Commitments payable    
     
Operating lease commitments    
One year or less 1 420 1 369
From one to five years 6 233 6 008
Over five years 539 2 183
Total operating lease commitments 8 192 9 560
     
Other Commitments    
One year or less 2 780 2 712
From one to five years 14 88
Total other commitments 2 794 2 800
Net commitments by maturity 10 159 11 425
     
NB: Commitments are GST inclusive where relevant.
     
     
1. Operating leases included are effectively non-cancellable and comprise:
Leases for office accommodation.
Lease payments for the rental of the APVMA's office at Amtech Estate, Symonston are subject to annual increase of 3.75%. During 11/12 the APVMA signed a new lease agreement, extending the lease term to October 2020, with a further two 5 year options available.
2. The nature of other commitments is for the purchase of scientific assessment services and general contractors/consultants goods and services.
     
The above schedule should be read in conjunction with the accompanying notes.

 

Australian Pesticides and Veterinary Medicines Authority
 
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 
Note 1: Summary of Significant Accounting Policies
Note 2: Events After the Reporting Period
Note 3: Expenses
Note 4: Income
Note 5: Fair Value Measurements
Note 6: Financial Assets
Note 7: Non-Financial Assets
Note 8: Payables
Note 9: Provisions
Note 10: Cash Flow Reconciliation
Note 11: Contingent Assets and Liabilities
Note 12: Senior Management Personnel Remuneration
Note 13: Financial Instruments
Note 14: Financial Asset Reconciliation
Note 15: Appropriations
Note 16: Reporting of Outcomes
Note 17: Cost Recovery Summary
Note 18: Budgetary Reporting and Explanation of Major Variances

 

Australian Pesticides and Veterinary Medicines Authority
         
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
 
Note 1: Summary of Significant Accounting Policies
         
1.1 Objectives of the Australian Pesticides and Veterinary Medicines Authority
         
The Australian Pesticides and Veterinary Medicines Authority (APVMA) is an Australian Government controlled entity. The APVMA is responsible for the assessment and registration of pesticides and veterinary medicines and for their regulation up to and including the point of retail sale.
The APVMA administers the National Registration Scheme for Agricultural and Veterinary Chemicals (NRS) in partnership with the States and Territories and with the active involvement of other Australian government agencies.
Its role is to independently evaluate the safety and performance of chemical products intended for sale, making sure that the health and safety of people, animals and the environment are protected.
The APVMA (formerly National Registration Authority for Agricultural and Veterinary Chemicals) was established under the Agricultural and Veterinary Chemicals (Administration) Act 1992. Following the introduction of the Public Governnance, Performance and Accountability Act 2013 on 1 July 2014, the APVMA was reclassified from an FMA Act entity to a corporate Commonwealth entity.
The APVMA is structured to meet a single outcome:
Outcome 1: Protection of the health and safety of people, animals, the environment, and agricultural and livestock industries through regulation of pesticides and veterinary medicines.
The continued existence of the APVMA in its present form and with its present programs is dependent on Government policy and on continuing appropriations by Parliament for the APVMA's administration and programs.
         
1.2 Basis of Preparation of the Financial Report
         
The financial statements are general purpose financial statements and are required by section 42 of the PGPA Act.
         
The Financial Statements and notes have been prepared in accordance with:
  1. Financial Reporting Rule (FRR) for reporting periods ending on or after 1 July 2014; and
  2. Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.
The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.
The financial report is presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified.
Unless an alternative treatment is specifically required by an accounting standard or the FRR, assets and liabilities are recognised in the statement of financial position when and only when it is probable that future economic benefits will flow to the entity or a future sacrifice of economic benefits will be required and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under executory contracts are not recognised unless required by an accounting standard. Liabilities and assets that are unrecognised are reported in the schedule of commitments or the schedule of contingencies.
Unless alternative treatment is specifically required by an accounting standard, income and expenses are recognised in the Statement of Comprehensive Income when and only when the flow, consumption or loss of economic benefits has occurred and can be reliably measured.
         
1.3 Significant Accounting Judgements and Estimates
         
In the process of applying the accounting policies listed in this note, the APVMA has made the following judgements that have the most significant impact on the amounts recorded in the financial statements: the fair value of leasehold improvements have been taken to be the market value of similar properties as determined by an individual valuer. In some instances, entity buildings are purpose-built and may in fact realise more or less in the market.
No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next accounting period.
         
1.4 New Australian Accounting Standards
         
Adoption of new Australian Accounting Standard Requirements
The following standard has been adopted earlier than the application date as stated in the standard.
         
Standard Nature of change in accounting policy and adjustment to financial statements
AASB 13 Fair value measurement The amendments change AASB 13 Fair Value Measurement and provide relief for not-for-profit public sector entities from making some previously-required disclosures about the fair value measurement of property, plant and equipment assets which are primarily held for internal or policy use, rather than to earn revenue. More specifically, the disclosure of quantitative information about the significant unobservable inputs used in fair value measurements and the sensitivity of certain fair value measurements to changes in unobservable inputs is no longer required.
         
The following new standard was issued prior to the signing of the statement by the accountable authority and chief financial officer, were applicable to the current reporting period and had a material effect on the entity's financial statements:
         
Standard Nature of change in accounting policy and adjustment to financial statements
AASB 1055 Budgetary reporting AASB 1055 sets out budgetary disclosure requirements for whole-of-government financial statements, each government's General Government Sector (GGS) financial statements and the financial statements for each not-for-profit entity with the GGS.
AASM 1055 requires disclosure of the original budget as well as explanations for major variances between the original budget and the actual amount disclosed in the financial statements. The original budget is the first budget presented to Parliament for the reporting period.
When budget information has not been presented on the same basis and classification as the financial statements, AASB 1055 requires budget information to be restated to be consistent with the financial statements.
Major variance explanation disclosures are those relevant to the information needs of users when assessing performance and accountability.
AASB 1055 does not require prior-year budget comparatives.
All other new or revised standards and interpretations that were issued prior to the sign-off date and are applicable to the current reporting period did not have a material effect, and are not expected to have a future material effect, on the entity's financial statements.
         
Future Australian Accounting Standard Requirements
The following amended standards were issued by the Australian Accounting Standards Board prior to the signing of the statement by the accountable authority and chief financial officer, which are expected to have a material impact on the entity's financial statements for future reporting period(s):
         
Standard Application date for the APVMA Nature of impending changes in accounting policy and likely impact on initial application
AASB 2015-6 Extending related party disclosures fo Not For Profit public sector entities 1 July 2016 AASB 2015-6 removed the exception that allowed not-for-profit public sector entities to avoid applying certain paragraphs of AASB 124 Related Party Disclosures. 
The amended standard will require these entitites to identify and disclose transactions with key management personnel that occur outside the person's capacity as an ordinary taxpayer, or that involving a benefit not available to the general public.
All other new standards, revised standards, interpretations or amending standards that were issued by the Australian Accounting Standards Board prior to the sign-off date and are applicable to future reporting period(s) are not expected to have a future material impact on the entity's financial statements.
         
1.5 Revenue
         
Revenue from the sale of goods is recognised when:
  1. the risks and rewards of ownership have been transferred to the buyer;
  2. the APVMA retains no managerial involvement nor effective control over the goods;
  3. the revenue and transaction costs incurred can be reliably measured; and
  4. it is probable that the economic benefits associated with the transaction will flow to the APVMA.
Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when:
  1. the amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and
  2. the probable economic benefits with the transaction will flow to the entity.
 
The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction.
Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at balance date. Allowances are made when collectability of the debt is no longer probable.
Interest revenue is recognised using the effective interest method as set out in AASB 139 Financial Instruments: Recognition and Measurement.
         
Resources Received Free of Charge
Resources received free of charge are recognised as revenue when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense. Resources received free of charge are recorded as either revenue or gains depending on their nature.
Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another non-corporate or corporate Commonwealth entity as a consequence of a restructuring of administrative arrangements (refer to Note 1.7).
         
Revenue from Government
Funding received or receivable from non-corporate Commonwealth entities (appropriated to the non-corporate Commonwealth entity as a corporate Commonwealth entity payment item for payment to the APVMA) is recognised as Revenue from Government unless they are in the nature of an equity injection or a loan.
Corporate Commonwealth entities can not recognise monies collected on behalf of the Commonwealth as administered revenue or an asset. As fees and charges paid by industry is administered in nature, amounts owed to the APVMA can not be recognise as revenue or a trade receivable.
         
1.6 Gains
         
Resources Received Free of Charge
Resources received free of charge are recognised as gains when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense.
Resources received free of charge are recorded as either revenue or gains depending on their nature.
Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Government entity as a consequence of a restructuring of administrative arrangement (refer to Note 1.7).
         
Sale of Assets
Gains from disposal of assets are recognised when control of the asset has passed to the buyer.
         
1.7 Transactions with the Government as Owner
         
Equity Injections
Amounts appropriated which are designated as 'equity injections' for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.
         
Restructuring of Administrative Arrangements
Net assets received from or relinquished to another Government entity under a restructuring of administrative arrangements are adjusted at their book value directly against contributed equity.
         
Other Distributions to Owners
The FRR require that distributions to owners be debited to contributed equity unless it is in the nature of a dividend.
         
1.8 Employee Benefits
         
Liabilities for 'short-term employee benefits' (as defined in AASB 119 Employee Benefits) and termination benefits due within twelve months of balance date are measured at their nominal amounts.
The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability.
Other long-term employee benefits are measured as net total of the present value of the defined benefit obligation at the
end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the
obligations are to be settled directly.
Leave
The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of the APVMA is estimated to be less than the annual entitlement for sick leave.
The leave liabilities are calculated on the basis of employees' remuneration at the estimated salary rates that applied at the time the leave is taken, including the APVMA's employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.
The liability for long service leave has been determined by reference to the 'short-hand method' as outlined in the Resource Management Guide No. 125 - Commonwealth Entities Financial Statements Guide as at 30 June 2015. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation and is discounted using the 10 year bond rate at 30 June 2015.
         
Separation and Redundancy
Provision is made for separation and redundancy benefit payments. The APVMA recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.
         
Superannuation
The majority of staff of the APVMA are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS) or the PSS accumulation plan (PSSap).
The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.
The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported by the Department of Finance and Deregulation's administered schedules and notes.
The APVMA makes employer contributions to the employee superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. The APVMA accounts for the contributions as if they were contributions to defined contribution plans.
The liability for superannuation recognised as at 30 June represents outstanding contributions for the financial year.
         
1.9 Leases
         
A distinction is made between finance leases and operating leases. Finance leases effectively transfer from the lessor to the lessee substantially all the risks and rewards incidental to ownership of leased assets. An operating lease is a lease that is not a finance lease. In operating leases, the lessor effectively retains substantially all such risks and benefits. The APVMA has no finance leases.
The discount rate used is the interest rate implicit in the lease. Leased assets are amortised over the period of the lease. Lease payments are allocated between the principal component and the interest expense.
Operating lease payments are expensed on a straight line basis that is representative of the pattern of benefits derived from the leased assets.
         
1.10 Fair Value Measurement
         
The entity deems transfers between levels of the fair value hierarchy to have occurred at the end of the reporting period.
         
1.11 Cash
         
Cash is recognised at its nominal amount. Cash and cash equivalents includes:
  1. cash on hand; and
  2. demand deposits in bank accounts with an orginal maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.
         
1.12 Financial assets
         
The APVMA classifies its financial assets in the following categories:
  1. financial assets as at fair value through profit or loss;
  2. held-to-maturity investments;
  3. available-for-sale financial assets; and
  4. loans and receivables.
         
The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Financial assets are recognised and derecognised upon trade date.
         
Effective Interest Method
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.
Income is recognised on an effective interest basis except for financial assets that are recognised at fair value through the profit and loss.
         
Financial Assets at Fair Value Through Profit or Loss
Financial assets are classified as financial assets at fair value through profit or loss (FVTPL) where the financial assets:
  1. have been acquired principally for the purpose of selling in the near future;
  2. are a derivative that is not designated and effective as a hedging instrument; or
  3. are a part of an identified portfolio of financial instruments that the APVMA manages together and has a recent actual pattern of short-term profit-taking.
Assets in this category are classified as current assets.
Financial assets at fair value through profit or loss are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest earned on the financial asset. Interest earned on any financial assets at FVTPL is included in line item 'Change in fair value through profit and loss' and is not to be included again in the line item 'Interest'. The APVMA has no financial assets at fair value through the profit or loss.
         
Available-for-Sale Financial Assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories.
Available-for-sale financial assets are recorded at fair value. Gains and losses arising from changes in fair value are recognised directly in reserves (equity) with the exception of impairment losses. Interest is calcualted using the effective interest method and foreign exchange gains and losses on monetary assets are recognised directly in profit or loss. Where the asset is disposed of or is determined to be impaired, part (or all) of the cumulative gain or loss preivoulsy recognised in the reserve is included in surplus and deficit for the period.
Where a reliable fair value cannot be established for unlisted investments in equity instruments, these instruments are valued at cost. The APVMA has no available-for-sale financial assets.
 
Held-to-Maturity Investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the group has the positive intent and ability to hold to maturity are classified as held-to-maturity investments. Held-to-maturity investments are recorded at amortised cost using the effective interest method less impairment, with revenue recognised on an effective yield basis. The APVMA has no held-to-maturity investments.
         
Receivables
Trade receivables, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'receivables'. Receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest rate.
         
Impairment of Financial Assets
Financial assets are assessed for impairment at the end of each reporting period.
Financial assets held at amortised cost - if there is objective evidence that an impairment loss has been incurred for loans and receivables or held to maturity investments held at amortised cost, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the asset's original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is recognised in the Statement of Comprehensive Income.
Available for sale financial assets - if there is objective evidence that an impairment loss on an available-for-sale financial asset has been incurred, the amount of the difference between its cost, less principal repayments and amortisation, and its current fair value, less any impairment loss previously recognised in expenses, is transferred from equity to the Statement of Comprehensive income.
Financial assets held at cost - if there is objective evidence that an impairment loss has been incurred, the amount of the impairment loss is the difference between the carrying amount of the asset and the present value of the estimated future cash flows discounted at the current market rate for similar assets.
         
1.13 Financial Liabilities
         
Financial liabilities are classified as either financial liabilities 'at fair value through profit or loss' or other financial liabilities.
Financial liabilities are recognised and derecognised upon 'trade date'.
         
Financial liabilities at Fair Value Through Profit or Loss
Financial liabilities at fair value through profit or loss are initially measured at fair value. Subsequent fair value adjustments are recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.
         
Other Financial Liabilities
Other financial liabilities are initially measured at fair value, net of transaction costs.
Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.
Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).
         
1.14 Contingent Liabilities and Contingent Assets
         
Contingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.
         
1.15 Acquisition of Assets
         
Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.
Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and revenues at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor APVMA's accounts immediately prior to the restructuring.
         
1.16 Property, Plant and Equipment
         
Asset Recognition Threshold
         
Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $5 000 for leasehold improvements and $2 000 for all other types, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).
The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to 'makegood' provisions in property leases taken up by the APVMA where there exists an obligation to restore the property to its original condition. These costs are included in the value of the APVMA's leasehold improvements with a corresponding provision for the 'makegood' recognised.
         
Revaluations
         
Following initial recognition at cost, property, plant and equipment are carried at fair value. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not differ materially from the assets' fair values as at the reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets.
Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reverses a previous revaluation decrement of the same asset class that was previously recognised through operating result. Revaluation decrements for a class of assets are recognised directly through operating result except to the extent that they reverse a previous revaluation increment for that class.
Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.
         
Depreciation
Depreciable property plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the APVMA using, in all cases, the straight-line method of depreciation.
Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.
Depreciation rates applying to each class of depreciable asset are based on the following useful lives:
    2015 2014
Leasehold improvements Shorter of lease term or useful life Shorter of lease term or useful life
Property, Plant and Equipment 3 to 15 years 3 to 15 years
Impairment
All assets were assessed for impairment at 30 June 2015. Where indications of impairment exist, the asset's recoverable amount is estimated and an impairment adjustment made if the asset's recoverable amount is less than its carrying amount.
The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset's ability to generate future cash flows, and the asset would be replaced if the APVMA were deprived of the asset, its value in use is taken to be its depreciated replacement cost.
         
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.
         
1.17 Intangibles
         
The APVMA's intangibles comprise internally developed and externally acquired software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.
Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of the APVMA's software are 3 to 10 years (2014: 3 to 10 years).
All software assets were assessed for indications of impairment as at 30 June 2015.
         
1.18 Taxation
         
The APVMA is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).
Revenues, expenses and assets are recognised net of GST except:
  1. where the amount of GST incurred is not recoverable from the Australian Taxation Office; and
  2. for receivables and payables where applicable.

 

Australian Pesticides and Veterinary Medicines Authority
 
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
 
Note 2: Events After the Reporting Period
 
There was no subsequent event that had the potential to significantly affect the ongoing structure and financial activites of the entity.

 

Australian Pesticides and Veterinary Medicines Authority
     
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
     
Note 3: Expenses    
     
  2015 2014
  $'000 $'000
Note 3A: Employee benefits    
Wages and salaries 16 687 16 055
Superannuation:    
Defined contribution plans 1 868 1 775
Defined benefit plans 1 138 1 147
Leave and other entitlements 1 938 1 909
Seperation and redundancies 77 -
Other employee benefits 405 555
Total employee benefits 22 113 21 441
     
     
Note 3B: Suppliers
Goods and services    
Consultants 1 242 1 694
Contractors 7 052 6 369
Other 181 174
Total goods and services 8 475 8 237
     
Goods and services are made up of:    
Provision of goods – external parties 404 409
Rendering of services – related entities 3 659 3 661
Rendering of services – external parties 4 412 4 167
Total goods and services 8 475 8 237
     
Other supplier expenses    
Operating lease rentals - external parties    
Minimum lease payments 1 292 1 299
Workers compensation premiums 94 155
Total other supplier expenses 1 386 1 454
Total supplier expenses 9 861 9 691
     
     
Note 3C: Depreciation and amortisation
Depreciation:    
Leasehold improvements 352 340
Property, plant and equipment 253 212
Total depreciation 605 552
     
Amortisation:    
Intangibles - Computer Software 598 289
Total amortisation 598 289
Total depreciation and amortisation 1 203 841

 

Australian Pesticides and Veterinary Medicines Authority
     
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
 
Note 3: Expenses
     
  2015 2014
  $'000 $'000
Note 3D: Losses from asset sales    
Infrastructure, plant and equipment    
Proceeds from sale (3) (2)
Carrying value of assets sold 13 10
Total losses from assets sales 10 8
     
Note 4: Income
     
  2015 2014
  $'000 $'000
OWN-SOURCE REVENUE    
     
Note 4A: Other revenue    
Resources received free of charge    
Remuneration of auditors 36 36
Other revenue 521 288
Total other revenue 557 324
     
     
     
REVENUE FROM GOVERNMENT    
     
Note 4B: Revenue from Government
Appropriations:    
Departmental appropriations 743 981
Departmental special appropriations - 26 970
Department of Agriculture    
Agricultural and Veterinary Chemicals (Administration) Act 1992 contribution 28 441 -
Total revenue from Government 29 184 27 951
     
Department of Agriculture contribution is equal to the following fees and charges paid by industry:
Levies 16 263 17 059
Annual renewal fee 4 703 4 793
Product application fees 5 554 5 087
Good manufacturing practice (GMP) licence fees 1 021 1 252
Permits, actives and other fees 900 779
Industry funds returned to the budget - (2 000)
Total industry contributions 28 441 26 970
     
In 2014 industry fees and charges were returned to the APVMA via a departmental special appropriation.

 

Australian Pesticides and Veterinary Medicines Authority
             
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
             
Note 5: Fair Value Measurements
             
The following table provides an analysis of assets and liabilities that are measured at fair value.
The different levels of fair value heirarchy are defined below.
             
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilites than the entity can access at measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
             
Note 5A: Fair Value Measurements, Valuation Techniques and Input Used
             
    Fair value measurements at the end of the reporting period For Level 2 and 3 fair value measurements
             
    2015 2014 Category (Level 1, 2 or 33) Valuation technique(s)1 Inputs used
    $'000 $'000
Non-financial assets2          
  Leasehold improvements 1 731 2 055 Level 3 Depreciated Replacement Cost Replacement Cost New (price per sq/m)
            Consumed economic benefit / Obsolescence of asset
             
  Property, plant and equipment 548 590 Level 2 Market Approach Adjusted market transactions
    212 255 Level 3 Depreciated Replacement Cost Replacement Cost New
            Consumed economic benefit / Obsolescence of asset
Total fair value measurement of assets in the statement of financial position 2 491 2 900      
             
1. No change in valuation technique occurred during the period.
2. Fair value measurements - highest and best use differs from current use of non-financial assets (NFAs)
The highest and best use of all non-financial assets are the same as their current use.
3. Recurring and non-recurring Level 3 fair value measurements - valuation processes
The APVMA procured valuation services from Australian Valuation Solutions (AVS) and relied on valuation models provided by AVS in 2014, no changes have occurred in 2015. The entity tests the procedures of the valuation model at least once every 12 months. The AVS has provided assurance that the model developed is in compliance with AASB 13.

 

Australian Pesticides and Veterinary Medicines Authority
                 
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
                 
Note 5: Fair Value Measurements
                 
Note 5B: Level 1 and Level 2 Transfers for Recurring Fair Value Measurements
                 
There were no transfers between level 1 and level 2.
                 
                 
Note 5C: Reconciliation For Recurring Level 3 Fair Value Measurements
                 
Recurring Level 3 fair value measurements - reconciliation for assets
 
 
  Non-financial assets
               
    Leasehold improvements Leasehold improvements Property, 
plant and equipment
Property, 
plant and equipment
  Total Total
    2015 2014 2015 2014   2015 2014
    $'000 $'000 $'000 $'000   $'000 $'000
Opening Balance1 2 055 2 274 255 184   2 310 2 458
Total gains/(losses) in accumulated depreciation2 (324) (313) (43) (37)3   (367) (350)
Purchases - 94 - 1083   - 202
Transfer into Level 34 - - - -   - -
Transfer out of Level 34 - - - -   - -
Closing balance 1 731 2 055 212 255   1 943 2 310
                 
1. Open balance as determined in accordance with AASB 13
2. These losses are presented in the Statement of Comprehensive Income under Depreciation and Amortisation.
3. A minor adjustment was made to the 2014 comparative figures to amend the incorrect allocation of accumulated depreciation. This did not result in a change to the closing balance.
4. There have been no transfers between levels of the hierarchy during the year.
The entity's policy for determining when transfers between levels are deemed to have occurred can be found in Note 1.

 

Australian Pesticides and Veterinary Medicines Authority
     
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
 
Note 6: Financial Assets
     
  2015 2014
  $'000 $'000
Note 6A: Cash and Cash Equivalents    
Cash on hand or on deposit 1 289 209
Special Accounts - 13 424
Total cash and cash equivalents 1 289 13 633
     
     
Note 6B: Trade and Other Receivables
Goods and services    
Goods and services - related entities 123 134
Goods and services - external parties 40 609
Total receivables for goods and services 163 743
     
Contribution receivable1
Department of Agriculture 13 426 -
Total contribution receivable 13 426 -
     
Other receivable
GST receivable from the Australian Taxation Office 94 125
Total other receivables 94 125
Total trade and other receivables (gross) 13 683 868
     
Less impairment allowance account:
Goods and services (17) (305)
Total impairmemnt allowance account (17) (305)
Total trade and other receivables (net) 13 666 563
     
1. An explaination of the contribution receivable can be found in Note 18B
     
     
Receivables are expected to be recovered in:    
No more than 12 months 13 666 563
More than 12 months - -
Total trade and other receivables (net) 13 666 563
     
Receivables are aged as follows:
Not overdue 13 562 259
Overdue by:    
Less than 30 days 6 304
61 to 90 days 19 -
More than 90 days 96 305
Total receivables (gross) 13 683 868
     
The impairment allowance account is aged as follows:
Not overdue - -
Overdue by:    
Less than 30 days - -
More than 90 days (17) (305)
Total impairment allowance account (17) (305)
     
Reconciliation of the impairment allowance account:
     
Movements in relation to 2015 Goods and  
  services Total
  $'000 $'000
Opening balance (305) (305)
Amounts reversed 288 288
Amounts written off - -
New impaired assets - -
Closing balance (17) (17)
     
Movements in relation to 2014 Goods and  
  services Total
  $'000 $'000
Opening balance (305) (305)
Amounts recovered and reversed - -
Amounts written off - -
New impaired assets - -
Closing balance (305) (305)
     
Credit terms for goods and services were within 30 days (2014: 30 days).

 

Australian Pesticides and Veterinary Medicines Authority
     
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
 
Note 7: Non-Financial Assets
     
  2015 2014
  $'000 $'000
Note 7A: Land and Buildings
Leasehold improvements    
Fair value 2 368 2 368
Accumulated depreciation (638) (313)
Total leasehold imporvements 1 730 2 055
Makegood    
Fair value 269 269
Accumulated depreciation (230) (203)
Total makegood 39 66
Total land and buildings (non-current) 1 769 2 121
     
All leasehold improvement are subject to revaluation.
No indicators of impairment were found for land and buildings.
     
No leasehold improvements are expected to be sold or disposed of within the next 12 months.
     
     
Note 7B: Property, Plant and Equipment
     
Property, plant and equipment:    
Fair value 1 224 1 057
Accumulated depreciation (463) (212)
Total property, plant and equipment (non-current) 761 845
     
All infrastructure, plant and equipment is subject to revaluation. The carrying amount is included in the valuation figures above.
No indicators of impairment were found for property, plant and equipment.
     
No property, plant or equipment is expected to be sold or disposed of within the next 12 months.
     
Revaluation of non-financial assets
     
All revaluations were conducted in accordance with the revaluation policy stated at Note 1. No revaluation increments or decrements were recorded in 2015 or 2014. The latest revaluation was conducted on 30 June 2013 by an independent valuer.

 

Australian Pesticides and Veterinary Medicines Authority
       
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
 
Note 7: Non-Financial Assets
       
Note 7C: Analysis of property, plant and equipment
       
TABLE A – Reconciliation of the opening and closing balances of property, plant and equipment (2014-15)
       
  Leasehold Other  
  Improvements P P & E Total
  $'000 $'000 $'000
As at 1 July 2014      
Gross book value 2 637 1 057 3 694
Accumulated depreciation and impairment (516) (212) (728)
Total as at 1 July 2014 2 121 845 2 966
Additions:      
Purchase - 170 170
Revaluation recognised in other comprehensive income - - -
Impairments recognised in the operating result - - -
Depreciation expense (352) (253) (605)
Disposals:      
Disposal - (3) (3)
Accumulated depreciation of disposed assets - 2 2
Total as at 30 June 2015 1 769 761 2 530
       
Total as of 30 June 2015 represented by:      
Gross book value 2 637 1 224 3 861
Accumulated depreciation and impairment (868) (463) (1331)
Total as of 30 June 2015 1 769 761 2 530
       
       
TABLE B – Reconciliation of the opening and closing balances of property, plant and equipment (2013-14)
       
  Leasehold Other  
  Improvements P P & E Total
  $'000 $'000 $'000
As at 1 July 2013      
Gross book value 2 543 653 3 196
Accumulated depreciation and impairment (176) - (176)
Total as at 1 July 2013 2 367 653 3 020
Additions:      
Purchase 94 405 499
Revaluation recognised in other comprehensive income - - -
Impairments recognised in the operating result - - -
Depreciation expense (340) (212) (552)
Disposals:     -
Other disposals - (1) (1)
Accumulated depreciation of disposed assets - - -
Total as at 30 June 2014 2 121 845 2 966
       
Total as at 30 June 2014 represented by:      
Gross book value 2 637 1 057 3 694
Accumulated depreciation and impairment (516) (212) (728)
Total as at 30 June 2014 2 121 845 2 966
       

 

Australian Pesticides and Veterinary Medicines Authority
     
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
     
Note 7: Non-Financial Assets
     
  2015 2014
  $'000 $'000
Note 7D: Intangibles
     
Internally developed computer software at cost:
Internally developed – in progress 2 214 1 540
Internally developed – in use 1 830 857
Accumulated amortisation (873) (573)
Total internally developed computer software 3 171 1 824
     
Purchased computer software at cost:
Purchased computer software 2 317 2 332
Accumulated amortisation (1 196) (1 094)
Total purchased computer software 1 121 1 238
Total intangibles (non-current) 4 292 3 062
     
No indicators of impairment were found for any intangible assets.
     
No intangibles are expected to be sold or disposed of within the next 12 months.

 

Australian Pesticides and Veterinary Medicines Authority
       
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
 
Note 7: Non-Financial Assets
       
Note 7E: Analysis of intangibles
       
Table A: Reconciliation of the opening and closing balances of intangibles (2014-15)
       
Item Computer
software
internally
developed
Computer
software
purchased
Total
  $'000 $'000 $'000
As at 1 July 2014      
Gross book value 2 397 2 332 4 729
Accumulated amortisation and impairment (573) (1094) (1 667)
Total as at 1 July 2014 1 824 1 238 3 062
Additions:      
Purchase or internally developed 1 655 185 1 840
Amortisation (307) (291) (598)
Disposals:      
Disposal (8) (200) (208)
Accumulated amortisation of disposed assets 7 189 196
Total as at 30 June 2015 3 171 1 121 4 292
       
Total as of 30 June 2015 represented by:      
Gross book value 4 044 2 317 6 361
Accumulated amortisation and impairment (873) (1 196) (2 069)
Total as of 30 June 2015 3 171 1 121 4 292
       
       
Table B: Reconciliation of the opening and closing balances of intangibles (2013-14)
       
Item Computer
software
internally
developed
Computer
software
purchased
Total
  $'000 $'000 $'000
As at 1 July 2013      
Gross book value 1 611 1 902 3 513
Accumulated amortisation and impairment (851) (941) (1 792)
Total as at 1 July 2013 760 961 1 721
Additions:      
by purchase or internally developed 1 194 445 1 639
Amortisation (121) (168) (289)
Disposals:      
Disposal (408) (15) (423)
Accumulated amortisation of disposed assets 399 15 414
Total as at 30 June 2014 1 824 1 238 3 062
       
Total as at 30 June 2014 represented by:      
Gross book value 2 397 2 332 4 729
Accumulated amortisation and impairment (573) (1094) (1 667)
Total as at 30 June 2014 1 824 1 238 3 062
       

 

Australian Pesticides and Veterinary Medicines Authority
     
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
     
Note 7: Non-Financial Assets
     
  2015 2014
  $'000 $'000
Note 7F: Other Non-Financial Assets
Prepayments 283 306
Total other non-financial assets 283 306
     
Total other non-financial assets expected to be received in:    
No more than 12 months 262 306
More than 12 months 21 -
Total other non-financial assets 283 306
     
No indicators of impairment were found for other non-financial assets.
     
     
     
Note 8: Payables
     
  2015 2014
  $'000 $'000
Note 8A: Suppliers    
Trade creditors and accruals 3 848 3 900
Total supplier payables 3 848 3 900
     
All supplier payables are expected to be settled within 12 months
     
Settlement is usually made within 30 days.    
     
Suppliers in connection with    
Related parties 2 605 2 769
External parties 1 243 1 131
Total other non-financial assets 3 848 3 900
     
     
Note 8B: Other Payables
Salaries and wages 685 669
Superannuation 106 92
Unearned income 25 -
Lease incentive 213 253
Lease liability 660 628
Total other payables 1 689 1 642
     
Total other payables are expected to be settled in:
No more than 12 months 856 801
More than 12 months 833 841
Total other payables 1 689 1 642
     

 

Australian Pesticides and Veterinary Medicines Authority
     
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
     
Note 9: Provisions
     
  2015 2014
  $'000 $'000
Note 9A: Employee provisions
Long service leave 3 876 3 969
Annual leave 1 702 1 783
Total employee provisions 5 578 5 752
     
Employee provisions are expected to be settled in:
No more than 12 months 2 022 1 565
More than 12 months 3 556 4 187
Total employee provisions 5 578 5 752
     
     
Note 9B: Other provisions
Provision for restoration obligations 455 438
Total other provisions 455 438
     
All other provisions are expected to be settled in more than 12 months.
     
Carrying amount 1 July 2014 438 422
Unwinding of discount or change in discount rate 17 16
Closing balance 30 June 2015 455 438
   
The APVMA currently has one agreement for the leasing of premises that have provisions requiring the APVMA to restore the premises to their original condition at the conclusion of the lease. The APVMA has made a provision to reflect the present value of this obligation.

 

Australian Pesticides and Veterinary Medicines Authority
     
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
     
Note 10: Cash Flow Reconciliation
     
  2015 2014
  $'000 $'000
Reconciliation of cash and cash equivalents as per statement of financial position to cash flow statement
     
Report cash and cash equivalents as per:
Cash Flow Statement 1 289 13 633
Statement of Financial Position 1 289 13 633
Difference - -
     
     
     
Reconciliation of operating result to net cash from operating activities:
Net cost of services (32 647) (31 673)
Revenue from Government 29 184 27 951
Equity injection following restructure to a corporate Commonwealth entity 5 155 -
     
Adjustment for non-cash items    
Depreciation / amortisation 1 203 841
Loss on disposal of assets 10 8
Closing of the APVMA special account on 1 July 2014 13 424 -
     
Changes in assets/liabilities    
(Increase) / decrease in net receivables (13 103) 1 840
(Increase) / decrease in prepayments 23 39
Increase / (decrease) in employee provisions (174) 316
Increase / (decrease) in supplier payables (52) 795
Increase / (decrease) in other payables 47 146
Increase / (decrease) in other provisions 17 16
Net cash from operating activities 3 087 279
     
     
Note 11: Contingent Assets and Liabilities
     
The APVMA had no quantifiable, unquantifiable or significant remote contingencies.

 

Australian Pesticides and Veterinary Medicines Authority
     
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
     
Note 12: Senior Management Personnel Remuneration
     
  2015 2014
  $ $
     
Short-term employee benefits:    
Salary 1 442 528 1 633 386
Other allowances - 15 350
Total Short-term employee benefits 1 442 528 1 648 736
     
Post-employment benefits:    
Superannuation 249 589 286 138
Total post-employment benefits 249 589 286 138
     
Other long-term benefits:    
Annual leave 113 942 127 562
Long service leave 49 667 55 849
Total other long-term benefits 163 609 183 411
     
Seperations and terminations 76 730 -
Total employment benefits 1 932 456 2 118 285
     
The total number of senior management positions in 2014 was eight. In October 2014, following an internal restructure, the total number of senior management positions dropped to six.
The 2014 comparative figures have been amended following the change in definition of senior management and the change in calculation of their remuneration.

 

Australian Pesticides and Veterinary Medicines Authority
     
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
     
Note 13: Financial Instruments
     
  2015 2014
  $'000 $'000
13A: Categories of financial instruments
Financial Assets    
Loans and receivables financial assets    
Cash and cash equivalents 1 289 13 633
Trade & other receivables 146 438
Total loans and receivables 1 435 14 071
Total financial assets 1 435 14 071
     
Financial liabilities    
Financial liabilities measured at amortised cost    
Other Liabilities    
Trade creditors and accruals 3 848 3 900
Other payables 1 476 1 389
Total financial liabilities measured at amortised cost 5 324 5 289
Total financial liabilities 5 324 5 289
     
     
13B: Net gains or losses on financial assets    
Loans and receivables
Interest revenue 18 -
Net gain/(loss) from financial assets 18 -
     
     
13C: Net gains and losses on financial liabilities
Other Liabilities    
Lease liability increase (32) (76)
Net gain/(loss) from financial assets (32) (76)
     
     
13D: Fair value of financial instruments
     
The net fair values of cash and cash equivalents, trade receivables and other receivables approximate their carrying amounts.

The net fair values for trade creditors and other liabilities are approximated by their carrying amounts.

 

Australian Pesticides and Veterinary Medicines Authority
           
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
 
Note 13: Financial Instruments
           
13E: Credit risk
           
The APVMA is exposed to minimal credit risk as loans and receivables are cash, trade receivables and other 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 of trade and other debtors (2015: $163 000 and 2014: $743 000).
           
To aid the APVMA to manage its credit risk, there are internal policies and procedures that guide employees on debt recovery techniques that are to be applied.
           
 
           
The APVMA holds no collateral to mitigate against credit risk.
           
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  
  2015 2014 2015 2014  
  $'000 $'000 $'000 $'000  
Loans and receivables          
Cash and cash equivalents 1 289 13 633 - -  
Trade & other receivables 42 134 121 609  
Total 1 331 13 767 121 609  
           
           
Ageing of financial assets that are past due but not impaired for 2015
           
  0 to 30 31 to 60 61 to 90 90+  
  days days days days Total
  $'000 $'000 $'000 $'000 $'000
Loans and receivables          
Trade & other receivables 6 - 19 96 121
Total 6 - 19 96 121
           
           
Ageing of financial assets that are past due but not impaired for 2014
           
  0 to 30 31 to 60 61 to 90 90+  
  days days days days Total
  $'000 $'000 $'000 $'000 $'000
Loans and receivables          
Trade & other receivables 304 - - 305 609
Total 304 - - 305 609

 

Australian Pesticides and Veterinary Medicines Authority
           
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
 
Note 13: Financial Instruments
           
13F: Liquidity risk
The APVMA's financial liabilities are payables. The exposure to liquidity risk is based on the notion that the APVMA will encounter difficulty in meeting its obligations associated with financial liabilities. 

This is highly unlikely due to the level of funds held in reserve as well as funding mechanisms available to the APVMA (Advance from the Finance Minister). The APVMA manages its budgeted funds to ensure it has adequate funds to meet payments as they fall due. In addition, the APVMA 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 2015
           
  On within 1 1 to 5 > 5  
  demand year years years Total
  2015 2015 2015 2015 2015
  $'000 $'000 $'000 $'000 $'000
Other liabilities          
Trade creditors and accruals - 3 848 - - 3 848
Other payables - 832 567 77 1 476
Total - 4 680 567 77 5 324
           
           
Maturities for non-derivative financial liabilities 2014
           
  On within 1 1 to 5 > 5  
  demand year years years Total
  2014 2014 2014 2014 2014
  $'000 $'000 $'000 $'000 $'000
Other liabilities          
Trade creditors and accruals - 3 900 - - 3 900
Other payables - 730 360 299 1 389
Total - 4 630 360 299 5 289
           
           
13G: Market risk
           
The APVMA holds basic financial instruments that do not expose the Agency to market risks. The APVMA is not exposed to 'Currency risk', Interest rate risk' or Other price risk'.

 

Australian Pesticides and Veterinary Medicines Authority
       
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
 
Note 14: Financial Asset Reconciliation
       
    2015 2014
  Notes $'000 $'000
Financial Assets      
       
Total financial assets as per statement of financial position   14 955 14 196
Less: non-financial instrument components      
Contribution receivable 6B 13 426 -
Other receivables (GST receivable) 6B 94 125
Total other non-financial assets   13 520 125
       
Total financial assets as per financial instruments note   1 435 14 071
       

 

Australian Pesticides and Veterinary Medicines Authority
               
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
               
Note 15: Appropriations
               
Table A: Annual Appropriation ('Recoverable GST exclusive')
               
    2015 Appropriation Appropriation applied in 2015 (current and prior years)      
  Appropriation Act        
  Annual 
Appropriation
Total appropriation Variance    
  $'000 $'000 $'000 $'000    
DEPARTMENTAL            
Ordinary annual service 743 743 743 -    
Other services            
  Equity - - - -    
Total Departmental 743 743 743 -    
               
 
               
    2014 Appropriation Appropriation applied in 2014 (current and prior years)  
  Appropriation Act FMA Act    
  Annual 
Appropriation
Section 30 Section 31 Total appropriation Variance1
  $'000 $'000 $'000 $'000 $'000 $'000
DEPARTMENTAL            
Ordinary annual service 981 2 276 1 259 3 404 (2 145)
Other services           -
  Equity - - - - - -
Total Departmental 981 2 276 1 259 3 404 (2 145)
               
Notes:
1. These variances are due to unspent Departmental Annual Appropriations in 2013.

 

Australian Pesticides and Veterinary Medicines Authority
 
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
 
Note 15: Appropriations
 
Table B: Departmental Capital Budgets ('Recoverable GST exclusive')
 
The APVMA did not receive any departmental capital budget funding during 2015 (2014: nil).
 
Table C: Unspent Departmental Annual Appropriation ('Recoverable GST exclusive')
 
There were no unspent departmental annual appropriations at 30 June 2015 (2014: nil).

 

Australian Pesticides and Veterinary Medicines Authority
     
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
     
Note 16: Reporting of Outcomes
     
The APVMA has a single Outcome
Note 15A: Net Cost of Outcome Delivery
     
  Outcome 1
  2015 2014
  $'000 $'000
Departmental    
Expenses (33 204) (31 997)
Own source income 557 324
Net (cost)/contribution of outcome delivery (32 647) (31 673)
     
     
Outcome 1 is described in Note 1.1.

 

Australian Pesticides and Veterinary Medicines Authority
     
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
     
Note 17: Cost Recovery Summary
     
  2015 2014
  $'000 $'000
Amounts applied    
Payments from portfolio bodies 34 390 28 554
Total amounts applied 34 390 28 554
     
Expenses    
Departmental 31 904 30 692
Total expenses 31 904 30 692
     
Revenue    
Payments to portfolio departments 28 440 27 014
Total revenue 28 440 27 014
     
Receivables    
Overdue by    
Less than 30 days: 268 304
More than 90 days: 16 -
Total receivables 284 304
     
Amounts written off:    
Departmental - -
Total expenses - -
     
Cost recovered activities:    
     
The agricultural and veterinary medicines chemical industry pay application fees to register new products and active constituents, amend a current registration, or apply for a permit. An annual fee is payable each year to renew the registration of a product. Product owners also pay an annual levy based on the sales of their registered products.
Documentation (Cost Recovery Impact Statement) for the above activities is available at www.apvma.gov.au/node/4161.

 

Australian Pesticides and Veterinary Medicines Authority
       
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
       
Note 18: Budgetary Reporting and Explanation of Major Variances
       
The following tables provide a comparison of the original budget as presented in the 2014-15 Portfolio Budget Statements (PBS) to the 2014-15 final outcome as presented in accordance with Australian Accounting Standards for the entity. The Budget is not audited.
Variances are considered to be 'major' based on the following criteria:
  • the variance between budget and actual is greater than 10% and greater than $250,000; and
  • The variance between budget and actual is greater than 2% of the relevant category (Income, Expenses and Equity totals); or
  • an item below this threshold but is considered important for the reader's understanding or is relevant to an assessment of the discharge of accountability and to an analysis of performance of an entity.
Note 18A: Departmental Budgetary Reports
       
Statement of Comprehensive Income
for the year ended 30 June 2015
       
  Actual Budget1 Variance2
  2015 2015 2015
  $'000 $'000 $'000
NET COST OF SERVICE      
Expenses      
Employee benefits 22 113 21 063 1 050
Suppliers 9 861 10 012 (151)
Depreciation and amortisation 1 203 1 107 96
Finance costs 17 - 17
Losses from asset sales 10 - 10
Total Expenses 33 204 32 182 1 022
       
Own-Source Income      
       
Own-source revenue      
Other revenue 557 339 218
Total own-source revenue 557 339 218
Total Own-Source Income 557 339 218
       
Net Cost of Services 32 647 31 843 804
       
Revenue from Government 29 184 30 239 (1 055)
Surplus/(Deficit) Attributable to the Australian Government (3 463) (1 604) (1 859)
       
OTHER COMPREHENSIVE INCOME      
Items not subject to subsequent reclassification to profit and loss      
Equity injection following reclassification to a corporate Commonwealth entity 5 155 - 5 155
Total other comprehensive income 5 155 - 5 155
Total Comprehensive Income/(Loss) Attributable to the Australian Government 1 692 (1 604) 3 296
       
1. The APVMA's original budgeted financial statement that was first presented to parliament in respect of the reporting period (i.e. from the entity's 2014-15 Portfolio Budget Statements (PBS)).
2. Between the actual and original budgeted amounts for 2015. Explanations of major variances are provided at Note 18B.

 

Australian Pesticides and Veterinary Medicines Authority
       
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
       
Note 18: Budgetary Reporting and Explanation of Major Variances
Note 18A: Departmental Budgetary Reports (continued)
       
Statement of Financial Position
for the year ended 30 June 2015
       
  Actual Budget1 Variance2
  2015 2015 2015
  $'000 $'000 $'000
       
ASSETS      
Financial Assets      
Cash and cash equivalents 1 289 12 942 (11 653)
Trade and other receivables 13 666 270 13 396
Total financial assets 14 955 13 212 1 743
Non-Financial Assets      
Land and buildings 1 769 2 015 (246)
Property, plant and equipment 761 819 (58)
Intangibles 4 292 2 382 1 910
Other non-financial assets 283 345 (62)
Total non-financial assets 7 105 5 561 1 544
       
Total Assets 22 060 18 773 3 287
       
LIABILITIES      
Payables      
Suppliers 3 848 3 263 585
Other payables 1 689 1 4943 195
Total payables 5 537 4 757 1 465
       
Provisions      
Employee provisions 5 578 5 7113 (133)
Other provisions 455 439 16
Total provisions 6 033 6 150 (802)
       
Total Liabilities 11 570 10 907 663
       
Net Assets 10 490 7 866 2 624
       
EQUITY      
Contributed equity 5 528 373 5 155
Reserves 1 123 1 123 -
Retained surplus 3 839 6 370 (2 531)
Total Equity 10 490 7 866 2 624
       
1. The APVMA's original budgeted financial statement that was first presented to parliament in respect of the reporting period (i.e. from the entity's 2014-15 Portfolio Budget Statements (PBS)).
2. Between the actual and original budgeted amounts for 2015. Explanations of major variances are provided at Note 18B.
3. $685,000 has been reclassifed from employee provisions to other payables for budget 2015. This is due to inconsistent classification of accrued salary and superannuation. In the PBS, these accruals are recorded as employee provisions while in the financial statements they are recorded as other payables.

 

Australian Pesticides and Veterinary Medicines Authority
                         
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
                         
Note 18: Fair Value Measurements
                         
Note 18A: Departmental Budgetary Reports (continued)
                         
Statement of Changes in Equity
for the year ended 30 June 2015
                         
    Asset    
  Retained Revaluation Contributed Total
  Earnings Reserves Equity/capital Equity
  Actual Budget1 Variance2 Actual Budget1 Variance2 Actual Budget1 Variance2 Actual Budget1 Variance2
  2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015
  $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Opening Balance                        
Balance carried forward from previous period 7 302 7 974 (672) 1 123 1 123 - 373 373 - 8 798 9 470 (672)
Adjusted opening balance 7 302 7 974 (672) 1 123 1 123 - 373 373 - 8 798 9 470 (672)
Comprehensive income                        
Surplus/(Loss) for the period (3 463) (1 604) (1 859) - - - - - - (3 463) (1 604) (1 859)
Other comprehensive income - - - - - - 5 155 - 5 155 5 155 - 5 155
Total comprehensive income (3 463) (1 604) (1 859) - - - 5 155 - 5 155 1 692 (1 604) 3 296
Closing Balance at 30 June 3 839 6 370 (2 531) 1 123 1 123 - 5 528 373 5 155 10 490 7 866 2 624
                         
1. The APVMA's original budgeted financial statement that was first presented to parliament in respect of the reporting period (i.e. from the entity's 2014-15 Portfolio Budget Statements (PBS)).
2. Between the actual and original budgeted amounts for 2015. Explanations of major variances are provided at Note 18B.

 

Australian Pesticides and Veterinary Medicines Authority
       
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
       
Note 18: Budgetary Reporting and Explanation of Major Variances
Note 18A: Departmental Budgetary Reports (continued)
       
Cash Flow Statement
for the year ended 30 June 2015
       
  Actual Budget1 Variance2
  2015 2015 2015
  $'000 $'000 $'000
       
Operating Activites      
Cash received      
Appropriations 743 743 -
Agricultural and Veterinary Chemicals (Administration) Act 1992 contribution 34 390 29 496 4 894
Net GST received 980 1 074 (94)
Interest received 17 - 17
Other cash received 593 337 256
Total cash received 36 723 31 650 5 073
Cash used     -
Employees 22 531 20 907 1 624
Suppliers 11 105 11 070 35
Total cash used 33 636 31 977 1 659
Net cash flows from operating activities 3 087 (327) 3 414
Investing Activities     -
Cash received     -
Proceeds from sales of property, plant and equipment 3 - 3
Total cash received 3 - 3
Cash used     -
Purchase of property, plant and equipment 2 010 700 1 310
Total cash used 2 010 700 1 310
Net cash flows from or (used by) investing activities (2 007) (700) (1 307)
Financing Activities     -
Cash used     -
Departmental balance of special account 13 424 - 13 424
Total cash used 13 424 - 13 424
      -
Net cash flows from financing activities (13 424) - (13 424)
Net increase or (decrease) in cash held (12 344) (1 027) (11 317)
      -
Cash and cash equivalents at the beginning of the reporting period 13 633 13 969 (336)
      -
Cash and cash equivalents at the end of the reporting period 1 289 12 942 (11 653)
       
1. The APVMA's original budgeted financial statement that was first presented to parliament in respect of the reporting period (i.e. from the entity's 2014-15 Portfolio Budget Statements (PBS)).
2. Between the actual and original budgeted amounts for 2015. Explanations of major variances are provided at Note 18B.

 

Australian Pesticides and Veterinary Medicines Authority
   
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
   
Note 18: Budgetary Reporting and Explanation of Major Variances
Note 18B: Departmental Major Budget Variances for 2015
   
 
   
   
Explanations of major variances Affected line items (and statements)
   
In April 2014, when the APVMA's budget for the 14-15 PBS was prepared, there was uncertainty as to whether the APVMA would become a non-corporate Commonwwealth entity or a corporate Commonwealth entity when the PGPA Act commenced on 1 July 2014. Given that at the time the APVMA's current status was an FMA Act agency, the budget was prepared on the basis that the APVMA would become a non-corporate Commonwealth entity.  
However, as stated previously in Note 1, on 1 July 2014 the APVMA was re-classified as a corporate Commonwealth entity.  
The major change to the APVMA's financial statements following this re-classification was the closing of the APVMA's special account. The combined administered and departmental special account balance at 30 June 2014 of $18.579 million was appropriated to a special appropriation. Monies held by the Department of Finance representing unspent cash from fees and charges paid by industry are now recorded as a receivable. Prior to 1 July 2014 these funds were held in a special account and recorded as cash.
  • Cash and cash equivalents
  • Trade and other receivables
    (Statement of Financial Position)
  • Financing activities - Cash used
    (Statement of Financial Position)
The administered portion of the $18.579 million balance of the special account at 30 June 2014 was $5.155 million. On 1 July 2014, this balance became an equity injection, based on the notion that the re-classification from an FMA Act agency to a corporate Commonwealth entity and the resulting dissolving of APVMA's administered function is a restructure of administrative arrangements.
  • Other Comprehensive Income
    (Statement of Financial Position)
  • Contributed equity
    (Statement of Change in Equity)
Actual total expenditure is approximately 3.2% above budget. This is largely due to increased staff levels required in the transitional years to complete the implementation of the Better Regulation reforms.
  • Employee benefits
  • Total expenditure
    (Statement of Comprehensive Income)
  • Cash received - Other cash received
  • Cash used - Total cash used
    (Statement of Comprehensive Income)
Revenue from government is slightly under budget due to lower than anticipated fees and charges paid by industry. This decrease is also partially explained by the fact the APVMA can no longer recognise outstanding fees and charges as revenue or a trade receivable (refer Note 1.5 for further details).
  • Revenue from Government
    (Statement of Financial Position)
  • Trade and other receivables
    (Statement of Financial Position)
After the completion of the 14-15 PBS budget, it was decided that additional funds would be allocated to continue with the significant investment in internally developed software (intangibles) to support the on-going reforms to the APVMA's activites.
  • Cash and cash equivalents
  • Non financial asset - Intangibles
    (Statement of Financial Position)
  • Cash received - Other cash received
  • Purchase of property, plant & equipment
    (Cash Flow Statement)
Payables liability is higher than forecast largely due to the timing of supplier payments. The amount in the PBS was based on the situation where a significant proportion of creditors were paid just prior to year end.
  • Payables - Suppliers
    (Statement of Financial Position)

 

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