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Department of Agriculture Annual Report 2018–19

Departmental Financial Statements

Statement of Comprehensive Income for the period ended 30 June 2019

				Original Budget	Variance
		2019	2018	2019	2019
	Notes	$'000	$'000	$'000	$'000
NET COST OF SERVICES
Expenses
Employee benefits	1A	542 506	527 794	502 482	40 024
Suppliers	1B	264 680	237 921	278 535	( 13 855)
Grants	1C	3 341	12 654	4 060	( 719)
Depreciation and amortisation	4	31 782	31 485	28 240	3 542
Finance costs	6B	58	34	250	( 192)
Impairment loss allowance on financial instruments	1D	1 692	4 320		1 692
Write-down and impairment of other assets	1E	1 646	1 060	4 882	( 3 236)
Other expenses	1F	2 036	3 509	0	2 036
Total expenses		847 741	818 777	818 449	29 292

Own-source income
Own-source revenue
Sale of goods and rendering of services	2A	409 371	401 306	382 707	26 664
Interest	2B	419	767	423	( 4)
Other revenue	2C	30 400	26 976	36 407	( 6 007)
Total own-source revenue		440 190	429 049	419 537	20 653

Gains
Other gains	2D	310	945	0	310
Total gains		310	945	0	310
Total own-source income		440 500	429 994	419 537	20 963

Net cost of services		407 241	388 783	398 912	8 329

Revenue from Government		391 812	380 677	382 674	9 138
Deficit		( 15 429)	( 8 106)	( 16 238)	809

Total comprehensive loss		( 15 429)	( 8 106)	( 16 238)	809

The above statement should be read in conjunction with the accompanying notes.

Statement of Financial Position as at 30 June 2019

				Original Budget	Variance
		2019	2018	2019	2019
	Notes	$'000	$'000	$'000	$'000
ASSETS
Financial assets
Cash and cash equivalents	3A	38 547	32 069	27 270	11 277
Trade and other receivables	3B	105 131	98 095	77 602	27 529
Other investments		17 500	16 500	15 500	2 000
Total financial assets		161 178	146 664	120 372	40 806

Non-financial assets
Land, buildings and leasehold improvements	4	40 706	46 174	39 860	846
Property, plant and equipment	4	31 449	32 744	29 570	1 879
Computer software	4	113 492	98 764	126 660	( 13 168)
Inventories		2 110	2 275	2 297	( 187)
Prepayments		6 799	8 822	8 086	( 1 287)
Total non-financial assets		194 556	188 779	206 473	( 11 917)

Total assets		355 734	335 443	326 845	28 889

LIABILITIES
Payables
Suppliers	5A	45 634	42 448	21 587	24 047
Other payables	5B	12 532	10 329	44 440	( 31 908)
Total payables		58 166	52 777	66 027	( 7 861)

Provisions
Employee provisions	6A	169 916	150 962	138 714	31 202
Other provisions	6B	11 846	13 459	5 161	6 685
Total provisions		181 762	164 421	143 875	37 887

Total liabilities		239 928	217 198	209 902	30 026
Net assets		115 806	118 245	116 943	( 1 137)

EQUITY
Contributed equity		163 496	149 357	172 426	( 8 930)
Asset revaluation reserves		25 665	25 665	25 665	0
Industry reserves		63 112	54 322	43 931	19 181
Accumulated deficit		( 136 467)	( 111 099)	( 125 079)	( 11 388)
Total equity		115 806	118 245	116 943	( 1 137)

The above statement should be read in conjunction with the accompanying notes.

Statement of Changes in Equity for the period ended 30 June 2019

	Accumulated deficit		Asset revaluation reserves		Industry reserves		Contributed equity		Total equity
	2019	2018	2019	2018	2019	2018	2019	2018	2019	2018
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Opening balance
Balance carried forward from previous period	( 111 099)	( 92 602)	25 665	25 665	54 322	43 931	149 357	120 844	118 245	97 838
Application of new accounting standard	( 1 149)	0	0	0	0	0	0	0	( 1 149)	0
Adjusted opening balance	( 112 248)	( 92 602)	25 665	25 665	54 322	43 931	149 357	120 844	117 096	97 838

Comprehensive income
Surplus / (deficit) for the period	( 15 429)	( 8 106)	0	0	0	0	0	0	( 15 429)	( 8 106)
Total comprehensive income/ (loss)	( 15 429)	( 8 106)	0	0	0	0	0	0	( 15 429)	( 8 106)

Transactions with owners
Contributions by owners
Equity injection - Appropriations	0	0	0	0	0	0	4 315	16 777	4 315	16 777
Departmental capital budget	0	0	0	0	0	0	9 824	11 736	9 824	11 736
Total transactions with owners	0	0	0	0	0	0	14 139	28 513	14 139	28 513
Transfers between equity components	( 8 790)	( 10 391)	0	0	8 790	10 391	0	0	0	0
Closing balance as at 30 June	( 136 467)	( 111 099)	25 665	25 665	63 112	54 322	163 496	149 357	115 806	118 245

Accounting policy

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.

Industry Reserves

Each cost recovered program holds a separate industry reserve. Programs in surplus are held within the industry reserve balance. Programs in deficit are held against the accumulated deficit of the department.

The above statement should be read in conjunction with the accompanying notes.

Cash Flow Statement for the period ended 30 June 2019

				Original Budget	Variance
		2019	2018	2019	2019
	Notes	$'000	$'000	$'000	$'000

OPERATING ACTIVITIES
Cash received
Appropriations		375 119	384 001	390 316	( 15 197)
Sale of goods and rendering of services		400 764	395 182	378 044	22 720
Interest		0	351	423	( 423)
GST received		25 469	22 477	26 096	( 627)
Other		58 724	24 506	19 218	39 506
Total cash received		860 076	826 517	814 097	45 979

Cash used
Employees		527 915	520 507	505 621	22 294
Suppliers		272 696	265 729	291 379	( 18 683)
Grants		41 088	13 822	4 060	37 028
Other		93	1 161	1 206	( 1 113)
Total cash used		841 792	801 219	802 266	39 526
Net cash from operating activities		18 284	25 298	11 831	6 453

INVESTING ACTIVITIES
Cash received
Proceeds from sales of property, plant and equipment		33	37	0	33
Proceeds from sales of investments		16 500	16 000	16 000	500
Interest		416	422	0	416
Total cash received		16 949	16 459	16 000	949

Cash used
Purchase of land and buildings		3 249	11 517	8 950	( 5 701)
Purchase of property, plant and equipment		6 134	6 287	4 887	1 247
Purchase of software		31 881	26 862	20 876	11 005
Purchase of investments		17 500	16 500	15 500	2 000
Total cash used		58 764	61 166	50 213	8 551
Net cash used by investing activities		( 41 815)	( 44 707)	( 34 213)	( 7 602)

FINANCING ACTIVITIES
Cash received
Contributed equity		20 184	11 631	12 176	8 008
Departmental capital budget		9 824	12 195	9 824	0
Total cash received		30 008	23 826	22 000	8 008
Net cash from financing activities		30 008	23 826	22 000	8 008

Net increase / (decrease) in cash held		6 477	4 417	( 382)	6 859
Cash and cash equivalents at the beginning of the reporting period		32 069	27 652	27 652	4 417
Cash and cash equivalents at the end of the reporting period	3A	38 547	32 069	27 270	11 276

The above statement should be read in conjunction with the accompanying notes.

Budget Variance Commentary

The following tables provide a comparison of the original budget as presented in the 2018-19 Portfolio Budget Statements (PBS) to the 2018-19 final outcome as presented in accordance with Australian Accounting Standards for the department. The Budget is not audited. Explanations of major variances are provided below.

Variances are considered to be ‘major’ based on the following criteria:

the variance between budget and actual is greater than +/- 10% of the original budget and $10 million for a line item; or
the variance between budget and actual is greater than 2% of the relevant sub-total (i.e. total expenses, total income, total assets or total liabilities) and $10 million; 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 the department.

Major variances and explanations Statement of Comprehensive Income Total expenses were $29.3 million higher than the original budget estimate as a result of: Higher than budgeted employee benefits expenses of $40.0 million due to increases in employee provisions as a result of a decrease in the 10 year government bond rate and pay increases per the Enterprise Agreement. Offset by lower than budgeted worker compensation expenses as a result of a reduction in claims.	Affected line items Total expenses Employee benefits expense Suppliers expense
Total own-source income was $20.7 million higher than the original budget primarily due to higher rendering of services revenue of $26.7 million. Revenue was higher as a result of higher than budgeted fees from imported goods, vessel arrival charges and the implementation of the independent observer function.	Total own-source income Sale of goods and rendering of services
Statement of Financial Position Cash and cash equivalents balance was $11.3 million higher compared with the original budget. The variance predominantly relates to higher revenue from cost recovery arrangements. This also contributed to the higher than budgeted industry reserve equity balance. Trade and other receivables balance was $27.5 million higher than the original budget due to appropriation receivable and higher revenue from cost recovery arrangements.	Cash and cash equivalents Industry reserves Trade and other receivables

Intangibles balance was $13.2 million lower than the original budget due to a lower opening balance in actuals compared to budget.	Intangibles
Employee provisions balance was $31.2 million higher than the original budget due to significant increases in employee provisions as a result of a decrease in the 10 year government bond rate and the pay rises per the Enterprise Agreement.	Employee provisions
Cash Flow Statement The net change in cash held during 2018-19 was $6.9 million higher than budget. The change was driven by increased cash from cost recovery revenue collections, offset by increased expenditure on employee expenses and capital items to account for delays in the prior year.	Net increase/(decrease) in cash held

Major variances and explanations

Statement of Comprehensive Income

Total expenses were $29.3 million higher than the original budget estimate as a result of:

Higher than budgeted employee benefits expenses of $40.0 million due to increases in employee provisions as a result of a decrease in the 10 year government bond rate and pay increases per the Enterprise Agreement.
Offset by lower than budgeted worker compensation expenses as a result of a reduction in claims.

Affected line items

Total expenses
Employee benefits expense

Suppliers expense

Total own-source income was $20.7 million higher than the original budget primarily due to higher rendering of services revenue of $26.7 million. Revenue was higher as a result of higher than budgeted fees from imported goods, vessel arrival charges and the implementation of the independent observer function.

Total own-source income
Sale of goods and rendering of services

Statement of Financial Position

Cash and cash equivalents balance was $11.3 million higher compared with the original budget. The variance predominantly relates to higher revenue from cost recovery arrangements. This also contributed to the higher than budgeted industry reserve equity balance.

Trade and other receivables balance was $27.5 million higher than the original budget due to appropriation receivable and higher revenue from cost recovery arrangements.

Cash and cash equivalents
Industry reserves
Trade and other receivables

Intangibles balance was $13.2 million lower than the original budget due to a lower opening balance in actuals compared to budget.

Intangibles

Employee provisions balance was $31.2 million higher than the original budget due to significant increases in employee provisions as a result of a decrease in the 10 year government bond rate and the pay rises per the Enterprise Agreement.

Employee provisions

Cash Flow Statement

The net change in cash held during 2018-19 was $6.9 million higher than budget. The change was driven by increased cash from cost recovery revenue collections, offset by increased expenditure on employee expenses and capital items to account for delays in the prior year.

Net increase/(decrease) in cash held

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Department of Agriculture Annual Report 2018–19

Departmental Financial Statements

Statement of Comprehensive Income for the period ended 30 June 2019

Statement of Financial Position as at 30 June 2019

Statement of Changes in Equity for the period ended 30 June 2019

Cash Flow Statement for the period ended 30 June 2019

Budget Variance Commentary

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