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Annual Report 2008/09

21 September 2009

The Hon. Joe Helper Minister for Agriculture GPO Box 4440 MELBOURNE VIC 3001

Dear Minister

In accordance with the Financial Management Act 1994, I am pleased to submit to you the PrimeSafe Annual Report for the year ending 30 June 2009. The PrimeSafe Corporate Plan 2010/15, developed in accordance with the Meat Industry Act 1993 is also included within this Annual Report.

Yours sincerely

Bill Bray CHAIRPERSON

Corporate Plan 2010/15

From the Chairperson

The PrimeSafe Board

From the Chief Executive

The value of trust

Organisational Profile

Report of Operations

Financial Report 2008/09

Disclosure Index

AcknowledgementsPrimeSafe gratefully acknowledges assistance in the preparation of this report from:

- Aquanas Foods, Abbotsford - Count Your Chickens, Epping - Oyster Little Bourke, Melbourne - Rainbow Meats – The Healthy Choice, Camberwell

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contents

PRIMESAFE ANNUAL REPORT 2008/09(i)

PRIMESAFE ANNUAL REPORT 2008/09 1

PURPOsEThe Victorian Government established PrimeSafe to ensure, in partnership with industry, the safety of Victorian meat, poultry and seafood for all consumers.

MissiONTo regulate and advance food safety in the Victorian meat, poultry and seafood industries through a credible, effective and efficient Quality Assurance (QA) system that facilitates opportunities for industry growth and innovation.

KEy bUsiNEss ObjEcTivEsTo deliver this purpose and mission PrimeSafe:

• ensurestheeffectiveapplicationofthe Meat Industry Act 1993 and Seafood Safety Act 2003;

• providesaframeworkwhichenablesindustrytodeliveraQAsystemthat provides sustainable value;

• continuouslyimprovesandadvancestheQAsystemofregulatory control;

• ensuresahighlevelofconsumerconfidenceinthesafetyofVictorianprocessed meat, poultry and seafood for domestic and international markets;and

• facilitatesindustrycollaborationconsistentwiththeVictorianGovernment’s original intent in establishing PrimeSafe.

CORPORATE PLAN 2010/15

PRIMESAFE ANNUAL REPORT 2008/092

vALUEsThe core values that underpin PrimeSafe are:Our people will act with:

• professionalism; • objectivity;and • impartiality.

Our system of regulatory control will deliver:

• consistencythroughuniformapplication;and

• continuousimprovement.

Our partnerships will be based on:

• respectandintegrity;and

• valuecreation.

Together, these values enable PrimeSafe to fulfil legislative responsibilities, engageandsecurethecommitmentofstakeholdersandbuildappropriatelinkagesacrossthefoodsafetynetwork.



KEy sTRATEgiEs fOR ThE NExT fivE yEARs1. Consumer The consumer is the ultimate beneficiary of PrimeSafe’s services. Our strategy is to provide safe Victorian processed meat, poultry and seafood and to ensure confidence of consumers, government and stakeholdersinthePrimeSafesystem.

2. ShareholderMaintain a strong and responsive relationship with the Victorian Government, as shareholder, to support the PrimeSafe system of regulatory control.

3. IndustrystakeholdersContinuouslyenhancetherelationshipwithindustrystakeholderstomaintaintheir commitment to the benefits of the Victorian Government partnership model.

4. People capabilitiesToensurePrimeSafehastheskillsandcompetenciesavailabletoenablethe successful delivery of the Corporate Plan.

5. KeylinksMaintain and develop relationships with relevant food safety and government organisations to build their understanding and confidence in the PrimeSafe system.

6. System enhancementReview and refine the PrimeSafe requirements for QA systems and processes to ensure they deliver effective, measurable outcomes.

7. RiskmanagementIdentify,minimiseandproactivelymanageallrisksinherentinPrimeSafe’ssystems and operations.

8. IndustryknowledgeimprovementFacilitate the development of industry specific training programs to enhance industryknowledgeofQAandfoodsafety.

9. Governance Continually enhance the governance of PrimeSafe to ensure it enables the organisation to function with optimum efficiency and effectiveness.



Ultimately, we must ensure

that consumers are confident

that meat, poultry and

seafood is safe to eat.


FROM ThE ChAIRPERSON

The past 12 months have been difficult due to the changed economic climate. Primesafe recognises the meat and seafood industries are not immune and they need strong income streams and lower cost burdens to survive and prosper. Primesafe is aware that it imposes one of many compliance costs on our licensees and therefore the Primesafe board is keen to keep these costs as low as possible.

The year ahead will provide many challenges and opportunities for licensees. As an organisation, we continued to improve and refine our systems, while ensuring they remain strong and protect public health. Primesafe will continue to strive to improve efficiencies, and will work to minimise costs in the system by imposing the lowest level of regulatory intervention necessary to get the right outcome. Our reduced audit program has now been in place for some time providing a clear opportunity for licensees to reduce their costs while maintaining an effective quality assurance (QA) system. Our goal is to allow industry to achieve and demonstrate compliance, at low cost, while ensuring their QA systems improve.

This year the board developed our five-year corporate Plan for 2010/15. This process involved all Directors and, importantly, feedback from industry. The corporate Plan reflects a strong governance framework within Primesafe. We must effectively apply both the meat and seafood Acts, through the delivery of a sustainable QA framework. Ultimately, we must ensure that consumers are confident that victorian red meat, poultry and seafood is safe to eat.

The board highly values the staff of Primesafe who must always act in a professional and objective manner. Licensees can expect that staff apply the Primesafe system with uniformity and consistency at all times. in refining the corporate Plan we have incorporated the principles of the Primesafe Licensee charter, basing all our relationships and partnerships on both integrity and respect. These values, determined by the board, allow us to fulfil our legislative responsibilities in a fair and unbiased way, which is essential to our productive relationship with licensees.

The Primesafe regulatory system is mature, with both the QA system and standards well defined and third party auditors and licensees well aware of their responsibilities. from this base we now have the opportunity to explore ways of doing things better.

Opportunities lie in the productive links we maintain with industry organisations. We will work with these organisations to enhance the development of food safety training programs. The board has seen that in many instances a lack of understanding of some fundamental food safety requirements is the cause of many audit failures and non-compliance issues. improved access to training in food safety, facilitated and organised by industry groups, is considered an important strategy for the future.

july 2009 saw a changeover of some board Directors. The three-year term and selection process for Directors ensures that an invigorated, enthusiastic and passionate board guides Primesafe. i am a great supporter of the selection panel process, where industry representatives are charged with the responsibility to recommend a skills-based board to government. As chairperson of Primesafe, i am part of this process. industry representation ensures that we are able to recommend the best candidates to drive food safety outcomes for red meat, poultry and seafood industries in victoria.

it has been a pleasure to work with the current board over the past three years. The policies developed and overseen by the current board, the planning process that will guide the development of Primesafe over the next five years, and the development of the Primesafe Licensee charter were achieved through frank, honest and robust discussion by a group of people committed to Primesafe. i sincerely thank the present board and welcome new Directors who commenced in july this year.

i would also like to sincerely thank brian casey, chief Executive of Primesafe, for his invaluable support during my first term as chairperson. Thanks also to all Primesafe staff for their work during the past year. it has been a pleasure to work with this group of committed, highly professional people and i look forward to continuing this relationship in the future.

Bill Bray


ThEPRIMESAFE bOARd

bill bray (chairperson)

is a beef and lamb producer in south gippsland and has a keen interest in on-farm research and development. he was the first producer in Australia to receive dual accreditation for flockcare and cattlecare. he is a Director of the National farmers’ federation and chairman of the Nff Quarantine committee. he is also a member of the Export Meat industry Advisory council, the Quarantine Export Advisory committee and past President of the cattle council of Australia.

jillian francis (Deputy chairperson)

is a registered food safety auditor with RAbQsA international inc. with accreditations in food service Operation, Live Animal and Animal feed. she works extensively in the agricultural sector Australia wide, primarily within the stock feed and dairy industries. jillian is also a registered auditor with the Department of human services and Dairy food safety victoria. jillian previously owned and operated an AQis accredited quarantine facility in southern NsW for the production of export bovine embryos.

john carnie is victoria’s chief health Officer. he is a public health physician with postgraduate qualifications in paediatrics, public health and epidemiology. he is a member of the National health and Medical Research council and a past President of the faculty of Public health Medicine of the Royal Australasian college of Physicians. he was awarded the Public service Medal in the Queen’s birthday honours in june 2009.

Paul conwayis the Assistant secretary of the Australasian Meat industry Employees Union. he is a victorian branch federal council Member and a council Delegate of the geelong Trades hall. Paul has 29 years experience in the meat industry and is a certified training provider for Worksafe health and safety representatives. he is also a Director of the Meat industry Employees’ superannuation fund.

Ailsa foxhas a family farming business producing beef, lamb and wool. Ailsa is vice President of the victorian farmers federation and former President of the victorian farmers federation Livestock group. she has also been a Director of the goulburn broken catchment Authority for nine years, and

was formally a councillor for the shire of Mansfield, a commissioner of the shire of Murrindindi and a delegate to cattle council of Australia.

vin gannon is a business management consultant in the seafood industry with a background in the processing and primary production of seafood, utilising quality control systems and traditional and alternative processing methods. he is also Executive Officer of the victorian Abalone Divers Association, Director of seafood industry victoria, independent chairman of the victorian Ecologically sustainable fishing Association and former chairman of the board of management of Portland District health.

vicki hardwick is a Director of the hardwick group of companies involving a processing plant supplying domestic and export markets. she is also co-manager of a sheep and cattle property in central victoria and south Australia. she has 27 years experience in the production, processing and retail sectors of the red meat industry. vicki is a past member of the National Occupational health and safety council and former Director of National Meat industry Training Advisory council Limited.

frank herd is Managing Director of M. c. herd Pty Ltd and challenge Meats Pty Ltd and a Director of h. W. greenham & sons Pty Ltd, a major beef exporter to the UsA, japan and Korea. he is also a past board Member of Australian Meat Processor corporation Ltd and currently a member of the Australian Processors council.

Patrick Mccaffrey was a member of the board and chairperson of the Audit and Risk Management committee up until january 2009. Patrick relocated to Queensland to take up the position of chief Executive of golden cockerel Pty Ltd, a poultry processing company based in Mt cotton.

Andrew Ridderhas 26 years experience in the meat industry with extensive knowledge of meat processing practices including fresh, cooked, cured and fermented meat. Andrew is a Director of Ridders fresh and Tibaldi smallgoods and also chairman of the National smallgoods council and a board Member of the Australian Meat industry council.


bill bray (chairperson)

john carnie

Patrick Mccaffrey

vin gannon

jillian francis (Deputy chairperson)

Paul conway

Andrew Ridder

vicki hardwick

Ailsa fox

frank herd


Our involvement ensures the ongoing

integrity of the food safety system

established by individual meat,

poultry and seafood businesses.


FROM ThE ChIEF ExECuTIvE

consumers across Australia inherently trust that red meat, poultry and seafood is safe to eat. This unqualified consumer trust is well placed in victoria. Primesafe’s regulatory management system adopts national food safety standards to fulfil our commitment to a safe food outcome. Licensees themselves put hAccP-based QA programs in place to ensure that they meet these standards when producing, transporting and selling meat and seafood products.

The Primesafe system is working well with most licensees managing QA programs with increased confidence. for many licensees, QA forms the basis of their business management model. Once you reach a point where all aspects of business operations are managed under QA, the management of food safety requirements imposes no additional burden on a business and allows licensees to consistently produce safe, wholesome food without significant intervention by Primesafe.

This year saw the first full year of operation under the Primesafe Licensee charter which was initially released in March 2008. The charter outlines the roles and responsibilities, and clarifies the expectations of Primesafe, licensees and third party auditors. it also confirms the clear commitment from Primesafe to treat all licensees with consistency and respect. The charter provides certainty and clear guidelines that govern the way that our system is regulated enabling licensees to develop greater trust in the system.

A Primesafe licence carries with it significant food safety obligations. in adhering to the charter, Primesafe continues to strengthen victoria’s food safety framework by working with licensees to help them fulfil their obligations. Our involvement ensures the ongoing integrity of the food safety system established by the individual red meat, poultry and seafood businesses.

in providing a consistent and high standard of food safety regulatory management, all licensees can trust that Primesafe’s resources are efficiently allocated and that there is no arbitrary or unwarranted scrutiny of any business. We focus primarily on businesses that threaten the integrity of the system. Any licensed business that has more than one major or critical food safety non- conformance in a 12-month period or any person operating without a Primesafe licence will come under intense scrutiny.

The number of businesses identified with repeat major or critical non-conformances has reduced this year, reflecting the success of our monitoring programs. An understanding of the importance and relevance of internal audit and management review is fundamental to any successful QA program. Licensees with a history of major or critical non-conformance must demonstrate an improved understanding of QA food safety management if they are to be allowed to continue to operate. Primesafe’s objective is to ensure that any corrective action is sustainable and will prevent a repeat of previous non-conformances.

An improved knowledge and understanding of internal audit and management review will lead to sustainable compliance. Licensees who are able to grasp this concept return to normal audit arrangements with increased knowledge and understanding of internal audit and management review. Moving forward, these licensees are able to manage their QA food safety program with greater competence and confidence.

All meat processors, including retail butchers producing ready-to-eat meat products were required to confirm compliance with the minimum testing requirements for Listeria monocytogenes by july 2008. Almost every licensee producing these products readily accepted the revised testing guidelines and deserve praise for the seamless transition to the new nationally consistent requirements.

The Australian Meat industry council (AMic) should also be congratulated for its proactive work in ensuring that its members and others subject to the revised Listeria monocytogenes testing requirements had the necessary information and training available to enable compliance from july 2008.

A number of new, yet well-experienced staff have joined Primesafe in recent years. Their input this year, and that of staff members who have been with us for many years, provides energy and stability enabling Primesafe to deliver on our responsibilities to licensees and ultimately ensures that safe red meat, poultry and seafood is available to consumers.

Brian Casey


ThE vALuE OF TRuST

The application of hAccP-based QA for meat and seafood production in victoria has reached a level of maturity that allows licensed operators throughout the state to focus on delivering to the needs of their customers. The expectations of customers have increased and their needs have become more sophisticated in recent years, as has the ability of retailers and processors to add value to their product, invest in technology enhancing service, and continually drive demand for fresh and wholesome meat and seafood.

in talking to customers, it is clear that a high level of trust in food safety exists. They expect safe food, and have no doubt that operators have systems in place to deliver this. With this trust as a foundation, purchase decisions revolve around the service, experience, taste, quality and value of the product.

Count Your Chickens proves that loyalty develops when you go the extra milejacqui voolek calls Count Your Chickens at Epping Plaza “my chicken shop”.

This loyalty has grown quickly given that the store opened only six months ago in December 2008. yet it is no surprise coming from a customer who looks for quality and service when she purchases her food.

“i worked in the hospitality business many years ago so food safety is always in the back of my mind. i look at the display case and at the quality of the food that i bring home and i know that i don’t have to think about it.”

As a former personal trainer and someone who knows the importance of healthy eating, jacqui insists on high quality meat. “My son has a preference for chicken over other foods,” she says.

“i have never found a store that sells chicken fillets that are so well trimmed of fat or makes schnitzels that my son will eat. Now when i go shopping he makes sure that i have the peri peri schnitzel on the list.”

“The store is so bright and the display is beautiful. The glass casing is always clean, displaying chicken that is fresh.”

Count Your Chickens prepares all food on the premises. full chickens are delivered every morning and turned into an array of dishes that are ready for the customer to cook.

The display case is regularly stocked to show customers exactly how many imaginative and tasty meals can be made with chicken. The temperature is continually monitored to maintain the fresh quality of the food.

The seven staff members work as a seamless team and all believe that the way they prepare the food and interact with the customer determines whether or not the customer comes back. hygiene, cleanliness and compliance to the store’s food safety program, although critical, are simply a standard part of their daily routine.


The service assistants are always ready to discuss with customers how the meals are to be kept fresh and then cooked at home.

“When i first tried Count Your Chickens the staff couldn’t do enough for me in helping me to select the right product, providing a great smile and a friendly chat,” jacqui says.

“The whole experience continues to be wonderful for me. Every Wednesday when i do my shopping they have my order ready, right down to the wing tips that i feed to my dog.

“i still provide advice to people in relation to fitness and diet so i recommend that, like me, they shop at Count Your Chickens.”

Ongoing investment enhances quality at Rainbow Meats – The Healthy Choice Lindis Krejus-verlin travels from Toorak to shop at Rainbow Meats – The Healthy Choice in camberwell.

“i’m prepared to travel because the meat is absolutely brilliant, the prices are awesome and i have never seen a display that is as beautifully presented.”

Lindis is a firm believer in buying high-quality cuts of meat. “i have a cooking school and i use meat from Rainbow to demonstrate dishes. i tell everybody about the store.”

“There is no point in buying the cheaper cuts if my family, including a very fussy 14 year old son, are not going to eat it,” she says.

“i separate and refrigerate the product immediately when i get home and do everything to look after it. As a consumer, i have the right to expect that if i am looking after the product that i have purchased, others have looked after it in the same way before i buy it.”

Ultimately, the proof is in the product. Lindis regularly buys ham, eye fillet, leg of lamb, racks, shanks, osso bucco, and chuck for slow-cooked dishes such as casseroles. she says that she doesn’t even need to question it – the meat is treated in a way that maximises its freshness and eating quality.

Rainbow Meats – The Healthy Choice in camberwell is the third Melbourne store operated by frank Russo, who celebrates 30 years in the industry this year.

“We are always there to give the customer more than what they came for,” frank says.

Rainbow Meats has installed an electronic kiosk that allows customers to browse more than 2,000 recipe ideas, get a list of ingredients to make the dish that they choose and even a suggestion of which wine will go with the meal.

frank says that retailing now is all about offering an experience to the customer and the credibility of the product he sells has allowed him to partner with other retailers to further enhance the customer experience at the camberwell store.

The store’s investment in point-of-sale technology extends to the back of house. The loyalty card program allows a level of traceability, which can assist if there is ever a customer query regarding a past purchase. further technology investments include a portal-controlled refrigeration system that notifies staff by sMs should something go wrong with the refrigeration.

The store’s philosophy is that staff, customers and suppliers are all key stakeholders who benefit when all management systems run smoothly so that everyone experiences the comfort and benefit of being part of a professional business.

“We are continually developing our staff induction and training programs, quality assurance systems and operating procedures to make sure that this is the case. Additionally, close relationships with suppliers ensure that they understand our requirements so that our customers consistently get the ‘wow!’ factor,” frank says.

in the experience of Lindis, the focus on quality comes to life in everything that the store does.

“The service staff are polite and can’t do enough for you. And again, the cleanliness of the store shines out. This perception influences my confidence in the product.”


Aquanas delivers on quality, seasonality and service with Oyster Little BourkeWhen joseph vargetto opened Oyster Little Bourke three and a half years ago, his reason for purchasing seafood from Aquanas was straightforward.

“if i have good-quality food products coming through the door i get the best opportunity to succeed as a business and as a chef,” he says. “The quality of the product determines the shelf life and also gives me the ability to really show off the product as it should be.”

Oyster Little Bourke endeavours to combine the cuisine and style of the world’s best bistros and brassieres. The menu features oysters from around Australia according to their seasonal availability, an extensive steak menu, and an à la carte menu which includes fin fish, pork, duck and joseph’s signature dish: veal cutlet crumbed with parmesan and pistachio in porcini sauce. The location at the top end of Little bourke street in Melbourne attracts a varied clientele.

joseph was previously Executive sous chef at Melbourne’s Crown Casino, in charge of 15 different restaurants and 250 chefs. Aquanas has supplied Crown Casino since its opening and during that time the company has demonstrated to joseph that it runs a huge operation at high-quality levels, delivers on time and asks questions to understand exactly what the customer requires.

“My philosophy is that if any food is not right when it comes in, it gets sent back or thrown away. That’s the way we choose to treat it – it’s about respect for the customer.”

Precise ordering is important at Oyster Little Bourke. “We use templates so that nothing is over-ordered and that reduces any pressure on staff to use it or throw it out.”

for Oyster Little Bourke, quality is reputation. All food products go through the same set of standards. joseph says this is where the relationship with Aquanas pays off. “Aquanas is a good supplier. it’s fresh – i don’t have to worry about the quality.”

joseph explains that the attitude of the operator and the culture of staff are essential components of food safety, which is a view shared by Aquanas.

The Aquanas seafood-processing facility in Abbottsford supplies Melbourne’s top restaurants with fin fish, crustaceans, seasonal oysters, mussels and pipis as well as fresh and frozen vegetables, antipasto, dips, cream and an array of cheeses.

Aquanas employs 40 staff and runs a seven-day operation to ensure it can provide fresh food to restaurants as they need it. The focus on quality starts with the product that Aquanas buys each morning, and about 80 per cent is prepared according to customer orders and delivered on the same day.

general Manager Peter cavelleros says that the environment in which all staff work is the single best thing that helps to produce food to a quality that the customers demand.

“cleanliness and maintenance are pivotal. All benches and machinery are sanitised between each batch. We set ourselves very high standards in regard to food safety. We have created a culture within all workers’ minds that ‘this is the way that things are done around here’. This culture reduces the likelihood that standards will be relaxed or that a mishap will occur.”

This food safety philosophy has been in place since the first day of operation and remains central to the ongoing successful operation of Aquanas.


ORGANISATIONAL PROFILE

Establishment of Primesafe Primesafe was established on 1 july 2003, under the Seafood Safety Act 2003 and the Meat Industry Act 1993 which expanded the responsibility of the former victorian Meat Authority to include seafood safety, in addition to poultry and red meat food safety. Primesafe is also responsible for the regulatory management of pet meat and pet food.

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

functions of PrimesafeThe functions of Primesafe are prescribed under section 44 of the Meat Industry Act 1993 as follows:

•tocontrolandkeepunderreviewthestandardsof meat, poultry meat and game meat produced for consumption or sale within the state;

•tocontrolandkeepunderreviewthestandardsof the construction and hygiene of plant and equipment in a meat processing facility;

•tocontrolandkeepunderreviewthestandardsof construction, maintenance, cleanliness and hygiene of meat transport vehicles;

•toensurethatappropriatelyqualifiedpersonsare authorised as inspectors;

•tolicensemeatprocessingfacilities;

•subjecttotheRegulations,todeterminecategories of licences;

•toapprovequalityassuranceprogramsandtomonitor the implementation of those programs;

•inconsultationwiththeSecretaryoftheDepartment of human services or a municipal council, to protect public health;

•tofixandchargefeesinrespectofthecarryingout of any of its functions or the exercise of any of its powers;

•tocarryoutthefunctionsconferredontheAuthority by the Seafood Safety Act 2003 or the regulations made under that Act; and

•tocarryoutanyotherfunctionthatisconferredon the Authority by the Meat Industry Act 1993 or the regulations or by any other Act of the regulations made under any other Act.

Powers of Primesafe Primesafe 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 reports to the Minister for Agriculture.

Primesafe Licensee charter The Primesafe Licensee charter aims to provide clarity about the expectations that all licensees and industry stakeholders can hold when dealing with Primesafe.

it outlines the way Primesafe deals with its licensees, and the way that licensees may deal with Primesafe in order to gain the information that is required to meet licence requirements.

The charter also focuses on outlining the way that licensees can gain the best value from third party audits, which are an integral part of the Primesafe food safety regulatory management system.

Primesafe is committed to making sure that the expectations outlined within its charter are met at all times. feedback can be provided by:

Telephone: (03) 9685 7333

Facsimile: (03) 9696 5284

Email: [email protected]

A copy of the charter is available on the Primesafe website, http://www.primesafe.vic.gov.au

Organisational structurePrimesafe is managed by the chief Executive, who reports directly to the Primesafe board. The management team reports to the chief Executive and is made up of an Administration Manager and an Operations Manager, who supervise a total of seven staff.


Primesafe board

Responsibilities of the Board

The key responsibilities of the board include:

•Settingthebroadstrategy,objectivesandperformance targets for Primesafe.

•ReviewofPrimeSafe’sprogresstowardsachievement of specific goals.

•Riskmanagementforallkeybusinessandoperational risks.

•Reviewoftheinternalfinancialandoperationalcontrol arrangements of Primesafe to ensure that they remain effective and current.

•Approvalofstrategicplans,theannualaccountsand Primesafe’s policies.

•CEOselection,appointment,successionplanning and performance assessment.

•OversightofthemanagementoftheAuthorityby the cEO 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:

•livestockproduction;

•qualityassuranceandmanagement;

•poultryproductionandprocessing;

•meatprocessingforhumanconsumption;

•meatprocessingforotherthanhumanconsumption;

•industrialrelations;

•accounting;

•finance;

•businessmanagement;

•seafoodproductionandprocessing;

•retailing;

•consumermatters;and

•publichealth.

Board meetings

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

Sub-committees

The board has established two sub-committees, namely the Audit and Risk Management committee and the Appointments and Remuneration committee, to assist the board in meeting its statutory responsibilities. Membership for each of the sub-committees is as follows:

Audit and Risk Management Committee

Mr Patrick Mccaffrey (chairperson to 31 january 2009)

Ms jillian francis (chairperson from 1 february 2009)

Mr Paul conway

Mr vin gannon

Appointments and Remuneration Committee

Mr bill bray (chairperson)

Dr john carnie

Ms vicki hardwick

Mr Andrew Ridder


Primesafe compliance, surveillance and monitoring programs 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.

An overview of Primesafe’s compliance, surveillance and monitoring programs is detailed below.

Compliance systems

Primesafe utilises three levels of compliance control programs, depending on the severity and immediacy of the threat to public health.

Level one – Intensified audit frequency

in the event a licensee cannot demonstrate an adequate understanding and control of the QA program, Primesafe places the licensee on 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 QA 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.

Level two – Prohibition notice

The chief Executive 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 QA program that poses a serious and immediate threat to public health. The prohibition notice is only revoked when the licensee demonstrates product can be manufactured and stored in compliance with the QA program and the facility meets the appropriate standards and licensing requirements.

Level three – Prosecutions

The 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 is able to prosecute under 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.

REPORT OF OPERATIONS


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.

The following prosecutions for breaches of the Meat Industry Act 1993 were completed during this year;

Section of the Act

Description No. of prosecutions during 2008/09

section 73(1)

Obstruct, threaten and intimidate an inspector

1

The following prosecutions for breaches of the Seafood Safety Act 2003 were completed during this year;

Section of the Act

Description No. of prosecutions during 2008/09

section 9(1)

Operating a seafood business without a licence.

1

Surveillance systems

Sulphur dioxide testing program

Primesafe undertakes regular, random testing of fresh meat products to detect the use of sulphur dioxide (sO2). Under the food standards 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 food standards code.

Primesafe is committed to a policy of zero tolerance regarding the improper use of sO2. Licensees found in breach of the food standards code, for use of sO2 are faced with the following sanctions:

•Allproductsidentifiedascontainingpreservativesbeyond any prescribed level are condemned and disposed of under Primesafe supervision.

•Aprohibitionnoticeundertheprovisionsofsection 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.

•Thenoticeremainsinforceuntil:

- 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.

•FollowingrevocationoftheSection74prohibitionnotice, 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 sO2 use, 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. Again, the licensee meets all the costs of these audits.

During the financial year the detection rate for improper sO2 use was less than two per cent. This clearly demonstrates that the surveillance program is working and is virtually eliminating the illegal use of sO2 in meat processing facilities in victoria.

Increased audit program

Any licensed meat 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 QA documentation and compliance.

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

•Facilitiesproducinghigher-riskproductsaresubject to audits once every two months.

•Facilitiesproducinglower-riskproductsaresubjectto 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 initial compliance is achieved. The licensee is then subject to monthly audits in order to satisfy Primesafe that sustained compliance is maintained.


Monitoring systems

Complaints

Primesafe views all complaints seriously. Primesafe investigates any complaint that relates to food safety including all non-compliance issues at a licensed meat, poultry or seafood processing facility. Primesafe also investigates complaints regarding the service delivery of Primesafe, inadequate performance of an Accredited certification body or an individual auditor, and any breach of one or more of the information Privacy Principles under the Information Privacy Act 2000.

Primesafe contacts the complainant at both the commencement and conclusion of the investigation. The most common method of investigating complaints includes conducting an unannounced inspection of the business and/or reviewing relevant records from the licensee’s QA program. Where an investigation reveals a 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.

Primesafe will not investigate matters where the product is fit for human consumption but considered to be of poor quality. All complaints regarding food-borne illness or nuisances are investigated by staff from the local council in the first instance.

Under the Meat Industry Act 1993 and the Information Privacy Act 2000, Primesafe is required to keep all details of complainants strictly confidential. Primesafe does not disclose the identity of a complainant in any circumstances.

During the financial year, Primesafe received a total of 303 food safety complaints.

further details on how to lodge a complaint to Primesafe are available at http://www.primesafe.vic.gov.au

Approval for the manufacture of uncooked comminuted fermented meat productsThe Australia New Zealand food standards 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 hAccP-based quality assurance procedures that demonstrate compliance with the processing requirements of the Australia New Zealand food standards code. Primesafe assesses these procedures against limits set out in the Australia New Zealand food standards code.

businesses cannot commence manufacture of UcfM products unless written approval has been granted by Primesafe.

control of listeria in the manufacture of packaged ready to eat meatsThe Australia New Zealand food standards code prescribes mandatory requirements for the manufacture of packaged ready-to-eat 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 are required to conduct microbiological tests to ensure compliance with prescribed limits. To ensure consistent application of the Australia New Zealand food standards code in all states and Territories, all businesses manufacturing or intending to manufacture this type of product need to comply with the guidelines developed by the Meat standards committee of the Primary industries Ministerial council of Australia.

Ovine branding requirementsAbattoirs processing ovine and applying the prescribed lamb and/or two tooth brands must have appropriate procedures and daily records that provide for accurate traceability and identification of all lamb, two tooth and mutton.

Essentially, the following procedures set out comprehensive requirements that must be met by licensees.

Identification and traceability of ovine

Purchase and receival

Licensees must ensure that all records relating to the purchase and receival of ovine identify stock by its age class, and are retained and available to Primesafe.

Nathan howard LicENsiNg MANAgER

belinda dillon LicENsiNg MANAgER

Carly Savage LicENsiNg MANAgER

Andrew Coghill LicENsiNg MANAgER


Stock on hand

On each day of slaughter, licensees must conduct an inspection of livestock. Where mixed age classes of ovine are detected, the ovine must be re-drafted by age class prior to slaughter. The livestock record must be completed, signed and available for inspection by no later than 8am on any day of slaughter.

Pre-slaughter

On each day of slaughter, licensees must authorise a person to produce a pre-slaughter record of all ovine intended for slaughter on that day including:

•thenumberofanimalstobepresentedfor slaughter;

•thenumberofanimalsineachlot;and

•theageclassforeachlotidentifiedaseither lamb, two tooth or mutton.

During Slaughter

Lot identified as lamb

At least five percent of each lot of lamb must be subject to a dentition inspection before head removal and identified as follows:

•Lamb–nocuts.

•Twotooth–onecut.

•Mutton–twocuts.

Lot identified as two-tooth

Prior to head removal, each carcase in a lot of two tooth shall be marked with one cut by an authorised person.

After slaughter

On each day of slaughter, licensees must produce a record of all carcasses processed, and clearly and accurately record on a daily basis, the following details:

•thenumberofovineprocessed;

•totalnumberofovineineachageclassclearlyindentifying the number of lamb, two tooth or mutton processed on that day.

Correlation of records

The pre-slaughter record, after slaughter record, and carcase delivery records must be reconciled daily by a person who is not responsible for conducting any of the previous authorised activities.

food safety standardsThe policy of the victorian government is to adopt national food safety standards wherever available.

copies of legislation and standards are available on the Primesafe website, http://www.primesafe.vic.gov.au

•AustralianStandardfortheHygienicProductionand Transportation of Meat and Meat Products for human consumption (As 4696:2007)

•AustralianStandardforConstructionofPremisesand hygienic Production of Poultry Meat for human consumption (As 4465:2005)

•AustralianStandardforHygienicProductionof Rabbit Meat for human consumption (As 4466:1997)

•AustralianStandardfortheHygienicProductionof Wild game Meat for human consumption (As 4464:2007)

•AustralianStandardforHygienicProductionof Ratite (Emu/Ostrich) Meat for human consumption (As 5010:2001)

•AustralianStandardforHygienicProductionof Natural casings for human consumption (As 5011:2001)

•AustralianStandardforHygienicRenderingof Animal Products (As 5008:2007)

•AustralianStandardfortheHygienicProductionof Pet Meat (As 4841:2006)

•AGuidetotheImplementationandAuditingof hAccP

•VictorianStandardfortheHygienicProductionof Meat Retail Premises (March 2006)

•TheAustraliaNewZealandFoodStandardsCode

human resource managementPrimesafe has continued its commitment to Oh&s compliance as well as general staff health and well being during the financial year.

Employment and conduct principlesPrimesafe 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.

brendan Ryan OPERATiONs MANAgER


culturally appropriate services

Primesafe is committed to policies, programs and strategies aimed at delivering culturally appropriate services to all victorians. No special initiatives were needed by Primesafe to meet statutory obligations and ensure that the outcomes of Primesafe’s deliberations were adequately communicated to the culturally and linguistically diverse participants in the state’s meat and seafood sectors.

Public administration values and employment principlesThe Public Administration Act 2004 abolished the Office of commissioner for Public Employment and established the state services Authority. Notwithstanding, Primesafe continues to implement the previous directions of the commissioner for Public Employment with respect to upholding public sector conduct, managing and valuing diversity, managing underperformance, reviewing personal grievances, and selecting on merit.

Workforce data staffing trendsPrimesafe is an equal opportunity employer and during the year under review, Primesafe employed five male (2008: five) and five female (2008: six) staff.

Executive officer dataThere were no persons who held a position of executive officer as defined by the Public Administration Act 2004 during this financial period.

victorian industry Participation PolicyPrimesafe has not undertaken any projects during this financial reporting period relevant to the victorian industry Participation Policy.

consultanciesThere were no consultants engaged by Primesafe during the year.

Disclosure of major contractsPrimesafe did not enter into any major contracts during 2008/09.

freedom of informationThe Freedom of Information Act 1982 gives the public a right to apply for access to documents held by Primesafe.

for the period 1 july 2008 to 30 june 2009, Primesafe received no requests for documents.

MakingaFreedomofInformationRequest

freedom of information requests must be made in writing describing the documents requested and including payment of the $23.40 application fee (as at 1 july 2009). Assistance can be provided to applicants to help determine the type of documents being requested.

The application fee may be waived if the payment is likely to cause hardship to the applicant. further charges may be payable, for example searching for documents (at $20.00 per hour) and photocopying (at 20 cents per page).

Requests should be sent to: Administration Manager Primesafe PO box 2057 sOUTh MELbOURNE vic 3205

Enquiries concerning freedom of information in Primesafe can be made on (03) 9685 7333 or email: [email protected]

further information regarding the Freedom of Information Act 1982 may be found at www. foi. vic. gov.au

compliance with the Building Act 1993 Primesafe did not undertake any building works that fall under the provisions of the Building Act 1993.

National competition PolicyPrimesafe continues to comply with the government’s competitive Neutrality Policy statement through implementation of contestable third-party auditing in victoria effective from 1 july 1997.

Richie Kasai ADMiNisTRATiON MANAgER


compliance with Whistleblowers Protection Act 2001The Whistleblowers Protection Act 2001 (the Act) is designed to protect people who disclose information about serious wrongdoings within the victorian Public sector and to provide a framework for the investigation of these matters.

The protected disclosure coordinator for the Department of Primary industries (DPi) acts as an agent for Primesafe to receive disclosures under the Act, and applies DPi procedures in managing the disclosures.

No disclosures of improper conduct by Primesafe have been made for the year ending 30 june 2009.

Disclosures of improper conduct by Primesafe or its employees may be made to any of the following:

•DPI’sprotecteddisclosurecoordinator(currentcontact details are available in the ‘About Us’ section on the DPi website at www.dpi.vic.gov.au under the heading ‘Legislation and Regulation’)

•TheOmbudsmanVictoria Level 9, 459 collins street (North Tower) MELbOURNE vic 3000 Telephone: (03) 9613 6222 Toll free: 1800 806 314

Additional information available on requestin compliance with the requirements of the standing Directions of the Minister for finance, details in respect of the items below have been retained by Primesafe and are available to the relevant Ministers, Members of Parliament and the public on request (subject to the freedom of information requirements, if applicable):

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

b) details of shares held by senior officers 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 in respect of the operation of Primesafe;

f) details of any other research and development activities undertaken by Primesafe that are not otherwise covered either in the Report of Operations or in a document which contains the financial report and Report of Operations;

g) details of overseas visits undertaken including a summary of the objectives and outcomes of each visit;

h) details of major promotional, public relations and marketing activities undertaken by Primesafe to develop community awareness of the services provided by Primesafe;

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

j) 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; and

k) a list of major committees sponsored by Primesafe, the purposes of each committee and the extent to which the purposes have been achieved.

The information is available on request from: Administration Manager Primesafe PO box 2057 sOUTh MELbOURNE vic 3205

Attestation on compliance with the Australian/New Zealand Risk Management standardi, brian casey, certify that Primesafe has risk management processes in place consistent with the Australian/New Zealand Risk Management standard and an internal control system is in place that enables Primesafe to understand, manage and satisfactorily control risk exposures. The board verifies this assurance and that the risk profile of Primesafe has been critically reviewed within the last 12 months.

Brian Casey chiEf ExEcUTivE

2 september 2009

Margaret McCormack REcEPTiONisT

Lesley Lee ADMiNisTRATiON AND AccOUNTs OfficER

Fiona McPadden AssisTANT ADMiNisTRATiON MANAgER


industry statistics

Licensed premises from 1999/00 to 2008/09

99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09

Export abattoirs 20 19 18 17 18 16 20 18 19 18

Local abattoirs 41 39 35 36 32 33 30 29 27 27

Poultry processing facilities

34 36 35 35 34 32 32 26 27 28

further meat processing facilities

262 281 292 285 282 280 297 315 325 322

Retail butcher shops 1,133 1,096 1,060 1,059 1,057 1,054 1,060 1,051 1,038 1,043

Prime tallow 3 4 5 4 4 4 4 4 3 2

game meat 3 2 3 2 2 2 2 4 3 3

inedible rendering 6 7 8 8 8 8 8 8 8 9

Pet meat processing plant

20 15 16 16 16 14 14 15 14

Pet food establishments

92 96 94 91 86 81 79 77 69 62

seafood processors - - - - 143 148 148 155 155 149

seafood retailers - - - - 175 189 194 194 195 192

Aquaculture - - - - - 45 41 38 30 20

Wildcatch harvest - - - - - 318 275 257 232 220

Total animals processed (domestic and export) from 1999/00 to 2008/09

Species 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09

cattle 1,515,339 1,589,508 1,492,849 1,583,034 1,442,831 1,553,086 1,388,873 1,606,614 1,585,421 1,647,173

calves 525,523 657,959 625,431 734,040 1,621,327 447,948 446,498 591,327 558,954 548,459

sheep 3,591,873 4,125,381 3,608,324 3,407,694 3,654,174 3,262,433 3,318,027 3,761,379 4,165,498 3,806,349

Lambs 7,132,941 8,132,222 6,884,295 6,679,986 5,793,133 7,043,919 7,886,646 9,130,535 9,189,921 8,548,511

Pigs 1,385,335 1,234,317 1,025,866 1,017,831 964,916 837,290 762,772 780,011 678,558 783,250

goats 175,692 285,607 300,824 246,639 253,323 431,693 402,973 340,651 330,513 437,046

Deer 37,291 35,312 44,309 33,677 41,171 25,476 18,580 10,527 8,646 4,412

Emu/ostriches 19,860 23,039 23,968 18,109 12,243 9,366 12,249 13,574 9,769 5,373

Rabbits 21,751 23,944 18,257 21,991 14,544 33,836 39,325 37,825 39,223 40,816

Animals processed during year ending 30 June 2008

Animals processed during year ending 30 June 2009

Species domestic Export Total domestic Export Total

cattle 545,074 1,040,347 1,585,421 570,438 1,076,735 1,647,173

calves 79,298 479,656 558,954 91,512 456,947 548,459

sheep 1,070,638 3,094,860 4,165,498 1,230,942 2,575,407 3,806,349

Lambs 4,271,036 4,918,885 9,189,921 3,767,836 4,780,675 8,548,511

Pigs 359,618 318,940 678,558 333,192 450,058 783,250

goats 22,500 308,013 330,513 31,506 405,540 437,046

Deer 503 8,143 8,646 371 4,041 4,412

Emu/ostriches 1,726 8,043 9,769 1,103 4,270 5,373

Rabbits 39,229 - 39,223 40,816 - 40,816

PRIMESAFE FINANCIAL REPORT 2008/09 25

FINANCIAL REPORT 2008/09

PRIMESAFE FINANCIAL REPORT 2008/0926

FIvE yEAR FInAncIAl SuMMARy

2009 $

2008 $

2007 $

2006 $

2005 $

Revenue from Government - - - - 266,899

Total income from transactions 1,860,203 1,663,941 1,768,722 1,204,705 1,838,726

Total expenses from transactions 1,776,852 1,738,538 1,605,847 1,528,921 1,448,403

Net result from transactions 83,351 (74,597) 162,875 (324,216) 657,222

Net result for the period 73,321 (84,877) 158,856 (332,263) 664,941

Net cash flow from operating activities 274,351 78,757 283,330 (280,659) 756,847

Total assets 2,749,237 2,582,846 2,602,113 2,356,756 2,677,286

Total liabilities 1,523,266 1,430,196 1,364,587 1,278,086 1,266,353

Note: Figures from 2005 to 2008 have been recast based on the comprehensive operating statement format and separation of transactions from other economic flows.

Overview

PrimeSafe ended the financial year with a net result of $73,321 which is significantly higher than 2007/08. For the financial year ended 2008/09, PrimeSafe’s total income increased by $196,262 compared to 2007/08. This was primarily the result of licence fee rebates that were issued in 2007/08 which reduced the total income for that period. A total rebate of $187,510 was paid to businesses in the red meat, poultry and pet meat industries.


We certify that the attached financial statements for PrimeSafe have been prepared in accordance with Standing Direction 4.2 of the Financial Management Act 1994, applicable Financial Reporting Directions, Australian accounting standards 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 notes forming part of the financial statements, presents fairly the financial transactions during the year ended 30 June 2009 and financial position of PrimeSafe as at 30 June 2009.

We are not aware of any circumstance which would render any particulars included in the financial statements to be misleading or inaccurate.

Bill Bray Brian casey ChAIRPERSON ChIEF ExECuTIvE

Melbourne Melbourne 2 September 2009 2 September 2009

PRIMESAFE cERtIFIcAtIon


AudItoR GEnERAl’S REPoRt


The above comprehensive operating statement should be read in conjunction with the accompanying notes included on pages 34 to 58.

Notes2009

$2008

$

Income from transactions

Rendering of services 2(a) 1,727,104 1,523,074

Interest 2(b) 117,750 126,866

Other income 2(c) 15,349 14,001

total income from transactions 1,860,203 1,663,941

Expenses from transactions

Employee benefits 3(a) 919,846 873,106

Board and committee fees 3(b) 83,180 76,888

Depreciation and amortisation 3(c) 88,626 66,335

Other operating expenses 3(d) 685,200 722,209

total expenses from transactions 1,776,852 1,738,538

net result from transactions (net operating balance) 83,351 (74,597)

other economic flows included in net result

Net gain/(loss) on non-financial assets 4(a) (10,030) (10,280)

total other economic flows included in net result (10,030) (10,280)

comprehensive result 73,321 (84,877)

coMPREhEnSIvE oPERAtInG StAtEMEnt FoR thE FInAncIAl yEAR EndEd 30 JunE 2009


The above balance sheet should be read in conjunction with the accompanying notes included on pages 34 to 58.

Notes2009

$2008

$

Assets

Financial assetsCash 15 94,200 422,126

Receivables 5 36,658 64,941

Other financial assets 15 2,292,000 1,849,000

Total financial assets 2,422,858 2,336,067

Non-financial assetsPrepayments 6 27,677 8,698

Property, plant and equipment 7 173,716 209,346

Intangible assets 8 124,986 28,735

Total non-financial assets 326,379 246,779

total assets 2,749,237 2,582,846

liabilities

Payables 9 121,083 75,252

Deferred income 1,244,296 1,189,972

Provisions 10 157,887 164,972

total liabilities 1,523,266 1,430,196

net assets 1,225,971 1,152,650

Equity

Accumulated surplus 665,116 591,795

Contributed capital 560,855 560,855

total equity 1,225,971 1,152,650

BAlAncE ShEEt AS At 30 JunE 2009


Equity at 1 July 2008

$

Total comprehensive

result $

Equity at 30 June 2009

$

Accumulated surplus 591,795 73,321 665,116

Contributed capital 560,855 - 560,855

total equity at end of financial year 1,152,650 73,321 1,225,971

Equity at 1 July 2007

$

Total comprehensive

result $

Equity at 30 June 2008

$

Accumulated surplus/(deficit) 676,672 (84,877) 591,795

Contributed capital 560,855 - 560,855

total equity at end of financial year 1,237,527 (84,877) 1,152,650

StAtEMEnt oF chAnGES In EquIty FoR thE FInAncIAl yEAR EndEd 30 JunE 2009

The above statement of changes in equity should be read in conjunction with the accompanying notes included on pages 34 to 58.


Notes2009

$2008

$

cash flows from operating activities

ReceiptsReceipts from licence holders and other sources 1,745,988 1,557,487

Goods and Services Tax recovered from the ATO 78,973 82,414

Interest received 117,750 126,866

Total receipts 1,942,711 1,766,767

PaymentsPayments to suppliers and employees (1,668,360) (1,688,010)

Total payments (1,668,360) (1,688,010)

net cash flows from/(used in) operating activities 15(b) 274,351 78,757

cash flows from investing activities

Payments for property, plant and equipment (70,220) (143,284)

Payments for intangible assets (123,120) (30,780)

Payments for term deposits (2,292,000) -

Proceeds from sale of property, plant and equipment 34,063 74,337

net cash flows from/(used in) investing activities (2,451,277) (99,727)

net increase/(decrease) in cash and cash equivalents (2,176,926) (20,970)

Cash and cash equivalents at the beginning of the financial year 2,271,126 2,292,096

cash and cash equivalents at the end of the financial year 15(a) 94,200 2,271,126

cASh Flow StAtEMEnt FoR thE FInAncIAl yEAR EndEd 30 JunE 2009

The above cash flow statement should be read in conjunction with the accompanying notes included on pages 34 to 58.


1. SuMMARY OF SIGNIFICANT ACCOuNTING POLICIES

(a) Statement of compliance

The financial report is a general purpose financial report which has been prepared on an accrual basis in accordance with the Financial Management Act 1994 and applicable Australian Accounting Standards and Interpretations (AASs). AASs include Australian equivalents to International Financial Reporting Standards.

In complying AASs, the entity has where relevant, applied those paragraphs applicable to not-for-profit entities.

(b) Basis of preparation

The financial statements have been prepared on a historical cost basis. Cost is based on the fair values of the consideration given in exchange for assets.

In the application of the AASs, management is required to make judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgements. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision, and future periods if the revision affects both current and future periods.

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.

The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2009 and the comparative information presented for the year ended 30 June 2008.

(c) Scope and presentation of financial statements

Early adoption of AASB 1001 (September 2007)

As a result of a state wide policy to improve consistency in public sector reporting, PrimeSafe has revised the presentation of its complete set of financial statements to align with the AASB 1049 presentation format, used in the Financial Report for the State and the general government sector. In addition, PrimeSafe has also early adopted the September 2007 version of AASB 101.

In keeping with AASB 101 (September 2007) this complete set of financial statements includes the following changes:

(a) the notion of:

• ‘acompletesetoffinancialstatements’ratherthanusing‘financialreport’;• ‘changesinequity’ratherthan‘movementsinequity’;and• ‘transactionswithownersintheircapacityasowners’ratherthan‘transactionswithownersasowners’.

notES to thE FInAncIAl REPoRt FoR thE FInAncIAl yEAR EndEd 30 JunE 2009


1. SuMMARY OF ACCOuNTING POLICIES (continued)

(b) references to equity holders as owner.

Some of the changes applied to the financial statements and notes as a result of alignment to AASB 1049 that are allowable under the AASB 101 (September 2007) include the following:

• extendedoperatingstatementincorporatingnon-ownerchangesinequity,whichisnowreferredtoascomprehensiveoperatingstatement;

• itemsbeingpresentedbyliquidityorderinthebalancesheet;• theinclusionofalimitednumberofGovernmentFinanceStatistics(GFS)classifications,suchasincomeorexpenses

fromtransactions,andothereconomicflows;and• aglossaryoftermsincludedinthenotesexplainingcertainterms,includingGFStermsadopted.

Comprehensive operating statement

The comprehensive operating statement includes items previously included in the statement of changes in equity.

Incomeandexpensesinthecomprehensiveoperatingstatementareseparatedintoeither‘transactions’or ‘othereconomicflows’.

Balance sheet

Items of assets and liabilities in the balance sheet are:

• rankedinliquidityorder;• aggregatedintofinancialandnon-financialassets;• classifiedaccordingtoGFSterminology,butretainmeasurementanddisclosurerulesunderexistingaccounting

standardsapplicabletoPrimeSafe;and• currentversusnon-currentassetsandliabilitiesaredisclosedinthenoteswhererelevant.

Statement of changes in equity

The statement of changes in equity presents reconciliations of each non-owner and owner equity opening balance at the beginning of the year to the closing balance at the end of the year, showing separately movements due to amounts recognised in the comprehensive result and amounts recognised in equity related to transactions with owners in their capacity as owners.

Cash flow statement

The cash flow statement classifies flows by operating, investing and financing activities in accordance with AASB 107 Cash Flow Statements. There were no significant changes due to alignment of PrimeSafe’s financial statements presentation formats to AASB 1049.



(d) Reporting entity

The financial statements cover PrimeSafe as an individual reporting entity. PrimeSafe operates under the provisions of the Meat Industry Act 1993, the Meat Industry Regulations 2005 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 Report of Operations on page 18 which does not form part of these financial statements.

Objectives and funding

The mission of PrimeSafe is to regulate and advance food safety in the victorian meat, poultry and seafood industries through a credible, effective and efficient Quality Assurance (QA) system that facilitates opportunities for industry growth and innovation. This is achieved through the following objectives:

• developmentandadvancementofaQAsystemofregulatorycontrol;• theprovisionofaQAsystemthatdeliversvaluetoindustrystakeholders;and• ensuringahighlevelofconsumerconfidenceinthesafetyofmeat,poultryandseafoodinVictoria.

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

(e) Goods and Services Tax (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 stated inclusive 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 and 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 presented on a gross basis.




(f) Income from transactions

Licence Fees

Revenue from licence fees is recognised in the period to which the licences relate, with the prepaid portion recorded as a liability (prepaid licence fees).

Registration Fees

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

Interest revenue

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

Revenue from sale of goods

Revenue from the sale of goods is recognised by PrimeSafe when the significant risks and rewards of ownership of the goods have transferred to the buyer.

Other Income

All other income, including grants received and court costs received is recognised upon receipt.

(g) Expenses from transactions

Employee benefits

Expenses for employee benefits are recognised when incurred.

Superannuation

Defined contribution plans

Contributions to defined contribution superannuation plans are expensed when incurred.

Depreciation and amortisation

Depreciation is provided on property, plant and equipment, including freehold buildings but excluding land. Depreciation is calculated on a straight-line basis so as to write off the net cost or other revalued amount of each asset over its expected useful life to its estimated residual value.

Leasehold improvements are depreciated over the estimated useful life, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period. Note 7 provides details on the estimated useful lives that are used in the calculation of depreciation on property, plant and equipment.

Intangible assets with finite useful lives are amortised 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 amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each annual reporting period.

In addition, an assessment is made at each reporting date to determine whether there are indicators that the intangible asset concerned is impaired. If so, the assets concerned are tested as to whether their carrying value exceeds their recoverable amount.

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually or whenever there is an indication that the asset may be impaired. The useful lives of intangible assets that are not being amortised are reviewed each period to determine whether events and circumstances continue to support an indefinite useful life assessment for that asset.

Other operating expenses

Supplies and services

Supplies and services expenses are recognised as an expense in the reporting period in which they are incurred.



(h) Other economic flows included in the net result

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

Net gain/(loss) on non-financial assets

Net gain/(loss) on non-financial assets and liabilities includes realised and unrealised gains and losses from revaluations, impairments, and disposals of all physical assets and intangible assets.

Disposal of non-financial assets

Any gain or loss on the sale of non-financial assets is recognised at the date that control of the asset is passed to the buyer and is determined after deducting from the proceeds the carrying value of the asset at that time.

Impairment of non-financial assets

Goodwill and intangible assets with indefinite useful lives (and intangible assets not yet available for use) are tested annually for impairment (i.e. as to whether their carrying value exceeds their recoverable amount, and so require write-downs) and whenever there is an indication that the asset may be impaired.

If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their possible recoverable amount. Where an asset’s carrying value exceeds its recoverable amount, the difference is written off as an other economic flow, except to the extent that the write-down can be debited to an asset revaluation reserve amount applicable to that class of asset.

It is deemed that, in the event of the loss of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made. The recoverable amount for most assets is measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cash inflows is measured at the higher of the present value of future cash flows expected to be obtained from the asset and fair value less costs to sell.

Net gain/(loss) on financial instruments

Net gain/(loss) on financial instruments includes realised and unrealised gains and losses from revaluations of financial instruments that are designated at fair value through profit or loss or held-for-trading, impairment and reversal of impairment for financial instruments at amortised cost, and disposals of financial assets.

Impairment of financial assets

Bad and doubtful debts are assessed on a regular basis. Those bad debts considered as written off by mutual consent are classified as a transaction expense. The allowance for doubtful receivables and bad debts not written off by mutual consent areadjustedas‘othereconomicflows’.

(i) Financial assets

Cash and cash deposits

Cash and cash deposits, including cash equivalents, comprise cash on hand and cash at bank, deposits at call and highly liquid investments with an original maturity of three months or less, which are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value.

For the cash flow statement presentation purposes, cash and cash equivalents includes bank overdrafts, which are included as interest bearing liabilities on the balance sheet.

Receivables

Receivables consist predominantly of court cost recoveries, and are due at the discretion of the courts.

A provision for doubtful receivables is made when there is objective evidence that the debts may not be collected and bad debts are written off when identified (refer to Note 1(h)).




(j) Non-financial assets

Property, plant and equipment

All non-current physical assets are measured initially at cost and subsequently less accumulated depreciation and impairment.

Intangible assets

Intangible assets are initially recognised at cost. Subsequently, intangible assets with finite useful lives are carried at cost less accumulated amortisation and accumulated impairment losses. Costs incurred subsequent to initial acquisition are capitalised when it is expected that additional future economic benefits will flow to PrimeSafe.

(k) Liabilities

Payables

Liabilities are recognised for amounts payable in the future for goods and services received, whether or not billed to PrimeSafe.

Payables represent liabilities for goods and services provided to PrimeSafe prior to the end of the financial year and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

Provisions

Provisions are recognised when PrimeSafe has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the present value of those cashflows.

Employee benefits

(i) Wages and salaries and annual leave

Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled within 12 months of the reporting date are recognised in the provision for employee benefits in respect of employee services up to the reporting date, classified as current liabilities and measured at their nominal values.

Those liabilities that are not expected to be settled within 12 months are recognised in the provision for employee benefits as current liabilities, measured at present value of the amounts expected to be paid when the liabilities are settled using the remuneration rate expected to apply at the time of settlement.

(ii) Long service leave

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

current liability – 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.

The components of this current LSL liability are measured at:

• presentvalue–componentthatPrimeSafedoesnotexpecttosettlewithin12months;and• nominalvalue–componentthatPrimeSafeexpectstosettlewithin12months.



(k) Liabilities (continued)

non-current liability – 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.

Employee benefits on-costs

Employee benefits on-costs (payroll tax, workers compensation, superannuation, annual leave and LSL accrued while on LSL take in service) are recognised separately from the provision for employee benefits.

(l) Commitments

Commitments are disclosed at their nominal value and inclusive of the GST payable.

(m) Contingent assets and contingent liabilities

Contingent assets and liabilities are not recognised in the balance sheet, but are disclosed by way of a note and, if quantifiable, are measured at nominal value. Contingent assets and liabilities are presented inclusive of GST receivable

or payable respectively.

(n) Equity

Contribution by owners

Additions to net assets which have been designated as contributions by owners are recognised as contributed capital. Other transfers that are in the nature of contributions or distributions have also been designated as contributions by owners.

(o) Operating leases

Operating lease payments are recognised as an expense in the comprehensive operating statement in the year in which

they are incurred.

(p) Income tax

PrimeSafe is classified as an “exempt organisation” by the Australian Tax Office and is therefore exempt from the tax on its income by virtue of Section 23(d) of the Tax Assessment Act.

(q) Functional and presentation currency

The functional currency of PrimeSafe is the Australian dollar, which has also been identified as the presentation currency of PrimeSafe.

(r) Rounding of amounts

Amounts in the financial statements have been rounded to the nearest dollar.



(s) New accounting standards and interpretations

Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2009 reporting period.

As advised in Note 1(c), PrimeSafe has early adopted the September 2007 version of AASB 101.

As at 30 June 2009, the following standards and interpretations had been issued but were not mandatory for financial year ending 30 June 2009. PrimeSafe has not, and does not intend to, adopt these following standards early.

Standard / Interpretation Summary

Applicable for annual reporting periods beginning or ending on

Impact on financial statements

AASB 8 Operating Segments Supersedes AASB 114 Segment Reporting

Beginning 1 Jan 2009 Not applicable

AASB 2007-3 Amendments to Australian Accounting Standards arising from AASB 8 [AASB 5, AASB 6, AASB 102, AASB 107, AASB 119, AASB127, AASB 134, AASB 136, AASB 1023 and AASB 1038].

An accompanying amending standard, also introduced consequential amendments into other Standards

Beginning 1 Jan 2009 Impact expected to be insignificant.

AASB 2008-3 Amendments to Australian Accounting Standards arising from AASB 3 & AASB 127 [AASB 1, 2, 4, 5, 7, 101, 107, 112, 114, 116, 121, 128, 131, 132, 133, 134, 136, 137, 138 & 139 and Interpretations 9 & 107]

This Standard gives effect to consequential changes arising from revised AASB 3 and amended AASB 127. The Preface to those Standards summarise the main requirements of those Standards.


AASB 2008-5 Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASBs5, 7, 101, 102, 107, 108, 110, 116, 118, 119, 120, 123, 127, 128, 129, 131, 132, 134, 136, 138, 139, 140, 141, 1023 & 1038]

A suite of amendments to existing standards following issuance of IASB Standard Improvements to IFRSs in May 2008. Some amendments result in accounting changes for presentation, recognition and measurement purposes.


AASB 2008-9 Amendments to AASB 1049 for Consistency with AASB 101

Amendments to AASB 1049 for consistency with AASB 101 (September 2007) version.

Beginning 1 Jan 2009 Not applicable to public sector entities except for certain presentation formats.


2. INCOME FROM TRANSACTIONS2009

$2008

$

(a) Rendering of services Meat and seafood processing licence fees, and registration fees 1,727,104 1,710,584

Rebates issued to the red meat, poultry and pet meat industries - (187,510)

total revenue from rendering of services 1,727,104 1,523,074

(b) Interest Interest from term deposits 117,750 126,866

total interest revenue 117,750 126,866

(c) Other incomeBad debts recovered 4,425 566

Court costs received 8,740 13,000

Sundry income 2,184 435

total other income 15,349 14,001



3. ExPENSES FROM TRANSACTIONS

2009 $

2008 $

(a) Employee benefitsSalaries and related on-costs 684,967 683,178

Superannuation contributions 234,879 189,928

total employee benefits 919,846 873,106

(b) Board and committee fees Member fees 35,485 36,813

Superannuation contributions 8,285 15,624

Meeting and travel expenses 39,410 24,451

total Board and committee fees 83,180 76,888

(c) Depreciation and amortisationDepreciation of non-current assets 61,757 59,298

Amortisation of intangible assets 26,869 7,037

total depreciation and amortisation 88,626 66,335

(d) Other operating expensesPurchase of supplies and consumables 65,675 83,526

Motor vehicle and travelling costs 80,752 73,922

Computer costs 58,460 104,926

Communication costs 27,670 45,535

Insurance 19,311 19,253

Legal and professional fees 190,677 143,775

Printing and postage 89,006 92,672

Industry and Government liaison 27,791 19,005

Minimum lease payments 115,408 107,276

Bad debt from transactions 10,450 32,319

total other operating expenses 685,200 722,209


4. OThER ECONOMIC FLOWS INCLuDED IN NET RESuLT

2009 $

2008 $

(a) Net gain/(loss) on non-financial assetsNet gain/(loss) on disposal of physical assets (10,030) (10,280)

total net gain/(loss) on non-financial assets and liabilities (10,030) (10,280)

5. RECEIvABLES 2009

$2008

$

current receivables

ContractualAccrued interest 10,256 31,621

Sundry receivables 45,035 48,570

Provision for doubtful receivables (a) (See note 5(a) below) (39,095) (36,070)

16,196 44,121

StatutoryGST input tax credits recoverable 20,462 20,820

20,462 20,820

total current receivables 36,658 64,941

total receivables 36,658 64,941

Note: (a) Receivables are comprised predominantly of court costs recoveries. No interest is charged and the period of credit is determined by the courts.

(a) Movement in the provision for doubtful receivables2009

$2008

$

Balance at beginning of year (36,070) (22,133)

Increase in provision recognised in the net result (10,450) (13,937)

Reversal of provision for receivables written off as uncollectable 7,425 -

Balance at end of year (39,095) (36,070)

6. PREPAYMENTS2009

$2008

$

current prepayments

Prepayments 27,677 8,698

total current prepayments 27,677 8,698

total prepayments 27,677 8,698



7. PROPERTY, PLANT AND EQuIPMENT

7.1: Asset carrying amounts 2009 $

2008 $

nature-based classification

Buildings:

- Leasehold improvements at cost 63,335 63,335

- Less: accumulated depreciation (62,373) (58,066)

Plant, equipment and vehicles:

- Plant, equipment and vehicles at fair value 288,538 322,529

- Less: accumulated depreciation (115,784) (118,452)

net carrying amount of property, plant and equipment 173,716 209,346

The following useful lives of assets are used in the calculation of depreciation:

Communication equipment 3 yearsComputer equipment 3 yearsFixtures and fittings 10 yearsFurniture 10 yearsLeasehold improvements 9 years Motor vehicles 5 years

7.2: Movement in carrying amounts

Communication equipment

Computer equipment

Fixtures and fittings Furniture

Leasehold improvements Motor vehicles Total

2009 $

2008 $

2009 $

2008 $

2009 $

2008 $

2009 $

2008 $

2009 $

2008 $

2009 $

2008 $

2009 $

2008 $

opening balance 8,203 - 19,332 17,670 - - 6,694 9,503 5,268 12,305 169,849 173,492 209,346 212,970

Additions - 11,210 5,250 11,752 2,570 - - - - - 62,403 120,320 70,223 143,282

Disposals - - - - - - - - - - (44,096) (76,274) (44,096) (76,274)

Depreciation expense

(3,367) (3,007) (11,264) (10,090) (431) - (2,809) (2,809) (4,307) (7,037) (39,579) (47,689) (61,757) (70,632)

closing balance 4,836 8,203 13,318 19,332 2,139 - 3,885 6,694 961 5,268 148,577 169,849 173,716 209,346


8. INTANGIBLE ASSETS

2009 $

2008 $

Gross carrying amountopening balance 138,425 107,645

Additions 123,120 30,780

Disposals (107,645) -

closing balance 153,900 138,425

Accumulated amortisationopening balance (109,690) (105,645)

Amortisation expense (26,869) (4,045)

Disposals 107,645 -

closing balance (28,914) (109,690)

net book value at the end of the financial year 124,986 28,735

Intangible assets comprise capitalised software development expenditure for PrimeSafe’s licensing system which is amortised over its useful life of three years. The PrimeSafe licensing system will be fully amortised in 2011.

9. PAYABLES2009

$2008

$

current payables

Supplies and suppliers (a) 77,968 38,266

Taxes payable 43,115 36,986

total current payables 121,083 75,252

total payables 121,083 75,252

Note: (a) 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.

(a) Maturity analysis of contractual payables

Please refer to Table 14.4 in Note 14 for the maturity analysis of contractual payables.

(b) Nature and extent of risks arising from contractual payables

Please refer to Note 14 for the nature and extent of risks arising from contractual payables.



10. PROvISIONS

2009 $

2008 $

current provisions

Employee benefits 141,318 160,134

total current provisions 141,318 160,134

non-current provisions

Employee benefits 16,569 4,838

total non-current provisions 16,569 4,838

total provisions 157,887 164,972

11. SuPERANNuATION

(a) Superannuation expense recognised in the Comprehensive Operating Statement

2009 $

2008 $

defined contribution plans

Employer contributions 51,125 48,179

Other 192,039 157,373

total superannuation expense recognised in comprehensive operating Statement 243,164 205,552

12. LEASES

Leasing arrangementsThe operating lease is a non-cancellable, property lease with a three year term and rent payable monthly in advance. The current lease which expires on 31 January 2012 has an option to renew for a further three years.

2009 $

2008 $

non-cancellable operating leases payable

- Not longer than one year 88,391 47,157

- Longer than one year and not longer than five years 145,069 -

233,460 47,157


13. COMMITMENTS FOR ExPENDITuRE2009

$2008

$

(a) Capital expenditure commitmentsVehicles Payable:

Not longer than one year 34,708 -

total capital expenditure commitments 34,708 -

(b) Other expenditure commitmentsProfessional services Payable:

Not longer than one year 51,517 53,022

total other expenditure commitments 51,517 53,022

All amounts shown in the commitments note are nominal amounts inclusive of GST.

14. FINANCIAL INSTRuMENTS

(a) Financial risk management objectives and policies

PrimeSafe’s principal financial instruments comprise of:

• cashassets;• termdeposits;• receivables(excludingstatutoryreceivables);and• payables(excludingstatutorypayables).

Details of significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement, and the basis on which income and expenses are recognised, with respect to each class of financial asset, financial liability and equity instrument above are disclosed in Note 1 to the financial statements.

The main purpose in holding financial instruments is to prudentially manage PrimeSafe’s financial risks within Government policy parameters.

The carrying amounts of PrimeSafe’s financial assets and financial liabilities by category are in Table 14.1 below.



14. FINANCIAL INSTRuMENTS (continued)

14.1: Categorisation of financial instruments2009

$2008

$

Financial assets

Cash at bank and on hand 94,200 422,126

Term deposits 2,292,000 1,849,000

Accrued interest 10,256 31,621

Prosecution costs awarded by court 5,940 12,500

total financial assets (a) 2,402,396 2,315,247

Financial liabilities

Payables at amortised cost 77,968 38,266

total financial liabilities (b) 77,968 38,266

Notes: (a) The total amount of financial assets disclosed here excludes statutory receivables (i.e. Amounts owing from GST input tax credits recoverable).(b) The total amount of financial liabilities disclosed here excludes statutory payables (i.e. Taxes payable).

14.2: Net holding gain/(loss) on financial instruments by category2009

$2008

$

Financial assets

Cash at bank - -

Term deposits 117,750 126,866

Prosecution costs awarded by court 8,740 13,000

126,490 139,866

Financial liabilities

Payables at amortised cost - -

- -

The net holding gains or losses disclosed above are determined as follows:

• Forcashandcashequivalents,thenetgainorlossiscalculatedbytakingtheinterestrevenue,plusorminusforeignexchange gains or losses arising from revaluation of the financial assets, and minus any impairment recognised in the netresult;and

• Forfinancialassetsandliabilitiesmeasuredatamortisedcost,thenetgainorlossiscalculatedbytakingthemovementin the fair value of the financial asset or liability.



(b) Credit risk

The maximum exposure to credit risk at balance date for each class of financial asset is the carrying amount as disclosed in the balance sheet.

PrimeSafe does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments entered into by PrimeSafe.

Financial assets that are either past due or impaired

Currently PrimeSafe does not hold any collateral as security nor credit enhancements relating to any of its financial risks.

As at the reporting date, there is no event to indicate that any of the financial assets were impaired.

There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated at the carrying amounts as indicated.

The following table discloses the ageing only of financial assets that are past due but not impaired:

14.3: Ageing analysis of financial assets (a)

carrying amount

Not past due and

not impaired

Past due but not impaired

Impaired financial

assets

Less than 1 month 1-3 months

3 months - 1 year

1-5 years

2009 $ $ $ $ $ $ $

Receivables:

- Prosecution costs awarded by court

5,940 - - - 5,940 - 39,095

5,940 - - - 5,940 - 39,095

2008Receivables:

- Prosecution costs awarded by court

12,500 - - - 12,500 - 36,070

12,500 - - - 12,500 - 36,070

Note: (a) Ageing analysis of financial assets must exclude the types of statutory financial assets (e.g. Amounts owing from GST input tax credit recoverable).

(c) Liquidity risk

Liquidity risk arises when PrimeSafe is unable to meet its financial obligations as 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. It also continuously manages risk through monitoring future cash flows and maturities planning to ensure adequate holding of high quality liquid assets and dealing in highly liquid markets.

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




14.4: Maturity analysis of financial liabilities

Maturity dates (a)

carrying amount

Nominal amount

Less than 1 month

1-3 months

3 months –1year

2009 $ $ $ $ $

Payables:

- Supplies and suppliers 77,968 77,968 77,968 - -

- Taxes payable 43,115 43,115 4,061 30,075 8,979

121,083 121,083 82,029 30,075 8,979

2008Payables:

- Supplies and suppliers 38,266 38,266 38,266 - -

- Taxes payable 36,986 36,986 4,353 24,791 7,842

75,252 75,252 42,619 24,791 7,842

Note: (a) The amounts disclosed are the contractual undiscounted cash flows of each class of financial liabilities.

(d) Market risk

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

Interest rate risk

Exposure to interest rate risk is insignificant and might arise primarily through PrimeSafe’s interest bearing activities. Minimisation of risk is achieved by undertaking fixed rate or non-bearing financial instruments. For financial liabilities, PrimeSafe mainly undertakes financial liabilities with relatively even maturity profiles.

The carrying amounts of financial assets and financial liabilities that are exposed to interest rates are set out in Table 14.5. In addition, PrimeSafe’s sensitivity to interest rate risk is set out in the Table 14.6.




14.5: Interest rate exposure of financial instruments

Interest rate exposure

Weighted average effective

interest ratecarrying amount

Fixed interest

rate

variable interest

rate

Non-interest bearing

2009 % $ $ $ $

cash and deposits:

- Cash on hand and at bank 1.50% 94,200 - 93,900 300

Receivables:

- Sundry receivables - 16,196 - - 16,196

Investments and other financial assets:

- Term deposits 4.12% 2,292,000 - 2,292,000 -

2,402,396 - 2,385,900 16,496

Payables:

- Supplies and suppliers - 77,968 - - 77,968

- Taxes payable - 43,115 - - 43,115

121,083 - - 121,083

2008 cash and deposits:

- Cash on hand and at bank 4.40% 422,126 - 421,826 300

Receivables:

- Sundry receivables - 44,121 - - 44,121

Investments and other financial assets:

- Term deposits 7.70% 1,849,000 - 1,849,000 -

2,315,247 - 2,270,826 44,421



Sensitivity disclosure analysis

Taking into account past performance, future expectations, economic forecasts, and fund managers’ knowledge and experienceofthefinancialmarkets,PrimeSafebelievesthefollowingmovementsare‘reasonablypossible’overthenext 12 months.

• Aparallelshiftof+1percentand-1percentinmarketinterestrates(AUD).

Table 14.6 below discloses the impact on net result and equity for each category of financial instrument held by PrimeSafe at year-end as presented to key management personnel, if the above movements were to occur.

14.6: Market risk exposure

Interest rate risk

carrying amount

- 100 basis points

+100basispoints

Net Result Net Result

2009 $ $ $

Financial assets:

Cash and deposits 2,386,200 (23,862) 23,862

total increase/(decrease) 2,386,200 (23,862) 23,862

2008Financial assets:

Cash and deposits 2,271,126 (22,711) 22,711

total increase/(decrease) 2,271,126 (22,711) 22,711

(e) Fair value

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

• thefairvalueoffinancialassetsandfinancialliabilitieswithstandardtermsandconditionsandtradedinactive liquidmarketsaredeterminedwithreferencetoquotedmarketprices;and

• thefairvalueofotherfinancialassetsandfinancialliabilitiesaredeterminedinaccordancewithgenerallyacceptedpricing models based on discounted cash flow analysis.

PrimeSafe considers that the carrying amount of financial 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.



15. CASh FLOW INFORMATION

(a) Reconciliation of cash and cash equivalents2009

$2008

$

Cash on hand and at bank 94,200 422,126

Term deposits - 1,849,000

Bank overdraft - -

Balance as per cash flow statement 94,200 2,271,126

At 30 June 2009, cash at bank included the amount of a notional shortfall for the payment of unpresented cheques of$33,338(2008–$28,686).

Term deposits of $2,292,000 as recorded on the balance sheet as at 30 June 2009 have not been included in cash and cash equivalents due to the deposits having maturity dates of over three months.

(b) Reconciliation of net result for the period to net cash flows from operating activities

2009 $

2008 $

net result for the period 73,321 (84,876)

non-cash movements:

- Loss on sale or disposal of non-current assets 10,030 10,280

- Depreciation and amortisation of non-current assets 88,625 66,335

- Bad debts and doubtful debts 3,025 13,937

Movement in assets and liabilities:

- Decrease in current receivables 3,894 14,584

- (Increase)/decrease in other current assets 2,386 (1,109)

- Increase in payables and deferred income 100,153 46,066

- (Decrease)/increase in provisions (7,083) 13,540

net cash flows from/(used in) operating activities 274,351 78,757


16. RESPONSIBLE 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.

Names

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

Governing Board

Chairperson Mr W. Bray 1 July 2008 to 30 June 2009

Deputy Chairperson Ms J. Francis 1 July 2008 to 30 June 2009

Director Dr J. Carnie 1 July 2008 to 30 June 2009

Director Mr P. Conway 1 July 2008 to 30 June 2009

Director Ms A. Fox 1 July 2008 to 30 June 2009

Director Mr v. Gannon 1 July 2008 to 30 June 2009

Director Ms v. hardwick 1 July 2008 to 30 June 2009

Director Mr F. herd 1 July 2008 to 30 June 2009

Director Mr P. McCaffrey 1 July 2008 to 31 January 2009

Director Mr A. Ridder 1 July 2008 to 30 June 2009

Accountable Officer

Chief Executive Mr B. Casey 1 July 2008 to 30 June 2009

Remuneration

2009 2008

Governing Board

$0 1 1

$1–9,999 8 9

$10,000–19,999 1 1

Accountable officer

$220,000–229,999 - 1

$230,000–239,999 1 -

total numbers 11 12

total amount 276,178 278,429

Amounts relating to Ministers are reported in the financial statements of the Department of Premier and Cabinet.

Responsible Persons and related party disclosures

Certain directors are licensees and therefore remit licence fees to PrimeSafe based 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.


17. REMuNERATION OF ExECuTIvES

There were no executive officers employed during the reporting period. Amounts relating to the Accountable Officer are disclosed in Note 16.

18. REMuNERATION OF AuDITORS

2009 $

2008 $

victorian Auditor-General’s office

Audit of the financial statements 9,450 8,400

9,450 8,400

19. SEGMENT INFORMATION

PrimeSafe operates in the meat industry, covering the red meat, poultry and seafood industries, as a food safety licensing authority throughout victoria, Australia.

20. GLOSSARY OF TERMS

comprehensive result

Total comprehensive result is the change in equity for the period other than changes arising from transactions with owners. It is the aggregate of net result and other non-owner changes in equity.

commitments

Commitments include those operating, capital and other outsourcing commitments arising from non-cancellable contractual or statutory sources.

Employee benefits expenses

Employee benefits expenses include all costs related to employment including wages and salaries, leave entitlements, redundancy payments and superannuation contributions.

Financial asset

A financial asset is any asset that is:

(a)cash;(b)anequityinstrumentofanotherentity;(c) a contractual right:

•toreceivecashoranotherfinancialassetfromanotherentity;or•toexchangefinancialassetsorfinancialliabilitieswithanotherentityunderconditionsthatarepotentiallyfavourable

totheentity;or(d) a contract that will or may be settled in the entity’s own equity instruments and is:

•anon-derivativeforwhichtheentityisormaybeobligedtoreceiveavariablenumberoftheentity’sownequityinstruments;or

•aderivativethatwillormaybesettledotherthanbytheexchangeofafixedamountofcashoranotherfinancialasset for a fixed number of the entity’s own equity instruments.



20. GLOSSARY OF TERMS (continued)

Financial statements

Dependingonthecontextofthesentencewheretheterm‘financialstatements’isused,itmayincludeonlythe main financial statements (i.e. comprehensive operating statement, balance sheet, cash flow statements, and statementofchangesinequity);oritmayalsobeusedtoreplacetheoldterm‘financialreport’undertherevised AASB 101 (Sept 2007), which means it may include the main financial statements and the notes.

Intangible assets

Intangible assets represent identifiable non-monetary assets without physical substance.

Interest revenue

Interest revenue includes interest received on bank term deposits, interest from investments, and other interest received.

net result

Net result is a measure of financial performance of the operations for the period. It is the net result of items of revenue, gainsandexpenses(includinglosses)recognisedfortheperiod,excludingthosethatareclassifiedas‘othernon-ownerchanges in equity’.

net result from transactions/net operating balance

Net result from transactions or net operating balance is a key fiscal aggregate and is revenue from transactions minus expenses from transactions. It is a summary measure of the ongoing sustainability of operations. It excludes gains and losses resulting from changes in price levels and other changes in the volume of assets. It is the component of the change in net worth that is due to transactions and can be attributed directly to government policies.

non-financial assets

Non-financialassetsareallassetsthatarenot‘financialassets’.

other economic flows

Other economic flows are changes in the volume or value of assets or liability that do not result from transactions. It includes gains and losses from disposals, revaluations and impairments of non-current physical and intangible assets. In simple terms, other economic flows are changes arising from market re-measurements.

Payables

Includes short and long term trade debt and accounts payable, grants and interest payable.

Receivables

Includes short and long term trade credit and accounts receivable, grants, taxes and interest receivable.

Sale of goods and services

Refers to revenue from the direct provision of goods and services and includes fees and charges for services rendered sales of goods and services, fees from regulatory services, work done as an agent for private enterprises.


20. GLOSSARY OF TERMS (continued)

Supplies and services

Supplies and services generally represent cost of goods sold and the day-to-day running costs, including maintenance costs, incurred in the normal operations of PrimeSafe.

transactions

Transactions are those economic flows that are considered to arise as a result of policy decisions, usually an interaction between two entities by mutual agreement. They also include flows within an entity such as depreciation where the owner is simultaneously acting as the owner of the depreciating asset and as the consumer of the service provided by the asset. Taxation is regarded as mutually agreed interactions between the government and taxpayers. Transactions can be in kind (e.g. assets provided/given free of charge or for nominal consideration) or where the final consideration is cash. In simple terms, transactions arise the policy decisions of the government.



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

LEGISLATION REQuIREMENT PAGE REFERENCE

MINISTERIAL DIRECTIONS

ReportofOperations–FRDGuideline

Charter and purpose

FRD 22B Manner of establishment and the relevant Minister 16

FRD 22B Objectives, functions, powers and duties 16

FRD 22B Nature and range of services provided 16

Management and structure

FRD 22B Organisational structure 16

Financial and other information

FRD 8B Budget portfolio outcomes N/A

FRD 10 Disclosure index 59

FRD 12A Disclosure of major contracts 22

FRD 15B Executive officer disclosures 22, 56

FRD 22B, SD 4.2(k) Operational and budgetary objectives and performances against objectives N/A

FRD 22B Employment and conduct principles 21

FRD 22B Occupational health and safety policy 21

FRD 22B Summary of the financial results for the year 26

FRD 22B Significant changes in financial position during the year 26

FRD 22B Major changes or factors affecting performance 26

FRD 22B Subsequent events N/A

FRD 22B Application and operation of Freedom of Information Act 1982 22

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

FRD 22B Statement on National Competition Policy 22

FRD 22B Application and operation of the Whistleblowers Protection Act 2001 23

FRD 22B Details of consultancies over $100,000 22

FRD 22B Details of consultancies under $100,000 22

FRD 22B Statement of availability of other information 23

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

FRD 25 victorian Industry Participation Policy disclosures 22

FRD 29 Workforce Data disclosures 22

SD 4.5.5 Risk management compliance attestation 23

SD 4.2(g) General information requirements 23

SD 4.2(j) Sign-off requirements (i)

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LEGISLATION REQuIREMENT PAGE REFERENCE

Financial Report

Financial statements required under Part 7 of the FMA

SD 4.2(a) Statement of Changes in Equity 32

SD 4.2(b) Operating Statement 30

SD 4.2(b) Balance Sheet 31

SD 4.2(b) Cash Flow statement 33

Other requirements under Standing Directions 4.2

SD 4.2(c) Compliance with Australian accounting standards and other authoritative pronouncements 34

SD 4.2(c) Compliance with Ministerial Directions 34

SD 4.2(c) Accountable officer’s declaration 27

SD 4.2(d) Rounding of amounts 40

Other disclosures as required by FRDs in notes to the financial statements

FRD 9A Department disclosures of administered assets and liabilities N/A

FRD 11 Disclosure of ex-gratia payments N/A

FRD 13 Disclosure of parliamentary appropriations N/A

FRD 21A Responsible person and executive officer disclosures 55

FRD 102 Inventories N/A

FRD 103D Non-current physical assets 45

FRD 104 Foreign currency N/A

FRD 106 Impairments of assets 38

FRD 107 Investment properties N/A

FRD 109 Intangible assets 46

FRD 110 Cash flow statements 33

FRD 112A Defined benefit superannuation obligations 47

FRD 113 Investments in subsidiaries, jointly controlled entities and associates N/A

FRD114A Financialinstruments–GeneralGovernmentEntitiesandpublicnon-financialcorporations N/A

FRD 119 Contributions by owners N/A

Legislation

Freedom of Information Act 1982 22

Building Act 1993 22

Whistleblowers Protection Act 2001 23

Victorian Industry Participation Policy Act 2003 22

Financial Management Act 1994 34

Multicultural Victoria Act 2004 22

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PrimeSafe

150 Albert RoadSouth Melbourne VIC 3205

PO Box 2057South Melbourne VIC 3205

T 03 9685 7333F 03 9696 5284www.primesafe.vic.gov.au

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