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Note 1 Financial Performance

for the period ended 30 June 2020

Financial performance

This section analyses AFMA's financial performance for the year ended 30 June 2020.

Note 1.1 Expenses

2020

2019

$’000

$’000

Note 1.1A Employee benefits

Wages and salaries

15,117

15,992

Superannuation:

Defined contribution plans

1,779

1,892

Defined benefit plans

931

1,027

Leave and other entitlements

1,615

1,953

Total employee benefits

19,442

20,864

Accounting Policy

Accounting policies for employee related expenses is contained in the People and relationships section.

Note 1.1B: Suppliers

Goods and services

Research

4,051

3,466

Surveillance and compliance

1,471

1,343

Consultants and contractors

4,585

5,251

Travel and meetings

1,253

2,213

Information technology and communications

1,461

1,477

Training and development

189

319

Building repairs and outgoings

392

456

External audit fees provided free of charge

40

43

General administrative

745

1,482

Total goods and services

14,187

16,050

Goods supplied

154

224

Services rendered

14,033

15,826

Total goods and services supplied or rendered

14,187

16,050

Other suppliers

Workers compensation expenses

253

116

Operating lease rental 1

0

2,357

Short-term leases

474

0

Total other suppliers

727

2,473

Total suppliers

14,914

18,523

AFMA does not have any short-term lease commitments as at 30 June 2020, however AFMA leases three properties on month-to-month arrangements.

The above lease disclosures should be read in conjunction with the accompanying notes 1.1C, 1.2B, 2.2A and 2.4A.

1AFMA has applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117.

Accounting Policy

Short-term leases and leases of low-value assets

AFMA has elected not to recognise right-of-use assets and lease liabilities for short-term leases of assets that have a lease term of 12 months or less and leases of low-value assets (less than $10,000). AFMA recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

2020

2019

$’000

$’000

Note 1.1C: Finance Costs

Lease Liabilities 1

108

0

Unwinding of Discount

2

21

Total finance costs

110

21

The above lease disclosures should be read in conjunction with the accompanying notes 1.1B, 1.2B, 2.2A and 2.4A.

1The Entity has applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117.

Note 1.1D: Write-Down and Impairment of Assets

Asset write-downs and impairments from:

Impairment of property, plant and equipment

10

30

Total write-down and impairment of assets

10

30

Note 1.1E: Impairment Loss Allowance on Financial Assets

Impairment on trade and other receivables 1

7,932

11

Total impairment on financial instruments

7,932

11

1In 2019-20 impairment loss included waiver of levy amounts to support Commonwealth fishers during Covid-19. Refer to overview for further details.

Note 1.2 Own Source Revenue

Note 1.2A: Sale of Goods and Rendering of Services

Rendering of services

2,990

3,027

Total sale of goods and rendering of services

2,990

3,027

Disaggregation of revenue from contracts with customers

Major product / service line:

Regulatory Services

2,235

2,334

Other revenue

755

693

Total sale of goods and rendering of services

2,990

3,027

Note 1.2B: Rental Income

Operating lease:

Sublease - Thursday Island office

155

153

Sub-leasing right of use assets:

Sublease - Canberra office

0

124

Employee car parking

3

44

Total rental income

158

321

Leasing commitments receivable

AFMA in its capacity as a lessor sub-leases office accommodation on Thursday Island. All commitments are GST exclusive.

Commitments for minimum lease receipts in relation to non-cancellable operating leases are receivable as follows:

Within 1 year

145

One to two years

149

Two to three years

154

Total sub-lease commitments receivable

448

2020

2019

$’000

$’000

Note 1.2C: Interest

Interest

8

14

Total interest

8

14

Note 1.2D: Levies and licence charges

Levies and licensing charge 1

14,602

13,888

Total levies and licence charges

14,602

13,888

1Levies and licensing charges comprise of cost recovered amounts credited to the AFMA Special Account in accordance with s94C of the Fisheries Administration Act 1991. For further information on AFMA's cost recovery arrangements refer to Note 4.3.

Note 1.3A: Revenue from Government

Appropriations:

Departmental appropriation

19,890

19,908

Special Appropriation (Coronavirus Economic Response Package) 1

10,334

-

Total revenue from Government

30,224

19,908

Reconciliation of Coronovirus Economic Response Package 2019-20

2020

$’000

Levies and licensing charges per 2019-20 Levy Regulations

14,602

Levies and licensing charges for 2019-20 receipts collected

6,692

Difference represented by 2019-20 levy amounts waived

-7,910

Act of grace payments

-2,529

Total waivers and act of grace payments

-10,439

Special Appropriation (Coronavirus Economic Response Package)

10,334

Net impact on AFMA cash reserves

-105

1 In 2019-20 special appropriations also included Assistance for Severely Affected Regions (Special Appropriation) (Coronavirus Economic Response Package) Act 2020. Refer to overview and table below for details:

Revenue from Contracts with Customers

The following is a description of principal activities from which the AFMA generates its revenue: - Regulatory services which primarily consists of fees for services for observers, logbooks and licensing, vessel monitoring services provided to both industry and State Governments and other regulatory compliance services. Fees for services and compliance services are recognised over time based on actual costs incurred.- Other revenues which primarily consist of service contracts with related Commonwealth Government entities for enforcement and research activities. Other revenue enforcement activities are recognised either over time as expenses are incurred for each project. Research services are recognised at a point in time when milestones have been met.

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 end of the reporting period. Allowances are made when collectability of the debt is no longer probable.

Revenue from Government

Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when AFMA gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned. Appropriations receivable are recognised at their nominal amounts.

Other Revenue

Resources received free of charge (RRFOC) 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. RRFOC are recorded as either revenue or gains depending on their nature.