2017/18 - parliament of victoria...integrated poultry operation, with three plants in victoria...

ANNUAL REPORT 2017/18

27 August 2018

The Hon. Jaala Pulford, MP Minister for Agriculture Level 20, 1 Spring Street MELBOURNE VIC 3002

Dear Minister

PrimeSafe proudly acknowledges Victoria’s Aboriginal communities and their rich culture and pays respect to their Elders past and present. We acknowledge Aboriginal people as Australia’s first people and as the Traditional Owners and custodians of the land and water on which we rely. We recognise and value the ongoing contribution of Aboriginal people and communities to Victorian life and how this enriches us. We embrace the spirit of reconciliation, working towards the equality of outcomes and ensuring an equal voice.

In accordance with the Financial Management Act 1994, I am pleased to present PrimeSafe’s Annual Report for the year ending 30 June 2018.

Yours sincerely

Candy Broad Chairperson

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C O N T E N T S

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VIS IONStrong consumer confidence in the safety of Victoria’s meat, poultry and seafood through industry quality assurance.

MISSION STATEMENTTo advance and regulate food safety in Victorian meat, poultry, seafood and pet food industries through credible quality assurance systems and services that also support opportunities for industry growth and innovation.

ABOUT PRIMESAFEPrimeSafe is the Statutory Authority responsible for regulating the safety of red meat, poultry and seafood in Victoria. PrimeSafe has the primary objective for the provision of safe, wholesome meat, poultry and seafood for all consumers. PrimeSafe is also responsible for the regulatory management of pet food.

PrimeSafe ensures compliance with Australian Standards for food safety and uses a licensing and inspection system as a mechanism for food businesses to adopt and implement a quality assurance program so that food safety and consumer confidence are maintained.

PrimeSafe seeks to build strong partnerships with our stakeholders and licensees, and provides a range of information support services to allow the continued delivery of safe, world-class products and ensure market access for innovative new products that meet consumer demand.

The ticks of the PrimeSafe logo represent the significant steps of quality assurance and a collaborative approach between industry and government.

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F R O M T H E C H A I R P E R S O N

I am pleased to report that PrimeSafe has completed another successful year that has included many achievements. PrimeSafe continues to be highly committed to protecting public health through the maintenance of food safety and consumer confidence in the meat and seafood industries. PrimeSafe legislation requires that licensees maintain a food safety program that is tailored to the needs of each business and uses quality assurance as the basis to ensure compliance with the Australian Standards for food safety. This approach continues to provide benefits for food businesses and the Victorian economy through consumer confidence in Victoria’s meat and seafood industries.

PrimeSafe delivered its regulatory functions for 2017/18 with no food borne disease outbreaks attributed to a PrimeSafe licensee. Furthermore, the delivery of the Statement of Expectations of the Minister for Agriculture and key measures of performance are provided in this report and are also published on the website. The Board has also overseen the continued delivery of the 2015-2020 Corporate Plan, with 41 of the 48 strategies now completed, with the remaining activities at an advanced stage.

The PrimeSafe Communication Strategy is facilitating the delivery of the Government’s policy direction to assist small businesses through continued and improved interactions with licensees and other stakeholders, while remaining an effective Victorian meat and seafood safety regulator. The strategy to enhance food safety through supporting each business to understand food safety risk and compliance requirements is successfully increasing compliance and decreasing overall regulatory burden. This has been especially noticeable with small businesses whereby meeting information needs has decreased long-term trends in targeted areas of major non-compliance and consumer complaints.

Revised licence categories and fees were implemented during 2017/18 following the formal Regulatory Impact Statement and other administrative requirements required by the Subordinate Legislation Act 1994. The Scrutiny of Acts and Regulations Committee of Cabinet endorsed the changes that more closely align fees with the cost of regulating each business and streamline throughput categories in response to industry restructuring, including the removal of licence categories that were no longer used. While introducing new licence categories and fees is never easy, the Board is confident that these changes will assist PrimeSafe to deliver increased information and support to licensees and allow the restoration of equity in preparation for major investment in core database and digitisation technologies in the coming year.

During the year, the Minister for Agriculture announced amendments to legislation in the areas of wild game, abalone and rock lobster, and mobile meat processing. PrimeSafe continues to work with Government so that new arrangements can be implemented as they are formalised. As each element of legislation is amended, PrimeSafe is ready to create licencing categories and support information, and continues to engage with the relevant industries to ensure a smooth and timely transition for new businesses as they develop.

Also, during the year PrimeSafe undertook a survey with our licensees to assess stakeholder satisfaction and the progress of implementing communication and information activities. The independent survey team was told that 94% of licensees are satisfied with their dealings with PrimeSafe. Results of the survey will be used to make further enhancements with the objective of licensees having a consistent experience in their interactions with PrimeSafe that is commensurate with the food safety risk at their business.


I have been pleased to continue meeting with PrimeSafe licensees and stakeholders across the meat, poultry, seafood and pet food sectors. I have seen firsthand many food processing, manufacturing, storage and retail facilities of various sizes and scales and have come to appreciate and understand the everyday challenges for these businesses, and the opportunities that exist for making Victoria’s food industry vibrant and exciting.

I wish to specifically thank the Board Directors whose experience and perspectives have helped to guide the governance and strategic direction of PrimeSafe. During the year, the Board established a Governance Committee that has led the review of the Board Charter and established formal policies that define the governance arrangements of the Board and PrimeSafe overall, so that these are integrated into the overall policy and internal quality assurance framework of the agency.

The Board is dedicated to ensuring that PrimeSafe achieves its objectives and I thank all the Directors for their commitment and contribution over the last three years. For those Board members who have concluded their association with PrimeSafe, I especially thank you for your hard work and passion for improving the public health and consumer confidence of Victorians in meat and seafood, and I wish you well for your future endeavours. In addition, I congratulate those members who are returning to the Board and I look forward to working with the new team.

It has been a real pleasure working with the Chief Executive Officer, Dr Brendan Tatham, and his team of committed staff throughout 2017/18. Brendan’s professionalism and leadership skills are of a high calibre and the Board thanks Brendan for his commitment and dedication in leading the organisation.

I look forward to continuing my role as Chairperson of PrimeSafe. Victoria’s food industry has an exciting future, and more so as PrimeSafe continues its work as an effective meat and seafood safety regulator in Victoria.

Candy Broad


T H E P R I M E S A F E B O A R D

CANDY BROAD (CHAIRPERSON)

Candy has extensive governance experience through her current and former roles as a Board Director and Government Minister. Candy is an Independent Trustee Director of First Super, Board Director of the Australian Council of Superannuation Investors, Chair of safe steps Family Violence Response Centre, Deputy Chair of Women’s Health Victoria, and a Director of Haven; Home, Safe. She was a Victorian Government Minister for seven years, with a total of 15 years’ parliamentary experience as the Member for Northern Victoria and the Member for Melbourne North. Her ministerial portfolios included Housing, Local Government, Energy and Resources, and Ports. Candy is a Graduate Member of the Australian Institute of Company Directors and a Graduate Member of the Australian Institute of Superannuation Trustees.

FRANK WHITFORD

Frank has extensive knowledge of the retail industry across Australia having held Managing Director roles at Fletcher Jones, Mitre 10 and Sportsgirl/Sportscraft. He is also involved with the family wagyu beef breeding and calf rearing business in northern Victoria. Frank is the current Deputy Chair of the Goulburn Murray Water Board, a Board member of the Australian Wagyu Association and has served as a Director on various boards for over 17 years.

NICOLA BAAINI

Nicola is Director of Karve It Up Meats and Fine Foods Pty Ltd, an independent retail butcher shop in the northern suburbs of Melbourne. With over 21 years of business, finance and human resource management experience, she blends a profound knowledge of retail and small business with sound corporate governance principles. Nicola is a Councillor of the Victorian Retail Council for the Australian Meat Industry Council and is passionate about the growth and future of the meat industry, particularly the retail sector.

CAROLINE BARRETT

Caroline is a Veterinarian at Royal Canin (Mars Petcare foods). She has over 20 years of international experience in scientific, laboratory and animal healthcare fields. Caroline was a Veterinary Pathologist at Gribbles Pathology Laboratories for 10 years, diagnosing disease in animals across Victoria and beyond, and previously worked in rural and urban general practice. Caroline has a particular interest in veterinary public health.

JANETTE BOWMAN

Janette has extensive experience in environmental health and public health, and was previously Assistant Director in the Victorian Department of Health. She has held leadership roles in water policy and water regulation, Legionnaires’ disease control, climate change adaptation and health risk management. She has extensive experience in State and National strategies to protect health and prevent illness including advice and information to industry, professionals and the community. She was awarded a Public Service Medal in September 2009 and the National Emergency Medal in April 2013.


PAUL CONWAY

Paul is Secretary of the Australasian Meat Industry Employees Union (AMIEU), Vice President of the Federal Body of the AMIEU and a Federal Council Member. Paul is also a Council Delegate of the Geelong Trades Hall. Paul has over 37 years’ experience in the meat industry and is a certified training provider of Union Good Governance Training to Victorian AMIEU Committee of Management representatives. He is also the Secretary of the Meat Industry Employees’ Superannuation Fund.

GARY HARDWICK

Gary is founder and an Executive Director of Hardwicks Meatworks Pty Ltd, a processing plant supplying domestic and export markets. Gary has 43 years’ experience in the production, processing and retail sectors of the red meat industry and has extensive farming interests. He is a qualified accountant and a member of the Australian Society of Accountants, Board member of the Australian Meat Industry Superannuation Trust and a Director of the Australian Meat Processor Corporation. He is also Chairman of the National Meat Processors Council and a member of the Australian Processors Council for the Australian Meat Industry Council.

CHRIS TURNER

Chris is the Chief Executive Officer of Turosi Foods Pty Ltd and responsible for the operations of a fully integrated poultry operation, with three plants in Victoria including a cooking facility. He was previously a PrimeSafe Director between 2000 and 2003. He is a member and previous President of both the National Chicken Meat Council and the Victorian Chicken Meat Council and has been involved in the chicken meat industry for more than 44 years. He is also a Board member of the Northern Health Foundation.

NELIA VARCOE

Nelia is the Quality Assurance Manager at Langdon Ingredients in Victoria. Nelia was formerly the Quality Assurance and Occupation Health and Safety Manager at Clamms Seafood Pty Ltd, where she assisted domestic and international seafood suppliers to improve compliance and the adoption of sustainable seafood practices. Nelia has been involved in the food industry for 19 years and has expertise and experience in food safety compliance and quality assurance systems, having worked in various food sectors including seafood, meat, smallgoods, dairy and bakery.

JENNIFER MCDONALD

Jennifer has extensive experience in government administration, regulation, organisational governance and public policy operating as a senior executive at local, state and international levels. After working with CSIRO and in Victorian local government community services for 20 years, she first worked in the food safety field as the manager responsible for food regulation and population health at the then Victorian Department of Human Services. Before joining the PrimeSafe Board in December 2017, she spent four years as CEO of Dairy Food Safety Victoria.


PrimeSafe has achieved excellent progress during 2017/18 in delivery of its legislated functions, Minister’s Statement of Expectations, Corporate Plan and associated strategies. It has been pleasing to lead the organisation through implementation of the communications strategy along with the new information and support arrangements. This has been made possible by the revised licence categories and fees that became effective this year. It is satisfying to see these new activities have had a dramatic affect in the first year with long-term trends showing improvement in areas where targeted activities have been undertaken. Further evidence of this success is the independent representative survey of licensees that has provided outstanding feedback and further assisted to identify areas where licensees seek more information, and how they can use new information. The advent of the PrimeSafe eNews that is distributed to all licensees and is available to anyone who wishes to subscribe has been highly successful with usage statistics showing that reading and further information links are twice that of comparative publications. The licensee survey also showed the popularity of the short headline format that provides instant access to more detailed information when it is required.

I was pleased to assist the Board with the review of PrimeSafe’s Risk Management Framework. The separate consideration of external and internal risks helped PrimeSafe to focus on risk mitigation activities in the areas where a residual risk may impact on the industries or PrimeSafe itself. This review assisted a targeted review of the management of third party conformity assessment bodies and their auditors and refinement of these arrangements in accordance with Joint Accreditation System of Australia and New Zealand (JAS-ANZ) and international standards for conformance assessment. The third party auditors are a critical part of PrimeSafe’s food safety regulatory system and ensuring consistency and rigor between auditors will continue to be an important on-going focus.

The risk based approach to regulation is described in the Compliance and Enforcement Policy that was revised during the year and is published on the website. Consumer expectations of food safety and animal welfare continue to increase, along with concern about environmental issues such as marine biotoxins. PrimeSafe continues to manage compliance with Australian Standards during these and other incidents in accordance with legislated regulatory powers. PrimeSafe also participated in the management of national food borne disease incidents during the year, with our expertise and formal incident management training being used to assist other industry sectors and jurisdictions. These activities also benefited PrimeSafe by ensuring full integration with state and national arrangements. More than ever, PrimeSafe is at a high level of preparedness that is shown by the effective management of a number of listeria notifications, animal welfare incidents and biosecurity incursions without any adverse impact on Victorian consumers and markets. The strong relationships built and maintained by PrimeSafe and State and Australian Governments and agencies ensure the delivery of consistent compliance to Australian Standards for food safety and biosecurity, thereby assisting to maintain consumer confidence in Victorian and Australian meat and seafood products and particularly, preserving Australia’s superior export market access status.

I continue to be involved in a number of State and National forums including the Australian Meat Regulators’ Group (AMRG), SAFEMEAT, Implementation Sub-committee for Food Regulation, Australian Shellfish Quality Assurance Committee and the Victorian Salmonella Strategy Working Group. PrimeSafe’s representation at these important forums and national review processes ensured that the interests of Victoria’s meat and seafood licensees are addressed at the national level. These strategic industry and Government collaborations and relationships are important and the benefits from these activities include:

F R O M T H E C H I E F E X E C U T I V E

– The development by AMRG of a formal review process for industry to achieve nationally consistent regulatory recognition of alternative techniques and new technologies;

– The finalisation by Food Standards Australia and New Zealand (FSANZ) of national process hygiene controls and microbiological guidelines for poultry meat; and

– The review of Australian Shellfish Quality Assurance Program (ASQAP) and subsequent Victorian Shellfish Quality Assurance Program (VSQAP) and the new agreement between PrimeSafe, Victorian Fisheries Authority (VFA) and Commonwealth Department of Agriculture and Water Resources (DAWR) to ensure continued export market access for Victorian shellfish, with increased monitoring activities being conducted by the VFA.

The PrimeSafe compliance requirements for meat processors that export under the Tier 1 system were audited by the Commonwealth Department of Agriculture and Water Resources. The Tier 1 system for export certification continues to be available to PrimeSafe licensees to export meat from a PrimeSafe licensed facility. It is pleasing that more meat processors continue to use this opportunity to become Tier 1 accredited so they can start exporting into markets that acknowledge PrimeSafe’s implementation of the Australian Standards for food safety meet internationally accepted specifications.

During the year, the Victorian Red Tape Commissioner completed a review into food safety regulation. By working closely with the review, PrimeSafe was able to satisfy the Commissioner that our risk based regulatory program was both highly effective and efficient, and that the administrative recommendations were able to be implemented immediately. An example of this is the review of the reduced audit program that is described further in this report.

It has been my great pleasure to continue working with Candy Broad, Chairperson of PrimeSafe. Candy has significant insight into the contemporary operation of the public sector from which PrimeSafe has significantly benefited. I have especially enjoyed the opportunities to visit licensees, stakeholders from industry sectors and peak bodies over the course of the year, which has proven invaluable. We were able to see firsthand world-class meat and seafood businesses in operation and the challenges facing modern day businesses, along with innovative new products being delivered to market in response to changes in consumer demands.

I would like to thank the Board for their service to PrimeSafe over the last three years. The Board provides invaluable support and oversight of the delivery of PrimeSafe’s objectives and I have valued their counsel in manoeuvring through issues that sometimes provide interesting challenges. I especially thank the Board Directors that are leaving for their dedication and commitment to PrimeSafe and wish them well for the future. I look forward to working with the new Board to further develop PrimeSafe and the achievement of food safety and animal welfare outcomes for all Victorians.

In closing, I would like to express my warmest thanks and congratulations to all PrimeSafe staff for their ongoing efforts and commitment to the organisation. There is no other workplace like PrimeSafe where all the elements of a public sector agency and industry specialists are tightly integrated. I am proud to work with this high performing team and continue to be impressed by the consistent high level of professionalism and dedication shown by all PrimeSafe staff, as demonstrated by the achievement of being one of the highest ranked agencies in the recent People Matter survey of the entire Victorian public sector.

Dr Brendan Tatham



G O V E R N A N C E A N D O R G A N I S AT I O N A L P R O F I L E

ESTABLISHMENT OF PRIMESAFEPrimeSafe is established under the Meat Industry Act 1993 and the Seafood Safety Act 2003.

PrimeSafe reports to the Minister for Agriculture.

FUNCTIONS OF PRIMESAFEThe functions of PrimeSafe are prescribed under Section 44 of the Meat Industry Act 1993 as follows:

• to control and keep under review the standards of meat, poultry meat and game meat produced for consumption or sale within the State;

• to control and keep under review the standards of the construction and hygiene of plant and equipment in a meat processing facility;

• to control and keep under review the standards of construction, maintenance, cleanliness and hygiene of meat transport vehicles;

• to ensure that appropriately qualified persons are authorised as inspectors;

• to licence meat processing facilities;

• subject to the Regulations, to determine categories of licences;

• to approve quality assurance programs and to monitor the implementation of those programs;

• in consultation with the Secretary of the Department of Health and Human Services or a municipal council, to protect public health;

• to fix and charge fees in respect of the carrying out of any of its functions or the exercise of any of its powers;

• to carry out the functions conferred on the Authority by the Seafood Safety Act 2003 or the regulations made under that Act; and

• to carry out any other function that is conferred on the Authority by the Meat Industry Act 1993 or the regulations or by any other Act or the regulations made under any other Act.

POWERS OF PRIMESAFEPrimeSafe has all the powers necessary to enable it to perform its functions as outlined in the Meat Industry Act 1993 and the Seafood Safety Act 2003.

PRIMESAFE BOARDRE SPONSIBILITIE S OF THE BOARD

The key responsibilities of the Board include:

• setting the broad strategy, objectives and performance targets for PrimeSafe;

• review of PrimeSafe’s progress towards achievement of specific goals;

• risk management for all key business and operational risks;

• review of the internal financial and operational control arrangements of PrimeSafe to ensure that they remain effective and current;

• approval of strategic plans, the annual accounts and PrimeSafe’s policies;

• Chief Executive selection, appointment, succession planning and performance assessment; and

• oversight of the management of PrimeSafe by the Chief Executive to ensure it operates effectively and has a culture of compliance and best practice business performance in all areas of operational, financial, human resource, risk management and asset management.

MEMBERSHIP AND TERM OF THE BOARD

The Board consists of at least eight and not more than 10 members appointed by the Minister for Agriculture. Members of the Board are appointed for a period of up to three years.

As set out in Section 48 of the Meat Industry Act 1993, Board members have expertise in one or more of the following areas:

• livestock production;

• quality assurance and management;

• poultry production and processing;

• meat processing for human consumption;

• meat processing for other than human consumption;

• industrial relations;

• accounting;

• finance;

• business management;

• seafood production and processing;

• retailing;

• consumer matters; and

• public health.


Table 1: Attendance at Board and Board Committee meetings during the year ended 30 June 2018

Board (Eligible)

Audit and Risk Management

Committee (Eligible)

Appointments and Remuneration

Committee (Eligible)

Governance Committee (Eligible)

Candy Broad 7 (7) – 1 (1) –

Frank Whitford 6 (7) 3 (4) 1 (1) –

Nicola Baaini 5 (7) – – –

Caroline Barrett 7 (7) 4 (4) – –

Janette Bowman 6 (7) 4 (4) – 2 (2)

Paul Conway 7 (7) – – –

Gary Hardwick 6 (7) 2 (4) – –

Jennifer McDonald 3 (3) 1 (1) – –

Chris Turner 6 (7) 4 (4) 2 (2)

Nelia Varcoe 2 (7) – 1 (1) –

BOARD MEE TINGS

Board meetings are held regularly throughout the year as necessary for the Board to discharge its obligations.

COMMIT TEE S

The Board has established three committees, namely the Audit and Risk Management Committee, the Appointments and Remuneration Committee, and the Governance Committee to assist the Board in meeting its statutory responsibilities. Membership for each of the committees is as follows:

Audit and Risk Management Committee

Mr Frank Whitford (Chair)

Dr Caroline Barrett

Ms Janette Bowman

Mr Gary Hardwick

Mr Chris Turner

Ms Jennifer McDonald (from December 2017)

The Audit and Risk Management Committee acts as an independent advisory service to the PrimeSafe Board to assist in the effective discharge of responsibilities including:

• Fulfilling of statutory and fiduciary responsibilities relating to the accounting and financial reporting practices of the PrimeSafe Board;

• Oversight of the Victorian Auditor-General’s report of PrimeSafe; and

• Provision of advice to the PrimeSafe Board regarding risks to the Authority.

All members of the Audit and Risk Management Committee are independent members.

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G O V E R N A N C E A N D O R G A N I S AT I O N A L P R O F I L E

ORGANISATIONAL STRUCTURE

Executive Support Officer

Eleanor Li Manager, Business & Corporate Services

Amita Bernardi Manager, Information &

Support Services

Andrew Coghill Manager, Compliance & Enforcement Services

Appointments and Remuneration Committee

Ms Candy Broad (Chairperson)

Mr Chris Turner

Ms Nelia Varcoe

Mr Frank Whitford

The responsibility of the Appointments and Remuneration Committee is to assist members of the PrimeSafe Board to determine the:

• Total remuneration payable to the Chief Executive; and

• Key performance indicators for the Chief Executive.

Governance Committee

Ms Jan Bowman (Chairperson)

Mr Chris Turner

The purpose of the Governance Committee is to provide advice to the PrimeSafe Board about policies that ensure best practice board governance and accountability, effectiveness and continuing development.

The Governance Committee is authorised by the PrimeSafe Board to:

• Review the organisation’s governance arrangements and make recommendations to the PrimeSafe Board;

• Take any actions to enable the Governance Committee to fulfil its responsibilities;

• Seek independent advice as necessary to perform its duties; and

• Make decisions based on consensus of the members.

Brendan Tatham Chief Executive Officer

BOARD

Third Party Auditors

Administration Officer

Licensing Manager

Licensing Manager

Licensing Manager

Licensing Manager

Food Safety Officer

Accounts & Administration

Officer

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CHIEF E XECUTIVE OFFICER

DR BRENDAN TATHAM

Brendan was appointed Chief Executive Officer of PrimeSafe in December 2013. He is responsible for administering the regulation of food safety in the red meat, poultry and seafood industries in Victoria, and the delivery of a broad range of strategic food safety issues.

Brendan has substantial experience from leadership roles in the public sector, including meat industry research and development, food safety and supply chain security, emergency management and regulatory compliance. He has worked across a range of industries and coordinated at the state level, the management of major incidents including counter terrorism and emergency management in food safety, biosecurity, natural disaster, mining and energy sectors. He has also managed infringement and prosecution services, compliance and enforcement policy and skills development within Government.

Brendan has an Honours Degree in Agricultural Science and a PhD in Biotechnology.

MANAGEMENT TE AM

ANDREW COGHILL Manager, Compliance and Enforcement Services

Andrew joined PrimeSafe in 2006 and was appointed Manager, Compliance and Enforcement Services in March 2014. Andrew oversees the regulatory management of the meat, poultry and seafood industries in Victoria, and has significant experience interpreting and applying legislation and standards within a regulatory environment.

Andrew holds a Bachelor of Commerce.

DR AMITA BERNARDI Manager, Information and Support Services

Amita joined PrimeSafe in April 2014 having had over 20 years’ experience in the private food sector.

With a broad range of compliance expertise and a strong background in quality assurance and product development, Amita currently oversees the development and delivery of key information and support services for licensees and the general public. She also oversees the arrangement between PrimeSafe and third party conformity assessment bodies, and meat inspectors at Tier 1 meat processing facilities.

Amita holds a PhD in Food Science.

ELEANOR LI Manager, Business and Corporate Services

Eleanor joined PrimeSafe in January 2017 and has broad corporate experience gained over many years in the Victorian Government and private sector with a focus on accounting and business management. Eleanor is responsible for the management of financial, information technology, human resource, statutory and legal functions of PrimeSafe.

Eleanor is a Chartered Accountant.


PERFORMANCE AGAINST STATUTORY OBJECTIVESFor the 2017/18 period, PrimeSafe operated in accordance with the Government’s priorities and expectations as articulated in the Ministerial Statements of Expectations dated 11 December 2015, 28 April 2017 and 6 June 2018. Objectives of the December 2015 Ministerial Statement of Expectations, have been incorporated within the objectives of the April 2017 and June 2018 statements. Delivery of the Corporate Plan (2015-2020) and the Minister’s expectations were included in business planning processes, and ensured that PrimeSafe delivered its legislated functions and the Minister’s expectations using best regulatory practice.

TIMELINE SS

PrimeSafe’s regulatory and administrative processes are aligned with other State-based regulatory systems, including those for biosecurity and planning, and Australian Standards and guidelines for food safety and animal welfare. These are implemented within the regulatory framework prescribed by legislation.

Timelines for key regulatory, administrative and licensing processes are defined in the PrimeSafe Compliance and Enforcement Policy that was reviewed during the year and is published on the website along with key performance measures of PrimeSafe. Timelines and responsiveness remain important to PrimeSafe and for 2017/18, all licence approvals, enquiries and complaints were managed within target timeframes. Key decisions for licensing, compliance and enforcement will continue to be made as quickly as possible in the context of matters under the control of PrimeSafe, with issues pertaining to public health and animal welfare being prioritised.

RISK BA SED REGUL ATION

PrimeSafe’s risk-based approach to food safety regulation is achieved at the lowest cost, with continuous improvement in policy and procedures achieved by an audited quality assurance framework. PrimeSafe maintains a comprehensive risk management plan that is monitored and reviewed annually to inform the policies and procedures used to ensure food safety and consumer confidence. During 2017/18, a review of the risk management plan separated external and internal consequences and mitigation controls that facilitated specific projects to address residual risks. The reduced audit policy was revised to enhance this opportunity for licensees with an ongoing commitment to sustaining a food safety quality assurance program that demonstrate superior performance and lower food safety risk to attract a lower frequency of scheduled audits.

Minimum regulatory compliance requirements are defined within legislation and Australian Standards that are used by businesses to achieve food safety outcomes. PrimeSafe has a suite of regulatory and non-regulatory compliance and enforcement tools published in the PrimeSafe Compliance and Enforcement Policy that are used commensurate with risk.

COMPLIANCE REL ATED A SSISTANCE AND ADVICE

PrimeSafe is committed to delivering information and regulatory activities to licensees that is impartial, proportionate, predictable and transparent. All activities are delivered in accordance with prescribed functions and in accordance with best regulatory practice to ensure a consistent licensee experience.

The views of licensees and stakeholders are important to PrimeSafe. Legislated requirements, Ministerial expectations, and best regulatory practices are reflected in PrimeSafe communication policies and procedures, published in the PrimeSafe Compliance and Enforcement Policy, and guide engagement activities. In May 2018, a phone survey of licensees was conducted to obtain their experience and future needs for PrimeSafe communications. The survey, which focused on evaluating stakeholder and communication activities of PrimeSafe, was conducted by an independent research company and reported a very high engagement level of people surveyed. The representative survey found that 94% of licensees were satisfied with their dealings with PrimeSafe and identified some further information requirements, such as hygiene and sanitation, and temperature control. The insights from the survey will further inform PrimeSafe’s communication strategy. Importantly, licensees told PrimeSafe that they found the information provided valuable and that they preferred to receive information electronically.

Licensees continue to be advised in writing and electronically about regulatory developments, with further information and support provided about high priority issues that are identified with the assistance of feedback.

SMALL BUSINE SS REGUL ATORY BURDEN

PrimeSafe assists small business and reduces regulatory burden by supporting licensees to understand compliance requirements and develop a commitment to quality assurance. This ensures food safety and promotes consumer confidence, demand and business growth. Small businesses are provided detailed information about the requirements of Australian Standards to promote compliance, then demonstrate their commitment through verification audits commensurate with risk. This approach ensures compliance with legislation and standards, while reducing costs to small business from compliance and enforcement. The PrimeSafe Board will

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continue to monitor the use of information to assist compliance through annual reporting of key performance indicators.

In accordance with formal reviews of PrimeSafe and the Ministerial Statement of Expectations, PrimeSafe provides information and support, and written material to licensees. A recent survey of licensees, of which 89% are small businesses, indicated that they particularly value information and advice provided by PrimeSafe.

As PrimeSafe is committed to providing information and support, industry has been advised that PrimeSafe will continue to support licensees and use a consultative process to seek input into the content of PrimeNotes.

PrimeSafe and information and support is aligned with Australian Standards and Victorian legislation and assist licensees to understand and interpret standards so they can demonstrate compliance.

The Shelf Life and Labelling PrimeNote is widely used and has had a clear impact on reducing non-compliance. Analysis of the last four years of complaints and non-compliance records have shown that, since December 2014, there have been 12,285 website views of the PrimeNote for Shelf Life and Labelling, of which only 1,413 were multiple views. Analysis has identified that since the publication of this PrimeNote, major non-compliance and consumer complaints related to shelf life and labelling have decreased.

CLE AR CONSISTENT AND TR ANSPARENT REGUL ATION

During the reporting period, PrimeSafe revised licence fees to ensure they remained contemporary with business needs and activities. Some fees were amended to ensure that they were more closely aligned with the costs of regulating those businesses.

PrimeSafe remains committed to the Memorandum of Understanding with other Victorian food safety regulators, which describes how the Victorian food regulatory system is applied consistently by all regulators. Throughout 2017/18, PrimeSafe proactively engaged with other state and national food safety regulators, and participated in formal committees, including the Victorian Food Regulators Forum, Australian Meat Regulators Group, the Implementation Sub-Committee for Food Regulation and the national SAFEMEAT partnership between governments and industries to ensure complementary development and consistent implementation of Australian Standards.

PrimeSafe requires that third party auditors maintain Joint Accreditation System of Australia and New Zealand (JAS-ANZ) compliance for the PrimeSafe regulatory audit program. As JAS-ANZ is also used by proprietary audit programs that are often required by the customers of licensees, this provides the opportunity for licensees to benefit from efficiencies of combining regulatory and proprietary commercial audits. Auditor calibration and identification of improvements occur at regular meetings between PrimeSafe and third party auditors. During 2017/18, six complaints were raised about six specific auditors and were addressed. As a result of these activities, PrimeSafe revised audit management policies in accordance with national and international auditing standards to enhance auditor consistency and ensuring auditors understand regulatory requirements.

PrimeSafe’s governance and administrative framework is based on the concepts of quality assurance and performance. During 2017/18, PrimeSafe conducted 41 internal audits of its policies and procedures that enabled further refinement in administration, information and support, licensing, and compliance and enforcement.

DEMONSTR ATING ACHIE VEMENT

PrimeSafe’s risk management and business planning processes incorporate the Ministerial Statement of Expectations, legislated functions, and the PrimeSafe Corporate Plan (2015-2020). Specific achievements, regulatory activities and targets are included in this Annual Report, along with detailed measures associated with Ministerial expectations, and indicators of industry performance that are on the website. This information continues to provide the Board with a dashboard guide to confirm opportunities realised while indicating where increased emphasis may be required.


R E P O R T O F O P E R AT I O N S

INFORMATION AND SUPPORTPrimeSafe’s Information and Support team deliver a key component of the PrimeSafe Corporate Plan (2015-2020). This function provides general advice to licensees or prospective licensees including:

• general clarification or interpretation of standards, legislation and guidelines;

• responding to general enquiries;

• assisting prospective licensees with PrimeSafe licensing requirements;

• conducting workshops and forums for licensees to assist them in their understanding of guidelines, licensing and compliance with Australian Standards; and

• the provision of general food safety information.

PrimeSafe routinely provides assistance by responding to requests for information from a range of different sources, including existing and prospective licensees, consumers, Local Government, State Government agencies and other food regulators. During 2017/18, PrimeSafe responded to 2,288 new enquiries, averaging more than six new enquiries every day. Information provided ranged from licensing requirements for meat and seafood transportation, high-risk processing activities, standards interpretation and construction and maintenance issues. PrimeSafe also considered new complex food safety issues that included alternative cooking and cooling processes, sous vide, edible rendering and high pressure processing. Enquiries are monitored to identify areas of interest where new information may be required, or where communication material can be enhanced. PrimeSafe launched its eNews publication in August 2017, with four editions being published online and emailed to recipients during 2017/18.

PrimeSafe’s technical guidelines and fact sheets continue to be accessed regularly on the PrimeSafe website due to their practical information on food safety and industry specific issues. During 2017/18, PrimeSafe revised its Shelf Life and Labelling Requirements for Meat Products and Ageing of Beef PrimeNotes, following consultation with industry. In 2018/19, PrimeSafe will continue to consult with industry to develop new PrimeNotes, including information requested about smallgoods and allergens to assist industry to understand these high-risk areas.

PrimeSafe continues to collaborate with the Victorian Fisheries Authority and the Victorian Department of Health and Human Services, especially in relation to risk assessments for new seafood supply chains as they arise.

MANAGEMENT OF CONFORMANCE A SSE SSMENT BODIE S

PrimeSafe requires meat processing facilities and seafood businesses to implement a food safety program in accordance with the Meat Industry Act 1993 or the Seafood Safety Act 2003. Food safety programs are audited by Conformity Assessment Bodies (CAB) under an established agreement with PrimeSafe. During 2017/18, PrimeSafe revised arrangements with CABs to ensure that the PrimeSafe audit program and management of auditors promotes auditor consistency in accordance with the National Regulatory Food Safety Auditor Guideline.

Throughout 2017/18, PrimeSafe considered new complex food safety issues that included pet meat processing, alternative processes for curing, cooking, and rendering of various products. In addition, PrimeSafe developed a new risk assessment policy and procedures for meat processing facilities and seafood businesses.

CONTROL OF LISTERIA IN THE MANUFACTURE OF PACK AGED RE ADY-TO-E AT ME ATS

The Australia New Zealand Food Standards Code prescribes mandatory requirements for the manufacture of packaged Ready-to-Eat (RTE) meat products, including microbiological limits for Listeria monocytogenes. These limits apply to all packaged cooked and cured/salted meat, packaged heat-treated meat paste and packaged heat-treated pate.

In order to comply with the Australia New Zealand Food Standards Code, all businesses producing these packaged products must conduct microbiological tests to ensure compliance within the prescribed limit. To ensure consistent application of the Australia New Zealand Food Standards Code in all States and Territories, all businesses manufacturing or intending to manufacture RTE meat products need to comply with the Guidelines for the Management of Listeria developed by the AMRG. These national guidelines were revised in 2016 to clarify product sampling and testing requirements to ensure compliance with the Code.

To assist licensees, a PrimeSafe guideline for the management of Listeria in RTE meat products has been maintained to ensure consistency of Listeria monitoring requirements.


FOOD SAFE T Y STANDARDS

The Victorian Government is a signatory to the national food regulation system and has adopted Australian Standards for food safety wherever available.

Copies of legislation and standards are available on the website at www.primesafe.vic.gov.au.

• The Australia New Zealand Food Standards Code

• Australian Standard for the Hygienic Production and Transportation of Meat and Meat Products for Human Consumption (AS 4696:2007)

• Australian Standard for Construction of Premises and Hygienic Production of Poultry Meat for Human Consumption (AS 4465:2005)

• Australian Standard for Hygienic Production of Rabbit Meat for Human Consumption (AS 4466:1997)

• Australian Standard for the Hygienic Production of Wild Game Meat for Human Consumption (AS 4464:2007)

• Australian Standard for Hygienic Production of Ratite (Emu/Ostrich) Meat for Human Consumption (AS 5010:2001)

• Australian Standard for Hygienic Production of Natural Casings for Human Consumption (AS 5011:2001)

• Australian Standard for the Hygienic Rendering of Animal Products Second Edition (AS 5008:2007)

• Standard for the Hygienic Production of Pet Meat, PISC Technical Report 88 - Amended 2009 (AS 4841:2006)

• A Guide to the Implementation and Auditing of HACCP (SCARM Report 60)

• Victorian Standard for Hygienic Production of Meat at Retail Premises (March 2006)

COMPLIANCE AND ENFORCEMENT PrimeSafe’s main objective is to ensure the safety of all meat and seafood products for consumers. PrimeSafe utilises a number of compliance, surveillance and monitoring programs to achieve this objective.

Consistent with the PrimeSafe Licensee Charter, regulatory programs and systems governing the Victorian meat and seafood industries are managed in a manner that ensures licensees are treated equally and fairly and the food safety system is administered efficiently and effectively. PrimeSafe’s Compliance and Enforcement Policy summarises the risk-based approach to regulatory management. The policy explains how PrimeSafe undertakes activities to achieve compliance with Australian Standards for food safety and guides PrimeSafe decision-making to ensure that its compliance activities and actions are consistent, fair and credible, using a risk-based approach. The policy is available on the PrimeSafe website and is updated as required to reflect changes in standards and organisational policies.

Following the introduction of a four-year trial commencing in 2014 to allow the use of kangaroo meat for pet food, PrimeSafe approved the collection and utilisation of culled kangaroo carcases by pet meat processors. The trial has been extended by the Victorian Government until March 2019. During 2017/18, there were three PrimeSafe licensed pet meat processing businesses participating in the trial that collected 30,632 culled kangaroo carcases, which otherwise would have been left as waste.

APPROVAL FOR THE MANUFACTURE OF UNCOOKED COMMINUTED FERMENTED ME AT PRODUCTS

The Australia New Zealand Food Standards Code (the Code) prescribes mandatory requirements for the manufacture of uncooked comminuted fermented meat (UCFM) products. Businesses intending to manufacture UCFM products are required to obtain PrimeSafe approval.

A written request for approval must contain Hazard Analysis Critical Control Points (HACCP) based quality assurance procedures that demonstrate compliance with the processing requirements of the Code.

PrimeSafe has revised the process for the amendment of food safety plans by licensees approved to manufacture UCFM products pertaining to pre-mixes (i.e. gluten and dairy free) and starter cultures that have improved food safety outcomes for those PrimeSafe licensed facilities manufacturing UCFM products.



COMPLIANCE – THIRD PART Y AUDITS

All meat and seafood processing facilities are required to undertake third party audits to assess compliance with standards. The frequency of audits for licensees is set by the level of risk inherent in the product processed at the facility. For example, the greater the assessed risk, the greater the number of audits required.

Retail butcher shops, further meat processing facilities, poultry processing facilities, inedible rendering facilities, prime tallow processing facilities and pet food establishments are required to undertake audits on a biannual basis (i.e. twice a year).

Retail butcher shops, further meat processing facilities and seafood processing facilities manufacturing smallgoods are required to undertake audits on a quarterly basis (i.e. four times a year). Abattoirs (not supervised by Department of Agriculture and Water Resources), game meat processing facilities and pet meat processing facilities also require audits on a quarterly basis.

All seafood processing facilities are required to undertake one audit per year. Any seafood processing facility processing red meat or poultry meat requires biannual audits.

Food safety programs for wildcatch and aquaculture seafood businesses are reviewed by PrimeSafe.

Where licensees are able to demonstrate continued superior performance that indicates a lower overall risk profile, they may be approved for a reduced audit schedule. During 2017/18, four licensees maintained a reduced audit schedule with one further meat processor successfully being granted a reduced audit schedule.

Where a non-conformance is identified at an audit, PrimeSafe will adjust the frequency of audits to ensure that the non-conformance is addressed.

Major and critical non-conformances are classified as follows:

A major non-conformance is a potential high-risk situation where the potential impact is likely to compromise meat or seafood safety if no remedial action is taken to correct the non-conformance within a specified period.

A critical non-conformance is a high-risk situation where the potential impact of the non-conformance is of substantial and/or immediate significance to meat or seafood safety warranting immediate corrective action. When a critical non-conformance is identified at an audit, a PrimeSafe officer undertakes an immediate investigation.

Table 1: Third Party Audits

2017/18 2016/17

Total Number of Third Party Audits

Conducted

Number of Major or Critical

Non-Conformances %

Total Number of Third Party Audits

Conducted

Number of Major or Critical

Non-Conformances %

4,323 290 6.71 4,136 183 4.42


COMPLIANCE – SURVEILL ANCE PROGR AMS

Animal Welfare Compliance

PrimeSafe is committed to ensuring that all licensed facilities comply with Australian Standards, including those for animal welfare where compliance with the animal welfare component of the relevant Standard is required.

The Australian Standards relevant to the Animal Welfare Compliance Program are:

• Australian Standard for the Hygienic Production and Transportation of Meat and Meat Products for Human Consumption (AS 4696:2007);

• Australian Standard for Construction of Premises and Hygienic Production of Poultry Meat for Human Consumption (AS 4465:2005); and

• Standard for the Hygienic Production of Pet Meat, PISC Technical Report 88 - Amended 2009 (AS 4841:2006).

Unannounced inspections of all licensed abattoirs, pet meat processing facilities handling live animals and poultry processing facilities are conducted on a biannual basis to ensure compliance with the relevant Australian Standard.

The unannounced inspection of abattoirs involves an assessment of the restraint, stunning and sticking equipment and processes, together with a review of associated procedures as documented in the food safety program. During the year, 34 inspections of abattoirs occurred to assess compliance with the Standard, with four non-conformances identified during the reporting period.

Unannounced inspections of poultry processing facilities involve an assessment of the handling and slaughter of poultry and a review of associated procedures as documented in the food safety program. During the year, 34 inspections were conducted to assess compliance with the Standard of which three facilities demonstrated non-compliance.

Unannounced inspections of pet meat processing facilities involve an assessment of the collection of animals in the field, restraint, stunning and sticking equipment processes, together with a review of associated procedures as documented in the food safety program. During the year, three pet meat processing facilities handling live animals were inspected biannually for compliance with Australian Standards, with no non-conformances identified.

Table 2: Issues Raised at Audit

Issues Raised at AuditNumber of Major or Critical

non–conformances identified %

Animal Welfare / Slaughter / Harvesting 2 0.4

Construction and Equipment Maintenance 66 14.7

Document Control / Record Keeping 141 31.5

Food Borne Illness / Pathogen Control 34 7.6

High Risk Processing / Ready to Eat Products 26 5.8

Licensing 10 2.2

Meat and Seafood Transportation 5 1.1

Operational Hygiene / Sanitation 53 11.8

Pest Control 11 2.5

Product Handling 2 0.4

Product Identification / Traceability 26 5.8

Product Wholesomeness 10 2.2

Staff Training 27 6.0

Standards Interpretation 0 0

Temperature Control 34 7.6

Unlicensed Facility / Person or Business 0 0

Waste Disposal and Odour 1 0.2

Total 448

Note: An individual corrective action request (CAR) may include more than one issue. Therefore, the number of issues will exceed the number of CARs raised.



Sulphur Dioxide Testing Program

PrimeSafe undertakes regular, random testing of fresh meat products to detect the use of sulphur dioxide (SO2). Under the Australia New Zealand Food Standards Code (the Code), only sausage and sausage meat have a prescribed maximum level of SO2. As no other fresh meat has a prescribed level, any use renders the product adulterated and unfit for human consumption and is a breach of the Code.

PrimeSafe is committed to a policy of zero tolerance regarding the improper use of SO2 because of its high risk to public health as an allergen that is especially dangerous for the large proportion of the community that are sensitive to preservatives.

Licensees found in breach of the Code for use of SO2 are faced with the following sanctions:

• All products identified as containing preservatives beyond any prescribed level are condemned and disposed of under PrimeSafe supervision.

• A prohibition notice under the provisions of Section 74 of the Meat Industry Act 1993 is issued in the interests of public health, prohibiting the facility from operating and therefore, precluding the sale and storage of meat at the facility.

• The notice remains in force until:

– the facility amends the food safety program to the satisfaction of PrimeSafe;

– it is demonstrated that all staff have an adequate understanding of safe food handling practices and the capacity to fully comply with the Victorian Standard for Hygienic Production of Meat at Retail Premises; and

– the licensee attends a formal interview at the PrimeSafe office and provides a written submission to PrimeSafe confirming a commitment to the food safety program and a capacity to operate within that program.

• Following revocation of the Section 74 prohibition notice, the facility is placed on a weekly intensified audit frequency for a minimum of four weeks. The licensee meets all the costs of these audits.

In the event of a subsequent detection of improper use of SO2, the above arrangements apply with the addition that all staff engaged at the facility must undergo a minimum of five days training on safe food handling practices and compliance with PrimeSafe requirements. Once the facility is given approval to re-open, it is subject to weekly intensified audits for a minimum of eight weeks.

During the 2017/18 period, one PrimeSafe licensed business was identified as improperly using SO2. This result demonstrates a non-compliance rate of 1.12% since 2004.

IT SurveillanceDuring the 2017/18 period, PrimeSafe conducted an IT surveillance program, monitoring social media and online material for potential breaches of licence conditions and illegal activity. PrimeSafe reviewed online activity every six months by searching the internet for any non-compliant activity or unlicensed meat processing facilities or seafood businesses operating illegally in Victoria.

Auditor surveillance programDuring 2017/18, PrimeSafe conducted an auditor surveillance program to ensure compliance with audit standards. PrimeSafe conducted inspections at 23 licensed facilities as part of a targeted inspection program which identified two critical CARs and nine major CARs raised at these facilities as part of this program.

Repeat Corrective Action Request ProgramFacilities Subject to Biannual or Quarterly Audits Any licensed meat or seafood processing facility identified as having more than one major or critical non-conformance during a 12-month period is subject to an unannounced PrimeSafe inspection to assess the food safety program documentation and compliance.

Facilities Subject to Annual Audits Any licensed meat or seafood processing facility identified as having more than one major or critical non-conformance and/or a PrimeSafe sanction within a period of two consecutive audits is subject to an unannounced inspection to assess the food safety program documentation and compliance.

Where compliance is evident at inspection, PrimeSafe will take no further action. In the event that non-compliance is identified, the licensee is required to immediately rectify the issue and the facility is placed on intensified audits until compliance is achieved. To ensure sustained compliance, licensees are then subject to increased scheduled audits for the next 12 months.

• Facilities producing higher-risk products are subject to audits once every two months; and

• Facilities producing lower-risk products are subject to audits once every four months.

In the event a further major or critical non-conformance is identified during this 12-month period, the licensee must rectify the issue immediately and is again subject to an intensified audit frequency until compliance is achieved. The licensee is then subject to monthly audits in order to satisfy PrimeSafe that sustained compliance can be maintained.

During 2017/18, PrimeSafe conducted 35 inspections with 21 facilities found to be non-compliant with Australian Standards.

P R I M E S A F E A N N U A L R E P O R T 2 0 1 7 / 1 8 1 9

COMPL AINTS AND NOTIFICATIONS

Complaints

PrimeSafe views all complaints seriously and investigates complaints in relation to:

• food safety issues or non-compliance with the applicable standards at a licensed meat or seafood processing facility, or a meat transport vehicle;

• the operation of an unlicensed facility or vehicle;

• inadequate performance of an accredited third party auditing body or an individual auditor; or

• the service delivery of PrimeSafe;

• a breach of the Information Privacy Principles under the Information Privacy Act 2000.

PrimeSafe does not investigate complaints in relation to:

• customer service grievances;

• product that is fit for human consumption but considered to be of poor quality; or

• issues where no substantiating evidence is provided to support an allegation.

Complaints regarding local nuisance such as odour or noise may be investigated by PrimeSafe or local councils, depending on the nature of the complaint. Complaints regarding facilities registered with local councils, such as supermarkets and restaurants, are directed to the council where the facility is located.

Complaints in relation to the service delivery of PrimeSafe are investigated by the Chief Executive Officer. Complaints relating to a decision made by the Chief Executive Officer are investigated by the Chairperson.

Due to confidentiality provisions of the Meat Industry Act 1993 and the Privacy and Data Protection Act 2014, there are limitations on the information PrimeSafe can disclose to the complainant at the completion of an investigation. To prevent disclosure prior to any subsequent legal proceedings and in accordance with the confidentiality provisions of the legislation, PrimeSafe is unable to provide specific details on the progress or outcome of any complaint. When requested, a complainant will be advised that an investigation has been completed and if their complaint was substantiated.

The most common method of investigating complaints includes conducting an unannounced inspection of the business and/or reviewing relevant records from the licensee’s food safety program. Where an investigation reveals non-conformance, the licensee is required to remedy the issue to the satisfaction of PrimeSafe and take action to remove the likelihood of this issue occurring again. The licensee must be able to demonstrate sustained compliance.

Under the Meat Industry Act 1993 and the Privacy and Data Protection Act 2014, PrimeSafe is required to keep all details of complainants strictly confidential. PrimeSafe does not disclose the identity of a complainant.

For the period 1 July 2017 to 30 June 2018, PrimeSafe received a total of 381 complaints. The nature of complaints is summarised on page 24.

In 2017/18, PrimeSafe received 15 complaints in relation to food borne illness. PrimeSafe investigations identified three cases where licensees were found to be non-compliant with standards where this may have contributed to food borne illnesses.

Further details on how to lodge a complaint to PrimeSafe are available at www.primesafe.vic.gov.au.



Listeria Notifications

In 2017/18, the reported incidence of listeria monocytogenes (LM) detections decreased compared to the previous year. A total of 0.22 per cent of facilities manufacturing smallgoods detected LM at their facility during the year (0.31 per cent in 2016/17).

ENFORCEMENT

PrimeSafe utilises three levels of compliance control dependant on the severity and immediacy of the threat to public health.

Level one - Intensified Audit FrequencyIn the event a licensee cannot demonstrate an adequate understanding and control of their food safety program, PrimeSafe enforces intensified audits. The frequency and duration of intensified audits continues until compliance is initially demonstrated and is able to be sustained.

Once an external auditor confirms compliance, PrimeSafe interviews the licensee, where necessary, to assess their understanding of the food safety program and commitment to sustained compliance. When PrimeSafe is satisfied, the intensified audit frequency is revoked and the licensee returns to a specified audit schedule.

There were 128 businesses subject to an intensified audit frequency for the 2017/18 period.

Table 3: Type of Complaints

2017/18 2016/17

Type of complaintReceived

ComplaintsSubstantiated

ComplaintsReceived

ComplaintsSubstantiated

Complaints

Animal Welfare / Slaughter / Harvesting 13 2 7 3

Breach of Information Privacy 0 0 0 0

Construction and Equipment Maintenance 4 1 3 3

Document Control / Record Keeping 0 0 0 0

Food Borne Illness / Pathogen Control 15 3 15 3

High Risk Processing / Ready to Eat Products 4 1 13 7

Licensing 7 0 9 1

Meat and Seafood Transportation 19 9 13 3

Operational Hygiene / Sanitation 22 7 25 7

Pest Control 6 2 1 0

Product Handling 19 9 18 9

Product Identification / Traceability 25 11 27 11

Product Wholesomeness 92 22 116 23

Staff Training 2 0 2 0

Standards Interpretation 0 0 1 0

Temperature Control 11 4 13 5

Unlicensed Facility / Person or Business 84 27 59 23

Waste Disposal and Odour 41 15 38 20

Other 9 0 25 5

Total 381 118 385 123


Level two - Prohibition NoticeThe Chief Executive Officer of PrimeSafe has authority under the Meat Industry Act 1993 and Seafood Safety Act 2003 to issue a prohibition notice preventing a meat processing facility or seafood business from operating. This action can only be taken where it is warranted to ensure the protection of public health.

A notice is issued when an inspection of the facility reveals a breach of the standards or food safety program that poses a serious and immediate threat to public health. The prohibition notice is revoked when the licensee demonstrates that product can be manufactured and stored in compliance with the food safety program and the facility meets the appropriate standards and licensing requirements.

There was a total of 14 prohibition notices issued under the Meat Industry Act 1993 and four prohibition notices issued under the Seafood Safety Act 2003 for the 2017/18 period.

Level three - ProsecutionsThe primary and most effective tools available to PrimeSafe in regulating licensees to ensure protection of public health are the audit system and a prohibition notice. In extreme circumstances, when the above compliance programs have not achieved the desired outcome of protecting public health, PrimeSafe will prosecute offences of the Meat Industry Act 1993 and Seafood Safety Act 2003.

Prosecution is the primary tool available to PrimeSafe to prevent and discourage illegal meat and seafood processing that poses a risk to public health. PrimeSafe always investigates complaints of illegal processing because of the serious risk to public health. Offenders are pursued to the full extent of the law.

One prosecution was completed during the year for a breach of the Meat Industry Act 1993.

INDUSTRY STATISTICS

Table 1: Licensed Businesses

2017/18 2016/17 2015/16 2014/15 2013/14

Export abattoirs 22 20 21 21 16

Local abattoirs 17 19 19 20 23

Poultry processing facilities 20 21 22 21 22

Further meat processing facilities 350 352 352 346 351

Retail butcher shops 904 927 941 961 967

Prime tallow processing facilities 2 3 3 3 3

Game meat processing facilities 1 1 1 1 1

Inedible rendering facilities 9 9 9 9 8

Pet meat processing facilities 11 12 13 14 13

Pet food establishments 57 54 55 58 58

Seafood processing facilities 155 149 148 148 144

Seafood retailers 195 195 211 202 209

Aquaculture businesses 19 18 18 19 22

Wildcatch businesses 188 191 205 223 228

Meat transport vehicles 5,291 5,212 5,214 4,865 4,767



Table 2: Animals Processed (Domestic and Export)

2017/18 2016/17 2015/16 2014/15 2013/14

Cattle 1,503,910 1,248,811 1,653,814 2,232,172 1,806,579

Calves 290,185 252,009 358,802 400,104 440,175

Sheep 3,607,096 2,780,174 3,394,947 3,942,913 4,133,799

Lamb 11,918,241 10,063,199 10,219,929 9,815,001 10,178,567

Pigs 1,152,889 1,179,934 1,161,768 1,144,259 1,018,668

Goats 977,563 1,044,017 979,079 1,214,816 1,253,707

Deer 2,634 2,678 2,685 2,649 3,248

Emu-Ostriches 4,023 5,058 6,654 5,742 4,338

BUSINESS AND CORPOR ATEOCCUPATIONAL HE ALTH AND SAFE T Y

PrimeSafe has an Occupational Health and Safety (OH&S) policy that ensures all staff remain safe and healthy while at their worksites. An OH&S Incident Reporting system is in place and staff are required to include an OH&S component within their annual workplans.

During 2017/18, zero OH&S incidents were reported. Reported OH&S incidents are assessed and reviewed by the Chief Executive Officer.

EMPLOYMENT AND CONDUCT PRINCIPLE S

PrimeSafe is committed to applying merit and equity principles when appointing staff. The selection processes ensure that applicants are assessed and evaluated fairly and equitably on the basis of the key selection criteria and other accountabilities without discrimination.

The recruitment and selection process:

• Recognises and complies with all current legislation governing all aspects of recruitment;

• Ensures the best person is recruited for each position; and

• Ensures all recruitment activities are conducted in accordance with the principles of equal opportunity.

PUBLIC ADMINISTR ATION VALUE S AND EMPLOYMENT PRINCIPLE S

PrimeSafe has policies in place to ensure compliance with all public-sector employment principles, including public sector conduct.

PrimeSafe is committed to being an employer of choice and provides all staff with the opportunity and encouragement to further their development and the early resolution of workplace issues. All PrimeSafe employees are provided with guidance on how to avoid conflicts of interest and how to respond to offers of gifts and understand how PrimeSafe deals with any misconduct.


FIVE YE AR FINANCIAL SUMMARY

2018 2017 2016 2015 2014

$ $ $ $ $

Total income from transactions 2,852,972 2,258,240 2,221,834 2,192,673 2,092,710

Total expenses from transactions 2,495,336 2,077,151 2,271,543 2,000,043 2,242,652

Net result from transactions 357,636 181,089 (49,709) 192,630 (149,942)

Net result for the period 360,363 185,110 (53,615) 192,630 (169,104)

Net cash flow from operating activities 699,813 600,034 126,437 176,431 (608,741)

Total assets 3,968,389 3,406,040 2,832,964 2,794,679 2,616,809

Total liabilities 2,568,827 2,366,841 1,977,923 1,886,975 1,901,735

COMPAR ATIVE WORKFORCE DATA (i) ( i i )

Table 1: Full-time equivalents (FTE) staffing trends from 2014 to 2018(i)

2018 2017 2016 2015 2014

12.7 9.8 10.8 9.8 9.8

Table 2: Summary of employment levels in June of 2017 and 2018(i)

Ongoing EmployeesFixed Term and

Casual Employees

Employees (Headcount)

Full Time (Headcount)

Part Time (Headcount)

FTE FTE

June 2018 7 5 2 6.7 5

June 2017 5 4 1 4.8 5



Table 3: Details of employment levels in June of 2017 and 2018(i)

2018 2017

OngoingFixed Term and

Casual EmployeesOngoing

Fixed Term and Casual Employees

Employees (Headcount) FTE FTE

Employees (Headcount) FTE FTE

Gender

Male 2 2 3 2 2 3

Female 5 4.7 3 3 2.8 2

Self described 0 0 0 0 0 0

Total 7 6.7 6 5 4.8 5

Age

25-34 3 3 2 2 2 1

35-44 2 2 1 2 1.8 1

45-54 1 0.8 2 0 0 3

55-64 1 0.9 1 1 1 0

Total 7 6.7 6 5 4.8 5

Note:

(i) All figures reflect employment levels during the last full pay period in June of each year.

(ii) Excluded are those on leave without pay or absent on secondment, external contractors/consultants, and temporary staff employed by employment agencies.

E XECUTIVE OFFICER DATA

An Executive Officer (EO) is defined as a person employed as a public service body head or other executive under Part 3, Division 5 of the Public Administration Act 2004. All figures reflect employment levels at the last full pay period in June of the current and corresponding previous reporting year.

There were no persons who held a position of executive officer as defined by the Public Administration Act 2004 for the year end 30 June 2018.

The number of executives in the report of operations is based on the number of executive positions that are occupied at the end of the financial year. Note 8.3 in the Financial Statements lists the actual number of and amount of remuneration paid to EOs over the course of the reporting period. The Note does not distinguish between executive levels, nor does it disclose vacant positions, nor does it include the Accountable Officer. To assist readers, this disclosure is reconciled in Table 1.


Table 1: Reconciliation of executive numbers

2018 2017

Executives with total remuneration over $100,000 0 0

(Financial Statement Note 8.3)

Vacancies 0 0

Accountable Officer (Chief Executive Officer) 1 1

Separations 0 0

Total executive numbers at 30 June 2018 1 1

IMPLEMENTATION OF THE VICTORIAN INDUSTRY PARTICIPATION POLICY

In October 2003, the Victorian Parliament passed the Victorian Industry Participation Policy Act 2003 which requires public bodies and departments to report on the implementation of the Local Jobs First - Victorian Industry Participation Policy (Local Jobs First - VIPP). Departments and public bodies are required to apply the Local Jobs First - VIPP in all procurement activities valued at $3 million or more in metropolitan Melbourne and $1 million or more for procurement activities in regional Victoria.

During 2017/18 PrimeSafe did not commence or complete any projects to which a VIPP Plan or Local Industry Development Plan (LIDP) was required.

GOVERNMENT ADVERTISING E XPENDITURE

PrimeSafe did not undertake any Government campaign advertising during 2017/18.

CONSULTANCY E XPENDITURE

Details of consultancies (valued at $10,000 or greater)

In 2017/18, there was one consultancy where the total fees payable to the consultant was $10,000 or greater. The 2017/18 total expenditure occurred in relation to consultancies was $39,000 (excl. GST). Details of the individual consultancy is outlined below.

Consultant Purpose of ConsultancyTotal Approved Project

Fee (excl. GST)Expenditure 2017/18

(excl. GST)Future Expenditure

(excl. GST)

Bartley Consulting Undertake stakeholder survey of PrimeSafe licensees to evaluate effectiveness of PrimeSafe’s communication activities and measure stakeholder satisfaction.

$38,730 $39,000 Nil

Details of consultancies under $10,000In 2017/18, there were no consultancies engaged during the year where the total fees payable to the consultant was less than $10,000.



ICT expenditure refers to PrimeSafe’s costs in providing business-enabling ICT services. It comprises Business As Usual (BAU) ICT expenditure and Non-Business As Usual (non-BAU) ICT expenditure. Non-BAU expenditure relates to extending or enhancing PrimeSafe’s current ICT capabilities. BAU ICT expenditure is all remaining ICT expenditure which primarily relates to ongoing activities to operate and maintain the current ICT capability.

DISCLOSURE OF MA JOR CONTR ACTS

PrimeSafe did not enter into or award any major contracts (valued at $10 million or more) during 2017/18.

FREEDOM OF INFORMATION

The Freedom of Information Act 1982 allows the public a right of access to documents held by PrimeSafe. For the 12 months ending 30 June 2018, PrimeSafe received one application.

The request was from a member of the general public. The request was released with documents granted access in part with exemption associated with personal information.

Making a requestAccess to documents may be obtained through written request to the Manager, Business and Corporate Services, as detailed in Section 17 of the Freedom of Information Act 1982. In summary, the requirements for making a request are:

• it should be in writing;

• it should identify as clearly as possible which document is being requested; and

• it should be accompanied by the appropriate application fee (the fee may be waived in certain circumstances).

Requests for the documents in the possession of PrimeSafe should be addressed to:

Manager, Business and Corporate Services PrimeSafePO Box 2057SOUTH MELBOURNE VIC 3205

Requests can also be lodged online at www.foi.vic.gov.au.

Access charges may also apply once documents have been processed and a decision on access is made; for example, photocopying and search and retrieval charges.

Further information regarding Freedom of Information (FOI) can be found at www.foi.vic.gov.au.

Business As Usual (BAU) ICT Expenditure

(Total)

Non-Business As Usual (non-BAU) ICT Expenditure

(Total = Operational expenditure and capital expenditure) Operational Expenditure Capital Expenditure

$169,676 $0 $0 $0

INFORMATION AND COMMUNICATION TECHNOLOGY E XPENDITURE

For the 2017/18 reporting period, PrimeSafe had a total ICT expenditure of $169,676 with details shown below.


COMPLIANCE WITH THE BUILDING ACT 1993

PrimeSafe does not own or control any government buildings and consequently is exempt from notifying its compliance with the building and maintenance provisions of the Building Act 1993.

COMPE TITIVE NEUTR ALIT Y POLICY

Competitive neutrality requires government businesses to ensure where services compete, or potentially compete with the private sector, any advantage arising solely from their government ownership be removed if it is not in the public interest. Government businesses are required to cost and price these services as if they were privately owned. Competitive neutrality policy supports fair competition between public and private businesses and provides government businesses with a tool to enhance decisions on resource allocation.

PrimeSafe continues to implement and apply this principle in its business undertakings.

COMPLIANCE WITH THE PROTECTED DISCLOSURE ACT 2012

The Protected Disclosure Act 2012 (the Act) encourages and assists people in make disclosures of improper conduct by public officers and public bodies. The Act provides protection to people who make disclosures in accordance with the Act and establishes a system for the matters to be disclosed to be investigated and rectifying action to be taken.

PrimeSafe does not tolerate improper conduct by employees, nor the taking of reprisals against those who come forward to disclose such conduct. It is committed to ensuring transparency and accountability in its administrative and management practices and supports the making of disclosures that reveal corrupt conduct, conduct involving a substantial risk to public health and safety or the environment.

PrimeSafe will take all reasonable steps to protect people who make such disclosures from any detrimental action in reprisal for making the disclosure. It will also afford natural justice to the person who is the subject of the disclosure to the extent it is legally possible. During 2017/18, all PrimeSafe staff received training about protected disclosures.

No disclosures of improper conduct by PrimeSafe or its employees were made for the year ending 30 June 2018.

What is a ‘protected disclosure’? A protected disclosure is a complaint of corrupt or improper conduct by a public officer or a public body.

PrimeSafe is a ‘public body’ for the purposes of the Act.

What is ‘improper or corrupt conduct’? Improper or corrupt conduct involves substantial:

• mismanagement of public resources; or

• risk to public health or safety or the environment; or

• corruption.

The conduct must be criminal in nature or a matter for which an officer could be dismissed.

How do I make a ‘protected disclosure’? You can make a protected disclosure about PrimeSafe, or its Board members, officers or employees by contacting the Independent Broad-Based Anti-Corruption Commission (IBAC) Victoria on the contact details provided below.

• Independent Broad-Based Anti-Corruption Commission (IBAC) Victoria

Address: Level 1, North Tower, 459 Collins Street, MELBOURNE VIC 3000

Postal address: IBAC, GPO Box 24234, MELBOURNE VIC 3001

Phone: 1300 735 135

Website: www.ibac.vic.gov.au

Email: See the website above for the secure email disclosure process which also provides for anonymous disclosures.

Please note that PrimeSafe is unable to receive protected disclosures.

How can I access PrimeSafe’s procedures for the protection of persons from detrimental action?PrimeSafe has established procedures for the protection of persons from detrimental action in reprisal for making a protected disclosure about PrimeSafe, its Board members or employees. You can access PrimeSafe’s procedures on our website at www.primesafe.vic.gov.au.



ADDITIONAL INFORMATION AVAIL ABLE ON REQUE ST

In compliance with the requirements of the Standing Directions of the Minister for Finance, details in respect of the items listed below have been retained by PrimeSafe and are available on request, subject to the provisions of the Freedom of Information Act 1982.

a) a statement that declarations of pecuniary interests have been duly completed by all relevant officers;

b) details of shares held by a senior officer as nominee or held beneficially in a statutory authority or subsidiary;

c) details of publications produced by PrimeSafe about the activities of PrimeSafe, and where they can be obtained;

d) details of changes in prices, fees, charges, rates and levies charged by PrimeSafe for its services, including services that are administered;

e) details of any major external reviews carried out on PrimeSafe;

f) details of assessments and measures undertaken to improve the occupational health and safety of employees, not otherwise detailed in the Report of Operations;

g) details of all consultancies and contractors including:

– consultants/contractors engaged;

– services provided; and

– expenditure committed to for each engagement.

h) a general statement on industrial relations within PrimeSafe and details of time lost through industrial accidents and disputes, which are not otherwise detailed in the Report of Operations.

The information is available on request from:

Manager, Business and Corporate Services PrimeSafePO Box 2057SOUTH MELBOURNE VIC 3205

AT TE STATION FOR FINANCIAL MANAGEMENT COMPLIANCE WITH MINISTERIAL STANDING DIRECTION 5.1.4

I, Candy Broad, on behalf of the PrimeSafe Board, certify that PrimeSafe has complied with the applicable Standing Directions of the Minister for Finance under the Financial Management Act 1994 and Instructions.

The PrimeSafe Audit and Risk Management Committee has verified this.

Candy Broad

Chairperson

27 August 2018


F I N A N C I A L R E P O R T 2 0 1 7 / 1 8


PrimeSafe has presented its audited general purpose financial statements for the financial year ended 30 June 2018 in the following structure to provide users with the information about PrimeSafe’s stewardship of resources entrusted to it.

FINANCIAL STATEMENTS

Comprehensive operating statement 35

Balance sheet 36

Cash flow statement 37

Statement of changes in equity 38

NOTE S OF THE FINANCIAL STATEMENTS

1. About this report 39

The basis on which the financial statements have been prepared and compliance with reporting regulations

2. Funding delivery of our services 40

Revenue recognised from taxes, grants, sales of goods and services and other sources

2.1 Summary of income that funds our service delivery 40

2.2 Other Income 40

3. The cost of delivering services 41

Operating expenses of PrimeSafe

3.1 Expenses incurred in delivery of services 41

3.2 Employee and Board member benefits 41

3.3 Other operating expenses 44

4. Key assets available to support service delivery 45

Property, intangible assets, and other financial assets

4.1 Total property, plant and equipment 45

4.2 Intangible assets 46

4.3 Investments and other financial assets 47

4.4 Revaluation of assets 47

4.5 Impairment of assets 47

H O W T H I S R E P O R T I S S T R U CT U R E D


5. Other assets and liabilities 48

Working capital balances, and other key assets and liabilities

5.1 Receivables 48

5.2 Payables 49

5.3 Deferred Income 49

6. Financing our operations 50

Cash flow information and commitments

6.1 Cash flow information 50

6.2 Commitments for expenditure 51

7. Risks, contingencies and valuation judgements 52

Financial risk management, contingent assets and liabilities as well as fair value determination

7.1 Financial instruments 52

7.2 Contingent assets and contingent liabilities 58

7.3 Fair value determination 58

8. Other disclosures 61

8.1 Other economic flows included in net result 61

8.2 Responsible persons 62

8.3 Remuneration of executives 63

8.4 Related parties 63

8.5 Remuneration of auditors 64

8.6 Subsequent events 64

8.7 Australian Accounting Standards issued that are not yet effective 64

8.8 Accounting for the Goods and Services Tax (GST) 65


In accordance with a resolution of the Board of PrimeSafe, we declare that the attached financial statements for PrimeSafe have been prepared in accordance with Direction 5.2 of the Standing Directions of the Minister for Finance under the Financial Management Act 1994, applicable Financial Reporting Directions, Australian Accounting Standards including Interpretations, and other mandatory professional reporting requirements.

We further state that, in our opinion, the information set out in the comprehensive operating statement, balance sheet, statement of changes in equity, cash flow statement and accompanying notes, presents fairly the financial transactions during the year ended 30 June 2018 and financial position of PrimeSafe as at 30 June 2018.

At the time of signing, we are not aware of any circumstance which would render any particulars included in the financial statements to be misleading or inaccurate.

We authorise the attached financial statements for issue.

Candy Broad Brendan Tatham Eleanor Li Chairperson Chief Executive Officer Chief Financial Officer

Melbourne Melbourne Melbourne 27 August 2018 27 August 2018 27 August 2018

P R I M E S A F E D E C L A R AT I O N

A U D I TO R – G E N E R A L’ S R E P O R T



A U D I TO R – G E N E R A L’ S R E P O R T ( C O N T. )

C O M P R E H E N S I V E O P E R AT I N G S TAT E M E N T FO R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 8


2018 2017

Notes $ $

Income from transactions

Licence and registration fees 2.1 2,796,192 2,197,528

Interest income 2.1 49,443 49,008

Other income 2.2 7,337 11,704

Total income from transactions 2,852,972 2,258,240

Expenses from transactions

Employee expenses 3.2 1,414,733 1,221,072

Board and committee fees 3.2 214,619 155,986

Depreciation 4.1.2 78,483 50,390

Amortisation 4.2 33,659 9,441

Other operating expenses 3.3 753,842 640,262

Total expenses from transactions 2,495,336 2,077,151

Net result from transactions (net operating balance) 357,636 181,089

Other economic flows included in net result

Net gain/(loss) on non-financial assets 8.1 2,727 4,021

Total other economic flows included in net result 2,727 4,021

Comprehensive result 360,363 185,110

The comprehensive operating statement should be read in conjunction with the notes to the financial statements.


2018 2017

Notes $ $

Assets

Financial assets

Cash 6.1 1,561,274 1,017,627

Receivables 5.1 45,735 75,325

Investments and other financial assets 4.3 1,995,000 1,975,000

Total financial assets 3,602,009 3,067,952

Non-financial assets

Prepayments 55,831 54,291

Property, plant and equipment 4.1 252,646 192,235

Intangible assets 4.2 57,903 91,562

Total non-financial assets 366,380 338,088

Total assets 3,968,389 3,406,040

Liabilities

Payables 5.2 227,100 154,833

Deferred income 5.3 2,085,957 2,002,957

Provisions 3.2.3 255,770 209,051

Total liabilities 2,568,827 2,366,841

Net assets 1,399,562 1,039,199

Equity

Accumulated surplus/(deficit) 838,707 478,344

Contributed capital 560,855 560,855

Net worth 1,399,562 1,039,199

The balance sheet should be read in conjunction with the notes to the financial statements.

B A L A N C E S H E E T A S AT 3 0 J U N E 2 0 1 8


2018 2017

Notes $ $

Cash flows from operating activities

Receipts

Receipts from licence holders and other sources 2,895,154 2,589,463

Goods and Services Tax recovered from the ATO 100,155 71,021

Interest received 58,320 27,765

Total receipts 3,053,629 2,688,249

Payments

Payments to suppliers and employees (2,353,816) (2,088,215)

Total payments (2,353,816) (2,088,215)

Net cash flows from/(used in) operating activities 6.1 699,813 600,034

Cash flows from investing activities

Payments for property, plant and equipment (157,985) (132,878)

Payments for intangible assets – (96,328)

Payments for term deposits 375,000 100,000

Cash transferred from term deposits (395,000) (275,000)

Proceeds from sale of property, plant and equipment 21,819 40,227

Net cash flows from/(used in) investing activities (156,166) (363,979)

Net increase/(decrease) in cash and cash equivalents 543,647 236,055

Cash and cash equivalents at beginning of financial year 1,017,627 781,572

Cash and cash equivalents at end of financial year 6.1 1,561,274 1,017,627

The cash flow statement should be read in conjunction with the notes to the financial statements.

C A S H F LO W S TAT E M E N T FO R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 8


S TAT E M E N T O F C H A N G E S I N E Q U I T Y FO R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 8

Accumulated Surplus

Contributions by Owner

Total

$ $ $

Balance at 1 July 2016 293,234 560,855 854,089

Net result for the year 185,110 – 185,110

Balance at 30 June 2017 478,344 560,855 1,039,199

Net result for the year 360,363 – 360,363

Balance at 30 June 2018 838,707 560,855 1,399,562

The statement of changes in equity should be read in conjunction with the notes to the financial statements.


N OT E S TO T H E F I N A N C I A L S TAT E M E N T S FO R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 8

1. ABOUT THIS REPORTThe financial statements cover PrimeSafe as an individual reporting entity.

PrimeSafe operates under the provisions of the Meat Industry Act 1993 and the Seafood Safety Act 2003.

Its principal address is:

PrimeSafe 150 Albert Road SOUTH MELBOURNE VIC 3205

A description of the nature of PrimeSafe’s operations and its principal activities is included in the Organisational Profile and Report of Operations, which do not form part of these financial statements.

STATEMENT OF COMPLIANCE

These general purpose financial statements have been prepared on a going concern basis in accordance with the Financial Management Act 1994 (FMA) and applicable Australian Accounting Standards (AAS) which include Interpretations, issued by the Australian Accounting Standards Board (AASB). In particular, they are presented in a manner consistent with the requirements of the AASB 1049 Whole of Government and General Sector Financial Reporting.

Where appropriate, those AAS paragraphs applicable to not-for-profit entities have been applied.

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

These annual financial statements were authorised for issue by the Board of PrimeSafe on 27 August 2018.

BA SIS OF ACCOUNTING PREPAR ATION AND ME A SUREMENT

These financial statements are presented in Australian dollars, and prepared in accordance with the historical cost convention, unless a different measurement basis is specifically disclosed in the note associated with the item measured on a different basis.

The accrual basis of accounting has been applied in the preparation of these financial statements whereby assets, liabilities, equity, income and expenses are recognised in the reporting period to which they relate, regardless of when cash is received or paid.

Judgements, estimates and assumptions are required to be made about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on professional judgement derived from historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

Revisions to accounting estimates are recognised in the period in which the estimate is revised and also in future periods that are affected by the revision. Judgements and assumptions made by management in the application of AAS that have significant effects on the financial statements and estimates relate to:

• the fair value of leasehold improvements, plant and equipment (refer to Note 7.3); and

• actuarial assumptions for employee benefit provisions based on likely tenure of existing staff, patterns of leave claims, future salary movements and future discount rates (refer to Note 3.1).

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

Amounts in the financial statements have been rounded to the nearest dollar, unless otherwise stated.



2. FUNDING DELIVERY OF OUR SERVICESObjectives and Funding

The mission of PrimeSafe is to advance and regulate food safety in Victorian meat, poultry, seafood and pet food industries through credible quality assurance systems and services that also support opportunities for industry growth and innovation.

This is achieved through the following outcomes:

• meat, seafood and poultry are safe for all consumers;

• protection of animal welfare;

• recognition of comprehensive food safety and QA systems;

• industry growth through innovation and market access;

• governance and resources for sustainable service delivery; and

• the preferred food safety regulator.

PrimeSafe is funded by the payment of licence fees from the meat, poultry and seafood industries in Victoria.

2.1 SUMMARY OF INCOME THAT FUNDS OUR SERVICE DELIVERY

2018 2017

Notes $ $

Licence and registration fees – meat and seafood 2,796,192 2,197,528

Interest 49,443 49,008

Other income 2.2 7,337 11,704

Total income from transactions 2,852,972 2,258,240

Income is recognised to the extent that it is probable that the economic benefits will flow to the entity and the income can be reliably measured at fair value.

Licence FeesRevenue from licence fees is recognised in the period to which the licences relate, with the prepaid portion recorded as a liability (deferred income). This deferred income is a current liability and will be recognised as income in the next financial year.

Registration FeesRegistration fees for registering meat inspectors are recognised upon receipt of income.

InterestInterest revenue is recognised on a time proportionate basis that takes into account the effective yield of the financial asset.

2.2 OTHER INCOME

2018 2017

$ $

Review and audit fees 508 –

Court costs received 1,500 7,500

Sundry income 5,329 4,204

Total other income 7,337 11,704

Other IncomeOther income includes review and audit fees, court costs received and bad debt reversals. Court costs are recognised when PrimeSafe receives notification of an entitlement. All other income is recognised in the period that the service occurs.


3. THE COST OF DELIVERING SERVICES

This section provides an account of the expenses incurred by PrimeSafe in delivering services and outputs. In Section 2, the funds that enable the provision of services were disclosed and in this note, the cost associated with provision of services are recorded.

3.1 E XPENSE S INCURRED IN DELIVERY OF SERVICE S

2018 2017

Notes $ $

Employee benefit expenses 3.2 1,414,733 1,221,072

Board and committee fees 3.2 214,619 155,986

Other operating expenses 3.3 753,842 640,262

Total expenses incurred in delivery of services 2,383,194 2,017,320

Expenses from transactions are recognised as they are incurred, and reported in the financial year to which they relate.

3.2 EMPLOYEE AND BOARD MEMBER BENEFITS

3.2.1 EMPLOYEE AND BOARD MEMBER BENEFITS IN THE COMPREHENSIVE OPERATING STATEMENT

2018 2017

$ $

Employee expenses

Salaries and wages 1,292,847 1,113,789

Superannuation expense 121,886 107,283

Total employee expenses 1,414,733 1,221,072

Board and committee fees

Member fees 136,789 131,165

Superannuation expense 25,182 12,460

Recruitment fees 43,394 –

Meeting and travel expenses 9,254 12,361

Total board and committee fees 214,619 155,986

Employee expensesThese expenses include all costs related to employment including wages and salaries, superannuation, fringe benefits tax, leave entitlements, redundancy payments and WorkCover premiums.

Board and committee feesThese expenses include all costs related to director fees including wages and salaries, superannuation, recruitment, meeting and travel expenses for board members.



3.2.2 SUPERANNUATION

Employees and directors of PrimeSafe are entitled to receive superannuation benefits and PrimeSafe contributes to accumulating contribution plans. Superannuation contributions paid or payable for the reporting period are included as part of employee benefits in the comprehensive operating statement of PrimeSafe.

The amounts expensed in relation to employee superannuation contributions made by PrimeSafe are as follows:

2018 2017

$ $

Accumulating contribution plans:

VicSuper 48,980 34,857

Other 98,088 84,886

Total accumulating contribution plans 147,068 119,743

SuperannuationThe amount recognised in the comprehensive operating statement is the employer contributions for members of accumulated superannuation plans that are paid or payable during the reporting period.


3.2.3 EMPLOYEE BENEFITS IN THE BALANCE SHEET

Provisions are recognised for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave for services rendered to the reporting date and recorded as an expense during the period the services are delivered.

2018 2017

$ $

Current provisions

Annual leave

Unconditional and expected to settle within 12 months 65,180 50,876

Unconditional and expected to settle after 12 months 16,295 5,653

Long service leave



Provisions for on-costs



Total current provisions for employee benefits 246,862 200,313

Non-current provisions

Employee benefits 7,670 7,523

On-costs 1,238 1,215

Total non-current provisions for employee benefits 8,908 8,738

Total provisions for employee benefits 255,770 209,051

Notes:

(i) Employee benefits consist of annual leave and long service accrued by employees. On-costs such as payroll tax, workers’ compensation insurance and superannuation are not employee benefits and are reflected as a separate provision.

(ii) Amounts are measured at present values.



Employee BenefitsProvisions are recognised for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave for services rendered to the reporting date.

(i) Wages and salaries, annual leave and sick leave Liabilities for wages and salaries, including non-monetary benefits annual leave are all recognised in the provision for employee

benefits as ‘current liabilities’, because PrimeSafe does not have an unconditional right to defer settlements of these liabilities.

Depending on the expectation of the timing of settlement, liabilities for wages and salaries, and annual leave are measured at:

• undiscounted value – if PrimeSafe expects to wholly settle within 12 months; or

• present value – if PrimeSafe does not expect to wholly settle within 12 months.

(ii) Long service leave Liability for long service leave (LSL) is recognised in the provision for employee benefits.

Unconditional LSL is disclosed in the notes to the financial statements as a current liability, even where PrimeSafe does not expect to settle the liability within 12 months because it will not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months.

Conditional LSL is disclosed as a non-current liability. There is an unconditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service. This non-current LSL liability is measured at present value.

Any gain or loss following revaluation of the present value of non-current LSL liability is recognised as a transaction through employee expenses.

Employee Benefits On-CostsProvisions for on-costs such as payroll tax, workers’ compensation and superannuation are recorded separately from the provision for employee benefits.

3.3 OTHER OPER ATING E XPENSE S

2018 2017

$ $

Other operating expensesMotor vehicle and travelling costs 80,469 63,853Computer costs 59,704 54,056Communication costs 21,460 18,180Insurance 28,594 30,553Legal fees 104,880 73,878Consultancies 39,000 –Recruitment fees 16,528 27,279Service fees 128,291 114,039Printing and postage 58,888 46,766Industry and Government liaison 7,966 7,573Operating lease rental and occupancy expenses 156,465 151,877Other supplies and consumables 51,597 52,208Total other operating expenses 753,842 640,262

Other operating expenses generally represent the day-to-day running costs incurred in normal operations and are recognised as an expense in the reporting period in which they are incurred.

Other supplies and consumables include costs such as bank charges, office supplies, stationery, archiving and cleaning.


4. KE Y A SSETS AVAIL ABLE TO SUPPORT SERVICE DELIVERYPrimeSafe controls infrastructure and other investments that are utilised in fulfilling its objectives and conducting its activities. They represent the resources purchased by PrimeSafe to be utilised for delivery of those outputs.

Fair value measurement

Where the assets included in this section are carried at fair value, additional information is disclosed in Note 7.3 in connection with how those fair values were determined.

4.1 TOTAL PROPERT Y, PL ANT AND EQUIPMENT

Gross carrying amount

Accumulated depreciation

Net carrying amount

2018 2017 2018 2017 2018 2017

$ $ $ $ $ $

Leasehold improvements at fair value 82,810 82,810 (68,922) (66,758) 13,888 16,052

Plant and equipment at fair value 216,605 156,537 (137,259) (107,002) 79,346 49,535

Motor vehicles at fair value 220,859 185,133 (61,447) (58,485) 159,412 126,648

520,274 424,480 (267,628) (232,245) 252,646 192,235

Recognition and MeasurementItems of property, plant and equipment are measured initially at cost and subsequently measured at fair value less accumulated depreciation and impairment. Fair value is determined using the depreciated replacement cost method.

For all assets measured at fair value, the current use is considered the highest and best use.

4.1.1 RECONCILIATION OF MOVEMENTS IN CARRYING AMOUNTS

Motor vehicles

Plant and equipment

Leasehold improvements Total

$ $ $ $

Opening balance 1 July 2017 126,648 49,535 16,052 192,235

Additions 90,188 67,798 – 157,986

Disposals (17,833) (1,259) – (19,092)

Depreciation (39,591) (36,728) (2,164) (78,483)

Closing balance 30 June 2018 159,412 79,346 13,888 252,646

Opening balance 1 July 2016 111,342 16,395 18,216 145,953

Additions 88,600 44,278 – 132,878

Disposals (36,206) – – (36,206)

Depreciation (37,088) (11,138) (2,164) (50,390)

Closing balance 30 June 2017 126,648 49,535 16,052 192,235


4.1.2 DEPRECIATION

2018 2017

$ $

Leasehold improvements at fair value 2,164 2,164

Plant and equipment at fair value 36,728 11,138

Motor vehicles at fair value 39,591 37,088

78,483 50,390

Depreciation

Plant and equipment, and other non-financial physical assets (excluding items under operating leases) that have finite useful lives are depreciated.

Depreciation is calculated on a straight-line basis at rates that allocate the asset’s value, less any estimated residual value, over its estimated useful life.

The following are typical estimated useful lives for the different asset classes for current and prior years.

Asset Class Useful life

Leasehold improvements 9 years

Plant and equipment 3-10 years

Motor vehicles 5 years

The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, and adjustments made where appropriate.

4.2 INTANGIBLE A SSE TS

2018 2017

$ $

Gross carrying amount

Opening balance 326,656 230,328

Additions from internal development – 96,328

Closing balance 326,656 326,656

Accumulated amortisation

Opening balance (235,094) (225,653)

Amortisation of intangible produced assets (33,659) (9,441)

Closing balance (268,753) (235,094)

Net book value at end of financial year 57,903 91,562



Recognition and MeasurementWhen the recognition criteria in AASB 138 Intangible Assets are met, internally generated intangible assets are recognised and measured at cost less accumulated amortisation and impairment.

Costs incurred subsequent to initial acquisition are capitalised when it is expected that additional future economic benefits will flow to PrimeSafe.

Intangible assets with finite useful lives are amortised as an expense from transactions on a systematic (typically straight-line) basis over the asset’s useful life. Amortisation begins when the asset is available for use, that is, when it is in the location and condition necessary for it to be capable of operating in the manner intended by management.

The typical estimated useful lives for intangible assets for current and prior years is three years.

The estimated useful lives, and amortisation method are reviewed at the end of each annual reporting period, and adjustments made where appropriate.

Intangible assets with finite useful lives are tested for impairment whenever an indication of impairment is identified. The policy in connection with testing for impairment is outlined in Note 4.5.

4.3 INVE STMENTS AND OTHER FINANCIAL A SSE TS

2018 2017

$ $

Current investments and other financial assets

Term deposits:

Australian dollar term deposits greater than three months 1,995,000 1,975,000

Total current investments and other financial assets 1,995,000 1,975,000

Total investments and other financial assets 1,995,000 1,975,000

4 .4 RE VALUATION OF A SSE TS

Revaluation increases or decreases arise from differences between an asset’s carrying value and fair value.

Asset carrying values are considered to approximate their fair value, and no revaluation adjustments were required during the 2018 financial year (2017: Nil).

See Note 7.3 for further information regarding fair value determination.

4.5 IMPAIRMENT OF A SSE TS

At the end of each reporting period, PrimeSafe assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. All financial instrument assets, except those measured at fair value through profit or loss, are subject to annual review for impairment.

During the 2018 financial year, no assets were impaired (2017: Nil).


5. OTHER A SSETS AND LIABILITIESThis section sets out other assets and liabilities in PrimeSafe.

5.1 RECEIVABLE S

2018 2017

$ $

Current receivables

Contractual

Accrued investment income 19,858 28,735

Other receivables 1,500 10,450

Provision for doubtful contractual receivables – (325)

21,358 38,860

Statutory

GST input tax credit recoverable 24,377 36,465

24,377 36,465

Total receivables 45,735 75,325 Receivables consist of:

• contractual receivables, which include debtors in relations to court cost recoveries, and accrued investment income; and

• statutory receivables, such as amounts owing from the ATO for Goods and Services Tax (GST) input tax credits recoverable.

Contractual receivables are recognised initially at fair value and subsequently measured at amortised cost, less an allowance for impaired receivables. A provision for doubtful receivables is recognised when there is objective evidence that the debts may not be collected, and bad debts are written off when identified.

Collectability of trade receivables is reviewed on an ongoing basis. Bad debts which are known to be uncollectible are written off, and classified as a transaction expense. A provision for impaired receivables is established when there is objective evidence that the Authority will not be able to collect all amounts due according to the original terms of receivables.

Statutory receivables do not arise from contracts and are recognised and measured similarly to contractual receivables (except for impairment), but are not classified as financial instruments.

Refer to Note 7.1.3 for ageing analysis of receivables.

Movement in the provision for doubtful contractual receivables

2018 2017

$ $

Balance at beginning of the year 325 2,425

Increase/(decrease) in provision recognised in the net result (325) (2,100)

Balance at end of the year – 325

In assessing impairment of statutory (non-contractual) financial assets, which are not financial instruments, professional judgement is applied in assessing materiality using estimates, averages and other computational methods in accordance with AASB 136 Impairment of Assets.


5.2 PAYABLE S

2018 2017

$ $

Current payables

Contractual

Supplies and services(i) 123,707 85,154

Other payables 56,782 33,945

180,489 119,099

Statutory

FBT payable 13,315 9,541

PAYG payable 28,386 23,815

Other taxes payable 4,910 2,378

46,611 35,734

Total payables 227,100 154,833

Note: (i) The average credit period is 30 days. No interest is charged on the other payables for the first 30 days from the date of the invoice.

Payables consist of:

• contractual payables, such as accounts payable and accrued expenses. These represent liabilities for goods and services provided to PrimeSafe prior to the end of the financial year that are unpaid, and arise when PrimeSafe becomes obliged to make future payments in respect of the purchase of those goods and services; and

• statutory payables, such as goods and services tax and fringe benefits tax payables.

Due to the short-term nature of the current payables, their carrying value is assumed to approximate their fair value.

Refer to Note 7.1.4 for ageing analysis of payables.

5.3 DEFERRED INCOME

2018 2017

$ $

Deferred income 2,085,957 2,002,957

Total deferred income 2,085,957 2,002,957

The revenue from licence and registration fees is recognised in the period to which the licences relate, with the prepaid portion recorded as deferred income. The deferred income is a current liability and will be recognised as income in the next financial year.




6. FINANCING OUR OPER ATIONSThis section provides information on the sources of finance utilised by PrimeSafe during its operations, along with other information related to financing activities of PrimeSafe.

This section includes disclosures of balances that are financial instruments (such as borrowings and cash balances). Notes 7.1 and 7.3 provide additional, specific financial instrument disclosures.

6.1 CA SH FLOW INFORMATION

Cash and deposits, including cash equivalents, comprise of cash on hand and cash at bank, which are held for the purpose of meeting short-term cash commitments rather than for investment purposes, and which are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

a) Reconciliation of cash and cash equivalents

2018 2017

$ $

Cash on hand 300 300

Cash at bank 1,560,974 1,017,327

Balance as per cash flow statement 1,561,274 1,017,627

Term deposits of $1,995,000 as recorded on the balance sheet as at 30 June 2018 have not been included in cash and cash equivalents due to the deposits having maturity dates of over three months as shown in Note 4.3.

b) Reconciliation of net result for the period

2018 2017

$ $

Net result for the period 360,363 185,110

Non-cash movements:

(Gain)/loss on sale or disposal of non-current assets (2,727) (4,021)

Depreciation of non-current assets 78,483 50,390

Amortisation of non-current assets 33,659 9,441

Movement in assets and liabilities:

(Increase)/decrease in receivables 29,589 (36,544)

(Increase)/decrease in prepayments (1,540) 6,740

Increase/(decrease) in payables 72,267 14,664

Increase/(decrease) in deferred income 83,000 381,847

Increase/(decrease) in provisions 46,719 (7,593)

Net cash flows from operating activities 699,813 600,034


6.2 COMMITMENTS FOR E XPENDITURE

Commitments for future expenditure include operating and capital commitments arising from contracts. These commitments are disclosed by at their nominal value and inclusive of the goods and services tax (GST) payable. In addition, where it is considered appropriate and provides additional relevant information to users, the net present values of significant individual projects are stated. These future expenditures cease to be disclosed as commitments once the related liabilities are recognised in the balance sheet.

2018 2017

$ $

Capital expenditure commitments payable

Less than one year – 60,840

Total capital expenditure commitments – 60,840

Operating and lease commitments payable

Less than one year 68,143 116,817

Longer than one year but not longer than five years – 68,143

Total operating and lease commitments 68,143 184,960

Less GST recoverable from the Australian Taxation Office 68,143 245,800

Total commitments for expenditure (exclusive of GST) 6,195 22,345

Total commitments for expenditure (exclusive of GST) 61,948 223,455

Operating Leases

Operating lease payments, including any contingent rentals, are recognised as an expense in the comprehensive operating statement on a straight-line basis over the lease term. The leased asset is not recognised in the balance sheet.

The operating lease is a non-cancellable property lease with an 18-month term and rent payable monthly in advance. The current lease expires 31 January 2019. PrimeSafe has commenced negotiations to re-enter a new lease.



7. RISK S, CONTINGENCIES AND VALUATION JUDGEMENTSPrimeSafe is exposed to risk from its activities and outside factors. In addition, it is often necessary to make judgements and estimates associated with recognition and measurement of items in the financial statements. This section sets out financial instrument specific information (including exposures to financial risks), as well as those items that are contingent in nature or require a higher level of judgement to be applied, which for PrimeSafe related mainly to fair value determination.

7.1. FINANCIAL INSTRUMENTS

Introduction

Financial instruments arise out of contractual agreements that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Due to the nature of PrimeSafe’s activities, certain financial assets and financial liabilities arise under statute rather than a contract. Such assets and liabilities do not meet the definition of financial instruments in AASB 132 Financial Instruments: Presentation.

Categories of financial instruments

Loans and receivables are financial instrument assets with fixed and determinable payments that are not quoted in an active market. These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial measurement, loans and receivables are measured at amortised cost less any impairment. Loans and receivables category includes cash and deposits, trade and other receivables, but exclude statutory receivables.

Collectability of trade receivables is reviewed on an ongoing basis. Bad debts which are known to be uncollectible are written off, and classified as a transaction expense. A provision for impaired receivables is established when there is objective evidence that the Authority will not be able to collect all amounts due according to the original terms of receivables.

Financial liabilities at amortised cost are initially recognised on the date they originated. They are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial instruments are measured at amortised cost. Financial instrument liabilities measured atamortised cost include all of PrimeSafe’s contractual payables.

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.

Financial instrument liabilities measured at amortised cost include all of PrimeSafe’s contractual payables. The main purpose in holding financial instruments is to prudentially manage PrimeSafe’s financial risks within the Government policy parameters.

The carrying amounts of PrimeSafe’s contractual financial assets and financial liabilities by category are disclosed in Table 7.1.1.


TABLE 7.1.1: FINANCIAL INSTRUMENTS: CATEGORISATION

Contractual financial assets –

loans and receivables

Contractual financial

liabilities at amortised

cost

Total

$ $ $

2018

Contractual financial assets

Cash and deposits:

Cash on hand and at bank 1,560,974 – 1,560,974

Term deposits 1,995,000 – 1,995,000

Accrued interest 19,858 – 19,858

Other contractual financial assets:

Other receivables 1,500 – 1,500

Total contractual financial assets 3,577,332 – 3,577,332

Contractual financial liabilities

Payables:

Supplies and services – 123,708 123,708

Other payables – 56,782 56,782

Total contractual financial liabilities – 180,490 180,490

2017

Contractual financial assets

Cash and deposits:

Cash on hand and at bank 1,017,327 – 1,017,327

Term deposits 1,975,000 – 1,975,000

Accrued interest 28,735 – 28,735

Other contractual financial assets:

Other receivables 10,125 – 10,125

Total contractual financial assets 3,031,187 – 3,031,187

Contractual financial liabilities

Payables:

Supplies and services – 85,154 85,154

Other payables – 33,945 33,945

Total contractual financial liabilities – 119,099 119,099

Note: The total amounts here exclude statutory amounts (e.g. amounts owing from GST input tax credit recoverable and taxes payable).



Credit risk

Credit risk arises from the contractual financial assets of PrimeSafe, which comprise cash and deposits, and non-statutory receivables. Credit risk is measured at fair value and is monitored on a regular basis.

PrimeSafe does not engage in hedging for its contractual financial assets and obtains contractual financial assets that are on fixed interest, except for cash assets, which are mainly cash at bank.

Except as otherwise detailed in the following table, the carrying amount of contractual financial assets recorded in the financial statements represents PrimeSafe’s maximum exposure to credit risk without taking account of the value of any collateral obtained.

TABLE 7.1.2: CREDIT QUALITY OF CONTRACTUAL FINANCIAL ASSETS THAT ARE NEITHER PAST DUE NOR IMPAIRED

Financial institutions

(AAA credit rating)

$

Other

$

Total

$

2018

Cash at bank and on hand 1,560,974 – 1,560,974

Term deposits 1,995,000 – 1,995,000

Accrued investment income 19,858 – 19,858

Other receivables – 1,500 1,500

Total contractual financial assets 3,575,832 1,500 3,577,332

2017

Cash at bank and on hand 1,017,327 – 1,017,327

Term deposits 1,975,000 – 1,975,000

Accrued investment income 28,735 – 28,735

Other receivables – 10,125 10,125

Total contractual financial assets 3,021,062 10,125 3,031,187

Note: The total amounts disclosed here exclude statutory amounts (e.g. amounts owing from GST input tax credit recoverable).


TABLE 7.1.3: MATURITY ANALYSIS OF CONTRACTUAL FINANCIAL ASSETS

Carrying amount

Not past due

and not impaired

Past due but not impaired

Less than 1 month

1–3 months

3 months – 1 year 1–5 years

$ $ $ $ $ $

2018

Receivables:

Accrued investment income 19,858 19,858 – – – –

Other receivables 1,500 – – 1,500 – –

Investments and other contractual financial assets:

Cash and cash equivalents 1,560,974 1,560,974 – – – –

Term deposits 1,995,000 1,995,000 – – – –

Total 3,577,332 3,575,832 – 1,500 – –

2017

Receivables:

Accrued investment income 28,735 28,735 – – – –

Prosecution costs awarded by court 10,125 – – – 10,125 –


Cash and cash equivalents 1,017,327 1,017,327 – – – –

Term deposits 1,975,000 1,975,000 – – – –

Total 3,031,187 3,021,062 – – 10,125 –

Note: The carrying amounts disclosed here exclude statutory amounts (e.g. amounts owing from GST input tax credit recoverable).

Liquidity risk

Liquidity risk is the risk that PrimeSafe would be unable to meet its financial obligations as and when they fall due. PrimeSafe operates under the Government fair payments policy of settling financial obligations within 30 days and in the event of a dispute, making payments within 30 days from the date of resolution.

PrimeSafe’s maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed in the face of the balance sheet. PrimeSafe manages its liquidity risk by:

• maintaining an adequate level of uncommitted funds that can be drawn at short notice to meet short-term obligations; and

• careful maturity planning of its financial obligations based on forecasts of future cash flows.

PrimeSafe’s exposure to liquidity risk is deemed insignificant based on prior periods’ data and current assessment of risk.

The carrying amount of PrimeSafe’s payables represents PrimeSafe’s maximum exposure to liquidity risk. All payables are likely to mature within one month.

The following table discloses the contractual maturity analysis for PrimeSafe’s contractual financial liabilities.


TABLE 7.1.4: MATURITY ANALYSIS OF CONTRACTUAL FINANCIAL LIABILITIES

Maturity dates

Carrying amount

Nominal amount

Less than 1 month 1–3 months

3 months – 1 year

$ $ $ $ $

2018

Payables:

Supplies and services 123,708 123,708 123,708 – –

Other payables 56,782 56,782 56,782 – –

Total 180,490 180,490 180,490 – –

2017

Payables:

Supplies and services 85,154 85,154 85,154 – –

Other payables 33,945 33,945 33,945 – –

Total 119,099 119,099 119,099 – –

Note: The carrying amounts disclosed here exclude statutory amounts (e.g. GST payables).

Foreign Exchange Risk PrimeSafe trades in Australian Dollars only so there is no exposure to foreign exchange risk.

Market Risk

PrimeSafe’s exposure to market risk is through interest rate risk.

Interest Rate Risk

Cash flow interest rate risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

PrimeSafe has minimal exposure to cash flow interest rate risks through its cash and term deposits.

PrimeSafe manages this risk by mainly undertaking fixed-rate or non-interest-bearing financial instruments with relatively even maturity profiles. Management has concluded that cash at bank is a financial asset that can be left at a floating rate without necessarily exposing PrimeSafe to significant bad risk.



TABLE 7.1.5: INTEREST RATE EXPOSURE OF FINANCIAL INSTRUMENTS

Interest rate exposure

Weighted average

interest rate Carrying

amountFixed

interest rate Variable

interest rateNon–interest

bearing

% $ $ $ $

2018

Financial assets

Cash and deposits 0.10% 1,560,974 – 1,560,974 –

Receivables:

Accrued investment income 2.56% 19,858 19,858 – –

Other receivables 1,500 – – 1,500


Term deposits 2.56% 1,995,000 1,995,000 – –

Total financial assets 3,577,332 2,014,858 1,560,974 1,500

Financial liabilities

Payables:

Supplies and suppliers 123,708 – – 123,708

Other payables 56,782 – – 56,782

Total financial liabilities 180,490 – – 180,490

2017

Financial assets

Cash and deposits 0.10% 1,017,327 – 1,017,327 –

Receivables:

Accrued investment income 2.33% 28,735 28,735 – –

Other receivables 10,125 – – 10,125


Term deposits 2.33% 1,975,000 1,975,000 – –

Total financial assets 3,031,187 2,003,735 1,017,327 10,125


Payables:

Supplies and suppliers 85,154 – – 85,154

Other payables 33,945 – – 33,945

Total financial liabilities 119,099 – – 119,099

Note: The carrying amounts disclosed here exclude statutory amounts (e.g. amounts owing from GST input credit recoverable and GST payables).



Sensitivity disclosure analysis and assumptions

PrimeSafe cannot be expected to predict movements in market rates and prices. Sensitivity analysis determined that a movement of 50 basis points up and 50 basis points down (2017: 50 up and 50 down) in market interest rates (AUD) would not have a material impact on PrimeSafe’s net result and equity for each category of financial instrument held by PrimeSafe at the end of the reporting period if the movements were to occur.

7.2. CONTINGENT A SSE TS AND CONTINGENT LIABILITIE S

PrimeSafe did not have any contingent assets or contingent liabilities as at 30 June 2018 (2017: Nil).

7.3. FAIR VALUE DE TERMINATION

Significant judgement: Fair value measurements of assets and liabilities

Fair value determination requires judgement and the use of assumptions. This section discloses the most significant assumptions used in determining fair values. Changes to assumptions could have a material impact on the results and financial position of PrimeSafe.

Fair value hierarchy

The fair values and net fair values of financial instrument assets and liabilities are determined as follows:

• Level 1 – the fair value of financial instrument assets with standard terms and conditions and traded in active liquid markets are determined with reference to quoted market prices;

• Level 2 – the fair value is determined using inputs other than quoted prices that are observable for the financial asset or liability, either directly or indirectly; and

• Level 3 – the fair value is determined in accordance with generally accepted pricing models based on discounted cash flow analysis using unobservable market inputs.

Consistent with AASB 13 Fair Value Measurement, PrimeSafe determines the policies and procedures for both recurring fair value measurements such as property, plant and equipment, and financial instruments in accordance with the requirements of AASB 13 and the relevant Financial Reporting Directions.

PrimeSafe considers that the carrying amount of financial instrument assets and financial liabilities recorded in the financial statements to be a fair approximation of their fair values, because of the short-term nature of the financial instruments and the expectation that they will be paid in full.


Financial Assets and Liabilities

The following table shows that the fair values of all of the contractual financial assets and liabilities are the same as the carrying amounts.

TABLE 7.3.1: FAIR VALUE OF FINANCIAL INSTRUMENTS MEASURED AT AMORTISED COST

Carrying amount Fair value

Carrying amount Fair value

2018 2018 2017 2017

$ $ $ $

Financial assets

Cash on hand and at bank 1,561,274 1,561,274 1,017,627 1,017,627

Receivables:

Accrued investment income 19,858 19,858 28,735 28,735

Other receivables 1,500 1,500 10,125 10,125

Investment and other contractual financial assets:

Term deposits 1,995,000 1,995,000 1,975,000 1,975,000


Payables:

Supplies and services 123,708 123,708 85,154 85,154

Other payables 56,782 56,782 33,945 33,945

Note: The carrying amounts disclosed here exclude statutory amounts (e.g. amounts owing from GST input credit recoverable, and GST payables).



NON-FINANCIAL A SSE TS

Property, Plant and Equipment

Plant and equipment is held at fair value. When plant and equipment is specialised in use, such that it is rarely sold other than as part of a going concern, fair value is determined using the depreciated replacement cost method.

There were no changes in valuation techniques throughout the period to 30 June 2018. For all assets measured at fair value, the current use is considered the highest and best use.

TABLE 7.3.2: FAIR VALUE MEASUREMENT HIERARCHY FOR ASSETS AS AT 30 JUNE 2018

Fair value measurement at end of reporting period using:

Carrying amount as at 30 June 2018 Level 1(i) Level 2(i) Level 3(i)

$ $ $ $

Leasehold improvements at fair value 13,888 – – 13,888

Plant and equipment at fair value 79,346 – – 79,346

Motor vehicles at fair value 159,412 – – 159,412

Total of plant, equipment and vehicles at fair value 252,646 – – 252,646

Note: (i) Classified in accordance with the fair value hierarchy

TABLE 7.3.3: FAIR VALUE MEASUREMENT HIERARCHY FOR ASSETS AS AT 30 JUNE 2017

Fair value measurement at end of reporting period using:

Carrying amount as at 30 June 2017 Level 1(i) Level 2(i) Level 3(i)

$ $ $ $

Leasehold improvements at fair value 16,052 – – 16,052

Plant and equipment at fair value 49,535 – – 49,535

Motor vehicles at fair value 126,648 – – 126,648

Total of plant, equipment and vehicles at fair value 192,235 – – 192,235

Note: (i) Classified in accordance with the fair value hierarchy

Refer to Note 4.1.1 for movements in property, plant and equipment assets

TABLE 7.3.4: DESCRIPTION OF SIGNIFICANT UNOBSERVABLE INPUTS TO LEVEL 3 VALUATIONS

2018 Valuation technique Significant unobservable inputs

Vehicles Depreciated straight-line cost Useful life of vehicles

Plant and equipment Depreciated straight-line cost Useful life of plant and equipment

Leasehold improvements Depreciated straight-line cost Useful life of leasehold improvements


The significant unobservable inputs have remained unchanged from 2017.

Net revaluation decreases are recognised in ‘Other economic flows – other movements in equity’ to the extent that a credit balance exists in the asset revaluation surplus in respect of the same class of property, plant and equipment. Otherwise, the net revaluation decreases are recognised immediately as other economic flows in the net result. The net revaluation decrease recognised in ‘Other economic flows – other movements in equity’ reduces the amount accumulated in equity under the asset revaluation surplus.

Revaluation increases and decreases relating to individual assets within a class of property, plant and equipment are offset against one another within that class but are not offset in respect of assets in different classes. Any asset revaluation surplus is not normally transferred to accumulated funds on derecognition of the relevant asset.

8. OTHER DISCLOSURESThis section includes additional material disclosures required by accounting standards or otherwise for the understanding of this financial report.

8.1 OTHER ECOMONIC FLOWS INCLUDED IN NE T RE SULT

Other economic flows measure the change in volume or value of assets or liabilities that do not result from transactions.

2018 2017

$ $

Net gain/(loss) on non-financial assets

Gain on disposal of property, plant and equipment 3,986 4,021

Loss on disposal of property, plant and equipment (1,259) –

Total net gain/(loss) on non-financial assets 2,727 4,021

Total other economic flows included in net result 2,727 4,021

Net Gain/(Loss) on Non-Financial Assets

Net gain/(loss) on non-financial assets and liabilities includes realised and unrealised gains and losses as follows:

Net gain/(loss) on disposal of non-financial assetsAny gain or loss on the disposal of non-financial assets is recognised at the date of disposal and is determined after deducting from the proceeds the carrying value of the asset at that time.



8.2 RE SPONSIBLE PERSONS

In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994, the following disclosures are made regarding responsible persons for the reporting period.

The persons who held the positions of Responsible Persons and Accountable Officer are as follows:

Governing Board

Chairperson Ms Candy Broad 1 July 2017 to 30 June 2018

Director Ms Nicola Baaini 1 July 2017 to 30 June 2018

Director Dr Caroline Barrett 1 July 2017 to 30 June 2018

Director Ms Janette Bowman 1 July 2017 to 30 June 2018

Director Mr Paul Conway 1 July 2017 to 30 June 2018

Director Mr Gary Hardwick 1 July 2017 to 30 June 2018

Director Ms Jennifer McDonald 12 December 2017 to 30 June 2018

Director Mr Chris Turner 1 July 2017 to 30 June 2018

Director Ms Nelia Varcoe 1 July 2017 to 30 June 2018

Director Mr Frank Whitford 1 July 2017 to 30 June 2018

Accountable OfficersChief Executive Officer Dr Brendan Tatham 1 July 2017 to 30 June 2018

Other Responsible PersonsMinister for Agriculture The Hon. Jaala Pulford, MP 1 July 2017 to 30 June 2018

Remuneration

2018 2017

Governing Board

$0 - 9,999 1 –

$10,000 - 19,999 8 9

$30,000 - 39,999 1 1

Accountable Officer

$240,000 - 249,999 1 1

Total numbers 11 11

Total amount (includes base and total remuneration) $418,756 $395,228

The compensation detailed above excludes the salaries and benefits the Portfolio Minister receives. The Minister’s remuneration and allowances is set by the Parliamentary Salaries and Superannuation Act 1968 and is reported in the financial statements of the Parliamentary Services. For information regarding related party transactions for Ministers, the register of members’ interests is publicly available from www.parliament.vic.gov.au/publications/register-of-interests.


8.3 REMUNER ATION OF E XECUTIVE S AND PAYMENTS TO OTHER PERSONNEL

Remuneration of executives

There were no persons who held a position of executive officer as defined by the Public Administration Act 2004 for the year ended 30 June 2018.

8.4 . REL ATED PARTIE S

PrimeSafe is a Statutory Authority of the State of Victoria. PrimeSafe is a wholly owned and controlled entity of the Victorian Government. Related parties of PrimeSafe include:

• all key management personnel, their close family members and personal business interests;

• all cabinet ministers and their close family members; and

• all departments and public sector entitles that are controlled and consolidated into the whole of state consolidated financial statements.

All related party transactions have been entered into on an arm’s length basis.

8.4.1 KEY MANAGEMENT PERSONNEL

Key management personnel of the Authority includes all Responsible Persons as listed in Note 8.2. Compensation comprises employee benefits in all forms of consideration paid, payable or provided by the entity, or on behalf of the entity, in exchange for services rendered, and is disclosed in the following categories.

Compensation of KMPs

2018

$

2017

$

Short-term employee benefits 378,580 356,259

Post-employment benefits 34,713 33,844

Other long-term benefits 5,463 5,125

Termination benefits – –

Share based payments N/A N/A

Total 418,756 395,228

Short-term employee benefits include amounts such as wages, salaries, annual leave or sick leave that is usually paid or payable on a regular basis, as well as non-monetary benefits such as allowances and free or subsidised goods or services.

Post-employment benefits include pensions and other retirement benefits paid or payable on a discrete basis when employment has ceased.

Other long-term benefits include long service leave, other long service benefit or deferred compensation.



8.4.2 TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL AND OTHER RELATED PARTIES

Certain directors are PrimeSafe licensees and therefore remit licence fees to PrimeSafe on normal commercial terms and conditions. There were no transactions outside the normal course of business during the financial year between the directors and PrimeSafe.

Compensation comprises employee benefits in all forms of consideration paid, payable or provided by the entity, or on behalf of the entity, in exchange for services rendered, and is disclosed in the following categories.

8.5 REMUNER ATION OF AUDITORS

2018 2017

$ $

Victorian Auditor-General's Office

Audit of the financial statements 17,000 14,600

17,000 14,600

8.6 SUBSEQUENT E VENTS

Events After the Reporting Period

No matters or circumstances have arisen since the end of the reporting period which significantly affected or may significantly affect the operations of PrimeSafe, the results of those operations, or the state of affairs of PrimeSafe in future financial years.

8.7 AUSTR ALIAN ACCOUNTING STANDARDS ISSUED THAT ARE NOT YE T EFFECTIVE

Certain new AAS have been published that are not mandatory for the 30 June 2018 reporting period. Department of Treasury and Finance assesses the impact of all these new standards and advises PrimeSafe of their applicability and early adopting where applicable.

PrimeSafe has not early adopted any new standards and, except for the items noted below, the impact of these new standards and interpretations in future years is not expected to be significant.

Standard/Interpretation Summary Applicable for annual reporting periods beginning on

Impact on public sector entity financial statements

AASB 15 Revenue from Contracts with Customers

The core principle of AASB 15 requires an entity to recognise revenue when the entity satisfies a performance obligation by transferring a promised good or service to a customer.

1 Jul 2019 The changes in revenue recognition requirements in AASB 15 may result in changes to the timing and amount of revenue recorded in the financial statements. The Standard will also require additional disclosures on service revenue and contract modifications. The preliminary assessment has not identified any material impact arising from AASB 15.


Standard/Interpretation Summary Applicable for annual reporting periods beginning on

Impact on public sector entity financial statements

AASB 16 Leases The key changes introduced by AASB 16 include the recognition of most operating leases (which are currently not recognised) on the balance sheet.

1 Jan 2019 The implementation of AASB 16 will result in most operating leases, with the exception of short-term and low-value leases, will come on to the balance sheet and will be recognised as right of use assets with a corresponding lease liability.

The payment of leases will be recognised as depreciation and interest expenditure in the comprehensive operating statement and will no longer be reported as lease occupancy expenses.

AASB 9 Financial Instruments The key changes include the simplified requirements for the classification and measurement of financial assets, a new hedging accounting model and a revised impairment loss model to recognise impairment losses earlier, as opposed to the current approach that recognises impairment only when incurred.

1 Jan 2018 The initial application of AASB 9 is not expected to significantly impact the financial position, however there will be a change to the way financial instruments are classified and new disclosure requirements.

8.8 ACCOUNTING FOR THE GOODS AND SERVICE S TA X (GST)

Income, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case, it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are recognised net of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow.

Commitments and contingent assets and liabilities are also stated inclusive of GST.


D I S C LO S U R E I N D E X

Legislation Requirement Page Reference

MINISTERIAL DIRECTIONS

REPORT OF OPER ATIONS – FRD GUIDANCE

Charter and purposeFRD 22H Manner of establishment and the relevant Ministers 8

FRD 22H Purpose, functions, powers and duties 8

FRD 8D Departmental objectives, indicators and outputs 12

FRD 22H Initiatives and key achievements 12

FRD 22H Nature and range of services provided 8, 14

Management and structureFRD 22H Organisational structure 10

Financial and other informationFRD 8D Performance against output performance measures N/A

FRD 8D Budget portfolio outcomes N/A

FRD 10A Disclosure index 66

FRD 12B Disclosure of major contracts 26

FRD 15E Executive officer disclosures 24

FRD 22H Employment and conduct principles 22

FRD 22H Occupational health and safety policy 22

FRD 22H Summary of the financial results for the year 23

FRD 22H Significant changes in financial position during the year N/A

FRD 22H Major changes or factors affecting performance N/A

FRD 22H Subsequent events 64

FRD 22H Application and operation of Freedom of Information Act 1982 26

FRD 22H Compliance with building and maintenance provisions of Building Act 1993 27

FRD 22H Statement on Competitive Neutrality Policy 27

FRD 22H Application and operation of the Protected Disclosure Act 2012 27

FRD 22H Application and operation of the Carers Recognition Act 2012 N/A

FRD 22H Details of consultancies over $10,000 25

FRD 22H Details of consultancies under $10,000 25

FRD 22H Disclosure of government advertising expenditure 25

FRD 22H Disclosure of ICT expenditure 26

FRD 22H Statement of availability of other information 28

FRD 24D Reporting of office-based environmental impacts N/A

FRD 25C Victorian Industry Participation Policy disclosures 25

FRD 29C Workforce Data disclosures 23

SD 5.2 Specific requirements under Standing Direction 5.2 i

The Annual Report of PrimeSafe is prepared in accordance with all relevant Victorian legislation and pronouncements. This index has been prepared to facilitate identification of PrimeSafe’s compliance with statutory disclosure requirements.

D I S C LO S U R E I N D E X


Legislation Requirement Page Reference

Compliance attestation and declarationSD 5.1.4 Attestation for compliance with Ministerial Standing Direction 28

SD 5.2.3 Declaration in report of operations i

FINANCIAL STATEMENTS - FRD GUIDANCE

DeclarationSD 5.2.2 Declaration in financial statements 32

Other requirements under Standing Directions 5.2SD 5.2.1(a) Compliance with Australian accounting standards and other 39 authoritative pronouncements

SD 5.2.1(a) Compliance with Ministerial Directions 39

SD 5.2.1(b) Compliance with Model Financial Report 39

Other disclosures as required by FRDs in notes to the financial statements*FRD 9B Departmental Disclosure of Administered Assets and Liabilities by Activity N/A

FRD 11A Disclosure of Ex gratia Expenses N/A

FRD 13 Disclosure of Parliamentary Appropriations N/A

FRD 21C Disclosures of Responsible Persons, Executive Officers and other Personnel 62

(Contractors with Significant Management Responsibilities) in the Financial Report

FRD 103G Non-Financial Physical Assets 45

FRD 110A Cash Flow Statements 37, 50

FRD 112D Defined Benefit Superannuation Obligations N/A

* Note: References to FRDs have been removed from the Disclosure Index if the specific FRDs do not contain

requirements that are of the nature of disclosure.

LEGISL ATION

Freedom of Information Act 1982 26

Building Act 1983 27

Protected Disclosure Act 2012 27

Carers Recognition Act 2012 N/A

Victorian Industry Participation Policy Act 2003 25

Financial Management Act 1994 39


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Photography: Joe Vittorio

Design and Production: Nuttshell

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2017/18 - parliament of victoria...integrated poultry operation, with three plants in victoria...

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