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Financial performance

This section analyses the financial performance of the Australian Pesticides and Veterinary Medicines Authority for the year ended 30 June 2019

1.1: Expenses

1.1: Expenses

2019

$'000

2018

$'000

1.1A: Employee benefits

Wages and salaries

20 590

20 215

Superannuation:

Defined contribution plans

2 416

2 050

Defined benefit plans

1 380

1 557

Leave and other entitlements

2 043

1 851

Separation and redundancies

2 790

-

Other employee benefits

1 597

823

Total employee benefits

30 816

26 496

Accounting Policy

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

Note

There were 35 staff separations on 1 July 2019, with all costs accrued and recorded under "Separations and redundancies".

Major expenses comprising "Other employee benefits" include increased staff recruitments, costs associated with staff recruitments, and learning and development costs.

1.1B: Suppliers

Goods and services supplied or rendered

Consultants

1 646

1 945

Contractors

7 102

5 214

Travel

625

481

IT services

1 833

1 010

Other

1 469

490

Total goods and services supplied or rendered

12 675

9 140

Note

"Other" supplier expenses has increased in 2018‐19 due to the digitisation of paper files as APVMA moves to a paperless office environment.

Goods supplied

778

585

Services rendered

11 897

8 555

Total goods and services supplied or rendered

12 675

9 140

Other supplier expenses

Operating lease rentals ‐ external parties

1 602

2 251

Workers compensation premiums

135

155

Total other supplier expenses

1 737

2 406

Total supplier expenses

14 412

11 546

1.1C: Finance Costs

Unwinding of discount

41

70

Total finance costs

41

70

Accounting Policy

All borrowing costs are expensed as incurred.

Leasing Commitments

On 3 June 2019, the APVMA commenced operations in the purpose‐built offices located at 102 Taylor Street, Armidale, NSW. The occupancy is a fifteen year lease plus two five year extension options, and subject to annual rent increases of 3.25%.

The APVMA continues to operate from the Canberra office. The current lease at 18 Wormald Street, Symonston, Canberra, is valid until October 2020, and is subject to annual rent increases of 3.75%. The reduced occupancy from 3 June 2019 resulted in a provision for onerous property lease payments of $1.355 million being created which will be amortised over the remainder of the lease period. This provision will continue to be reviewed each year for any changed circumstances.

Commitment for minimum lease payments in relation to non‐cancellable operating leases are payable as follows:

Within 1 year

2 374

1 700

Between 1 to 5 years

4 236

5 633

Over 5 years

11 638

12 772

Total operating lease commitments

18 248

20 105

Accounting Policy

Where an asset is acquired under a finance lease, the asset is capitalised at either the lease property's fair value or, if lower, the present value of minimum lease payments at the inception of the contract. A liability is recognised at the same time and for the same amount.

The discount rate used is the interest rate implicit in the lease. Leased assets are amortised over the lease period. Lease payments are allocated between the principal component and the interest expense.

Operating lease payments are expensed on a straight‐line basis which is representative of the pattern of benefits derived from the leased assets.

1.2: Own‐Source Revenue, Gains and Revenue from Government

1.2: Own‐Source Revenue, Gains and Revenue from Government

2019

$'000

2018

$'000

OWN-SOURCE REVENUE

1.2A: Other revenue

Resources received free of charge

Remuneration of auditors

46

36

Other revenue

328

177

Total other revenue

374

213

Accounting Policy

Resources Received Free of Charge

Resources received free of charge are recognised as revenue when fair value can be reliably determined and the donated services would have been purchased. 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.

Other Revenue

Revenue from rendering of services is recognised by reference to the completion stage of contracts at the reporting date. The revenue is recognised when the amount of revenue, stage of completion and transaction costs incurred can be reliably measured and the probable economic benefits from the transaction will flow to the APVMA.

The contracts completion stage (at the reporting date) is determined by reference to the proportion that costs incurred to date relate to the transaction's estimated costs.

Interest revenue is recognised using the effective interest method.

"Other revenue" is predominantly made up of specific services to the portfolio department throughout the 2018‐19 financial year.

REVENUE FROM GOVERNMENT

1.2B: Revenue from Government

Corporate Commonwealth entity payment item

24 902

6 056

Department of Agriculture contribution

Agricultural and Veterinary Chemicals (Administration) Act 1992

(refer below)

32 092

32 924

Total revenue from Government

56 994

38 980

Department of Agriculture contribution is equal to the following fees and charges paid by industry:

Levies

18 453

18 802

Annual renewal fee

5 222

5 604

Product application fees

5 911

6 246

Good manufacturing practice (GMP) licence fees

1 029

1 033

Permits, actives and other fees

1 393

1 106

Penalties and Infringements

84

133

Total industry contributions

32 092

32 924

Accounting Policy

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) is recognised as revenue from Government by the corporate Commonwealth entity unless the funding is in the nature of an equity injection or a loan.

Fees and Levies

Fees and levies are recognised as income when they are received.