We believe in a bright future for Victorian Agriculture. · RURal finance annual report 2013 05 CLIENTS • 68 per cent of Rural Finance clients are in the family farm and family

AnnuAl RepoRt 2013

We believe in a bright future for Victorian Agriculture.

RURal finance annual report 2013 05

CLIENTS

• 68percentofRuralFinanceclientsare in the family farm and family corporate segments, demonstrating our commitment to family farms as the core of Victorian agriculture.

• Strongriskmanagementwith80percent of our loan clients having a risk rating of five or less. The maximum risk rating is 10.

• Zerocreditlossesonthecommercialloan portfolio in the last 14 years.

GOVERNMENT

• 637applicationsforClean-upandRestoration Grants approved with funding of $13.1M distributed to flood-affected primary producers, small businesses and not-for-profit organisations.

• 67FirstFarmGrantsapprovedwithfunding of $0.35M distributed to assist young first time farmers develop a business plan and invest in business and property development.

• Administered64concessionalinterest rate loans to the value of $7.24Mtosupportprimaryproducers,small businesses and not-for-profit organisations to recover from the effects of floods and bushfires.

FINANCIALS

• Achievedanetprofitaftertaxof$32.3M which is a six per cent increase on the 2011/12 result of $30.5M; a strong result considering 2012/13 was a year of low system growth with many clients choosing to reduce debt levels from surplus funds.

• Maintainedreturnonequityat11.5 per cent in 2012/13.

• Theloanportfolioof$1.65Bis an eight per cent increase on the 2011/12 level, exceeding industry growth rates.

68% $13.1M 8%

04 RURal finance annual report 2013

BRAND

• LaunchedthenewRuralFinancewebsite that is mobile device friendly, encourages knowledge transfer and builds community.

• DevelopedtheGreatStateofAginitiative - launched at the Victorian farmers federation Heart of Victoria dinner by the Hon. Peter Walsh MP, Minister for agriculture and food Security, Minister for Water.

• NetPromoterScoreof+71demonstrating industry-leading client advocacy.

• Highrelationshipmanagement focus with all stakeholders.

• OpinionleaderintheVictorianagricultural production segment.

• Focusonreputationmanagement.

PEOPLE

• LaunchedtheAGACHIEVERS graduate program as part of our workforce planning to ‘grow our own’ talent pipeline.

• Completedanorganisation-widereview of workflow which resulted in a major realignment of many ‘client-facing’ roles, allowing staff to spend more time servicing our clients in process-efficient ways.

• 92percentstaffparticipationinthe annual staff survey, with results showing an uplift across several key areas for senior leadership, staff engagement, and role alignment.

PROCESS

• Furtherprocessimprovementinitiativeswere undertaken to provide efficient and effective processes for staff and clients. We have focused on reducing duplication and providing more efficient decision making processes.

• Ourprocessesarealignedtothe iT systems used at Rural finance, which is particularly relevant as we seek a new banking platform to replace a legacy transaction platform. This project was advanced during the year and remains ongoing. We expect a new system will drive change to existing processes and deliver further process improvements which will produce operating efficiencies.

• Ouraimistoachieveanalignmentof business processes and systems enabling Rural finance to meet its corporate Planning strategic objectives.

+71 92% DUPLICATION

Highlights increase in net profit after tax6%


MISSION

Supporting the sustainable economic growth of rural and regional Victoria by providing services that build business capability and resilience.

VISION

a sustainable and productive rural and regional Victoria.

VALUES

The six values of Rural finance reflect the behaviour that as an organisation and as individuals will be embraced in the pursuit of our corporation’s goals.

• Honestyandintegrity

• Teamwork

• Lead

• Achieve

• Createvalue

• Inspireconfidence

OBjECTIVES

The statutory objectives established by the Rural finance act 1988 are:

• Topromotetheestablishment,growthandstabilityof, and increased opportunities in rural industries in Victoria.

• TopromoteeconomicgrowthinregionalVictoria.

• Toprovidefinancialandotherservicesforruralindustriesin accordance with the act in a profitable, efficient and competitive manner and, if appropriate, in cooperation with other financial institutions.

STRATEGIC DIRECTION

The following corporate objectives provide a framework for the strategic direction of Rural finance in the 2013-16 planning period. all are consistent with the Government’s key issues for the Growing Victoria Together (GVT) Policy.

• UtiliseVictorianAgriculturalProduction(VAP)knowledge to add value to stakeholders.

• Actresponsiblyasacorporatecitizenandencourageagribusiness to be environmentally sustainable.

• Providefinancialsolutionsfortargetedregionalagribusinessto enhance income.

• ProvideanenhancedReturnOnEquity(ROE)from a creditworthy portfolio while preserving our cost To income (cTi) ratio.

• Provideresponsiblesupporttoindustryandthecommunity.

• ProvideadvicetoGovernmentandenhanceourroleasaneffective administrator of Government programs.

SCHOLARSHIP SCHEME

Since the program began in 1992, Rural finance has committedover$2.3Mtowardstheeducationof127outstanding students with career aspirations across a broad spectrum of rural industries. There are generally 15 holders of scholarships in any one year, representing an overall investment of approximately $90,000 per annum.

Rural finance scholarships are open to vocational, undergraduate and postgraduate students who can demonstrate a career commitment to agriculture. This includes students who have the opportunity to take up farming as a career as well as students planning to provide consultancy, research, technological and other services to the agricultural industry.

The Rural finance Scholarship program is recognised for the development of Victorian tertiary students to support them with funding towards research, education and living expenses.

The Scholarship program further demonstrates Rural finance’s ongoing commitment to Victorian agriculture and recognises the skills required to ensure progress and application of scientific, technical and managerial advances in the rural sector.

at the conclusion of their studies each scholar becomes a member of the Rural finance Scholarship alumni which offers ongoing opportunities for mentoring and networking.


BrandPROFILE

With origins dating back to the Soldier Settlement commission, Rural finance has played a major role in the development of regional Victoria.

Rural finance is wholly owned by the Victorian Government and is a significant lender to Victoria’s primary producers and rural businesses.

Rural finance also administers a range of Government initiatives, which give effect to Government policy for the promotion, development and support of rural communities and industries in Victoria. Programs administered on behalf of the federal and Victorian Governments include the Young farmers’ finance Scheme, natural Disaster Relief Schemes and industry adjustment Programs.

The functions of Rural finance are:

• Toprovidefinancialandotherservicessuchasinsurance,succession planning and estate planning to rural industries.

• OnthedirectionoftheTreasurer,toadministerVictorian and australian schemes of assistance or other schemes.

• DevelopandshareinsightsintoVictorianagriculture.

• Toadministertheremainingpurchaseleases,mortgages,contracts of sale and other interests created under the land Settlement act 1959 and the Soldier Settlement act 1958.

• Tobringtogetherandcoordinatefinancialresourcesforinvestment in rural industries.

• Tofacilitateanincreaseintheavailabilityofcapitalandexport finance to persons carrying on or seeking to establish rural industries.

• ToprovideservicesandadvicetoGovernmentwithregard to rural affairs and rural industries.

• Whereappropriate,toundertakepromotionalactivitiestofurther the purposes of the act.

Rural Finance believes in a bright future for Victorian agriculture.

Our purpose is to support and

enable farmers to build vibrant

businesses and drive the growth

of Victorian agriculture.

The Rural Finance Scholarship program is recognised for

supporting Victorian tertiary students with funding towards

research, education and living expenses.


8%increase in the role alignment of

staff to the Corporation’s strategy


PeopleSTAFF AS AT 30 jUNE 2013

123 employees in 11 offices across regional Victoria. CHIeF eXeCutIVe

oFFICer & eXeCutIVe

BoarD MeMBer

treaSurer oF VICtorIa

BoarD oF ManaGeMent

auDIt & rISK CoMMIttee

CreDIt CoMMIttee

reMuneratIon & CapaBIlItY CoMMIttee

eXeCutIVe aSSIStant

CoMpanY SeCretarY &

leGal CounSel

eXeCutIVe oFFICer

people & MarKetInG

CoMMunICatIonS

HuMan reSourCeS

MarKetInG

StrateGY & rISK

rISK

CreDIt

FInanCe & It

It SoFtWare DeVelopMent

It InFra-StruCture

ManaGeMent FInanCe

Corporate FInanCe

treaSurY FInanCe

aGrIBuSIneSS

SaleS - eaSt

SaleS - SoutH-WeSt/

WIMMera

rural InDuStrIeS

VICtorIan aGrICultural proDuCtIon

InForMatIon (Vapi)

proDuCtS & allIanCeS

SaleS - nortH-WeSt/

Central

Corporate SerVICeS

InDuStrY proGraMS

proCeSS IMproVeMent

loanS aDMInIStratIon

(BenDIGo)

loanS aDMInIStratIon (SHepparton)

operatIonS

increase in the

engagement level of staff

4%

10 RURal finance annual report 2013 RURal finance annual report 2013 11

Mr Michael Carroll MBa, B ag Sc, MaicD

Mr carroll was appointed to the Rural FinanceBoardon17September2008,appointed Deputy chair on 23 March 2010, and is convenor of the credit committee. Mr carroll holds positions in a range of agribusiness companies in a Board and advisory capacity. current directorships include Rural funds Management, Warrnambool cheese & Butter, Sunny Queen farms and Select Harvests as well as chair of Queensland Sugar limited. advisory clients range from corporate investors to successful family-owned agribusinesses.

He is also a member of the Marcus Oldham college foundation and a Director of the australian farm institute and the Geoffrey Gardiner foundation.

Mr carroll has held several senior executive positions at the national australia Bank (naB). He was responsible for establishing and leading naB’s agribusiness division. Roles prior to this included several years as a senior advisor in naB’s internal investment banking and corporate advisory department.

Before joining naB, Mr carroll worked for companies involved in the agricultural sector including Monsanto agricultural Products and a biotechnology venture capital company. Mr carroll comes from a family who has been involved in farming for over 130 years and has his own property in western Victoria.

Ms Alexandra Gartmann BSc(ReM), MaicD

Ms Gartmann was appointed to the Rural finance Board on 12 December 2008 and is a member of the audit and Risk committee as well as the Remuneration and capability committee. She has extensive experience in agriculture both in australia and overseas. Ms Gartmann is currently ceO of the foundation for Rural and Regional Renewal – a philanthropic organisation supporting the economic prosperity of rural, regional and remote communities across australia. for 10 years she held the position of ceO of the Birchip cropping Group — a community agricultural research and development organisation based in the Mallee-Wimmera region. She is current chair of the cSiRO Sustainable agriculture flagship advisory council. Ms Gartmann is a member of the Women in Primary industries Roundtable, the Victorian floods Disaster Relief fund advisory Panel and the australian landcare council. former positions include salinity abatement and extension with local government in Western australia and policy development with the Murray Darling Basin commission.

Rural Finance adheres to the principles underpinning best practice in

corporate governance, which are applied in a manner best suited to

the organisation and to best serve the Board members’ accountability

to the Treasurer, as shareholder and to other stakeholders.

Corporate GovernanceBOARD MEMBERS AS AT 30 jUNE 2013

Our single focus is Victorian agriculture.

Ms Sonia Petering B com, llB, GaicD, a fin, MiPaa

Mr Rob Goudswaard B ec, Grad Dip corporate finance (RMiT), faicD, f fin

Ms Petering was appointed to the Rural finance Board on 1 July 2003, appointed Deputy chair on 18 December 2007,andhasservedasChairsince 1 October 2009. Ms Petering is a member of the audit and Risk committee and the Remuneration and capability committee.

Ms Petering is a qualified practising lawyer, with law and commerce degrees from the University of Melbourne. She has over 19 years’ experience working in both Melbourne and in regional Victoria in legal advisory work, and has her own legal practice. Ms Petering is also a board member of the Transport accident commission and chair of its Marketing and Road Safety committee.

Ms Petering grew up on a grain farm in the Wimmera.

Mr Goudswaard was appointed ceO and Director of Rural finance on 1 august 2010 as well as chair of the Young farmers’ finance council. Prior to this, Mr Goudswaard had 30 years’ experience with australia andNewZealandBankingGrouplimited in various roles including chief Risk Officer institutional, Managing Director Regional, Rural & Small Business Banking, General Manager of Personal Banking asia and Pacific and chief OperatingOfficerwithANZSmalltoMedium Business. He has held leadership roles both in australia and internationally.

He is a fellow of the Williamson leadership community Program and an alumni of the Melbourne Business School, london Business School and Wharton/RaM University of Pennsylvania. Mr Goudswaard has a Bachelor of economics and a Postgraduate degree in corporate finance. He has attended Senior Management Programs at Melbourne Business School and london Business School. Mr Goudswaard has been a Director of World Vision australia since 2008 and is chair of its audit and Risk committee.

He runs a cattle and plantation property of 485 hectares near alexandra.

RURal finance annual report 2013 1312 RURal finance annual report 2013

RISk MANAGEMENT ATTESTATION

i, Sonia Petering, certify that Rural finance corporation of Victoria has risk management processes in place consistentwiththeAustralian/NewZealandRiskManagement Standard (or equivalent designated standard) and an internal control system is in place that enables the executive to understand, manage and satisfactorily control risk exposures. The audit and Risk committee verifies this assurance and that the risk profile of Rural finance has been critically reviewed within the last 12 months.

ACCOUNTABLE OFFICER’S DECLARATION

in accordance with the financial Management act 1994, i am pleased to present the Report of Operations for Rural finance corporation of Victoria for the year ending 30 June 2013.

Rob Goudswaard chief executive Officer

8 august 2013

Sonia Petering chair

For and on behalf of rural Finance Corporation of Victoria 8 august 2013

PRUDENTIAL STANDARD ATTESTATION

The Board of Directors of Rural finance corporation of Victoria certify that for the year ended 30 June 2013, Rural finance corporation of Victoria has established and maintained appropriate prudential policies and procedures consistent with the Victorian Government’s Prudential Standard and that the Rural finance corporation has complied with its policies and procedures from the Prudential Standard. The Board verifies this assurance and that compliance with the Standard has been subject to critical review within the last 12 months.

Rob Goudswaard chief executive Officer

Sonia Petering chair

Signed for and on behalf of the Board 8 august 2013

Corporate GovernanceBOARD MEMBERS AS AT 30 jUNE 2013

Mr Robert Hadler B. ec (Hons)

Mr Hadler was appointed to the Rural finance Board on 1 January 2012 and is convenor of the Remuneration and capability committee and a member of the credit committee. He has worked in many sectors of agribusiness including primary production, food processing and now retail, including the national farmers federation, aWB, coles and Goodman fielder. Mr Hadler has an extensive background in public policy, government relations and the media having spent 25 years working for some of australia’s largest companies, including naB and theAustraliaandNewZealand(ANZ)Banking Group.

early in his career, Mr Hadler worked as a policy adviser in the Prime Minister’s Department and was economics writer for The australian and that newspaper’s london correspondent. He is currently a Director with the australian Rural leadership foundation and the australian national Retailers association and has been a Director of the national landcare advisory committee, the national Greenhouse advisory Panel and the australasian investor Relations association.

Ms Helen Thornton B ec, aca, MaicD

Ms Thornton was appointed to the Rural finance Board on 1 July 2010 and is convenor of the audit and Risk committee and a member of the credit committee. She has extensive experience in risk management and both internal and external audit and has worked in a number of executive positions in the private sector.

Ms Thornton is currently a Director ofZoosVictoriaandChairofitsAudit and Risk and compliance committee. She is also on the Board of Big Sky Building Society and chair of its audit and Risk committee.

Mr william (Bill) whitford

MBa, faicD

Mr Whitford was appointed to the Rural finance Board on 1 July 2012. He is a member of the credit committee and the audit and Risk committee.

Mr Whitford has considerable experience in managing financing risks, having held senior financial markets roles with Banque national de Paris in australia andNewZealand,andtheStateBankof South australia in australia and the United Kingdom.

He has been active in the financing of state governments and their agencies, having worked in the financing of public infrastructure with the South australian Government, and in his current role as Managing Director of the Treasury corporation of Victoria. He is the Deputy chairman of the australian financial Markets association Market Governance committee.

Mr Whitford holds an MBa from adelaide University Graduate School of Management, and is a fellow of the australian institute of company Directors.


Measure 2011/12 2012/13

Requests for comment and engagement on Victorian agricultural production

72 61

net promoter score (range of -100 to 10, where 0 is neutral) 67 71

Workplace alignment % 43 51

Workplace engagement score % 57 61

loan processing time (% < 10 days) 75 78

Return on equity (%) 11.5 11.5

cost to income ratio (%) 28.8 29.8

loan portfolio growth (%) 6.5 8.1

% of client base in family corporate 13.7 15.3

Revenue generated from non-interest income activities % 2.5 2.1

Return to Government (%) 16.2 16.2

kPI MEASUREMENTS AGAINST THE BUSINESS PLAN 2012/13

20%

15%

10%

5%

0

Return to Government

2008 2009 2010 2011 2012 2013

LOAN PORTFOLIO

GROwTH

8.1%

2009 $’000

2010 $’000

2011 $’000

2012 $’000

2013 $’000

Profit before tax and community Service Obligations (cSOs) 28,658 34,499 40,725 45,086 47,753

community Service Obligations (cSOs) 1,298 1,372 1,335 1,432 1,518

Profit before tax 27,360 33,127 39,390 43,654 46,235

Tax expense 8,235 9,942 11,809 13,128 13,887

Profit before cSOs and after tax 20,423 24,557 28,916 31,958 33,866

Profit after tax 19,125 23,185 27,581 30,526 32,348

Dividend 8,593 9,562 11,592 13,790 15,263

Total assets 1,264,099 1,430,158 1,447,304 1,556,298 1,675,845

Total liabilities 1,023,811 1,176,248 1,177,405 1,269,663 1,372,125

equity 240,288 253,910 269,899 286,635 303,720

Process

SUMMARY OF FINANCIAL RESULTS

Net Profit Before Tax & CSOs

MIl

lIo

nS

50

40

30

20

10

0 2008 2009 2010 2011 2012 2013

Our insights into Victorian agriculture let us support and encourage investment in research and development, new markets and export opportunities.


2011/12 2012/13

No. $’000 No. $’000

Commercial loans

farm lending 1,064 214,609 1,266 245,087

Business lending 5 3,578 3 4,682

Subtotal commercial 1,069 218,187 1,269 249,769

Concessional loans

Young farmers’ finance Scheme1 101 24,708 108 25,615

Bushfires 20132 - - 2 250

floods 20122 11 1,735 47 4,984

floods 2010/112 155 19,640 13 2,191

Bushfires 20092 23 3,042 4 283

Subtotal concessional 290 49,125 174 33,323

Total Lending 1,359 267,312 1,443 283,092

REVIEw OF OPERATIONS

1 under the Young Farmers’ Finance Scheme, borrower’s receive a concession of 2% on purchase of land, Stock and equipment and a concession of 1% on the one 2 Grow product.

2 For further details regarding the concessional loans administered on behalf of the australian and Victorian Governments, please refer to pages 18-21.

38%in the grazing industries of beef and mixed farming

Significant growth ofBUSINESS LENDING

There has been limited demand for business lending in 2012/13. Rural finance continues to explore opportunities for further lending to this sector.

The business lending portfolio as at 30 June 2013 is $4.9M.

Clients

FARM LENDING

The 2012/13 year resulted in seasonal variances across Victoria, delivering mixed fortunes for primary producers. Southern Victoria experienced significant rainfall in the east but was unusually dry in the West. Broadacre cropping areas in the north received timely rainfall and grain harvest was relatively uninterrupted. Good prices at the start of harvest resulted in more grain being sold than usual. Many dairy businesses experienced a tighter cash flow year with lower milk prices and higher fodder costs.

Similar to the previous year, 2012/13 was a flat lending environment due to the australian dollar being at or above parity with the US dollar for most of the financial year. Despite this, Rural finance performed very well achieving new lending of $283Magainst$267Minthepreviousyear.

Overall, the rural loan portfolio has grown $125M to $1.65B mostly due to clients taking opportunities to expand or develop their business. Growth in the dairy industry accounted for 42 per cent of new lending and there was also significant growthof38percentinthegrazingindustriesofbeefandmixedfarming.

During the year we launched the additional client services of succession planning, insurance and estate planning. These initiatives have been well received by our client base.

YOUNG FARMERS’ FINANCE SCHEME

in 2012/13, 108 loans providing $22.43M of young farmer finance was approved. Of these, 39 loans with a value of $8.96M was provided to young broadacre farmers and 34 loans with a value of $6.9M was provided to young dairy farmers. The remaining $6.57Mwaswellspreadacrosstheother industries.

The Young farmers’ finance Scheme funding allocation was once again fully utilised which highlights the appetite for finance among Victoria’s young farmers remains strong.

42%of loan portfolio growth

Growth in dairy accounted for

Loan Portfolio

2000

1500

1000

500

0

MIl

lIo

nS

2008 2009 2010 2011 2012 2013

$8.96M YounG

BroaDaCre FarMerS

$6.57MotHer

InDuStrIeS

$6.9M YounG

DaIrY FarMerS

Farm lending up 15% $283M


BUSHFIRES 2013

Over the summer of 2013 a number of bushfire events occurred across Victoria. Two fire events during January in the chepstowe-carngham (west of Ballarat) and aberfeldy-Donnelly (Gippsland) districts were significant and resulted in the announcement of government support via concessional Bushfire loans of up to $200,000. The support is available to primary producers, small businesses and not-for-profit organisations who had suffered direct damage of the fires.

Two additional events in the Dereel (South of Ballarat) and Hallston (South West Gippsland) districts during March 2013 led to a further announcement of loan support.

applications close on 31 July 2013 and 30 September 2013 for the January and March fire events respectively.

as at 30 June 2013 two applications were approved for $0.25M.

BUSHFIRES 2009

The Black Saturday Bushfires devastated large areas of Victoria in february 2009 and as a result a number of government programs were announced to help those who were impacted by the fires.

immediately following the fires, concessional Bushfire loans of up to $200,000 were made available to farmers, small businesses and not-for-profit organisations affected by the fires. in acknowledgment of the difficulty faced by those attempting to recover from the fires, in June 2011, the level of support available under the concessional loan package was increased to a maximum of $500,000. in addition the government announced a separate $50,000 loan package designed to assist small businesses restore their operations.

applications for these extended programs closed on 31 December 2011. in the 2013 financial year four loans were approved for funds totalling $283,000. The delay in processing was due to additional information being required from applicants.

TORNADO/SEVERE STORM 2013

On 21 March 2013, a tornado and severe weather struck north east Victoria. To assist in the clean-up and recovery, the government announced concessional loans of up to $200,000 for primary producers, small business and not-for-profit organisations who were directly impacted by this event. entities within the shires of alpine, Benalla, Greater Shepparton, indigo, Moira, Strathbogie, Wangaratta and Wodonga are eligible to apply for the assistance.

applications close on 30 September 2013. as at 30 June 2013, one loan application had been received.

Applications for Clean-up and Restoration Grants

approved with funding of $13.1M distributed to

flood-affected primary producers, small businesses

and not-for-profit organisations.

637

$7.71M in concessional loans administered for flood and bushfire assistance.

GovernmentAUSTRALIAN/VICTORIAN GOVERNMENT SCHEMES

Natural Disaster Relief And Recovery

Arrangements (NDRRA) Assistance

FLOOD ASSISTANCE 2012

February – March 2012

extensive flooding was experienced in many parts of Victoria in late february and early March 2012. To assist those directly affected by the flood event the government announced clean-up and Restoration Grants in the most severely affected shires of Moira, Greater Shepparton, indigo and Towong. Grants were available to assist primary producers, small businesses and not-for-profit organisations.

The grant provided support of up to a maximum of $25,000 to assist in flood recovery, with funds released upon the presentation of invoices/receipts.

applications closed on 30 September 2012 and applicants deemed eligible had until 31 December 2012 to submit the relevant invoices/receipts to enable grant payments to be finalised.

at 30 June 2013, a total of 1,011 grant applications were approved for support totalling $20.14M.

in recognition of the widespread flooding that occurred during february and March, entities within the 20 most affected shires were eligible to apply for concessional flood loans of up to $200,000. The shires included alpine, Ballarat, Benalla, campaspe, east Gippsland, Greater Bendigo, Greater Shepparton, indigo, Macedon Ranges, Mansfield, Mildura, Mitchell, Moira, Mount alexander, Murrindindi, Strathbogie, Towong, Wangaratta, Whittlesea and Wodonga.

applications for assistance closed on 30 September 2012 and during 2012/13, 33 loans were approved for $3.55M.

june 2012

in June 2012 widespread flooding occurred in the shires of alpine, Baw Baw, Bass coast, cardinia, colac Otway,

east Gippsland, Golden Plains, Greater Geelong, Hume, latrobe, Mansfield, Mornington Peninsula, South Gippsland, Surf coast, Towong, Wellington and Yarra Ranges. in response the government announced concessional flood loans of up to $200,000 for farmers, small businesses and not-for-profit organisations affected by the flooding.

applications for assistance closed on 31 December 2012 and 14 loans were approved for 2012/13 for funding totalling $1.43M.

FLOOD ASSISTANCE 2010/11

Multiple flood events were experienced across Victoria from august 2010 to March 2011. as a result clean-up and Restoration Grants were made available to assist primary producers, small businesses and not-for-profit organisations who were directly affected by the flood events.

The grant provided support of up to a maximum of $25,000 per flooding event to assist the entities recover from the flood, with funds released upon the presentation of invoices/receipts.

During the 2013 financial year six grant applications were approved. a further eight applicant receive a supplementary payment against their initial application after the presentation of further invoices. a total of $159,683 in grant payments was released during 2013 to finalise the program.

in addition to the grants, concessional flood loans of up to $200,000 were made available to farmers, small businesses and not-for-profit organisations affected by the flood events.

applications closed on 31 December 2011 and a total of 222 loans for $21.92M were approved.

Given the magnitude of the flooding events, in June 2011 the government announced an exceptional Disaster assistance package to help those primary producers, small businesses and not-for-profit organisations who had suffered extreme damage. in cases where the support available via the clean-up and Restoration Grants and $200,000 concessional loan was insufficient to restore the entity, a combined loan and grant package of up to $650,000 was available to assist.

in the 2012/13 year, 13 loans were approved for $2.19M.


GovernmentRURAL INDUSTRIES

COLIBAN wATER

a key part of the Harcourt Rural Modernisation Project was the replacement of the existing rural channel structures with a new piped water system. However, before the design could be finalised the level of rural licence holder involvement in the new system had to be determined. Under the non-compulsory My choice program, licence holders were invited to declare their involvement in the program or to make an offer to sell part or all of the rural water licence.

Rural finance acted as an independent intermediary in the administration of the My choice offers.

RURAL INDUSTRIES AGENCY wORk

Rural finance continues to provide a range of property-related services to the Goulburn Murray Water (G-MW) connections Program throughout 2012/13 to assist the implementation of its modernisation plans, including rationalisation of under-utilised irrigation infrastructure. These services involve the purchase of irrigated properties; management and on-sale as agreed with G-MW.

Rural finance also acted as consultants to the north central catchment Management authority (nccMa) to assist with the purchase of long Swamp at Moolort.

further agency work undertaken in the 2012/13 financial year involved facilitating land sales at Tresco on behalf of G-MW.

LOwER LODDON IRRIGATORS RECOVERY PACkAGE (LLIRP)

On27April2011,theMinisterforAgriculture,Waterandfood Security, the Hon Peter Walsh MP, announced a $21M assistance package for flood affected irrigators. The package was to assist the lower loddon region to recover from the significant flooding event in January 2011; to mitigate the consequences of future floods by changing land use from intensive irrigation and to construct levees that will protect habitable homes.

Total funding of $12.8M was allocated to Rural finance to manage the voluntary buyback of farms, change land use and construct ring levees around habitable homes in the lower loddon floodplain.

Atotalof23propertiesfrom18landholders(2751haand46.34 delivery shares) were purchased during the land buyback phase. Rural finance, along with the Department of Sustainability and environment (DSe), then undertook a series of activities to maintain and prepare the buyback propertiesforresaleasdry-landcroppingandgrazingunits.Some of these activities included sowing 500ha to barley under a share-farming agreement; running sheep and cattle on agistment; controlling weeds; repairing houses worthy of preservation and removing others assessed as uneconomic to retain; and consolidating land titles.

The 23 properties purchased during the land buyback phase were consolidated into 15 properties. in 2012/13 seven properties were offered for sale. Three of these properties were sold and a further four were under contract as at 30 June 2013. The remaining eight properties will be offered for sale in the 2013/14 financial year.

GovernmentVICTORIAN GOVERNMENT SCHEMES

FIRST FARM GRANT

in May 2011 the State Government committed a further $1.2M to continue the first farm Grant. This program provides financial assistance for business planning and development opportunities to help young people who had, or were about to make a commitment to farming.

The grant was offered in two phases. The first phase, of up to $3,000, supported the costs associated with the development of a farm business plan. The remaining funds, up to a combined maximum of $10,000, were available to implement development activities identified in the plan.

By november 2011, sufficient applications were received to fully allocate the available budget and applications were closed.

During 2012/13, applications that were initially provided with in-principle approval submitted their business plans for consideration and lodged their requests for development activities. Over both the initial and revised programs 24 applications for the creation of a business plan were approved for grants totalling $55,604. a further $0.29M was approved for 43 applications to implement on-farm development activities.

MARYSVILLE AND TRIANGLE INVESTMENT SUBSIDY

The State Government initiated a program to help facilitate new infrastructure investment which will contribute to the economic rebuilding of the Marysville and Triangle region following the 2009 Black Saturday bushfire event. financial support was provided in the form of a subsidy equivalent to 50 per cent of the interest payable on new loans associated with new infrastructure developmenttoamaximumof$75,000perannum.

Potential infrastructure development projects could include tourism accommodation (such as B&Bs and holiday rentals), rental accommodation, retail and professional services accommodation, restaurants and food premises and light industry.

applications closed on 30 June 2013. at this time three applications were approved for subsidy support totalling $50,022. The remaining applications are in the process of being assessed.

FOOD AND FIBRE MARkETING COOPERATIVES GRANT

in July 2012, the Victorian Government launched the food and fibre Marketing cooperative Grants. The purpose of the grant is to encourage the establishment of cooperative groups among farmers and value chain participants, using the collective capability of the groups to generate better efficiency in markets and better access to markets.

Grants of up to $50,000 are available for approved activities to eligible cooperatives or collaborative marketing groups.

The program is open for a three year period to 30 June 2015 or until program funding is exhausted.

at 30 June 2013, five applications had been received. Two applications have been provided with in-principle approval and the balance are in process.


Financial StatementsFOR THE FINANCIAL YEAR ENDED 30 jUNE 2013

Note 2013 $’000

2012 $’000

Income from continuing operations

interest income 2 116,496 119,272

interest expense 2 (50,805) (58,979)

net interest income 65,691 60,293

Bad and doubtful debts 8 (95) -

net interest income after bad and doubtful debts 65,596 60,293

Other income 3 2,472 3,053

Total operating income 68,068 63,346

Expenses from continuing operations

Operating expenses 4 (20,315) (18,260)

Total operating expenses (20,315) (18,260)

Profit before income tax and community service obligations 47,753 45,086

community service obligations 20 (1,518) (1,432)

net profit before income tax 46,235 43,654

income tax expense 1(d(i)),6 (13,887) (13,128)

Net profit after income tax 32,348 30,526

Other comprehensive income for the year, net of tax - -

Comprehensive income 32,348 30,526

COMPREHENSIVE OPERATING STATEMENT

the comprehensive operating statement should be read in conjunction with the accompanying notes.

2011/12 2012/13

No. $’000 No. $’000

Floods – March 2012 Clean up and Restoration Grants

Primary producers 358 6,732 574 12,293

Small businesses 18 322 35 456

not-for-profit organisations 4 52 22 285

Total 380 7,106 631 13,034

Floods 2010/11 Clean up and Restoration Grants

Primary producers 2,474 45,822 4 121

Small businesses 201 3,396 1 17

not-for-profit organisations 105 1,516 1 21

Total 2,780 50,724 6 159

NATURAL DISASTER RELIEF AND RECOVERY ARRANGEMENTS (NDRRA) ASSISTANCE

2011/12 2012/13

No. $’000 No. $’000

First Farm Grants – Phase 1

Planning Grants approved 50 135 1 3

Development Grants approved 87 587 11 74

Total 137 722 12 77

First Farm Grants – Phase 2

Planning Grants approved 80 191 23 53

Development Grants approved 77 526 32 555

Total 157 717 55 608

First Farm Program total 294 1,439 67 685

Food and Fibre Marketing Cooperatives Grants - - 2 01

Marysville and Triangle Investment Subsidy - - 3 50

VICTORIAN GOVERNMENT SCHEMES

GovernmentREVIEw OF OPERATIONS

1 applications have been approved in principle. as at 30 June 2013 no funds had been paid.


STATEMENT OF CHANGES IN EqUITY

Note Contributed equity

Retained earnings

Reserve for credit losses

Total

Balance at 1 july 2011 77,137 175,251 17,511 269,899

net profit after income tax 30,526 30,526

Other comprehensive income for the year -

Transfer to reserve for credit losses (1,257) 1,257 -

Transactions with owner: -

Dividends paid 1(d(xiii)) (13,790) (13,790)

Balance at 30 june 2012 77,137 190,730 18,768 286,635

net profit after income tax 32,348 32,348

Other comprehensive income for the year -

Transfer to reserve for credit losses (1,497) 1,497 -

Transactions with owner: -

Dividends paid 1(d(xiii)) (15,263) (15,263)

Balance at 30 june 2013 77,137 206,318 20,265 303,720

the statement of changes in equity should be read in conjunction with the accompanying notes.

Rural Finance supports the sustainable economic growth of rural and regional Victoria by empowering local staff to provide trusted, tailored financial services.

STATEMENT OF FINANCIAL POSITION AS AT 30 jUNE 2013


Note 2013 $’000

2012 $’000

Assets

financial aSSeTS

cash assets 8,315 8,926

Government schemes 1(d(xiv,xv)),21 58 140

loan debtors 7 1,654,335 1,530,075

Other 9(a) 344 3,786

Total financial assets 1,663,052 1,542,927

nOn-financial aSSeTS

Property, plant and equipment 1(d(iv)),11 2,517 2,647

Deferred tax assets 10 774 781

Other non-financial assets 9(b) 9,502 9,943

Total non-financial assets 12,793 13,371

Total assets 1,675,845 1,556,298

Liabilities

interest bearing liabilities 12 1,344,424 1,236,776

Government schemes 1(d(xiv,xv)),21 10,952 14,009

Tax liabilities 6 4,334 4,066

Other 13 10,439 12,772

Provisions 14 1,976 2,040

Total liabilities 1,372,125 1,269,663

Net assets 303,720 286,635

Equity

contributed equity 77,137 77,137

Retained earnings 206,318 190,730

Reserve for credit losses 20,265 18,768

Net worth 303,720 286,635

commitments for expenditure 15

contingent liabilities and contingent assets 16

the statement of financial position should be read in conjunction with the accompanying notes.


Notes to the Financial Statements

1. BASIS OF PREPARATION OF THE FINANCIAL REPORT

The annual financial statements represent the audited general purpose financial statements for Rural finance corporation of Victoria (“the corporation”).

The purpose of the report is to provide users with information about the corporation’s stewardship of resources entrusted to it.

(a) Statement of compliance

These general purpose financial statements have been prepared in accordance with the financial Management act 1994 (fMa) and applicable australian accounting Standards (aaS) which include interpretations, issued by the australian accounting Standards Board (aaSB).

australian accounting Standards (aaSs) that have been recently issued or amended, but are not yet effective, have not been adopted in the preparation of this financial report.

(b) Basis of accounting preparation and measurement

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

These financial statements are presented in australian dollars, the functional and presentation currency of the corporation.

in the application of 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 judgements. actual results may differ from these estimates.

The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and also in future periods that are affected by the revision.

non-financial physical assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable, the asset’s sale is expected to be completed within 12 months from the date of classification, and the asset is available for immediate use in the current condition.

This report has been prepared in accordance with the historical cost convention. Historical cost is based on the fair values of the consideration given in exchange for assets. exceptions to the

historical cost convention include the fair value of property, plant and equipment which is based on its depreciated replacement value; and non-financial physical assets classified as held for sale which are measured at the lower of carrying amount and fair value less costs to sell, and are not subject to depreciation.

(c) Reporting entity

The financial statements cover the corporation as an individual reporting entity and was authorised for issue by the Board on 8 august 2013.

The corporation is a for-profit entity and its principal address is:

Rural finance corporation of Victoria 57ViewStreet Bendigo Vic 3550

(d) Summary of significant accounting policies

The accounting policies below have been applied in preparing the financial statements for the year ended 30 June 2013 and the comparative information presented for the year ended 30 June 2012.

(i) Income tax

Section 26 of the Rural finance act 1988 [as amended] provides for the corporation to pay into the consolidated fund the equivalent of commonwealth income tax or such amount, not exceeding that amount, as is determined by the Treasurer after consultation with the corporation.

STATEMENT OF CASH FLOwS


Note 2013 $’000

2012 $’000

Cash flows from operating activities

interest and fee receipts from loan debtors 116,408 119,488

interest received from TcV deposit held for lower loddon irrigation Recovery Project 41 153

interest received on investments 97 136

interest paid to TcV (51,582) (57,683)

Other interest paid (1,732) (1,673)

Other receipts 972 1,765

cash paid to suppliers and employees (18,523) (17,243)

inflows from administered commonwealth and State Government schemes 15,450 66,859

Outflows from administered commonwealth and State Government schemes (15,332) (66,518)

funds from administered State Government schemes placed with TcV (41) (12,638)

funds from administered State Government schemes withdrawn from TcV 18 11,157

income tax paid (13,612) (12,761)

Net cash inflow from operating activities 18(b) 32,164 31,042

Cash flows from investing activities

Principal receipts from loan debtors 860,765 996,970

advances to loan debtors (983,772) (1,088,671)

fixed asset purchases (1,336) (1,644)

Proceeds from sale of assets 595 829

Net cash outflow from investing activities (123,748) (92,516)

Cash flows from financing activities

Repayment of TcV borrowings (265,584) (210,634)

Proceeds from TcV borrowings 369,500 288,592

farm management deposits 2,338 738

Dividends (15,263) (13,790)

Net cash inflow/(outflow) from financing activities 90,991 64,906

Net increase/(decrease) in cash held (593) 3,432

cash at the beginning of the financial year 7,598 4,166

Cash at the end of the financial year 18(a) 7,005 7,598

the statement of cash flows should be read in conjunction with the accompanying notes.


recoverable. if any such indication exists and where the carrying value exceeds the estimated recoverable amount, the assets or cash-generating units are written down to their recoverable amount.

The recoverable amount of plant and equipment is the greater of fair value less costs to sell and value in use. in assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

ReValUaTiOnS

fair value is determined by reference to market-based evidence, which is the amount for which the assets could be exchanged between a knowledgeable willing buyer and a knowledgeable willing seller in an arm’s length transaction as at the valuation date.

any revaluation increment is credited to the asset revaluation reserve included in the equity section of the statement of financial position unless it reverses a revaluation decrement of the same asset previously recognised in the comprehensive operating statement.

any revaluation decrement is recognised in the comprehensive operating statement unless it directly offsets a previous revaluation increment of the same asset in the asset revaluation reserve.

(v) Revenue recognition

interest and other income is recognised on an accrual basis, however, interest on impaired loans is only taken to profit when received. This year no interest on loans previously classified as impaired [2012 - $300,000] has been recognised and brought to account.

(vi) Loan debtors

loans are measured at amortised cost using the effective interest method.

loans are recognised at recoverable amount, after assessing required provisions for impairment. impairment of a loan is recognised when there is reasonable doubt that not all the principal can be collected in accordance with the terms of the loan agreement [refer note 8].

The corporation maintains a specific provision and a reserve for credit losses against its loan balances [refer note 1 (d)(iii)].

The specific provision is a result of a separate assessment of relevant loan debtor’s financial statements within the loan portfolio where full recovery of principal is considered doubtful. all bad debts are written off against the specific provision.

(vii) Goods and Services Tax (GST)

The corporation is a financial institution and, as such, interest income and fees associated with this activity is deemed

input taxed. GST incurred on a purchase of goods and services that is directly related to these activities is recognised as part of the cost of acquisition of the asset or expense. GST incurred on transactions that is not able to be directly identified with input taxed activities is recovered on an apportionment basis. The unrecoverable portion is included as part of the cost of acquisition of the asset or expense.

The amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

(viii) Employee expenses and benefits

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

liabilities for employee benefits expected to be settled within twelve months of the reporting date are measured at their nominal amounts. liabilities for employee benefits, which are not expected to be paid or settled within 12 months of the reporting date, are accrued in respect


The Treasurer has directed the corporation to self assess its income tax obligations according to the Treasurer’s instructions developed for State Owned enterprises under the national Tax equivalent Regime (nTeR).

Deferred income tax is provided on all temporary differences at each balance date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised.

Deferred income tax liabilities are recognised for all taxable temporary differences.

The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled.

(ii) Financial instruments

Derivative instruments that do not qualify for hedge accounting are stated at fair value and any change in value is reflected in the comprehensive operating statement.

(iii) Reserve for credit losses

The reserve for credit losses is maintained to cover non identified possible losses and latent risks inherent in the overall portfolio. The reserve for credit losses is capped at 1.25% of risk weighted assets which is in accordance with the Prudential Supervision Policy set by the Treasurer.

(iv) Property, plant and equipment

all non-financial physical assets are measured initially at cost and subsequently revalued at fair value less accumulated depreciation and impairment.

The fair value of plant, equipment and vehicles is determined by reference to the asset’s depreciated replacement cost. existing depreciated historical cost is generally a reasonable proxy for depreciated replacement cost because of the short lives of assets concerned.

Depreciation of property, plant and equipment is calculated on a diminishing value basis to write off the cost of the asset over its expected useful life. The expected useful lives are 3 - 14 years which is consistent with previous years.

The cost of improvements to or on leasehold properties is amortised over the unexpired period of the lease or the estimated useful life, whichever is shorter. leasehold improvements at reporting date are being amortised over six years. [refer note 11] This is consistent with previous years.

Depreciation for software costs and licence fees is calculated on a straight-line basis to write off the cost of the asset over two and a half years. This is consistent with previous years.

RecOVeRaBle aMOUnT Of aSSeTS

at each reporting date, the corporation assesses whether there is any indication that an asset is impaired. Where an indicator of impairment exists, the corporation makes a formal estimate of the recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount. any revaluation decrement is recognised in the comprehensive operating statement unless it directly offsets a previous surplus of the same asset in the asset revaluation reserve.

iMPaiRMenT

The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be


(xiv) Commonwealth/State joint schemes

The corporation has administered schemes on behalf of the commonwealth and State Governments [refer note 21].

costs incurred by the corporation to service these schemes are included in operating expenses. administration fees received are shown in other income [refer note 3].

(xv) State Government agency schemes

The corporation administers several agency schemes on behalf of the State Government for industry restructuring and specifically targeted initiatives [refer note 21].

costs incurred by the corporation to service these schemes are included in operating expenses. administration fees received are shown in other income [refer note 3].

(xvi) Terms and conditions

lOan DeBTORS

loan instalments are payable in arrears on the first of the month following the instalment term. However, loan instalments for Soldier Settlement and land Settlement clients are payable within 30 days of the due date. as loans are held to maturity they are carried at theirprincipalamounts[referNote7].

OTHeR liaBiliTieS

These amounts include liabilities for goods and services and accrued interest incurred by the corporation prior to the end of financial year and which are unpaid. These amounts are unsecured and are usually paid within six months [refer note 13].

BORROWinGS

as borrowings are generally held until maturity they are carried at their principal amounts. Borrowing costs are recognised as expenses in the period in which they are incurred. These include interest on bank overdrafts and short-term and long-term borrowings, amortisation of discounts or premiums relating to borrowings. interest is accrued over the period it becomes due and is recorded as part of other liabilities [refer notes 12,13].

OTHeR financial aSSeTS

Other financial assets are recognised at the amounts receivable as they are generally due for settlement within 30 days [refer note 9].

(xvii) Farm management deposit scheme

The corporation accepts interest bearing deposits from primary producers under the farm Management Deposit Scheme. These deposits are in accordance with the commonwealth Taxation laws amendment (farm Management Deposits) act 1998 (as amended). interest rates on these deposits are at commercial rates.

(xviii) Rounding of amounts

Where indicated amounts have been rounded to the nearest thousand dollars.

(xix) New accounting standards and interpretations

as at 30 June 2013, various accounting standards and interpretations had been issued but were not mandatory for the financial year ended 30 June 2013. The corporation has not early adopted these standards and upon implementation they are not expected to have a significant impact.


of all employees at the present values of future amounts expected to be paid basedona3.79%perannumprojectedweighted average increase in salaries for 2012-13 [2011-12 4.31%]. Present values are calculated using discount rates provided by the Department of Treasury and finance at 30 June 2013.

(ix) Superannuation

The corporation’s superannuation plans are administered by the Government Superannuation Office (GSO) (formerly the Victorian Superannuation Board) and VicSuper. Details of Scheme benefits are included in the State Superannuation act 1988 [as amended].

The Revised Scheme was closed to new entrants on 30 June 1988 and members contribute a percentage of their salary according to age categories. The corporation contributes to the State Superannuation fund a fixed percentage of members’ salaries that have been determined by the GSO. contributions of$27,245[2012-$26,650]areincluded in this year’s operating expenses.

The new Scheme commenced on 1 July 1988 and was closed to new entrants on 31 December 1993. Members can elect to contribute at a fixed percentage of their salary. The corporation contributes to the State Superannuation fund a fixed percentage of members’ salaries that has been determined by the GSO. contributions of $80,195 [2012 - $94,681] are included in this year’s

operating expenses. The Department of Treasury and finance recognises and discloses the State’s defined benefit liabilities in its finance report.

The Victorian Superannuation fund [“VicSuper”] commenced on 1 January 1994. The corporation contributes to VicSuper the percentage of members’ salaries as set down in the commonwealth Superannuation Guarantee charge act 1992 [the “commonwealth act”]. contributions of$417,689[2012-$415,851]areincluded in this year’s operating expenses.

The corporation has also paid the contribution required by the commonwealth act to other complying funds for those employees not covered by the above schemes. contributions of $359,250 [2012 - $302,245] are included in this year’s operating expenses.

There were no contributions outstanding at 30 June 2013 [2012- $nil] and no loans have been made to the corporation by the schemes.

all schemes provide for benefits if there is retirement, disability, death, resignation or retrenchment.

(x) Leases

a lease is a right to use an asset for an agreed period of time in exchange for payment.

leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect risks and rewards incidental to ownership.

Operating lease payments, including any contingent rentals, are recognised as an expense in the comprehensive operating statement on a straight-line basis over the lease term.

(xi) Commitments

commitments are disclosed at their nominal value and inclusive of the Goods and Services Tax (GST) payable. in addition, where it is considered appropriate and provides additional relevant information to users, the net present value of significant individual projects are stated.

(xii) Cash flows

for the purpose of the statement of financial position and statement of cash flows, cash includes cash on hand and cash equivalents.

(xiii) Dividends

Section 26 of the Rural finance act 1988 [as amended] provides for a dividend payment to be made to the consolidated fund each year. an obligation to pay a dividend only arises after consultation between the Board and the Treasurer. following this consultation, a formal determination is made by the Treasurer. although this process has not yet been completed at the reporting date, the Board’s preliminary dividend estimate in respect of2012-13is$16,174,000whichisnot provided for at year-end. a payment of $15,263,000 was made this year in respect of 2011-12.


2. INTEREST INCOME AND INTEREST ExPENSE

Average Balance

2013 $’000

Interest 2013 $’000

Average Rate

%

Average Balance

2012 $’000

Interest 2012 $’000

Average Rate

%

Interest earning assets

loan debtors 1,566,830 116,374 7.43 1,461,570 119,124 8.15

investments with other financial institutions 3,850 122 3.17 3,619 148 4.09

Total interest income 1,570,680 116,496 1,465,189 119,272

Interest bearing liabilities

Borrowings from TcV 1,213,513 49,073 4.04 1,125,360 56,954 5.06

farm management deposits 34,322 1,500 4.37 33,220 1,712 5.15

credit balances 15,084 229 1.52 12,461 304 2.44

commonwealth Government 78 3 3.87 237 9 3.79

Total interest expense 1,262,997 50,805 1,171,278 58,979

average balances of loan debtors are gross amounts exclusive of provisions for impairment.

2013 $’000

2012 $’000

fees charged on lending activities 1,482 1,288

Government scheme administration fees 931 1,726

Other 59 39

Total other income 2,472 3,053

3. OTHER INCOME


Standard/Interpretation Summary Applicable for annual reporting periods

Impact on financial statements

aaSB 9 financial instruments This standard simplifies requirements for the classification and measurement of financial assets resulting from Phase 1 of the iaSB’s project to replace iaS 39 financial instruments: recognition and measurement (aaSB 139 financial instruments: recognition and measurement).

Beginning 1 Jan 2013 expected to have no significant impact.

aaSB 2009-11 amendments to australian accounting Standards arising fromAASB9[AASB1,3,4,5,7,101,102,108,112,118,121,127,128,131,132, 136, 139, 1023 and 1038 and interpretations 10 and 12]

This gives effect to consequential changes arising from the issuance of aaSB 9.


AASB2010-7.AmendmentstoAustralianaccounting Standards arising from aaSB 9 (December2010)[AASB1,3,4,5,7,101,102,108,112,118,120,121,127,128,131,132,136,137,139,1023&1038andInterpretations2,5,10,12,19&127]

This gives effect to consequential changes arising from the issuance of aaSB 9.


aaSB 2011-4. amendments to australian accounting Standards to remove individual key management personnel disclosure requirements [aaSB 124]

This Standard amends aaSB 124 Related Party Disclosures by removing the disclosure requirements in aaSB 124 in relation to individual key management personnel (KMP).

Beginning 1 July 2013 expected to have no significant impact.

aaSB 2011-10. amendments to australian accounting Standards arising from aaSB 119 (September 2011). [aaSB 1, aaSB 8, aaSB 101, aaSB 124, aaSB 134, aaSB 1049 & aaSB 2011-8 and interpretation 14]

This Standard makes consequential changes to a range of other australian accounting Standards and interpretation arising from the issuance of aaSB 119 employee Benefits.



5. RESPONSIBLE PERSON AND ExECUTIVE OFFICER DISCLOSURE

Ministers and Responsible Persons

in accordance with the Ministerial Directions issued by the Minister for finance under the fMa, the following disclosures are made regarding Responsible Persons for the reporting period.

The relevant Minister is Mr Michael O’Brien, Treasurer of Victoria. Remuneration of the Ministers is disclosed in the financial report of the Department of Premier and cabinet. Other relevant interests are declared in the Register of Member interests which is completed by each member of the Parliament.

Names

The persons who held positions of Minister and Responsible Persons in the entity are as follows:

Treasurer of Victoria The Hon. Michael O’Brien MP 13 March 2013 to 30 June 2013

Treasurer of Victoria The Hon. Kim Wells MP 1 July 2012 to 13 March 2013

non executive chair Ms Sonia Petering 1 July 2012 to 30 June 2013

chief executive Officer Mr Robert W Goudswaard 1 July 2012 to 30 June 2013

non executive Deputy chair Mr Michael carroll 1 July 2012 to 30 June 2013

non executive Board Member Ms alexandra Gartmann 1 July 2012 to 30 June 2013

non executive Board Member Ms Helen Thornton 1 July 2012 to 30 June 2013

non executive Board Member Mr Robert Hadler 1 July 2012 to 30 June 2013

non executive Board Member Mr William Whitford 1 July 2012 to 30 June 2013


2013 $’000

2012 $’000

Depreciation & Amortisation

Office furniture and equipment 279 375

Motor vehicles 454 432

leasehold improvements 41 36

Total depreciation and amortisation 774 843

Employee expenses

Superannuation contributions 1,039 1,209

Salaries, wages and long service leave 9,560 8,683

Other employee expenses 1,189 1,111

Total employee expenses 11,788 11,003

Occupancy expenses 648 603

Office expenses 1,007 992

Marketing and promotions 1,335 1,223

Professional and information technology expenses 2,561 1,485

Motor vehicle expense 416 402

Other operating expenses 1,645 1,607

loss on sale of non current assets 97 59

auditors' remuneration: amounts paid or provided for the auditor-General for auditing the financial statements

44 43

Total operating expenses 20,315 18,260

4. OPERATING ExPENSES


Remuneration of executives

The numbers of executive officers, other than the Minister and Responsible Persons, and their total remuneration during the reporting period are shown in the first two columns in the table below in their relevant income bands. The base remuneration of executive officers is shown in the third and fourth columns. Base remuneration is exclusive of bonus payments, long-service leave payments, redundancy payments, retirement benefits, superannuation contributions and other benefits.

Income band Total Remuneration Base Remuneration

2013 No.

2012 No.

2013 No.

2012 No.

$80,000 - $89,999 0 0 0 1

$90,000 - $99,999 0 0 1 1

$110,000 to $119,999 0 1 0 0

$120,000 to $129,999 0 0 1 1

$130,000 to $139,999 1 1 0 3

$140,000 to $149,999 0 0 0 0

$150,000 to $159,999 0 0 1 1

$160,000 to $169,999 0 0 1 1

$170,000to$179,999 1 0 0 1

$180,000 to $189,999 0 1 3 1

$190,000 to $199,999 0 2 0 0

$200,000 to $209,999 0 0 0 0

$210,000 to $219,999 0 1 0 0

$220,000 to $229,999 1 2 0 0

$230,000 - $239,999 1 0 0 0

$240,000 - $249,999 1 0 0 0

$250,000 - $259,999 0 1 0 0

$260,000 - $269,000 2 1 0 0

Total number of executives 7 10 7 10

Total annualised number of executives 7 9 7 9

Total amount $’000 1,549 2,007 1,089 1,381

During the 2012/13 financial year a staffing restructure resulted in changes in responsibilities and a consequential reduction of the executive officers to 7.


Income band Total Remuneration 2013 No.

Total Remuneration 2012 No.

$0 - $9,999 1 0

$20,000 - $29,999 0 3

$30,000 - $39,999 0 1

$40,000 - $49,999 3 3

$50,000 - $59,999 1 0

$100,000 - $109,999 0 0

$110,000 - $119,999 1 1

$390,000 - $399,999 0 0

$400,000 - $409,999 0 0

$450,000 - $459,999 0 0

$480,000 - $489,999 0 1

$500,000 - $509,999 1 0

Total persons 7 9

Total amount $’000 804 833

Remuneration

The total remuneration received or receivable by the Responsible Persons (excluding the Minister) in connection with the management of the entity during the reporting period was in the range:

Related party transactions

Mr William Whitford was appointed to the Board of the corporation on 1 July 2012. Mr Whitford is also the Managing Director of Treasury corporation of Victoria (TcV). TcV, which operates out of level 12, 1 collins Street, Melbourne, Victoria is the State of Victoria’s central financing authority and also the primary finance provider for the corporation. Details of loan facilities provided by TcV are set out in note 12, while a deposit amount is also held with TcV as detailed in note 18. Transactions during the year with TcV can be seen in the cash flow Statement. all transactions between the corporation and TcV are conducted in an arm’s length manner, under normal commercial terms and in accordance with the corporation’s policy.

There was no other responsible person related transactions or loans for the current financial year or for the 2011/12 financial year.


7. LOAN DEBTORS

Note 2013 $’000

2012 $’000

Gross loan debtors 1,654,390 1,530,075

less: Specific provision for impairment 8 (55) -

Total loan debtors 1,654,335 1,530,075

Maturity analysis net of specifically provided impaired loans

not longer than three months 50,790 51,117

longer than three and not longer than 12 months 81,577 84,571

longer than one and not longer than five years 422,240 388,093

longer than five years 1,099,728 1,006,294

1,654,335 1,530,075

Analysis of impaired loans

With provisions - -

Specific provision for impairment (55) -

(55) -

Interest on impaired loans

interest income foregone (187) (205)

interest income recognised - 300

Total interest income recognised (foregone) on impaired loans (187) 95


6. INCOME TAx

Note 2013 $’000

2012 $’000

Prima facie income tax on the operating profit 13,870 13,096

Permanent differences for amounts not deductible 49 37

Timing differences not booked/(not previously recognised as a deferred tax asset) (32) 6

adjustment for a prior year under/(over) provision - (11)

Income tax expense 13,887 13,128

Deferred tax assets and liabilities

Provision for tax payable (4,334) (4,066)

Deferred tax assets 10 774 781

This benefit will only be obtained if:

(i) The corporation derives future assessable income of a nature and of sufficient amount to enable the benefit to be realised. (ii) The corporation continues to comply with the conditions for deductibility imposed by the law. (iii) no changes in tax legislation adversely affect the corporation’s ability to realise the benefit.


10. TAx ASSETS

Reconciliation of the carrying amount of deferred tax assets at the beginning and end of the current and previous financial years are set out below.

2013 $’000

2012 $’000

carrying amount at start of year 781 728

amount arising during the year (7) 53

Carrying amount at end of year 774 781


8. PROVISIONS FOR IMPAIRMENT

2013 $’000

2012 $’000

Specific provision

Opening balance - -

amounts written off (40) -

Doubtful debts (recoveries) 95 -

Total provisions for impairment 55 -

Specific provisions for impairment comprise:

Provisions against loan debtors 55 -

Total specific provision movement for the year 55 -

Bad and doubtful debts 95 -

Bad and doubtful debts recovered - -

9. OTHER ASSETS

2013 $’000

2012 $’000

(a) Other financial assets

Sundry debtors 344 3,774

accrued interest on cash - 12

Total other financial assets 344 3,786

(b) Other non-financial assets

Prepayments 109 112

Physical assets classified as held for sale 9,383 9,816

Other 10 15

Total other assets 9,502 9,943

other assets at 30 June 2013 include $9,383,121 (2012: $9,816,039) of property held on behalf of the State Government in relation to the lower loddon Irrigation recovery package.


12. INTEREST BEARING LIABILITIES

2013 $’000

2012 $’000

Treasury corporation of Victoria (TcV) # 1,294,691 1,190,574

farm management deposits 41,419 39,081

credit accounts 8,314 7,037

commonwealth Government - 84

Total interest bearing liabilities 1,344,424 1,236,776

Maturity analysis



longer than one and not longer than five years 309,140 307,800

longer than five years 19,450 39,250

1,344,424 1,236,776

# refer to note 5 for related party details and the Cash Flow Statement for transactions during the year.

The corporation’s liabilities are guaranteed by the Treasurer of Victoria in accordance with Section 23 of the Rural finance act 1988 [as amended].

The corporation has ready access and authority to utilise highly liquid sources of funding from the commercial sector, including an overdraft facility [refer note 19], and borrowings from the Treasury corporation of Victoria up to the limits established by the Treasurer.


11. PROPERTY, PLANT AND EqUIPMENT

2013 $’000

2012 $’000

Leasehold improvements

fair value at start of year 166 172

acquisition of assets 105 30

Revaluation increments (decrements) - -

Depreciation and amortisation (41) (36)

Written down value of disposals - -

Fair value at end of year 230 166

Office furniture and equipment

fair value at start of year 892 960

acquisition of assets 82 334



Written down value of disposals (27) (27)

Fair value at end of year 668 892

Motor vehicles

fair value at start of year 1,589 1,602

acquisition of assets 1,149 1,280




Fair value at end of year 1,619 1,589

Total fixed assets

fair value at start of year 2,647 2,734

acquisition of assets 1,336 1,644




Fair value at end of year 2,517 2,647


14. PROVISIONS

2013 $’000

2012 $’000

Current

eMPlOYee BenefiTS - annUal leaVe

Unconditional and expected to settle within 12 months 367 335

Unconditional and expected to settle after 12 months 122 111

employee benefits - long service leave



1,416 1,563

PROViSiOnS RelaTeD TO eMPlOYee BenefiT On-cOSTS



222 235

Total current provisions 1,638 1,798

Non-current

employee benefits - long service leave 292 211

employee benefits on-costs 46 31

Total non-current provisions 338 242

Total provisions 1,976 2,040


13. OTHER LIABILITIES

2013 $’000

2012 $’000

funds held in trust 994 1,114

Sundry creditors 1,383 1,087

accrued interest 8,062 10,571

Total other liabilities 10,439 12,772

Maturity analysis

accRUeD inTeReST



8,062 10,571


18. RECONCILIATION OF CASH FLOwS

2013 $’000

2012 $’000

(a) Cash and cash equivalents

cash at bank 6,180 6,773

Term deposit 825 825

7,005 7,598

2013 $’000

2012 $’000

(b) Reconciliation of net cash flows from operating activities to operating profit after income tax.

Operating profit after income tax 32,348 30,526

Depreciation and amortisation 774 843

increase (decrease) in other liabilities (1,509) (136)

(Decrease) increase in provision for employee benefits 367 (328)

loss on sale of non current assets 97 59

(Decrease) increase in tax payable 268 420

Decrease (increase) in deferred tax assets 7 (53)

(increase) decrease in other assets (324) 698

(Decrease) increase in administered commonwealth and State Government schemes 136 (987)

Net cash provided by operating activities 32,164 31,042

CashpertheStatementofFinancialPositionat30June2013includes$1,309,927(2012:$1,328,462)heldonbehalfof the State Government in relation to the lower loddon irrigation Recovery Package. These funds have been placed with TcV in a separate account (refer note 5 for details of related parties).


15. COMMITMENTS

2013 $’000

2012 $’000

Loan debtors

not later than one year 190,127 171,107

later than one year but not later than five years - -

190,127 171,107

Leasehold premises - operating leases

not later than one year 821 773

later than one year but not later than five years 3,109 2,973

later than five years 1,342 1,535

5,272 5,281

16. CONTINGENT LIABILITIES AND CONTINGENT ASSETS

The corporation is not aware of any contingent liabilities or contingent assets.

17. SEGMENT REPORTING

The corporation operates predominantly within the finance industry in Victoria and therefore is not required to prepare segmented financial statements.


22. FINANCIAL RISk MANAGEMENT

The corporation has exposure to market risk, credit risk and liquidity risk from their use of financial instruments.

This note presents information about the corporation’s exposure to each of the above risks, their objectives, policies and processes for measuring and managing risk, and the management of capital.

The Board of Management has overall responsibility for the establishment and oversight of the risk management system and this is documented in the Risk Management Policy and Risk Management Plan which is reviewed annually. The Board has established an audit and Risk committee and credit committee which report regularly to the Board. These committees are assisted in the area of risk management by an internal audit function and the Risk Division. On a quarterly basis the audit and Risk committee review an updated Risk Register prepared by senior management of the corporation.

(a) Market risk

Market risk is the risk that changes in market prices, such as interest rates, will affect the corporation’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters. The corporation enters into derivatives, and also incurs financial liabilities, in order to manage market risk. all such transactions are carried out within the guidelines set by the Board and in accordance with the Prudential Supervision Policy set by the Treasurer.

Interest Rate Risk

interest rate risk to the corporation is the potential loss in earnings as a result of movement in interest rates, and arises from mismatches in repricing dates, cash flows and other characteristics of the corporation’s assets and its corresponding liability funding. Under its Prudential guidelines, interest rate risk is measured based on a one per cent parallel shift in interest rates across the yield curve.

The corporation is authorised to use synthetic financial instruments such as interest rate swaps, interest rate options and forward rate agreements in order to manage its financial risk.

Additionally,theCorporation’sfixedrateborrowingsarecarriedatamortisedcostconsistentwithAASB7.Debtisraisedunder a central borrowing program with the Treasury corporation of Victoria. The corporation has developed a policy to manage its interest rate risk, and uses a combination of matched rate funding and interest rate swaps to minimise the effect of movements in interest rates on its capital. floating rate assets are funded using floating rate liabilities. The corporation has previously entered into interest rate swaps to convert part of the centrally raised fixed rate liabilities into floating rate exposures. These transactions served to more closely match interest rates to the loan assets underlying the interest rate swap exposures and reduced the risk of loss of capital as a result of movements in interest rates. By converting the fixed rate liabilities to floating rates to match its floating rate portfolio, the corporation aimed to manage its net interest margin on borrowed funds.


2013 $’000

2012 $’000

lower loddon and northern Victoria irrigation Renewal Program 10,952 11,819

first farm Grants (8) (140)

natural Disaster floods 2010, 2011 & 2012 Grants (50) 2,190

10,894 13,869

19. CREDIT FACILITIES

The corporation has an established line of credit with Treasury corporation of Victoria (refer to note 22(c) for more details) and a within the day direct credit/funds transfer facility of $16,000,000 with the national australia Bank limited. The within the day facility has not been used at year end.

20. COMMUNITY SERVICE OBLIGATIONS

community Service Obligation (cSO) costs for 2012-13 include the funding of the Young farmers’ finance Scheme. The corporation commenced absorbing the cost of providing Young farmers’ finance concessional interest rate loans for loans approved from 1 July 2003.

cSO costs of providing this assistance program to the Victorian rural community during 2012-13 are as follows:

2013 $’000

2012 $’000

Young farmers’ finance Scheme 1,518 1,432

in addition to the above identifiable costs, the corporation absorbs the costs associated with remaining in a state of readiness to administer structural adjustment and assistance programs on behalf of Government. The opportunity costtotheCorporationonanannualbasisisestimatedtobe$1.7M.

21. GOVERNMENT SCHEMES

The corporation administers a number of schemes on behalf of the commonwealth and State Governments [refer note 1(d(xiv,xv))]. administration fees received for this are disclosed in note 3. The cash flow activities of the schemes have been included in the cash flow statement. Government Schemes (assets) and liabilities are as follows:


(b) Credit risk

credit risk represents the loss that would be recognised if counterparties failed to perform as contracted.

credit risk on the loan portfolio is minimised by the corporation having stringent credit policies, including regular reporting of credit issues to its Board appointed credit committee and risk rating of its portfolio. The corporation minimises its exposure to undue concentration of credit risk by dealing with clients [primary producers and rural businesses] representing a wide range of agricultural industries; usually taking prime security in the form of a charge over real estate and having sound lending policies and procedures.

The corporation is subject to Prudential limits for industry exposure which are reported on a quarterly basis to the external Prudential Supervisor (appointed by the Treasurer) and on a monthly basis to the corporation Board. The corporation is managing the loan portfolio within these Prudential limits.

The carrying amounts, net of any provisions for impairment, of the corporation’s financial assets which have been recognised on the statement of financial position, represent the maximum credit exposure.

The corporation’s exposure to credit risk is generally limited to south east australia by geographic area where an economic benefit is provided to Victoria. all loan debtors are involved in rural activities and there is no individually significant customer within the loan portfolio.

none of the assets shown under cash assets or other assets are past due (2012: $nil past due).

The ageing of the corporation’s loan debtors at the reporting date was:

2013 $’000

2012 $’000

not past due 1,648,979 1,527,162

Past due one - 30 days 1,642 662

Past due 31 - 60 days 1,232 857

Past due 61 - 90 days 658 340

Past due more than 90 days 1,824 1,054

1,654,335 1,530,075

The corporation holds registered mortgages over relevant property as security over loan debtors. Based on the corporation’s assessment and historic default rates, the corporation believes that no impairment allowance is necessary in respect of loan debtors, other than the specific provision as shown in note 8.


at the reporting date the interest rate profile of the corporation’s interest bearing financial instruments were:

Carrying Amount

2013 $’000

2012 $’000

Fixed rate instruments

financial assets 815,081 855,892

financial liabilities (584,609) (647,239)

230,472 208,653

Variable rate instruments

financial assets 847,569 683,109

financial liabilities (760,759) (590,650)

86,810 92,459

Sensitivity analysis

faiR ValUe SenSiTiViTY analYSiS fOR financial inSTRUMenTS

Other than for interest rate swaps, the corporation does not account for any fixed or variable interest rate financial assets or liabilities at fair value through profit or loss. Therefore a change in interest rates at the reporting date would not affect profit or loss in relation to the majority of assets or liabilities as shown in the table above.

caSH flOW SenSiTiViTY analYSiS fOR inTeReST RaTe SWaPS anD VaRiaBle RaTe inSTRUMenTS

a change of 100 basis points in interest rates for the reporting year would have increased (decreased) profit and retained earnings as shown below. The analysis is performed on the same basis for 2012 and assumes all other variables remain constant.

Year ended 30 June 2013 Year ended 30 June 2012

100bp increase $’000

100bp decrease $’000

100bp increase $’000

100bp decrease $’000

net change in loan debtors 8,476 (8,476) 6,831 (6,831)

net change in interest bearing liabilities (7,608) 7,608 (5,907) 5,907

Net change in profit 868 (868) 924 (924)


Note Carrying amount $’000

Contractual cash flows

$’000

One year or less $’000

Over one to five years

$’000

More than five years

$’000

30 june 2013

interest bearing liabilities 12 1,344,424 1,344,424 1,015,834 309,140 19,450

Other liabilities 13 10,439 10,439 10,439 - -

Government Schemes 21 10,952 10,952 10,952 - -

1,365,815 1,365,815 1,037,225 309,140 19,450

30 june 2012

interest bearing liabilities 12 1,236,776 1,309,103 921,134 345,049 42,920

Other liabilities 13 12,772 12,772 12,772 - -

Government Schemes 21 14,009 14,009 14,009 - -

1,263,557 1,335,884 947,915 345,049 42,920

Typically, the corporation maintains sufficient cash on hand to meet expected operational expenses, including the servicing of financial obligations.

in addition, the corporation has an established line of credit with TcV with no daily limit. However the corporation is subject to anannualnetborrowinglimitof$370,000,000aspertheTreasurer’sdirectionwhichisreportedtotheCorporation’sBoardon a monthly basis. for the year ended 30 June 2013 new borrowings exceeded repayments by $106,000,000. The corporation also has a within the day direct credit/funds transfer facility of $16,000,000 with the national australia Bank limited.

The following are the estimated contractual maturities of financial liabilities, including estimated interest payments.

(d) Net fair value of financial assets and liabilities

financial inSTRUMenTS

The net fair value of cash and cash equivalents and non interest bearing monetary financial assets and financial liabilities of the corporation approximates the carrying amount. as loan debtors and interest bearing liabilities are held to maturity they are carried at their principal amounts.

The net fair value of other monetary financial assets and financial liabilities is based upon market prices where a market exists or by discounting the expected future cash flows by the current interest rates of the TcV yield curve.


in relation to past due loans or impaired loan debtors the fair value of collateral held by the corporation is:

Past due 2013 $’000

Total loan exposure

2013 $’000

Collateral fair value

2013 $’000

Past due 2012 $’000

Total loan exposure

2012 $’000

Collateral fair value

2012 $’000

Past due one - 30 days 1,642 7,982 54,778 662 7,097 47,121

Past due 31 - 60 days 1,232 7,217 37,699 857 4,748 29,856

Past due 61 - 90 days 658 6,009 35,933 340 3,017 20,416

Past due more than 90 days 1,824 28,204 93,254 1,054 12,323 58,582

5,356 49,412 221,664 2,913 27,185 155,975

These figures are aligned to the methodology used by the corporation. To enable meaningful comparison to security values held for these loans the above table shows the total loan debtor balance for each loan that has any amount past due. in most cases only part of the loan balance is actually past due.

The corporation recognises amounts as past due where the individual client amount outstanding exceeds $200. from our experience arrears under $200 are due to minor charging and other variations that we do not consider contractually due. collateral fair value is measured by reference to the latest recorded value of the asset secured.

all transferred loans are managed in accordance with the corporation’s normal business rules, including commercial credit procedures and interest rate determinations consistent with the balance of the corporation’s loan portfolio.

(c) Liquidity risk

liquidity risk is the risk that the corporation will not be able to meet its financial obligations as they fall due. The corporation ensures it will have enough liquidity to meet its liabilities when due under both normal and stressed conditions. To manage this risk, the corporation constructs a maturity profile of its cash flows to identify potential liquidity risks. in developing the maturity profile consideration is given to:

• TheproportionofmaturingliabilitiestheCorporationwillbeabletorolloverorrenew,aswellasthebehaviourofliabilitieswith no clearly specified maturity date such as at call deposits.

• Thetimingofreceiptproceedsfromassetsalesandthelikelyvaluesgeneratedbythesesales.

• Accesstostandbyfacilities.

The corporation also has in place policies and procedures which limit maturity mismatches.

in the event of a market failure, the corporation continues to be dependent on TcV for its source of funds and would need to reduce lending activity commensurate with available funds (from loan repayments only) until markets recover.


We, the undersigned hereby certify that:

(a) The financial statements have been prepared in accordance with Standing Direction 4.2 of the financial Management act 1994 and applicable financial Reporting Directions.

(b) We further state that, in our opinion, the information set out in the comprehensive operating statement, statement of financial position, statement of changes in equity, statement of cash flows and notes to and forming part of the financial report represents fairly the financial transactions during the year ended 30 June 2013 and financial position of Rural finance corporation of Victoria as at 30 June 2013.

(c) in our opinion the financial statements present fairly the results of the financial transactions during the financial year and the financial position of Rural finance corporation of Victoria at the end of the year in accordance with australian accounting Standards and other mandatory professional reporting requirements.

(d) at the date of signing the statements, we are not aware of any circumstances which would render any particulars included in the statements misleading or inaccurate.

For and on behalf of rural Finance Corporation of Victoria.

S. Petering chair

S. M. Brown General Manager finance & iT

R. w. Goudswaard chief executive Officer

Certification of financial statements

8 august 2013


The carrying amounts and net fair values of financial assets and financial liabilities at balance date are:

Note 2013 Carrying amount $’000

2013 Net fair value $’000

2012 Carrying amount $’000

2012 Net fair value $’000

Financial assets

cash assets 8,315 8,315 8,926 8,926

loan debtors 7 1,654,335 1,707,595 1,530,075 1,619,900

Government Schemes 1(d(xv)),21 58 58 140 140

Other assets 344 344 3,786 3,786

1,663,052 1,716,312 1,542,927 1,632,752

Financial liabilities

interest-bearing liabilities 12 1,344,424 1,364,438 1,236,779 1,265,256

Other liabilities 13 10,439 10,439 12,772 12,772

Government Schemes 1(d(xv)),21 10,952 10,952 14,009 14,009

1,365,815 1,385,829 1,263,560 1,292,037

fair value measurements recognised in the statement of financial position are categorised as market value quoted price.

(e) Capital management

The Board’s policy is to maintain a strong capital base so as to sustain future development of the corporation. The Board of Management monitor the return on capital and the level of dividends to the shareholder. capital is represented by total equity as recorded in the statement of financial position.

The Treasurer has approved the current year capital adequacy limit of 15%. The Board is managing the growth of the business in line with these requirements.

23. FINANCIAL DERIVATIVES

no derivatives were held at 30 June 2013 (2012: nil).


Appendix 1CORPORATE GOVERNANCE

AUDIT AND RISk COMMITTEE

This committee is convened by Ms Helen Thornton and as at 30 June 2013 comprises Ms Sonia Petering, Ms alex Gartmann and Mr Bill Whitford. in addition, the ceO, representatives from management and the internal and external auditors attend meetings of the audit and Risk committee which are held at least four times a year.

The primary function of the audit and Risk committee is to assist the Board in discharging its responsibilities relating to risk management and overseeing accounting and reporting practices of Rural finance. in particular, the audit and Risk committee oversees:

• Accountingandbusinesspolicies,financialperformance and financial reporting processes including annual financial statements.

• Thescopeofwork,performanceandindependenceofinternal and external audit.

• Theoperationandimplementationoftheriskmanagementsystem framework.

• Accountability,managementinformationsystemsand internal controls.

• Compliancewithlawsandregulations.

• TheComplianceplanandthefinancialmanagementcompliance framework and our internal code of conduct.

CREDIT COMMITTEE

This committee is convened by Mr Michael carroll and consists of Mr Robert Hadler, Mr Bill Whitford, Ms Helen Thornton, and Mr Rob Goudswaard as at 30 June 2013.

The committee usually meets monthly and assists the Board in discharging its responsibilities by overseeing and monitoring lending activity, the exercise of lending authorities and the management of the loan and debt portfolios of Rural finance.

in fulfilling its function, the credit committee amongst other things:

• Assessesandapprovesloanapplicationsandlendingdelegations.

• Monitorstheassetqualityoftheloanportfoliowithintheindustry segments and ensures that industry exposure limits meet Prudential Standard Policy requirements.

• Ensuresthatcreditriskpoliciesreflectbestpracticecreditrisk principles.

REMUNERATION AND CAPABILITY COMMITTEE

The role of this committee is to advise and assist the Board in the effective discharge of its responsibilities by overseeing:

• Mattersrelatingtoexecutiveremunerationpolicy,remunerationpackages and the performance management framework to ensure they meet the strategic goals of Rural finance.

• Generalstaffremuneration,recruitment,retentionandtermination policies of the organisation.

• Monitoringexecutiveperformance,successionprograms, and development plans for the ceO and key executives.

as at 30 June 2013, the committee is convened by Mr Robert Hadler with other members being Ms Sonia Petering, Ms alex Gartmann and Mr Rob Goudswaard. This committee also meets at least four times a year.

REPORTING BY COMMITTEES TO BOARD

The charters of the Board committees require them to report to Board. This is achieved through their minutes and verbal reports from the convenors. Recommendations of the committees are brought to the Board as separate agenda items with separate Board papers and listings of any recommendations for consideration by the Board. each committee reports annually to Board on its performance against its charter.

Auditor-General’s ReportINDEPENDENT AUDITOR’S REPORT

john Doyle auditor-General

MelBourne 8 august 2013

TO THE BOARD MEMBERS, RURAL FINANCE CORPORATION OF VICTORIA

The Financial Report

The accompanying financial report for the year ended 30 June 2013 of the Rural finance corporation of Victoria which comprises comprehensive operating statement, statement of financial position, statement of changes in equity, statement of cash flows, notes comprising a summary of significant accounting policies and other explanatory information, and the certification of the financial statements has been audited.

The Board Members’ Responsibility for the Financial Report

The Board Members of the Rural finance corporation of Victoria are responsible for the preparation and fair presentation of the financial report in accordance with australian accounting Standards, and the financial reporting requirements of the financial Management act 1994, and for such internal control as the Board Members determine is necessary to enable the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

as required by the audit act 1994, my responsibility is to express an opinion on the financial report based on the audit, which has been conducted in accordance with australian auditing Standards. Those standards require compliance with relevant ethical requirements relating to audit engagements and that the audit be planned and performed to obtain reasonable assurance about whether the financial report is free from material misstatement.

an audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The audit procedures selected depend on judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. in making those risk assessments, consideration is given to the internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. an audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of

accounting estimates made by the Board Members, as well as evaluating the overall presentation of the financial report.

i believe that the audit evidence i have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Independence

The auditor-General’s independence is established by the ConstitutionAct1975.TheAuditor-Generalisnotsubject to direction by any person about the way in which his powers and responsibilities are to be exercised. in conducting the audit, the auditor-General, his staff and delegates complied with all applicable independence requirements of the australian accounting profession.

Opinion

in my opinion, the financial report presents fairly, in all material respects, the financial position of the Rural finance corporation of Victoria as at 30 June 2013 and of its financial performance and its cash flows for the year then ended in accordance with applicable australian accounting Standards, and the financial reporting requirements of the financial Management act 1994.

Matters Relating to the Electronic Publication of the Audited Financial Report

This auditor’s report relates to the financial report of the Rural finance corporation of Victoria for the year ended 30 June 2013 included both in the Rural finance corporation of Victoria’s annual report and on the website. The Board Members of the Rural finance corporation of Victoria are responsible for the integrity of the Rural finance corporation of Victoria’s website. i have not been engaged to report on the integrity of the Rural finance corporation of Victoria’s website. The auditor’s report refers only to the subject matter described above. it does not provide an opinion on any other information which may have been hyperlinked to/from these statements. if users of the financial report are concerned with the inherent risks arising from publication on a website, they are advised to refer to the hard copy of the audited financial report to confirm the information contained in the website version of the financial report.


Appendix 2THE wORkPLACE

Rural finance is committed to ensuring staff enjoy the benefits of a safe and productive workplace, and a culture which values the contribution of each and every member of its skilled and highly competent workforce.

Rural finance maintains a comprehensive range of policies that clearly articulate the values of the corporation. During the year several policies were revised to strengthen employment terms and conditions for staff as part of the employee value proposition, including flexible Work & leave Options, Dress code, Use of Social Media, and Health & Wellbeing. Rural finance remains committed to the values of equal opportunity, to the provision of a workplace free of harassment and discrimination, and to the right of every individual to the protection of their privacy.

Rural finance is committed to building a culture that values inclusion and diversity of backgrounds and experiences; a culture that reflects the rural and regional communities where staff live and service their clients.

The results from the annual staff survey (completed by 92 per cent of staff) showed an improvement from the previous year’s results in the overall engagement and alignment of staff, supporting the emphasis and importance Rural finance has on maintaining a safe, healthy, productive and vibrant workplace.

OCCUPATIONAL HEALTH AND SAFETY

Rural finance is subject to the employer obligations contained in the Occupational Health and Safety act 2004 and related Regulations and codes of Practice.

Rural finance is committed to providing a safe and healthy workplace for all staff. in the event of a work-related injury, all necessary steps are taken to ensure a similar injury does not happen again. if a staff member incurs a work-related injury that renders them unable to continue their normal work, assistance is provided for them to remain at work in some other capacity, or return to work as soon as it is safely possible. During 2012/13 eight work related injuries were reported however none resulted in lost time.

Two years on from the significant

organisational restructure and

operational changes undertaken by

Rural Finance, and a subsequent

workflow realignment project undertaken

in 2012, the focus remains on ensuring

our people are capable, aligned and

engaged. This objective continues to

be one of the key drivers of the strategy

to achieve our 2020 objectives.

During the year Rural finance continued to strengthen its performance efforts and assisted with alignment of all roles to the vision and mission and build engagement through:

• Continuingtodevelopandenhancestaffcompetenceand confidence to deliver the value propositions to all key stakeholders (such as family corporates, government and prospective staff).

• SuccessfullaunchoftheaG acHieVeRS graduate program as part of the regional workforce planning approach.

• Continuingtoinvestinanddevelopresidentsubjectmatterand skilled experts through knowledge sharing, development programs and learning opportunities such as secondments, project work and attendance at industry forums.

• Undertakingaworkflowrealignmentprojectwiththeresulting operating system transition of many ‘client-facing’ roles, allowing staff to spend more time servicing our clients in process efficient ways.

Appendix 1CORPORATE GOVERNANCE

ATTENDANCE BY DIRECTORS AT MEETINGS 2012/13

Members Meetings available for attendance Meetings attended

Board

Sonia Petering (chair) 12 12

Michael carroll (Deputy chair) 12 10

alexandra Gartmann 12 12

Rob Goudswaard 12 12

Robert Hadler 12 12

Helen Thornton 12 12

William Whitford1,2 12 101 appointed 1 July 2012 2 leave of absence granted for one meeting

Audit and Risk Committee

Helen Thornton (convenor) 5 5

alexandra Gartmann1 4 3

Sonia Petering 5 5

William Whitford2 4 31 appointed 23 august 2012 2 appointed 1 July 2012

Credit Committee

Michael carroll (convenor) 23 20


Rob Goudswaard 23 22

Robert Hadler 23 18

Helen Thornton 23 21

William Whitford2,3 23 201 retired from the Committee 23 august 2012 2 appointed 1 July 2012 3 leave of absence granted for one meeting

Remuneration and Capability Committee

Robert Hadler (convenor) 5 5


Rob Goudswaard 5 5

Sonia Petering 5 51 retired as Convenor and replaced by robert Hadler on 26 June 2013

IDENTIFICATION AND MANAGEMENT OF RISkS

Rural finance complies with the Prudential Standard established by the Department of Treasury and finance. it also complies with its own standards, policies and procedures as set by the Board and the audit and Risk committee, which are overseen by the General Manager Strategy and Risk. Risk management involves the identification, evaluation and monitoring of Rural finance activities and, in particular, reporting as follows:

• TotheTreasurerandtheParliamentof Victoria as Rural finance’s sole shareholder directly or through the Treasurer’s Department of Treasury and finance.

• TothePrudentialSupervisorwhointurnreports to the Treasurer. The Prudential Supervisor oversees Rural finance’s Prudential Standard and provides independent advice.

• TotheTreasureronRuralFinance’soperations. The Treasurer has appointed KPMG as Rural finance’s Prudential Supervisor.

The auditor-General oversees the external audit of Rural finance. The auditor-General has appointed HlB Mann Judd to provide audit assistance. liaison with Rural finance’s internal auditor, ernst & Young during 2012/13, is an essential part of the compliance process.


Rural Finance has an emphasis on maintaining a safe, healthy, productive and vibrant workplace.

STAFF INVOLVEMENT IN VOLUNTEER wORk

Board and management support and encourage staff to achieve a balanced lifestyle and to actively participate within their communities in worthwhile activities. One means of doing so is by providing time away from normal duties to enable staff participation in voluntary community work.

The Rural finance leave policy allows staff to apply for leave to enable them to participate in a range of community service programs and offer their services in voluntary emergency management situations.

Rural finance staff actively seek to support established charities by incorporating voluntary fundraising events into the workplace, such as participating in the Red cross ‘clash of the Suits’ blood donation competition, supporting cancer research through the hosting of an annual Biggest Morning Tea, participating in Relay for life, and supporting Red nose Day.

MULTICULTURAL ACTIVITIES

Rural finance provides where required:

• Interpretationandtranslationservicesfreeofchargetoclients.

• Relevantbrochuresinethnicfarmingcommunitylanguagesas required.

The Rural finance leave policy allows staff to swap a main stream public holiday for one of personal cultural significance.

Classification Female Male Total

Head Office

casual 1 0 1

Permanent 29 23 52

Part time 5 1 6

contract 3 1 4

Total 38 25 63

Regional Staff

casual 1 0 1

Permanent 14 28 42

Part time 12 1 13

contract 2 2 4

Total 29 31 60

Grand Total 67 56 123

EMPLOYMENT CATEGORY BREAkDOwN AS AT 30 jUNE 2013

Classification Female Male Total

Head Office

administration 19 0 19

Manager 6 14 20

Professional 13 11 24

Total 38 25 63

Regional Staff

administration 25 5 30

Manager 0 4 4

Professional 4 22 26

Total 29 31 60

Grand Total 67 56 123

OCCUPATIONAL CATEGORY BREAkDOwN AS AT 30 jUNE 2013

CODE OF CONDUCT

Staff are encouraged to use the Victorian Public Sector code of conduct as a frame of reference in their daily activities and interactions with clients, colleagues and stakeholders. additionally, there are a number of specific Rural finance policies that include behavioural and performance expectations and requirements of all staff, notably the Use of Social Media policy, and the Workplace Bullying, Harassment and Discrimination policy.

EqUAL OPPORTUNITY AND DISCRIMINATION

Rural finance is subject to commonwealth and State legislation prohibiting unlawful discrimination or harassment. Rural finance upholds equal opportunity principles in the workplace and recruitment and promotional practices are based on skills, competence and experience. The Rural finance equal Opportunity & Diversity policy was updated during the year.

BULLYING, INTIMIDATION AND HARASSMENT

Rural finance is committed to providing all employees (whether full time, part time, casual or trainees), consultants, contractors and visitors with a workplace free from bullying, intimidation and harassment. This commitment is supported by the Rural finance Workplace Bullying, Harassment and Discrimination policy which was revised during the year.

PRIVACY

as a statutory authority of the Victorian Government, Rural finance supports everyone’s right to privacy by:

• Ensuringthatallstaffmembershavetheirprivacyrespected.

• Ensuringthattheprivacyofthosemembersofthepublic who deal with Rural finance is assured.

Staff are aware of the need to ensure compliance with the information Privacy act 2000.

STAFF LEARNING AND DEVELOPMENT

Rural finance recognises that the effective delivery of our business goals and objectives depends on the capabilities of our people. capability building remains central to organisational performance and productivity with learning and development opportunities an integral part of Rural finance’s workforce planning approaches.

learning and development undertaken by staff during the year included:

• WilliamsonCommunityLeadershipProgram.

• MarcusOldhamRuralLeadershipProgram.

• RuralFinanceAGAchieversGraduateProgram.

• Salestraining.

• ManagementTransitiontraining.

• OHStraining.

• OccasionalCounsellortraining.

• Projectmanagementandbusinesswritingcourses.

• Workshopsonresilience,personaldevelopment, managing change, and understanding personality types.

• ITandsoftwareusagetraining.

• ConferencesincludingABARE,VictorianFarmersFederation,institute of Public administration australia and Grasslands.

• AustralianInstituteofCompanyDirectorscourse.

• VictorianGovernmenttrademissiontoChina.

• StudyintoCanadianagriculture.

Several staff also undertook further formal studies at undergraduate and postgraduate levels. Disciplines included agribusiness, management and applied finance.

Appendix 2THE wORkPLACE


AUDIT ACT 1994

Rural finance is subject to the provisions of the audit act 1994 and in particular to external audit by the Victorian auditor-General’s office.

FINANCIAL MANAGEMENT ACT 1994

The 2013 Rural finance annual Report has been prepared in accordance with the financial Management act 1994.

FREEDOM OF INFORMATION (FOI)

The freedom of information act 1982 does not apply to Rural finance.

INFORMATION PRIVACY ACT 2000/HEALTH RECORDS ACT 2001

Rural finance is subject to the information Privacy act 2000 and the Health Records act 2001, which make provision for the responsible collection and handling of personal and health information in the Victorian public sector.

a comprehensive statement of the privacy principles as they apply to Rural finance for safeguarding the privacy of our clients’ affairs and dealings can be found on our website.

MERIT AND EqUITY PRINCIPLES

Rural finance is committed to the principles of merit and equity as set out in the Public administration act 2004.

PUBLIC ADMINISTRATION ACT 2004

Rural finance is a public entity for the purposes of the act and is required by the act to give effect to the public sector values and employment principles contained in Part 2 of the act (sections 7–8);tocomplywith“aspecifiedwholeofGovernmentpolicy”(section 92); to provide financial information to the Treasurer (section 93); to provide non–financial information to the Premier (section 94) and to maintain certain documentation (section 95).

VICTORIAN INDUSTRY PARTICIPATION POLICY ACT 2003

Rural finance did not commence or complete any contracts in 2012/13 to which the Victorian industry Participation Policy applied.

wHISTLEBLOwERS PROTECTION ACT 2001

The Whistleblowers Protection act 2001 commenced operation on 1 January 2002 and was repealed on 10 february 2013 by the Protected Disclosure act 2012. The purpose of the Whistleblowers Protection act was to encourage and facilitate the making of disclosures of improper conduct by public officers and public bodies. The act provided protection to Whistleblowers who make disclosures in accordance with the act, and establishes a system for the disclosed matters to be investigated and rectifying action to be taken. Disclosures may be made by employees or by members of the public. Rural finance has been committed to the aims and objectives of the act. it does not tolerate improper conduct by its employees, officers or members, nor the taking of reprisals against those who come forward to disclose such conduct.

Rural finance recognises the value of transparency and accountability in its administrative and management practices and supports the making of disclosures that reveal corrupt conduct, conduct involving a substantial mismanagement of public resources or conduct involving a substantial risk to public health and safety or the environment. Rural finance will take all reasonable steps to protect people who make such disclosures from any detrimental action in reprisal for making the disclosure. it will also afford natural justice to the person who is the subject of the disclosure.

Appendix 3COMPLIANCE

Consultancies Engaged over $10,000

Summary of Projects Total Project Fees $

Expenditure for year $

Future Commitments $

Byron consulting Pty ltd Support for the due diligence and selection process for a provider of a new transaction platform

430,162 25,562 nil

Herbert Smith freehills Specialist legal advice 48,710 48,710 nil

Staite Henningsen Klein Rural finance brand enhancement assistance 30,069 30,069 nil

Right Management consultants Pty ltd

Workflow realignment review 26,052 26,052 nil

Hay Group Pty limited executive remuneration review and strategic planning assistance

21,050 21,050 nil

Peter collins and associates Pty ltd

assistance with strategic planning 14,185 14,185 nil

infact consulting Pty ltd assistance with due diligence process to select new transaction platform

13,820 13,820 99,000

RG ashby & co Pty ltd assistance with Young farmer initiative Scheme 12,834 12,834 24,910

KPMG assistance with strategic planning 10,304 10,304 nil

DETAILS OF CONSULTANCIES OVER $10,000

BUILDING wORkS AND SERVICES

Rural finance complies with the provisions of the Building act 1993, and provides the following information in relation to the buildings it occupies:

• RuralFinanceleasesallofitsofficepremises.

• Allbuildingsaresafeandinserviceablecondition.

• Regularbuildinginspectionsandmaintenanceworksareundertaken to ensure safety requirements of the above mentioned act are met, including essential services.

COMPETITION POLICIES

The competition code Victoria and the fair Trading act 1999 (Victoria) and regulations apply to Rural finance as well as the competitive neutrality Policy Victoria 2000. Rural finance is subject to the national Tax equivalent Regime.

Rural finance is subject to the usual commonwealth and State taxes, charges and fees. in the case of Goods and Services Tax, Rural finance is input taxed and recovery of the tax is therefore limited.

CONSULTANCIES

Rural finance was involved with 20 consultancy firms during the 2012/13 financial year. The total cost of consultants was $242,890 (GST exclusive).

DETAILS OF CONSULTANCIES UNDER $10,000

in the 2012/13 financial year there were 11 consultants engaged where the total fees payable to each consultant was less than $10,000. The total cost of these consultancies was $40,304. all figures are excluding GST.


PROTECTED DISCLOSURE ACT 2012

The Protected Disclosure act 2012 came into operation on 10 february 2013. The purposes of the act are to encourage and facilitate disclosures of improper conduct by public officers and public bodies and of detrimental action taken in reprisal for a person making a disclosure under the act and to provide protection to persons who make those disclosures and who may suffer detrimental action in reprisal for making them. The act applies to public bodies within the meaning of the act, which includes Rural finance.

The independent Broad-Based anti-corruption commission (‘iBac’) has a key role in receiving, assessing and investigating disclosures about corrupt or improper conduct under the act. Depending on its nature, a disclosure may be made to iBac, public service bodies and certain other investigating entities and public bodies. Rural finance is not an entity under which a disclosure may be made under the act and so is not permitted to assess or investigate disclosures. accordingly, Rural finance’s role is to ensure that staff making disclosures under the act are protected from detrimental action and that any disclosures made to Rural finance are handled appropriately and in particular are notified to iBac for assessment and investigation.

as at the date of this report, Rural finance is in the process of implementing procedures that reflect its role and responsibilities under the act including the handling of disclosures made to it and where appropriate, notification to iBac. Those procedures will be readily available and accessible by staff and the public on its website and upon request to Rural finance.

INFORMATION AVAILABLE ON REqUEST

The following information is retained by the chief executive Officer and is available on request:

• Astatementthatdeclarationsofpecuniaryinterestshavebeen duly completed by all relevant officers.

• Detailsofpublicationsproducedbytheentityaboutitself, and how these can be obtained.

• Detailsofchangesinprices,fees,charges,ratesandleviescharged by the entity.

• Detailsofanymajorexternalreviewscarriedouton the entity.

• Detailsofoverseasvisitsundertakenincludingasummary of the objectives and outcomes of each visit.

• Detailsofmajorpromotional,publicrelationsandmarketingactivities undertaken by the entity to develop community awareness of the entity and its services.

• Detailsofassessmentsandmeasuresundertakentoimprovethe occupational health and safety of employees.

• Ageneralstatementonindustrialrelationswithinthe entity and details of time lost through industrial accidents and disputes.

Number Type

Disclosures made to Rural finance nil nil

Disclosures referred to Rural finance for determination as to whether they are public interest disclosures

nil nil

Disclosures referred to Rural finance by the Ombudsman

nil nil

Disclosures referred by Rural finance to the Ombudsman to investigate

nil nil

investigations taken over by the Ombudsman from Rural finance

nil nil

Requestsunders.74totheOmbudsmanto investigate disclosures

nil nil

Disclosures that Rural finance has declined to investigate

nil nil

Disclosures that were substantiated on investigation and the action taken on the completion of the investigation

nil nil

any recommendations of the Ombudsman under the act that relate to Rural finance

nil nil

DISCLOSURES MADE UNDER THE wHISTLEBLOwERS PROTECTIONS ACT FOR 2012/13

Appendix 3COMPLIANCE


Appendix 5DISCLOSURE INDEx

The Rural Finance Corporation of Victoria Annual Report 2013 is prepared in accordance with all relevant Victorian legislations and pronouncements. This index has been prepared to facilitate identification of the Corporation’s compliance with statutory disclosure requirements.

Legislation Requirement Page reference

MINISTERIAL DIRECTIONS

Report of operations

CHarter anD purpoSe

fRD 22D Manner of establishment and the relevant Ministers 06, 35

fRD 22D Objectives, functions, powers and duties 06,07

fRD 22D nature and range of services provided 06

ManaGeMent anD StruCture

fRD 22D Organisational structure 08

FInanCIal anD otHer InForMatIon

fRD 10 Disclosure index 67-68

fRD 21B Disclosures of Responsible Persons, executive Officers and Other Personnel in the financial Report 35

fRD 22D Operational and budgetary objectives and performance against objectives 15-22

fRD 22D employment and conduct principles 59, 60

fRD 22D Occupational health and safety policy 59

fRD 22D Summary of the financial results for the year 14

fRD 22D Significant changes in financial position during the year 14, 15

fRD 22D Major changes or factors affecting performance 02, 03

fRD 22D application and operation of freedom of information act 1982 63

fRD 22D compliance with building and maintenance provisions of Building act 1993 62

fRD 22D Statement of national competition Policy 62

fRD 22D application and operation of the Whistleblowers Protection act 2001 63

fRD 22c Details of consultancies 62

fRD 22D Statement of availability of other information 64

fRD 24c Reporting of office-based environmental impacts 66

fRD 25 Victorian industry Participation Policy disclosures 63

fRD 29 Workforce Data disclosures 61

SD 4.5.5 Risk management attestation, Prudential Standards attestation 13

SD 4.2(g) General information requirements 14-22

SD 4.2(j) Sign-off requirements 13

Appendix 4ENVIRONMENTAL REPORTING

Rural Finance is committed to

reducing environmental impacts

through the environment policy,

setting key objectives and targets,

developing an action plan to achieve

these goals and monitoring and

reporting on these achievements.

as a government agency, Rural finance is making environmental issues central to planning, operations and policy decisions.

Some of the new environmental and continued initiatives undertaken for the year include:

• Furtherincreasedthenumberoffourcylinderanddieselvehiclesinthecarfleetfrom78percentattheendofthe2011/12 financial year to 84 per cent at the end of the 2012/13 financial year.

• Foodscrapbucketsandotherrecyclinginitiativesineachoffice has resulted in a recycling rate at 84 per cent of total waste.

• UsingGreenPowerelectricityforourregionaloffices.

• Airconditioningmanagedtosaveenergyasappropriate.

• BoardandCommitteepapersdistributedelectronically rather than printed on paper.

Actual 2011/12

Actual 2012/13

Energy consumption

Total kWh 350,319.70 342,458.51

% of Green Power 41% 40%

Mj per m2 456.36 446.12

Mj per fTe 11,245.22 10,992.87

Tonnes co2 emissions 300.04 273.58

water consumption

Total kl 581.00 569.00

litres per m2 210.24 205.90

litres per fTe 5,180.56 4,787.55

Total waste generation

Kg of waste 11,181.36 11,592.00

Kg per fTe 99.7 97.53

Tonnes co2-e 25.94 27.00

Recycling rate

Kg Recycled 9,372.96 9,384.00

% of total waste recycled 84% 81%

Paper purchase

Reams 1,986.05 1,833.00

Reams per fTe 17.71 15.42

Fuel usage (unleaded and diesel)

litres 175,168.34 186,919.00

Tonnes co2 emissions 435.72 468.30

Total Tonnes Co2 emissions 761.70 768.88

Unit of Greenhouse Gas Emissions per FTE per $profit (before Tax and Community Service Obligations)

15.06 13.53


Appendix 5DISCLOSURE INDEx

Legislation Requirement Page Reference

MINISTERIAL DIRECTIONS

Financial Report

FInanCIal StateMentS requIreD unDer part 7 oF tHe FMa

SD 4.2(a) financial statement requirements 27

SD 4.2(b) Operating statement 23

SD 4.2(b) Statement of financial position 24

SD 4.2(b) Statement of changes in equity 25

SD 4.2(b) cash flow statement 26

SD 4.2(b) notes to the financial statements 27-54

otHer requIreMentS unDer StanDInG DIreCtIonS 4.2

SD 4.2(c) compliance with australian accounting standards and other authoritative pronouncements 27

SD 4.2(c) compliance with Ministerial Directions 27

SD 4.2(d) Rounding of amounts 31

SD 4.2(c) accountable officer’s declaration 13

SD 4.2(f) compliance with Model financial Report 27

otHer DISCloSureS aS requIreD BY FrDS In noteS to tHe FInanCIal StateMentS

fRD 21a Responsible person and executive officer disclosures 35, 36

fRD 103D non-current physical assets 42

fRD 106 impairment of assets 28, 29

fRD 110 Statement of cash flows 26

LEGISLATION

audit act 1994 63

freedom of information act 1982 63

Building act 1983 62

Protected Disclosure act 2012 65

Victorian industry Participation Policy act 2003 63

financial Management act 1994 63

Multicultural Victoria act 2004 61

Corporate InformationRuRal Finance coRpoRation oF VictoRia as at 30 June 2013

Regional oFFices

Ballarat 1 Ascot St North, Ballarat West 3353 P: (03) 5334 4511 F: (03) 5334 4869

colac 35 Bromfield St, Colac 3250 P: (03) 5232 2680 F: (03) 5232 2970

Horsham 56 Hamilton St, Horsham 3400 P: (03) 5381 0052 F: (03) 5381 0065

leongatha Shop 2, 9 Peart St, Leongatha 3953 P: (03) 5662 5910 F: (03) 5662 5795

Mildura 158A Eighth St, Mildura 3500 P: (03) 5023 3025 F: (03) 5023 8080

shepparton 56A Wyndham St, Shepparton 3630 P: (03) 5821 2655 F: (03) 5831 2097

swan Hill 118 Curlewis St, Swan Hill 3585 P: (03) 5032 9900 F: (03) 5032 4471

traralgon 66 Church St, Traralgon 3844 P: (03) 5176 1761 F: (03) 5176 1682

Warrnambool 200 Lava St, Warrnambool 3280 P: (03) 5562 9611 F: (03) 5562 0744

Wodonga Unit 1, 22 Stanley St, Wodonga 3690 P: (02) 6056 9063 F: (02) 6056 9071

exteRnal auditoRs

HLB Mann Judd on behalf of the Auditor-General, Victoria

inteRnal auditoRs

Ernst & Young

BankeRs

National Australia Bank Limited

audit and Risk coMMittee

Ms HL Thornton (Convenor) Ms AEM Gartmann Ms SA Petering Mr WA Whitford

cRedit coMMittee

Mr MD Carroll (Convenor) Mr RW Goudswaard Mr RJ Hadler Ms HL Thornton Mr WA Whitford

ReMuneRation and capaBility coMMittee

Mr RJ Hadler (Convenor) Ms AEM Gartmann Mr RW Goudswaard Ms SA Petering

RegisteRed Head oFFice

57 View St, Bendigo 3550 P: (03) 5448 2600 F: (03) 5441 8901 E: [email protected] W: www.ruralfinance.com.au

ResponsiBle to

The Hon. Michael O’Brien MP, Treasurer of Victoria

cHaiR

Ms SA Petering

cHieF executiVe oFFiceR and BoaRd MeMBeR

Mr RW Goudswaard

BoaRd MeMBeRs

Mr MD Carroll (Deputy Chair) Ms AEM Gartmann Mr RJ Hadler Ms HL Thornton Mr WA Whitford

executiVe leadeRsHip teaM

Mr RW Goudswaard, Chief Executive Officer Mr SM Brown, General Manager Finance & Information Technology Ms KE Dalton, Executive Officer Mr PF Nee, General Manager Operations Ms JG Russell, General Manager People & Marketing Mr AK Smith, General Manager Agribusiness Mr AM Wilson-Annan, General Manager Strategy & Risk

secRetaRy

Mr PW Goffin

RURAL FINANCE AnnuAl RepoRt 2013 69

RegisteRed Head oFFice57 View Street, Bendigo, Victoria 3550 p (03) 5448 2600 F (03) 5441 8901 e [email protected] ruralfinance.com.au

Documents

We believe in a bright future for Victorian Agriculture. · RURal finance annual report 2013 05 CLIENTS • 68 per cent of Rural Finance clients are in the family farm and family