Department of Industry financial performance. Department of Industry financial performance

Transcription

1 financial performance Chapter 9 PART A CHAPTER 9 financial performance Independent auditor s report 108 Statement by the Secretary and Chief Financial Officer 110 Financial statements 111 Annual Report

2 PART A Chapter 9 financial performance 108

3 financial performance Chapter 9 PART A Annual Report

4 PART A Chapter 9 financial performance 110

5 financial performance Chapter 9 PART A Statement of Comprehensive Income for not-for-profit Reporting Entities incorporating the Department of Resources, Energy and Tourism for the period 1 July 2013 to 17 September 2013 for the year ended 30 June 2014 DIICCSRTE 1 RET Notes $'000 $'000 $'000 NET COST OF SERVICES Expenses Employee benefits 3A 440, ,560 60,889 Suppliers 3B 213, ,389 50,511 Grants 3C 6,866 15, Depreciation and amortisation 3D 48,174 48,844 1,519 Finance costs 3E Write-down and impairment of assets 3F 4,186 9, Other expenses 3G ,375 Total expenses 714, , ,767 Own-Source Income Own-source revenue Sale of goods and rendering of services 4A 56,386 70,218 7,495 Interest 4B Rental income 4C Other revenue 4D 20,395 26, Total own-source revenue 77,689 96,855 8,268 Gains Gains from sale of assets 4E Foreign exchange gains 4F Reversals of previous asset write-downs and impairments 4G Resources received free of charge and other gains 4H 2,535 9,160 1,268 Total gains 2,820 9,393 1,268 Total own-source income 80, ,248 9,536 Net cost of services (633,918) (539,509) (117,231) Revenue from Government 4I 592, , ,743 Deficit attributable to the Australian Government (41,425) (36,180) (488) OTHER COMPREHENSIVE INCOME Items not subject to subsequent reclassification to net cost of services Changes in asset revaluation reserve - (3,879) 4,922 Total comprehensive income/(loss) - (3,879) 4,922 Total comprehensive income/(loss) attributable to the Australian Government (41,425) (40,059) 4,434 The above statement should be read in conjunction with the accompanying notes. 1 The full year comparative figures for the financial year contained in these financial statements are those of the then, Innovation, Climate Change, Science, Research and Tertiary Education. 2 The full year comparative figures for the financial year of the Department of Resources, Energy and Tourism are included due to the majority of the functions of that agency being transferred to the on the 18 September Annual Report

6 PART A Chapter 9 financial performance Statement of Financial Position for not-for-profit Reporting Entities as at 30 June 2014 DIICCSRTE 1 RET Notes $'000 $'000 $'000 ASSETS Financial assets Cash and cash equivalents 6A 5,847 11, Trade and other receivables 6B 249, ,885 63,607 Other financial assets 6C Total financial assets 255, ,427 64,489 Non-financial assets Land and buildings 7A 138, ,330 9,748 Property, plant and equipment 7B 65,107 73,506 3,443 Laboratory equipment 7C 32,155 32,856 - Intangibles 7E 41,851 63,013 3,444 Inventories 7G 2,147 1,987 - Other non-financial assets 7H 7,739 3,215 1,668 Total non-financial assets 287, ,907 18,303 Total assets 543, ,334 82,792 LIABILITIES Payables Suppliers 8A 30,433 47,610 18,292 Grants 8B Other payables 8C 72,751 57,313 15,757 Total payables 104, ,238 34,049 Provisions Employee provisions 9A 105, ,988 22,382 Other provisions 9B 3,116 2,311 1,471 Total provisions 108, ,299 23,853 Total liabilities 212, ,537 57,902 Net assets 331, ,797 24,890 EQUITY Contributed equity 449, ,087 10,391 Asset revaluation reserve 9,800 9,800 4,922 Retained surplus/(accumulated deficit) (128,515) (87,090) 9,577 Total equity 331, ,797 24,890 The above statement should be read in conjunction with the accompanying notes. 1 The full year comparative figures for the financial year contained in these financial statements are those of the then, Innovation, Climate Change, Science, Research and Tertiary Education. 2 The full year comparative figures for the financial year of the Department of Resources, Energy and Tourism are included due to the majority of the functions of that agency being transferred to the on the 18 September

7 financial performance Chapter 9 PART A Statement of Changes in Equity for not-for-profit Reporting Entities incorporating the Department of Resources, Energy and Tourism for the period 1 July 2013 to 17 September 2013 for the year ended 30 June 2014 Retained earnings Asset revaluation surplus Contributed equity/capital Total equity $'000 $'000 $'000 $'000 Opening balance Balance carried forward from previous period (87,090) 9, , ,797 Opening balance - Department of Resources, Energy and Tourism (17,166) (17,166) Adjusted opening balance (87,090) 9, , ,631 Comprehensive income Deficit for the year (41,425) - - (41,425) Total comprehensive income (41,425) - - (41,425) Total comprehensive income attributable to Australian Government (41,425) - - (41,425) Transactions with owners Distribution to owners Restructuring Contributions by owners - - (4,985) (4,985) Equity injection - Appropriations ,725 55,725 Departmental capital budget (DCB) ,128 34,128 Total transactions with owners ,868 84,868 Closing balance attributable to Australian Government (128,515) 9, , ,074 The above statement should be read in conjunction with the accompanying notes. Annual Report

8 PART A Chapter 9 financial performance Statement of Changes in Equity for not-for-profit Reporting Entities for the year ended 30 June 2013 DIICCSRTE 1 Retained earnings Asset revaluation surplus Contributed equity/capital Total equity $'000 $'000 $'000 $'000 Opening balance Balance carried forward from previous period (50,910) 13, , ,103 Adjusted opening balance (50,910) 13, , ,103 Comprehensive income Other comprehensive income - Changes in asset revaluation surplus - (3,879) - (3,879) Deficit for the year (36,180) - - (36,180) Total comprehensive income (36,180) (3,879) - (40,059) Total comprehensive income attributable to Australian Government (36,180) (3,879) - (40,059) Transactions with owners Contributions by owners Restructuring ,054 65,054 Equity injection - Appropriations ,941 15,941 Departmental capital budget (DCB) ,758 34,758 Total transactions with owners , ,753 Closing balance attributable to Australian Government (87,090) 9, , ,797 The above statement should be read in conjunction with the accompanying notes. 1 The full year comparative figures for the financial year contained in these financial statements are those of the then, Innovation, Climate Change, Science, Research and Tertiary Education. 114

9 financial performance Chapter 9 PART A Statement of Changes in Equity for not-for-profit Reporting Entities for the year ended 30 June 2013 RET 1 Retained earnings Asset revaluation surplus Contributed equity/capital Total equity $'000 $'000 $'000 $'000 Opening balance Balance carried forward from previous period (6,861) - 9,362 2,501 Adjusted opening balance (6,861) - 9,362 2,501 Comprehensive income Other comprehensive income - Changes in asset revaluation surplus - 4,922-4,922 Deficit for the year (488) - - (488) Total comprehensive income (488) 4,922-4,434 Total comprehensive income attributable to Australian Government (488) 4,922-4,434 Transactions with owners Contributions by owners Restructuring 16,926-1,029 17,955 Total transactions with owners 16,926-1,029 17,955 Closing balance attributable to Australian Government 9,577 4,922 10,391 24,890 The above statement should be read in conjunction with the accompanying notes. 1 The full year comparative figures for the financial year of the Department of Resources, Energy and Tourism are included due to the majority of the functions of that agency being transferred to the on 18 September Annual Report

10 PART A Chapter 9 financial performance Cash Flow Statement for not-for-profit Reporting Entities incorporating the Department of Resources, Energy and Tourism for the period 1 July 2013 to 17 September 2013 for the year ended 30 June 2014 DIICCSRTE 1 RET Notes $'000 $'000 $'000 OPERATING ACTIVITIES Cash received Appropriations 689, , ,854 Sale of goods and rendering of services 69,775 67,752 10,377 Net GST received 14,736 14,090 3,121 Rental income Other 27,114 38, Total cash received 802, , ,633 Cash used Employees 467, ,081 67,797 Suppliers 250, ,911 40,319 Grants 11,514 12, Section 31 receipts transferred to OPA 74,775 93,338 - Other 2,914 3,335 12,125 Total cash used 806, , ,878 Net cash from/(used by) operating activities 11 (4,633) 9, INVESTING ACTIVITIES Cash received Proceeds on sales of property, plant and equipment Total cash received Cash used Purchase of property, plant and equipment 31,698 27,459 1,414 Purchase of intangibles 11,349 18, Total cash used 43,047 45,990 1,666 Net cash used by investing activities (42,951) (45,727) (1,666) FINANCING ACTIVITIES Cash received Appropriations - Contributed equity 8,683 12,822 - Appropriations - Departmental Capital Budget 33,413 30,742 - Loan Repayments Total cash received 42,096 43, Net cash from financing activities 42,096 43, Net increase/(decrease) in cash held (5,488) 7,332 (240) Cash and cash equivalents at the beginning of the reporting period 11,335 3, Cash and cash equivalents at the end of the reporting period 6A 5,847 11, The above statement should be read in conjunction with the accompanying notes. 1 The full year comparative figures for the financial year contained in these financial statements are those of the then, Innovation, Climate Change, Science, Research and Tertiary Education. 2 The full year comparative figures for the financial year of the Department of Resources, Energy and Tourism are included due to the majority of the functions of that agency being transferred to the on the 18 September

11 financial performance Chapter 9 PART A Schedule of Commitments as at 30 June 2014 DIICCSRTE 1 RET BY TYPE $'000 $'000 $'000 Commitments receivable National Science and Technology Centre sponsorship (200) (440) - Sublease rental income (3,414) - (3,636) GST recoverable on commitments (51,611) (54,176) (6,368) Other commitments receivable (619) (989) - Total commitments receivable (55,844) (55,605) (10,004) Commitments payable Capital commitments Land and buildings Property, plant and equipment 5,879 6,916 - Intangibles 1,014 1,399 - Total capital commitments 6,893 8,508 - Operating lease and other commitments Operating leases 497, ,887 52,121 Industry assistance 1,343 2,475 - Science and research grants Research and development Tertiary education skills and vocational education and training Climate change - 2,694 - Energy performance productivity Other 85, ,031 22,195 Total operating lease and other commitments 585, ,651 74,316 Total commitments payable 592, ,159 74,316 Net commitments by type 536, ,554 64,312 The above schedule should be read in conjunction with the accompanying notes. 1 The full year comparative figures for the financial year contained in these financial statements are those of the then, Innovation, Climate Change, Science, Research and Tertiary Education. 2 The full year comparative figures for the financial year of the Department of Resources, Energy and Tourism are included due to the majority of the functions of that agency being transferred to the on the 18 September Annual Report

12 PART A Chapter 9 financial performance Schedule of Commitments as at 30 June 2014 DIICCSRTE 1 RET $'000 $'000 $'000 BY MATURITY Commitments receivable Sponsorship receivable Within 1 year (200) (440) - Total sponsorship receivable (200) (440) - Operating lease income Within 1 year (813) - (549) Between 1 to 5 years (1,893) - (1,948) More than 5 years (708) - (1,139) Total operating lease income (3,414) - (3,636) GST and other commitments receivable Within 1 year (12,519) (11,572) (1,457) Between 1 to 5 years (15,972) (16,387) (3,126) More than 5 years (23,739) (27,206) (1,785) Total other commitments receivable (52,230) (55,165) (6,368) Total commitments receivable (55,844) (55,605) (10,004) Commitments payable Capital commitments Within 1 year 6,893 8,508 - Total capital commitments 6,893 8,508 - Operating lease commitments Within 1 year 65,679 53,511 5,896 Between 1 to 5 years 170, ,633 25,449 More than 5 years 261, ,743 20,776 Total operating lease commitments 497, ,887 52,121 Other commitments Within 1 year 75,906 72,326 11,308 Between 1 to 5 years 11,360 43,918 10,887 More than 5 years ,520 - Total other commitments 87, ,764 22,195 Total operating lease and other commitments 585, ,651 74,316 Total commitments payable 592, ,159 74,316 Net commitments by maturity 536, ,554 64,312 NOTE: Commitments are GST inclusive where relevant. Operating leases included are effectively non-cancellable and comprise of leases for office accommodation. Lease payments are subject to fixed annual percentage increases, together with reviews based on market values. Initial periods of some office accommodation are still current and some properties have the option to renew for a given period. The above schedule should be read in conjunction with the accompanying notes. 1 The full year comparative figures for the financial year contained in these financial statements are those of the then, Innovation, Climate Change, Science, Research and Tertiary Education. 2 The full year comparative figures for the financial year of the Department of Resources, Energy and Tourism are included due to the majority of the functions of that agency being transferred to the on the 18 September

13 financial performance Chapter 9 PART A Schedule of Contingencies as at 30 June 2014 DIICCSRTE 1 RET $'000 $'000 $'000 Contingent assets Guarantees Total contingent assets Contingent liabilities Guarantees Total contingent liabilities Net contingent assets/(liabilities) (4) - (4) Details of each class of contingent liabilities and contingent assets listed above are disclosed in Note 12 along with information on significant remote contingencies and contingencies that cannot be quantified. The above schedule should be read in conjunction with the accompanying notes. 1 The full year comparative figures for the financial year contained in these financial statements are those of the then, Innovation, Climate Change, Science, Research and Tertiary Education. 2 The full year comparative figures for the financial year of the Department of Resources, Energy and Tourism are included due to the majority of the functions of that agency being transferred to the on the 18 September Annual Report

14 PART A Chapter 9 financial performance Administered Schedule of Comprehensive Income for not-for-profit Reporting Entities incorporating the Department of Resources, Energy and Tourism for the period 1 July 2013 to 17 September 2013 for the year ended 30 June 2014 DIICCSRTE 1 RET Notes $'000 $'000 $'000 NET COST OF SERVICES Expenses Employee benefits 17A 5,306-5,890 Suppliers 17B 568, ,618 29,324 Fees 17C Subsidies 17D 1,037,281 1,070, ,862 Personal benefits 17E 1,114,112 3,437,943 - Finance costs 17F - 341,051 - Grants 17G 3,359,153 9,507, ,642 Depreciation and amortisation 17H 1,084-1,136 Write-down and impairment of assets 17I 74,088 4, Payments to CAC Act Bodies 17J 1,293, , ,850 Fair value losses 17K - 1,455,723 - Total expenses 7,453,166 17,168, ,141 Income Revenue Taxation revenue Income tax 18A Indirect tax 18B 1,439 1,235 - Fees from regulatory services 18C 11, ,026 Total taxation revenue 13,284 1, ,197 Non-taxation revenue Fees 18D 2, Interest 18E 6, ,859 4,267 Dividends 18F 36,295 81,021 59,800 Nation-building Fund 18G 7, ,181 - Royalties 18H 1,803,973-1,777,587 Other non-taxation revenue 18I 19,094 35,506 12,048 Total non-taxation revenue 1,875,951 1,045,567 1,854,180 Total revenue 1,889,235 1,046,802 2,007,377 The above schedule should be read in conjunction with the accompanying notes. 1 The full year comparative figures for the financial year contained in these financial statements are those of the then, Innovation, Climate Change, Science, Research and Tertiary Education. 2 The full year comparative figures for the financial year of the Department of Resources, Energy and Tourism are included due to the majority of the functions of that agency being transferred to the on the 18 September

15 financial performance Chapter 9 PART A Administered Schedule of Comprehensive Income for not-for-profit Reporting Entities incorporating the Department of Resources, Energy and Tourism for the period 1 July 2013 to 17 September 2013 for the year ended 30 June 2014 DIICCSRTE 1 RET Notes $'000 $'000 $'000 Gains Reversals of previous asset write-downs and impairments 18J - 48,136 - Other gains 18K 13, Fair value gains 18L - 508,933 - Total gains 13, ,551 - Total income 1,902,707 1,604,353 2,007,377 Net (cost of)/contribution by services (5,550,459) (15,564,599) 1,535,236 Surplus/(Deficit) before income tax on continuing operations (5,550,459) (15,564,599) 1,535,236 OTHER COMPREHENSIVE INCOME Items subject to subsequent reclassification to net cost of services Changes in asset revaluation surplus (33,597) (34,949) (118,366) Total other comprehensive income before income tax (33,597) (34,949) (118,366) Total comprehensive income/(loss) (5,584,056) (15,599,548) 1,416,870 The above schedule should be read in conjunction with the accompanying notes. 1 The full year comparative figures for the financial year contained in these financial statements are those of the then, Innovation, Climate Change, Science, Research and Tertiary Education. 2 The full year comparative figures for the financial year of the Department of Resources, Energy and Tourism are included due to the majority of the functions of that agency being transferred to the on the 18 September Annual Report

16 PART A Chapter 9 financial performance Administered Schedule of Assets and Liabilities for not-for-profit Reporting Entities as at 30 June 2014 ASSETS DIICCSRTE 1 RET Notes $'000 $'000 $'000 Financial assets Cash and cash equivalents 20A 130, Trade and other receivables 20B 154,819 23,019,081 76,364 Other investments 20C 4,010,034 5,470, ,799 Dividend receivable 20D 27,895 24,100 - Other financial assets 20E 160, ,997 Total financial assets 4,483,279 28,514, ,160 Non-financial assets Property, plant and equipment 21A Intangibles 21C 5,713-4,207 Total non-financial assets 6,543-4,207 Total assets administered on behalf of Government 4,489,822 28,514, ,367 LIABILITIES Payables Suppliers 22A 38,967 31,024 18,412 Subsidies 22B 96, ,271 2,464 Personal benefits 22C 6,897 78,769 - Grants 22D 68,428 86,698 31,188 Other payables 22E 13,154 12, Total payables 223, ,043 52,582 Provisions Employee provisions 23A 976-1,016 Provision for grants 23B - 6,709,000 - Other provisions 23C Total provisions 1,278 6,709,296 1,016 Total liabilities administered on behalf of Government 225,198 7,035,339 53,598 Net assets 4,264,624 21,478, ,769 The above schedule should be read in conjunction with the accompanying notes. 1 The full year comparative figures for the financial year contained in these financial statements are those of the then, Innovation, Climate Change, Science, Research and Tertiary Education. 2 The full year comparative figures for the financial year of the Department of Resources, Energy and Tourism are included due to the majority of the functions of that agency being transferred to the on the 18 September

17 financial performance Chapter 9 PART A Administered Reconciliation Schedule for not-for-profit Reporting Entities incorporating the Department of Resources, Energy and Tourism for the period 1 July 2013 to 17 September 2013 for the year ended 30 June 2014 DIICCSRTE 1 RET $'000 $'000 $'000 Opening assets less liabilities as at 1 July 21,478,873 18,419, ,562 Opening balance - Department of Resources, Energy and Tourism 822, Cash from restructuring - Special Accounts 181, Adjusted opening assets less liabilities 22,482,955 18,419, ,562 Net (cost of)/contribution by services Income 1,902,707 1,604,353 2,007,377 Expenses Payments to Non-CAC Act bodies (6,159,620) (16,233,248) (286,291) Payments to CAC Act bodies (1,293,546) (935,704) (185,850) Other comprehensive income: Revaluations transferred from reserves (33,597) (34,949) (118,366) Transfers (to)/from the Australian Government Appropriation transfers from Official Public Account Administered assets and liabilities appropriations Payments to Non-CAC Act bodies 20,916 79,870 - Payments to CAC Act bodies 45,163 48,573 - Annual appropriations Payments to Non-CAC Act bodies 2,793,069 2,386, ,474 Payments to CAC Act bodies 1,028, , ,656 Special appropriations (limited) Payments to Non-CAC Act bodies 318, ,539 - Payments to CAC Act bodies 265,150-56,194 Special appropriations (unlimited) Payments to Non-CAC Act bodies 3,925,451 16,525, Payments to CAC Act bodies Appropriation transfers to OPA Transfers to OPA (2,592,091) (1,908,582) (1,915,562) Transfers of TA foreign exchange gain to OPA - - (1,683) Transfers of ASI bank balance upon cessation to OPA - - (88,926) EIF Capital payments to CAC Act bodies - 141,923 - Appropriation from prior years 11,767 54,257 - Restructuring (18,450,449) 62,076 (2,036) Closing assets less liabilities as at 30 June 4,264,624 21,478, ,769 The above schedule should be read in conjunction with the accompanying notes. 1 The full year comparative figures for the financial year contained in these financial statements are those of the then, Innovation, Climate Change, Science, Research and Tertiary Education. 2 The full year comparative figures for the financial year of the Department of Resources, Energy and Tourism are included due to the majority of the functions of that agency being transferred to the on the 18 September Annual Report

18 PART A Chapter 9 financial performance Administered Cash Flow Statement for not-for-profit Reporting Entities incorporating the Department of Resources, Energy and Tourism for the period 1 July 2013 to 17 September 2013 for the year ended 30 June 2014 DIICCSRTE 1 RET Notes $'000 $'000 $'000 OPERATING ACTIVITIES Cash received Interest 1,741 2,283 - Dividends 32,500 56,921 59,800 Taxes Fees 12, ,057 Royalties 1,842,844-1,752,544 Nation-building Fund receipts 7, ,181 - Net GST received 90,485 17,647 23,516 Other 69,818 54,046 12,765 Total cash received 2,057, ,078 2,001,853 Cash used Suppliers 613, ,523 22,550 Grants 3,143,248 9,716, ,677 Employees 5,492-4,748 Subsidies 1,061,359 1,061,405 - Fees Personal benefits 1,201,583 3,460,801 - Payment to CAC Act Bodies 1,293, , ,850 Total cash used 7,318,403 15,593, ,205 Net cash from/(used by) operating activities 24 (5,261,321) (15,055,867) 1,565,648 INVESTING ACTIVITIES Cash received Nation-building Fund receipts - Education Investment Fund (EIF) - 141,923 - Higher Education Loan Program (HELP) and Student Financial Supplement Scheme (SFSS) loans repaid 635,451 1,730,629 - Australian Learning and Teaching Council receipts from liquidation - 2,087 - Return of Tourism Australia (TA) foreign exchange gain - - 1,683 Proceeds on the cessation of Australian Solar Institute (ASI) ,926 Repayments of advances and loans 8,190 13,841 3,980 Total cash received 643,641 1,888,480 94,589 The above statement should be read in conjunction with the accompanying notes. 1 The full year comparative figures for the financial year contained in these financial statements are those of the then, Innovation, Climate Change, Science, Research and Tertiary Education. 2 The full year comparative figures for the financial year of the Department of Resources, Energy and Tourism are included due to the majority of the functions of that agency being transferred to the on the 18 September

19 financial performance Chapter 9 PART A Administered Cash Flow Statement for not-for-profit Reporting Entities incorporating the Department of Resources, Energy and Tourism for the period 1 July 2013 to 17 September 2013 for the year ended 30 June 2014 DIICCSRTE 1 RET Notes $'000 $'000 $'000 Cash used Investments 22,388 23,000 - Advances and loans made HELP loans paid 1,201,576 5,041,959 - Purchase of intangibles 1, Purchase of property, plant and equipment Return TA gain to OPA - - 1,683 Return ASI proceeds to the OPA ,926 CAC Act Body investments 45,163 48,573 - Payments to CAC Act Bodies - Capital Payments to EIF - 141,923 - Total cash used 1,270,968 5,256,380 90,609 Net cash from/(used by) investing activities (627,327) (3,367,900) 3,980 Net increase/(decrease) in cash held (5,888,648) (18,423,767) 1,569,628 Cash and cash equivalents at the beginning of the reporting period Cash from Official Public Account Appropriations 8,330,419 20,235, ,891 Appropriation - Administered assets and liabilities 20,916 79,870 - Cash from restructuring - Special Accounts 181, Nation-building Fund - EIF - 141,923 - Equity appropriation - CAC Act Bodies 45,163 48,573 - Special Accounts 130,050 16,548 57,652 GST appropriations 140, ,763 - Total cash from official public account 8,848,149 20,643, ,543 Cash to Official Public Account Appropriations (2,630,122) (1,908,582) (1,984,258) Nation-building Fund - EIF - (141,923) - GST appropriations (139,334) (139,433) - Special Accounts (60,078) (29,730) (21,913) Total cash to official public account (2,829,534) (2,219,668) (2,006,171) Cash and cash equivalents at the end of the reporting period 20A 130, The above statement should be read in conjunction with the accompanying notes. 1 The full year comparative figures for the financial year contained in these financial statements are those of the then, Innovation, Climate Change, Science, Research and Tertiary Education. 2 The full year comparative figures for the financial year of the Department of Resources, Energy and Tourism are included due to the majority of the functions of that agency being transferred to the on the 18 September Annual Report

20 PART A Chapter 9 financial performance Schedule of Administered Commitments as at 30 June 2014 BY TYPE DIICCSRTE 1 RET $'000 $'000 $'000 Commitments receivable Net GST recoverable on commitments (216,640) (167,784) (80,580) Total commitments receivable (216,640) (167,784) (80,580) Commitments payable Capital commitments Property, plant and equipment Intangibles Capital investment 99,326 83,143 - Other 3,238 3,637 - Total capital commitments 102,676 86,780 - Operating lease and other commitments Operating leases 8, Industry assistance 359, ,222 - Science and research 29,994 1,019,187 - Research and development 757, ,939 - Tertiary education skills and vocational education and training 462,045 6,824,687 - Climate change assistance - 32,559 - Energy performance productivity 279, Other 742,981 29,331 1,124,712 Total operating lease and other commitments 2,640,375 9,078,044 1,124,712 Total commitments payable 2,743,051 9,164,824 1,124,712 Net commitments by type 2,526,411 8,997,040 1,044,132 The above schedule should be read in conjunction with the accompanying notes. 1 The full year comparative figures for the financial year contained in these financial statements are those of the then, Innovation, Climate Change, Science, Research and Tertiary Education. 2 The full year comparative figures for the financial year of the Department of Resources, Energy and Tourism are included due to the majority of the functions of that agency being transferred to the on the 18 September

21 financial performance Chapter 9 PART A Schedule of Administered Commitments as at 30 June 2014 BY MATURITY DIICCSRTE 1 RET $'000 $'000 $'000 Commitments receivable Other commitments receivable Within 1 year (91,218) (99,600) (39,614) Between 1 to 5 years (120,560) (66,992) (40,966) More than 5 years (4,862) (1,192) - Total other commitment receivable (216,640) (167,784) (80,580) Total commitment receivable (216,640) (167,784) (80,580) Commitments payable Capital commitments Within 1 year 72,846 55,815 - Between 1 to 5 years 29,830 24,515 - More than 5 years - 6,450 - Total capital commitments 102,676 86,780 - Operating lease commitments Within 1 year 1, Between 1 to 5 years 4, More than 5 years 2, Total operating lease commitments 8, Other commitments Within 1 year 1,145,395 8,080, ,433 Between 1 to 5 years 1,435, , ,279 More than 5 years 50,665 13,115 - Total other commitments 2,631,791 9,077,925 1,124,712 Total operating lease and other commitments 2,640,375 9,078,044 1,124,712 Total commitments payable 2,743,051 9,164,824 1,124,712 Net commitments by maturity 2,526,411 8,997,040 1,044,132 Note: Commitments are GST inclusive where relevant. The above schedule should be read in conjunction with the accompanying notes. 1 The full year comparative figures for the financial year contained in these financial statements are those of the then, Innovation, Climate Change, Science, Research and Tertiary Education. 2 The full year comparative figures for the financial year of the Department of Resources, Energy and Tourism are included due to the majority of the functions of that agency being transferred to the on the 18 September Annual Report

22 PART A Chapter 9 financial performance Schedule of Administered Contingencies as at 30 June 2014 DIICCSRTE 1 RET $'000 $'000 $'000 Contingent liabilities Claims for damages or costs Total contingent liabilities Net contingent assets/(liabilities) - (250) - Details of each class of contingent liabilities and contingent assets listed above are disclosed in Note 25, along with information on significant remote contingencies and contingencies that cannot be quantified. The above schedule should be read in conjunction with the accompanying notes. 1 The full year comparative figures for the financial year contained in these financial statements are those of the then, Innovation, Climate Change, Science, Research and Tertiary Education. 2 The full year comparative figures for the financial year of the Department of Resources, Energy and Tourism are included due to the majority of the functions of that agency being transferred to the on the 18 September

23 financial performance Chapter 9 PART A Annual Report

24 PART A Chapter 9 financial performance Note 1: Summary of Significant Accounting Policies 1.1 Objective of the The (the Department) is an Australian Government controlled entity. The objective of the Department is to contribute to the growth and development of globally competitive industries which is delivered through: contributing to an environment to improve the competitiveness and productivity of Australian manufacturing; science, development and innovation incentives and programs; upskilling Australians through an industry and consumer focussed vocational education and training system; and an efficient and competitive resources and energy sector. The Department s structure for changed as a result of the Administrative Arrangements Order (AAO) issued on 18 September The Department was renamed from the, Innovation, Climate Change, Science, Research and Tertiary Education to the. The functions that transferred into the Department as a result of the AAO were: Resources and Energy from the former Department of Resources, Energy and Tourism; the Anti-Dumping Commission from the Australian Customs and Border Protection Service; and the Adult Migrant English Program from the Department of Immigration and Border Protection. The functions that transferred out from the Department as a result of the AAO were: Climate Change to the Department of the Environment; International Climate Change to the Department of Foreign Affairs and Trade; Higher Education to the Department of Education; Student Support to the Department of Social Services; Small Business Policy to the Department of the Treasury; Indigenous Education to the Department of the Prime Minister and Cabinet; Tourism to the Australian Trade Commission; and Office of Spatial Policy to the Department of Communications. During the year the Department was structured to meet the following outcomes: Outcome 1: The sustainable development and growth of Australian industry particularly in the manufacturing, services and small business sectors by encouraging businesses to innovate, collaborate and commercialise ideas, and by delivering business advice, assistance and services. Outcome 2: Production, use and awareness of science and research knowledge, by supporting research activity, training and infrastructure, science communication, skill development, and collaboration within the research sector and between researchers and industry, domestically and internationally. Outcome 3: A growth in skills, qualifications and productivity through funding to improve teaching quality, learning, and tertiary sector infrastructure, international promotion of Australia s education and training sectors, and partnerships with industry. Outcome 4: Reduction of Australia s greenhouse gas emissions, adaptation to the impacts of climate change, and negotiation of an effective global solution, through the development and implementation of a national response to climate change; and bilateral, regional and multilateral engagement internationally. Outcome 5: The improved strength, competitiveness and sustainability of the resources, energy and tourism industries to enhance Australia s prosperity through the implementation of government policy and programs. The activities that contribute towards these outcomes are classified as either departmental or administered. Departmental activities involve the use of assets, liabilities, income and expenses controlled or incurred by the Department in its own right. Administered activities involve the management or oversight by the Department, on behalf of the Government, of items controlled or incurred by the Government. Administered activities are referred to in the shaded areas of these financial statements. The continued existence of the Department in its present form and with its present programs is dependent on Government policy and on continuing appropriations by Parliament for the Department s administration and programs. 130

25 financial performance Chapter 9 PART A 1.2 Basis of Preparation of the Financial Statements The financial statements are general purpose financial statements and are required by section 49 of the Financial Management and Accountability Act The financial statements and notes have been prepared in accordance with: Finance Minister s Orders (FMOs) for reporting periods ending on or after 1 July 2011; and Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period. The Department of Resources, Energy and Tourism was abolished by the Governor-General on 18 September The functions of the Department of Resources, Energy and Tourism were transferred to the. Due to the assumption of continuing operations, these financial statements incorporate the former Department of Resources, Energy and Tourism for the period 1 July to 17 September The financial statements and notes have been prepared on an accrual basis and are in accordance with the historical cost convention, except for certain assets and liabilities 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 statements and notes are 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 FMOs, 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 Department 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 executor contracts are not recognised unless required by an accounting standard. Liabilities and assets that are unrealised 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. Administered revenues, expenses, assets, liabilities and cash flows reported in the Schedule of Administered Items and related notes are accounted for on the same basis and using the same policies as for Departmental items, except as otherwise stated in Note Significant Accounting Judgements and Estimates In the process of applying the accounting policies listed in this note, the Department has made the following judgements that have the most significant impact on the amounts recorded in the financial statements: Snowy Hydro Ltd has been valued using the Capitalisation of Future Maintainable Earnings method, with the valuation provided by Leadenhall Corporate Advisory Pty Ltd. The assumptions which may affect the valuation include environmental markets, electricity demand and supply, electricity industry structure and water; The fair value of the Innovation Investment Fund loans (IIF loans) (including the Pre-Seed program) have been assessed to be the amount expected to be received by IIF Investments Pty Ltd and returned to the Australian Government; and Offshore Petroleum Royalties revenue accruals are based on historical trend analysis. During the financial year the Department made the following judgements that had a significant impact on the amounts recorded in the financial statements. Responsibility for the administration of the programs associated with these amounts transferred to the Department of Education on 18 September The value of the HELP receivable was calculated each year by an actuarial assessment. The two main measures impacting on the calculation of the HELP asset are the face value of the debt not expected to be repaid and the fair value of the remaining receivable, calculated as the present value of projected future cash flows. The fair value of the Provision for Unfunded University Superannuation, was calculated annually by actuarial assessment. The provision is valued in accordance with the requirements of AASB 137 Provisions, Contingent Liabilities and Contingent Assets. The discount rate used is based on the yields available on Government bonds. No other accounting assumptions or estimates have been identified that will have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next reporting period. Annual Report

26 PART A Chapter 9 financial performance 1.4 New Australian Accounting Standards Adoption of New Australian Accounting Standard Requirements No accounting standard has been adopted earlier than the application date as stated in the standard. The following new standards are applicable to the current reporting period: AASB 13, Fair Value Measurement is effective for reporting periods beginning on or after 1 January 2013 (the financial year) which increases the level of disclosures for items carried at fair value (including requirement to designate items as Level 1,2 or 3). Associated with the introduction of AASB 13 a number of accounting standards were amended to reference the new standard through AASB Amendments to Australian Accounting Standards arising from AASB 13 [AASB 1, 2, 3, 4, 5, 7, 9, , , 101, 102, 108, 110, 116, 117, 118, 119, 120, 121, 128, 131, 132, 133, 134, 136, 138, 139, 140, 141, 1004, 1023 & 1038 and Interpretations 2, 4, 12, 13, 14, 17, 19, 131 & 132]. These changes have no financial impact but will affect the disclosure presented within the financial statements. The following amendments to Standards or Interpretations for the current financial year have no financial impact on the Department. AASB 119 Employee benefits; AASB Amendments to Australian Accounting Standards arising from AASB 119 (September 2011) [AASB 1, AASB 8, AASB 101, AASB 124, AASB 134, AASB 1049 & AASB and Interpretation 14] Future Australian Accounting Standard Requirements All new standards, amendments to standards or interpretations that have been issued by the Australian Accounting Standards Board and are effective for future reporting periods will be adopted when effective and it is estimated that in doing this there will be no material financial impact for the current period. 1.5 Revenue Revenue from the sale of goods is recognised when: the risks and rewards of ownership have been transferred to the buyer; the seller retains no managerial involvement or effective control over the goods; the revenue and transaction costs incurred can be reliably measured; and it is probable that the economic benefits associated with the transaction will flow to the Department. 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: the amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and the probable economic benefits associated with the transaction will flow to the Department. 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. 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 the Department 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. Paid Parental Leave Scheme Amounts received by the Department and not yet paid to employees are presented on a gross basis, as cash and a liability payable. The total amount received under this scheme is disclosed as a footnote to Note 8C Other Payables. 132

27 financial performance Chapter 9 PART A 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 agency or authority as a consequence of a restructuring of administrative arrangements (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. Reversal of Previous Impairment Write-Downs Reversals of impairment write-downs that were recognised in a prior period are recognised as gains when an event occurring after the impairment write-down can be objectively related to the decrease in the impairment loss. 1.7 Transactions with the Australian 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 Australian Government entity under a restructuring of administrative arrangements are adjusted at their book value directly against contributed equity. The transfer of prior year appropriation receivable balances transferred between departments as a result of Machinery of Government changes are reflected in the restructure note only where appropriations have been adjusted via a section 32 of the Financial Management and Accountability Act 1997 determination. Where the transfer of appropriation receivable balances was funded through the Appropriation Bills, these were reflected as contributed equity for functions that transferred into the Department. For functions that transferred out, appropriation receivable is only reduced when the appropriation is formally lapsed. Other Distributions to Owners The FMOs 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 expected to be wholly settled within twelve months of the end of reporting period 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 provisions 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 Department 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 will be applied at the time the leave is taken, including the Department s employee superannuation contribution rates to the extent that 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 work of an actuary as at 30 June 2014 and management assessments relating to salary growth rates. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation. Annual Report

28 PART A Chapter 9 financial performance Separation and Redundancy Provision is made for separation and redundancy benefit payments. The Department 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 Department s main superannuation funds that staff are members of, are the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS accumulation plan (PSSap) or the Australian Government Employees Superannuation Trust (AGEST). The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap and AGEST are defined contribution schemes. 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 in the administered schedules and notes. The Department makes employer contributions to the employees superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. The Department accounts for the contributions as if they were contributions to defined contribution plans. The liability for superannuation recognised as at 30 June 2014 represents outstanding contributions for the final fortnight of the 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 Department does not have any finance leases. Operating lease payments are expensed on a straight line basis which is representative of the pattern of benefits derived from the leased assets. Lease incentives are initially recorded as a liability and are amortised over the life of the lease (refer to Note 8C) Borrowing Costs All borrowing costs are expensed as incurred Cash Cash is recognised at its nominal amount. Cash and cash equivalents include: cash on hand; demand deposits in bank accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value; cash held by outsiders; and cash in special accounts. 134