Accountability

Legislation, Functions, and Powers

Enabling legislation

The Australian War Memorial is established as a corporation by the Australian War Memorial Act 1980 (the Act). The functions of the Memorial and the powers of the Memorial, the Minister, the Council, the Chair, and the Director are outlined in the Act.

Functions of the Memorial

The functions of the Memorial are detailed in subsection 5(1) of the Act. They are:

(a) to maintain and develop the national memorial referred to in subsection 6(1) of the Australian War Memorial Act 1980 as a national memorial to Australians who have died:

(i) on or as a result of active service; or

(ii) as a result of any war or warlike operations in which Australians have been on active service;

(b) to develop and maintain, as an integral part of the national memorial referred to in paragraph (a), a National Collection of historical material;

(c) to exhibit, or to make available for exhibition by others, historical material from the memorial collection or historical material that is otherwise in the possession of the Memorial;

(d) to conduct, arrange for, and assist research into matters pertaining to Australian military history; and

(e) to disseminate information relating to:

(i) Australian military history;

(ii) the national memorial referred to in paragraph (a);

(iii) the memorial collection; and

(iv) the Memorial and its functions.

Powers of the Memorial

The powers of the Memorial are detailed in section 6 of the Act. They are:

to do all things necessary or convenient to be done for or in connection with the performance of its functions, including the power:

(a) to purchase, take on hire, accept as a gift, or take on deposit or loan historical material;

(b) to lend or hire out or otherwise deal with (other than by way of disposal) historical material;

(c) to accept gifts, devises, bequests, or assignments made to the Memorial, whether on trust or otherwise, and whether unconditionally or subject to a condition, to act as a trustee or to comply with the condition, as the case may be;

(d) to collect and make available (whether in writing or in any other form and whether by sale or otherwise) information relating to Australian military history;

(e) to make available (whether by sale or otherwise) reproductions, replicas, or other representations (whether in writing or in any other form) of historical material;

(f) to make available (whether in writing or in any other form and whether by sale or otherwise) information relating to the Memorial and its functions;

(g) to provide facilities to stimulate interest in Australian military history;

(h) to assist educational institutions in matters relating to Australian military history;

(j) to train members of the staff of the Memorial, and other such persons as the Council approves, in developing, caring for, and undertaking research in relation to the Memorial collection;

(k) to assist, on request, in the creation and maintenance of military museums in Defence Force establishments;

(m) to occupy, use, and control any land or building owned or held under lease by the Commonwealth and made available to the Memorial under section 7;

(n) to erect buildings;

(o) to purchase or take on hire, or to accept as a gift or on deposit or loan, and to dispose of or otherwise deal with furnishing, equipment, and other goods;

(p) to act as trustee of monies or other property vested in the Memorial on trust; and

(q) to act on behalf of the Commonwealth or of an authority of the Commonwealth in the administration of a trust relating to historical material or related matters.

Responsible Minister

The Minister for Veterans' Affairs has portfolio responsibility for the Memorial. Senator the Honourable Michael Ronaldson was the minister responsible for the Memorial for 2014—15.

Powers of the Minister

The Minister has the following powers under the Act:

(a) to make available to the Memorial for the purposes of the Memorial land owned or held under lease by the Commonwealth, and any building, structure or other improvements on that land [subsection 7(1)];

(b) on behalf of the Commonwealth, to make arrangements, in writing, with the Memorial for:

(i) the transfer of the ownership of historical material from the Commonwealth to the Memorial for the purpose of inclusion of the material in the Memorial's collection;

(ii) the deposit in the custody of the Memorial of historical material owned by the Commonwealth; and

(iii) the transfer to the Memorial of the ownership of, or the deposit in the custody of the Memorial of, such other goods or equipment owned by the Commonwealth as he or she considers to be of use to the Memorial, upon such terms and conditions as are specified in the arrangement [subsection 7(2)].

(c) to approve the disposal of historical material if the value of that material exceeds $5,000 [subsection 8(4)];

(d) to approve the appointment of a deputy to a member of Council [subsection 12(1)];

(e) to convene a meeting of Council at any time [subsection 17(2)];

(f) to grant leave of absence to the Director [section 23];

(g) to appoint a person to act in place of the Director, determine terms and conditions of the appointment, and terminate such an appointment [section 26];

(h) to approve contracts under which the Memorial is to pay or receive:

(i) in the case of historical material, an amount exceeding $250,000*; or

(ii) in any other case an amount exceeding $150,000* [section 35]; and

(i) to delegate his or her powers under the Act [section 39].

* Note: the financial limits in this clause were amended by a Regulation to $1,000,000 for both historical material and any other case.

Internal and External Audits

Internal audit

The Memorial's internal audit services are outsourced to PricewaterhouseCoopers.

The Internal Audit Plan 2014—15 was approved by Council in May 2014 and work was completed as follows:

• Risk management review of major events planning and management
• Work health and safety management and compliance
• Review of collection management — high-risk items

The reviews resulted in no major concerns or weaknesses being identified. Minor recommended actions have been addressed or incorporated into the 2015—16 Business Plan.

The Internal Audit Plan 2015—16 was approved by Council in May 2015. The new plan will include:

• Review of collection management in the Research Centre
• Review and update of the Fraud Risk Assessment and Fraud Control Plan
• Review of collection management — high-value and high-risk items
• Review of IT security and infrastructure
• Review of systems, controls, and procedures to manage staff entitlements

External audit

The audit of the 2014—15 Financial Statements was undertaken by Ernst & Young on behalf of the ANAO and resulted in a favourable report and unqualified audit certificate. The ANAO audit certificate for the Memorial's 2014—15 Financial Statements is at page 68.

Fraud Control

As required by the Commonwealth Fraud Control Guidelines 2011, the Memorial implements practices and procedures for effective fraud control. During 2014—15 the Memorial implemented the prevention, detection, and reporting procedures and processes as outlined in the Memorial's Fraud Control Plan 2014—17, which is based on the Fraud Risk Assessment undertaken in December 2010. All reasonable measures were taken to minimise the incidence of fraud at the Memorial.

The Memorial has identified one significant fraud risk. It relates to the potential loss of collection items in storage. The strategies in place to manage this risk include:

• continuous improvements to the stocktake program;
• adherence to collection movement and security plans;
• high-quality security arrangements with controlled access; and
• continual pursuit of funding to ensure regular improvements to storage area security systems and stocktake procedures.

There were no fraud incidents reported during 2014—15.

An enterprise-wide Fraud Risk Assessment was undertaken in January 2014 and the Fraud Control Plan was updated for 2014—17. One significant fraud risk was identified — the misuse of entitlements including leave, flex, and time off in lieu. The Head of Human Resources is responsible for ensuring controls are in place and for reporting against them every six months. Controls include:

• a formal leave approval process in place;
• reconciliation of staff absences to leave applications submitted;
• timely updating of leave records;
• managers/supervisors are supported to proactively manage staff flex leave balances; and
• regular undertaking of reviews for spot audits and controls for leave and entitlements.

Effects of Ministerial Directions

Government policy order under section 22 of the Public Governance, Performance and Accountability Act 2013

Under section 22 of the Public Governance, Performance and Accountability Act 2013 Council must ensure that the Memorial complies with the Government Policy Order to the extent that the Order applies to the authority. There are no General Policy Orders currently in effect.

Indemnities and Insurance Premiums

The total insurance premium for 2014—15 was $278,762.65 (excluding GST), which remained relatively steady when compared to the premium for 2013—14. This figure includes the benchmarking discount of $24,042.75. The policy provided comprehensive cover for property and general liability (including professional indemnity), with the premiums being $161,531.97 and $140,383.78 respectively. Council members are provided with indemnity insurance through directors' and officers' liability cover.

Legal Actions

There were no legal actions taken against the Memorial during 2014—15.

Ombudsman

No issues were raised with the Ombudsman during 2014—15.

Social Justice and Equity

The Memorial is committed to social justice and equity and aims to provide a high level of public access to its physical grounds, commemorative ceremonies, and public programs designed to increase understanding of the Australian experience of war and its impact on Australian society. The Memorial undertakes regular research studies to ensure it is informed on the changing needs of its diverse national and international audience.

The Memorial identifies audience groups and specific needs through varied and dedicated visitor research and evaluation. The Memorial regularly surveys its visitors to identify and monitor how well needs are being met. Results for 2014—15 indicate:

• About 3.4 per cent of the Memorial's general visitors have a disability.
• The Memorial's facilities and services for disabled visitors and their carers were rated very highly by those who used them (88 per cent rating of very satisfied).
• Among the visitors who used facilities and services for people with disabilities, the following proportions gave a rating of satisfied or very satisfied:
• 98 per cent — mobility-impaired access into the building (remains consistent with ratings from 2013—14)
• 97 per cent — mobility-impaired access within galleries and between floors (down from 98 per cent)
• 90 per cent — accessible toilets (remains consistent with ratings from 2013—14)
• 81 per cent — free wheelchairs and walkers (down from 90 per cent)
• 93 per cent — mobility-impaired parking (up from 84 per cent)
• These findings indicate that satisfaction with most disabled facilities and services, with the exception of the provision of free equipment (e.g. walking aids), has increased or remained consistent when compared to the previous year. The percentage of Australian visitors identifying as Aboriginal or Torres Strait Islander people (three per cent of the Australian population) increased to 1.5 per cent (up from one per cent). Indigenous Australians were just as satisfied (100 per cent positive satisfaction rating) by their visit to the Memorial as non—Indigenous Australians (99 per cent positive satisfaction rating).
• About 28 per cent of Australian visitors were born overseas — a slightly higher proportion than that found in the Australian population (27.7 per cent). As in previous years, satisfaction levels remained equal for all Australian visitors regardless of their country of birth.
• About 17 per cent of Australian visitors speak a language other than English at home (up from 15 per cent), a lower percentage than that found in the Australian population (19 per cent). Those Australians who spoke solely English at home were more likely to be very satisfied (85 per cent) with their visit than those visitors who spoke another language at home (75 per cent).

Advertising and Market Research Expenditure

In accordance with section 311A of the Commonwealth Electoral Act 1918, the following is a summary of amounts paid by the Memorial to advertising agencies, market research organisations, and media advertising organisations. As required, particulars of payments of less than $10,000 have not been included. The Memorial did not pay for the services of any polling or direct mail organisations.

Name	Services provided	Amount paid
WIN Television NSW Pty Ltd	General Memorial advertising	$83,838.00
Prime Media Group Limited	General Memorial advertising	$57,170.00
Fairfax Media	General Memorial advertising	$42,772.39
Southern Cross Austereo	General Memorial advertising	$42,264.00
Wingrove Design	General Memorial advertising	$32,940.00
Mediaheads	General Memorial advertising	$30,000.00
oOH! Media Pty Limited	General Memorial advertising	$27,784.00
Hardie Grant Magazines	General Memorial advertising	$22,750.00
Canberra FM Radio Pty Ltd	General Memorial advertising	$10,180.00
Nationwide News Pty Ltd	General Memorial advertising	$10,000.00
Val Morgan & Co. (Aust.) Pty Ltd	General Memorial advertising	$10,000.00
Seek	Recruitment advertising	$3,275.00
Advertising expenditure	$369,698.39
Market research expenditure	Nil
Total		$369,698.39

Freedom of Information Act 1982

The Memorial publishes a broad range of information on its website in compliance with the Information Publication Scheme (IPS), which was established under Part 2 of the Freedom of Information Act 1982 and commenced on 1 May 2011. The Memorial's IPS entry can be accessed at: http:// www.awm.gov.au/about/information-publication-scheme.

As part of its IPS entry, the Memorial publishes an Agency Plan on its website, available at: http://www.awm.gov.au/about/AWM-IPS_Agency_Plan.pdf.

The purpose of the Memorial's Agency Plan is to show what information the Memorial proposes to publish, how and to whom the information will be made available, and how the Memorial will otherwise comply with the IPS requirements.

Categories of documents

The Memorial has custody of four categories of documents which are treated differently for the purposes of the Freedom of Information Act 1982 (the FOI Act).

The four categories are:

(a) Administrative files and papers relating to all aspects of the Memorial's functions. These are subject to the FOI Act, and charges relating to the provision of these are applied and calculated in accordance with the nature and extent of the request.

(b) Items in the Memorial collection within the meaning of the Australian War Memorial Act 1980, other than documents placed in the Memorial collection by any agency. By virtue of subsection 13(1) of the FOI Act, these are not deemed to be documents of an agency, and therefore are not subject to the provisions of the FOI Act. They are, however, made available to the public as part of the Memorial's public reference facility.

(c) Items in the Memorial collection, within the meaning of the Australian War Memorial Act 1980, that have been placed in the collection by or on behalf of an agency. By virtue of subsection 13(2) of the FOI Act these are deemed for the purposes of the FOI Act to be in the possession of the agency that placed them in the Memorial collection. Access to these documents under the FOI Act is through the controlling agency.

(d) Commonwealth records owned by other agencies but in the custody of the Memorial. These are documents of the controlling agency and access to them under the FOI Act is through that agency.

Facilities for access

The Memorial caters for public access to its collections, with reading rooms and staff available to assist with reference inquiries. The Memorial's Research Centre specialises in the provision of public reference services. The facilities are available to any member of the public having gained approval for access to documents under the FOI Act. The access point at which members of the public may make inquiries on Freedom of Information (FOI) matters, submit formal requests for access to documents, or inspect documents to which access has been granted, is given below. The access point is open for business from 8.30 am to 4.51 pm, Monday to Friday (excluding public holidays). Information about access for people with disabilities can be obtained by contacting the FOI officer at the access point given below.

FOI procedures and initial contact points

Enquiries may be made in writing, by telephone, or in person at the official FOI access point given below. It is suggested that enquirers provide a contact telephone number.

Reception Desk
Australian War Memorial
Treloar Crescent
CAMPBELL ACT 2612

or

GPO Box 345
CANBERRA ACT 2601
Tel: (02) 6243 4290

If difficulty arises within the Memorial in identifying a document or in providing access in the form requested, an officer of the Memorial will contact the applicant with a view to resolving the difficulty. In consultation with applicants, documents will be made available as follows:

(a) by mail to an address specified by the applicant;

(b) at the official FOI access point; or

(c) at the information access office located within the regional office of the National Archives of Australia nearest to the applicant's normal place of residence.

Officers authorised to make decisions under the Freedom of Information Act 1982

The classification and designation of officers authorised to approve and deny access to documents, to impose charges, and to remit charges and application fees under the FOI Act and FOI (Charges) Regulations are set out below:

Assistant Director and Branch Head
National Collection
Senior Executive Band 1

Assistant Director and Branch Head
Public Programs
Senior Executive Band 1

Assistant Director and Branch Head
Corporate Services
Senior Executive Band 1

Executive Officer
Corporate Services
Australian Public Service Class 6

Executive Officer
National Collection
Australian Public Service Class 6

Executive Officer
Public Programs
Australian Public Service Class 6

The classification and designation of officers authorised to conduct an internal review under section 54 of the FOI Act are set out below:

Assistant Director and Branch Head
National Collection
Senior Executive Band 1

Assistant Director and Branch Head
Public Programs
Senior Executive Band 1

Assistant Director and Branch Head
Corporate Services
Senior Executive Band 1

Freedom of Information Act 1982, statistics 2014—15

In 2014—15 the Memorial received three requests for access to documents under the FOI Act. One request was granted in part, with all charges waived. No documents were found for one request and one was deemed to be exempt. The matter referred to the Administration Appeals Tribunal in the previous year was finalised in February 2015.

FOI Statistics Summary 2014—15

Received	Granted in full	Granted in part	No documents found	Withdrawn	Exempt	Refused on resource grounds
3	0	1	1	0	1	0

Environmental Protection and Biodiversity Conservation (EPBC) Act 1999, Section 516A Statement

In accordance with section 516A of the Environmental Protection and Biodiversity Conservation (EPBC) Act 1999 (the EPBC Act), Australian government agencies are required to include in their annual reports information detailing the environmental performance of the organisation and the organisation's contribution to ecologically sustainable development. This remains a key objective for the Memorial and is being applied to the development of plans for the enhancement and ongoing maintenance of the Memorial's buildings and its operations. The Memorial does not administer any legislation nor does it have any appropriation directly related to the principles of environmental sustainability and development. Accordingly, the Memorial's involvement relates to environmental practices within the Memorial. Social and equitable practices are included in the Memorial's Teamwork Agreement 2011—14 and will be included in the next Teamwork Agreement, which is currently being negotiated.

Energy consumption and environmental management

Consumption of electricity, gas, and water continues to be monitored closely and is a priority for the Memorial, with gas and electricity consumption remaining close to trend. The refinement of the control strategy for building climate control is ongoing, with emphasis still on managing temperature and humidity parameters to efficiently achieve both material conservation and energy efficiency needs.

Work on the Memorial's Lighting Master Plan was completed in time for Anzac Day 2015 and has greatly enhanced the Main Building's facade appearance, emphasising its architectural features while still achieving major energy savings compared to those existing currently.

Other energy-saving initiatives undertaken include the electronic monitoring of a number of gas sub-meters for the Main Building. Following on from the electronic monitoring of both gas and electricity meters in the Main Building, alarms have now been installed to advise if consumption is outside set parameters. Planning is well underway for the Main Building's remaining gas sub-meters to also be included. The Heating Ventilation and Air-conditioning (HVAC) system of the Treloar A building, including the electrical switchboards, has been completely upgraded. Included in this upgrade are electronic sub-meters, which are scheduled to be attached to the Building Management System to allow a proactive response to any consumption spikes. Fine-tuning of the new system continues.

The recycling of paper, cardboard, glass, plastic bottles, toner cartridges, and fluorescent tubes in the administration areas continues. The provision of recycling facilities for public events in the Memorial's grounds, including Anzac Day and Remembrance Day, is ongoing. In addition, the recycling of old display lighting in the Memorial's Main Building has commenced.

The replacement of gallery lighting with more energy-efficient lighting is ongoing, with electricity savings beginning to be realised.

Heritage management

The Memorial's endorsed Heritage Management Plan (HMP) continues to guide management of the Memorial's heritage precinct and, when required, heritage specialists continue to provide advice in regard to proposed building works in heritage-sensitive areas.

Bird-deterrent installations used around the Main Building continue to be refined.

Ongoing maintenance of the Memorial building fabric continues and includes minor repairs to the stonework and the implementation of a stonework-cleaning regime. This in turn includes the application of a biocide to reduce fungal and algal growth.

Other general heritage conservation activities undertaken include regular conservation and cleaning of key sculptural elements. Before Anzac Day a major clean of sculptures and plinths was undertaken. This was in addition to a clean of the stonework in the Commemorative Area and the Main Building tower, and general cleaning of the stone facade of the Memorial's Main Building.

In order to assist with its longevity, regular maintenance of the Lone Pine tree (Pinus halepensis) continues. The new Lone Pine tree, planted by Their Royal Highnesses The Duke and Duchess of Cambridge on Anzac Day 2014, remains in a healthy state, assisted by the fence and bird netting. It is anticipated that this tree will have developed significantly when the original tree reaches senescence.

Work Health and Safety

Executive commitment

The Memorial is committed to safeguarding the health and safety of its employees, workers, and visitors by providing and maintaining a safe working environment. The Memorial aims to eliminate all preventable work-related injuries and illnesses through systematic management. Furthermore, the Memorial is committed to supporting and promoting the holistic wellbeing of its employees. In 2014 the Memorial completed a Work Health and Safety System Audit, and system improvements have been integrated into a 2015—16 Work Health and Safety Improvement Plan. In addition, the Senior Management Group attended a due diligence briefing in order to increase skills and capabilities in work health and safety.

Work Health and Safety Committee

The Work Health and Safety Committee meets four times per year and assists the Memorial in developing, implementing, and reviewing measures designed to protect the health and safety of our workers and visitors. The committee is made up of worker and management representatives, and provides one of the key consultation mechanisms with workers in accordance with relevant legislation.

The Memorial's work health and safety function is managed through human resources, with assistance from professional experts who provide advice to the committee, assist with hazard and incident investigations and case management, and provide relevant training as required. In 2014 a program was conducted across the Memorial for the re-election of health and safety representatives.

Health and Wellbeing Program

The Memorial promotes health awareness among its employees by delivering an annual Health and Wellbeing Program. This is focused on health and lifestyle initiatives to create positive health changes for workers. Employee consultation is a key element of the program and staff participated in a Health and Wellbeing Survey in June 2015 to assist with development of the 2015—16 Program. This year programs included staff workshops to inform the development of a work health and safety framework, with particular emphasis on mental health and wellbeing. To support this framework, ongoing programs of mental health awareness for managers and supervisors, and mental health first aid for Security and Front of House staff, were also implemented. The aim of these programs is to increase our agility and resilience as an organisation and validate the unique working environment of the Memorial.

Other programs included quit smoking sessions and flu vaccinations.

Ongoing initiatives

In 2015 the Memorial implemented a program of training workshops on risk assessment and safe work method statements for managers, supervisors, and staff. This program is part of the Work Health and Safety Improvement Plan, with an enhanced focus on documented safety risk management and contractor management.

First aid officers are located throughout the Memorial buildings to ensure immediate assistance is available when required. Emergency response support has also been enhanced with additional cardiac defibrillators purchased for the Campbell and Mitchell sites.

The Memorial has a no-tolerance approach to bullying and harassment. The Memorial also has a number of contacts available should an employee or manager require advice regarding an instance of bullying or harassment. These include harassment contact officers across all business areas and the Employee Assistance Program. The Memorial addresses formal and informal allegations of bullying or harassment promptly and sensitively.

Outcome measures

The Memorial has maintained a focus on prompt reporting and management of accidents and incidents. Implementation of an early intervention program has delivered increased support for employees and has shown improved injury recovery rates. Implementation of enhanced early intervention and hazard identification and risk assessment processes is under way and aims to recognise cost benefits going forward.

No directions or notices under the Work Health and Safety Act 2011 were given to the Memorial.

REPORT by the auditor-general and financial statements

STATEMENT OF COMPREHENSIVE INCOME for the period ended 30 June 2015

	Note	2015	2014
		$	$
EXPENSES
Employee benefits	4A	23 329 252	25 537 528
Supplier	4B	24 488 163	18 535 551
Depreciation and amortisation	4C	19 824 597	18 892 459
Write-down and impairment of assets	4D	60 531	5 364
Losses from asset sales		6 761	20 707
Total expenses		67 709 304	62 991 609
OWN-SOURCE INCOME
Own-source revenue
Sale of goods and rendering of services	5A	4 975 521	4 361 496
Interest from deposits		2 558 612	3 061 152
Resources received free of charge	5B	796 508	1 093 073
Donations and sponsorships	5C	10 819 872	3 418 534
Other revenue	5D	380 666	213 398
Total own-source revenue		19 531 179	12 147 653
Gains
Gains from sale of assets		65 296	-
Total gains		65 296	-
Total own-source income		19 596 475	12 147 653
Net cost of services		48 112 829	50 843 956
Revenue from Government	5E	44 008 000	40 900 000
(Deficit) Surplus		(4 104 829)	(9 943 956)
OTHER COMPREHENSIVE INCOME Items not subject to subsequent reclassification to profit or loss
Changes in asset revaluation surplus		4 423 109	16 901 015
Total other comprehensive income		4 423 109	16 901 015
Total comprehensive income	3	318 280	6 957 059

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

	Note		2015	2014
			$	$
ASSETS
Financial assets
Cash and cash equivalents	7A		7 109 567	5 709 642
Trade and other receivables	7B		1 045 213	1 278 269
Investments	7C		61 000 000	67 000 000
Accrued interest			1 190 859	1 513 097
Total financial assets			70 345 639	75 501 008
Non-financial assets
Land and buildings	8A, F		143 489 809	139 869 189
Property, plant and equipment	8B, F		5 679 510	5 026 042
Heritage and cultural assets	8C, F		1 018 562 197	1 020 279 755
Exhibitions	8D, F		42 574 569	28 361 649
Intangibles	8E, F		4 664 104	4 949 241
Inventories			734 047	819 668
Prepayments	8G		656 804	1 158 581
Total non-financial assets			1 216 361 040	1 200 464 125
Total assets			1 286 706 679	1 275 965 133
LIABILITIES
Payables
Suppliers	9A		1 480 724	3 169 776
Other payables	9B		1 025 710	1 151 434
Total payables			2 506 434	4 321 210
Provisions
Employee provisions	10A		9 004 486	9 210 445
Total provisions			9 004 486	9 210 445
Total liabilities			11 510 920	13 531 655
NET ASSETS			1 275 195 759	1 262 433 478
EQUITY
Contributed equity			96 152 000	83 708 000
Asset revaluation reserves			620 479 581	616 056 472
Retained surplus			558 564 178	562 669 006
Total equity			1 275 195 759	1 262 433 478

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

STATEMENT OF FINANCIAL POSITION as at 30 June 2015

STATEMENT OF CHANGES IN EQUITY for the period ended 30 June 2015

	Retained earnings	Asset revaluation surplus	Contributed equity/capital	Total equity
	2015	2014	2015	2014	2015	2014	2015	2014
	$	$	$	$	$	$	$	$
Opening balance 1 July
Balance carried forward from previous period	562 669 006	572 612 962	616 056 472	599 155 457	83 708 000	58 450 000	1 262 433 478	1 230 218 419
Adjusted opening balance	562 669 006	572 612 962	616 056 472	599 155 457	83 708 000	58 450 000	1 262 433 478	1 230 218 419
Comprehensive income
Surplus (Deficit) for the period	(4 104 829)	(9 943 956)	-	-	-	-	(4 104 829)	(9 943 956)
Other comprehensive income	-	-	4 423 109	16 901 015	-	-	4 423 109	16 901 015
Total comprehensive income attributable to the Australian Government	(4 104 829)	(9 943 956)	4 423 109	16 901 015	-	-	318 280	6 957 059
Transactions with owners
Contributions by owners
Equity injection	-	-	-	-	12 444 000	25 258 000	12 444 000	25 258 000
Total transactions with owners	-	-	-	-	12 444 000	25 258 000	12 444 000	25 258 000
Closing balance as at 30 June	558 564 178	562 669 006	620 479 581	616 056 472	96 152 000	83 708 000	1 275 195 759	1 262 433 478

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

	Note	2015	2014
		$	$
OPERATING ACTIVITIES
Cash received
Receipts from Government		44 008 000	40 900 000
Sales of goods and rendering of services		4 728 249	4 217 294
Interest		2 880 850	2 778 488
Net GST received		3 658 040	3 278 957
Donations and sponsorships		10 331 171	3 210 384
Other		266 931	213 398
Total cash received		65 873 241	54 598 521
Cash used
Employees		(23 439 211)	(24 766 320)
Suppliers		(28 140 412)	(20 057 764)
Total cash used		(51 579 623)	(44 824 084)
Net cash from operating activities	11	14 293 618	9 774 437
INVESTING ACTIVITIES
Cash received
Proceeds from sales of property, plant and equipment		65 296	2 210
Investments		89 000 000	81 500 000
Total cash received		89 065 296	81 502 210
Cash used
Purchase of property, plant, equipment and intangibles		(31 402 990)	(30 697 602)
Investments		(83 000 000)	(82 500 000)
Total cash used		(114 402 990)	(113 197 602)
Net cash used by investing activities		(25 337 693)	(31 695 392)
FINANCING ACTIVITIES
Cash received
Contributed equity		12 444 000	25 258 000
Total cash received		12 444 000	25 258 000
Net cash from financing activities		12 444 000	25 258 000
Net (decrease)/increase in cash held		1 399 925	3 337 045
Cash and cash equivalents at the beginning of the reporting period		5 709 642	2 372 597
Cash and cash equivalents at the end of the reporting period	7A	7 109 567	5 709 642

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

CASH FLOW STATEMENT for the period ended 30 June 2015

SCHEDULE OF COMMITMENTS as at 30 June 2015

	Note	2015	2014
		$	$
By type
Commitments receivable
Rental income		(806 438)	-
Sponsorship		(591 130)	(3 269 264)
Grants		(5 855 674)	-
Other receivables		(643 098)	-
GST recoverable on commitments		(322 292)	(2 319 452)
Total commitments receivable		(8 218 632)	(5 588 716)
Commitments payable
Capital commitments	1.18
Land and buildings		68 612	397 820
Infrastructure plant and equipment		-	52 701
Exhibitions		109 849	6 098 907
Intangibles		46 750	-
National Collection		1 859 888	1 663 056
Total capital commitments		2 085 099	8 212 484
Other commitments
Operating leases	1.18	150 424	1 159 644
Project commitments		19 275	2 644 760
Other		9 186 760	16 766 350
Total other commitments		9 356 459	20 570 754
Total commitments payable		11 441 558	28 783 238
Net commitments by type		3 222 926	23 194 522
By maturity
Commitments receivable
Within one year		(3 636 129)	(3 217 950)
From one to five years		(4 453 838)	(2 370 766)
More than five years		(128 665)	-
Total commitments receivable		(8 218 632)	(5 588 716)
Commitments payable
Capital commitments
Within one year		495 714	6 480 548
From one to five years		174 059	1 731 936
More than five years		1 415 326	-
Total capital commitments		2 085 099	8 212 484
Operating lease commitments
Within one year		92 440	653 593
From one to five years		57 984	506 051
More than five years		-	-
Total operating lease commitments		150 424	1 159 644
Other commitments
Within one year		4 624 238	17 244 572
From one to five years		4 581 797	2 166 538
More than five years		-	-
Total other commitments		9 206 035	19 411 110
Total commitments payable		11 441 558	28 783 238
Net commitments by maturity		3 222 926	23 194 522

Commitments are GST inclusive where relevant.

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

Index to the notes to and forming part of the financial statements
Note	Description
1	Summary of Significant Accounting Policies
2	Events After the Reporting Period
3	Net Cash Appropriation Arrangements
4	Expenses
5	Income
6	Fair Value Measurement
7	Financial Assets
8	Non-Financial Assets
9	Payables
10	Provisions
11	Cash Flow Reconciliation
12	Contingent Assets
13	Senior Management Remuneration
14	Related Party Disclosures
15	Remuneration of Auditors
16	Financial Instruments
17	Financial Assets Reconciliation
18	Assets Held in Trust
19	Reporting of Outcomes
20	Budget Reports and Explanations of Major Variances

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.1 Objectives of the Memorial

The Memorial was established by section 4 of the Australian War Memorial Act 1980 and is a not-for-profit Australian government controlled entity.

The objective and outcome of the Memorial is to assist Australians in remembering, interpreting, and understanding the Australian experience of war and its enduring impact through maintaining and developing the National Memorial, its collection and exhibition of historical material, commemorative ceremonies and research.

The continued existence of the Memorial in its present form and with its present programs is dependent on government policy and on continued funding by parliament for the Memorial's administration and programs.

1.2 Basis of preparation of the Financial Statements

The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013.

The financial statements have been prepared in accordance with:

• Financial Reporting Rule (FRR) for reporting periods ending on or after 1 July 2014; and
• Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accrual basis and are in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.

The financial statements are presented in Australian dollars and where specified, some values are rounded to the nearest thousand.

Unless an alternative treatment is specifically required by an accounting standard or the FRR, assets and liabilities are recognised in the statement of financial position when and only when it is probable that future economic benefits will flow to the Memorial, or a future sacrifice of economic benefits will be required and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under executory contracts are not recognised unless required by an accounting standard. Liabilities and assets that are unrecognised are reported in the Schedule of Commitments or at Note 12.

Unless an alternative treatment is specifically required by an accounting standard, income and expenses are recognised in the statement of comprehensive income, when and only when the flow, consumption, or loss of economic benefits has occurred and can be reliably measured.

1.3 Significant accounting judgements and estimates

In the process of applying the accounting policies listed in this note, the Memorial has made the following judgements that have the most significant impact on the amounts recorded in the financial statements:

• The fair value of the National Collection is considered to be market selling price (where such a market exists), or depreciated replacement cost, taking into consideration the intrinsic value of historically significant objects. Owing to the size of the National Collection, a representative sample of all major categories is selected, valued and extrapolated to determine a total fair value.
• The fair value of land and buildings is considered to be the market value of similar assets, taking into account the heritage aspects of the buildings where appropriate, and using depreciated replacement cost if no active market is identified.
• The Memorial's primary liability, employee provisions, includes an estimation component in respect of long-term employee benefits measured as the present value of estimated future cash outflows.

No accounting assumptions and estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next accounting period.

1.4 New accounting standards

Adoption of new Australian Accounting Standard requirements

No accounting standard has been adopted earlier than the application date as stated in the standard.

The following new standards were issued by the Australian Accounting Standards Board (AASB) prior to the sign-off date, which are not expected to have a financial impact on the Memorial. They are disclosed to provide users with information about the main requirements:

• AASB 15 Revenue from Contracts with Customers (issued December 2014)

  The AASB has issued new standard AASB 15. This new Standard requires reporting about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer. The new Standard applies to reporting periods beginning on or after 1 January 2017.

The following revised and amending standards were issued by the AASB, which are relevant to the Memorial and are not expected to have a financial impact for future reporting periods. They are disclosed to provide users with information about the main requirements:

• AASB 9 Financial Instruments (issued December 2014)

  This Standard incorporates the classification and measurement requirements for financial liabilities, the recognition and derecognition requirements for financial instruments and the classification and measurement requirements for financial assets. The changes will apply to reporting periods beginning on or after 1 January 2018.

• AASB 2015-2 Amendments to Australian Accounting Standards — Disclosure Initiative: Amendments to AASB 101 (AASB 7, 101, 134 and 1049) (issued January 2015)

  This Standard amends AASB 101 to provide clarification regarding the disclosure requirements in AASB 101. The Standard proposes to address concerns about existing presentation and disclosure requirements and to allow entities to use judgement when applying a Standard in determining what information to disclose in their financial statements. The changes will apply to reporting periods beginning on or after 1 January 2016.

All other new standards, revised standards, interpretations and amending standards that were issued prior to the sign-off date and are applicable to future reporting periods are not expected to have a future financial impact on the Memorial.

1.5 Revenue

Revenue from the sale of goods is recognised when:

• the risks and rewards of ownership have been transferred to the buyer;
• the Memorial retains no managerial involvement in or effective control over the goods;
• the revenue and transaction costs incurred can be reliably measured; and
• it is probable that the economic benefits associated with the transaction will flow to the Memorial.

Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when:

• the amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and
• the probable economic benefits associated with the transaction will flow to the Memorial.

The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction.

Receivables for goods and services, which have 30-day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at the end of the reporting period. Allowances are made when collectability of the debt is no longer probable.

Project-specific sponsorship funding which meets the requirements of a contribution in accordance with AASB 1004 Contributions is recorded as revenue when the Memorial obtains control of the contribution or right to receive the contribution, it is probable that the economic benefits comprising the contribution will flow to the Memorial, and the amount can be measured reliably.

Interest revenue is recognised using the effective interest method as set out in AASB 139 Financial Instruments: Recognition and Measurement.

Revenues from Government

Funding received or receivable from non-corporate Commonwealth entities (appropriated to the non-corporate Commonwealth entity as a corporate Commonwealth entity payment item for payment to the Memorial) is recognised as revenue from government by the corporate Commonwealth entity unless it is in the nature of an equity injection or a loan.

1.6 Gains

Resources Received Free of Charge

Resources received free of charge are recognised as gains when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense.

Resources received free of charge are recorded as either revenue or gains depending on their nature.

Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition.

Sale of Assets

Gains from disposal of assets are recognised when control of the asset has passed to the buyer.

1.7 Transactions with the Government as Owner

Equity injections

Amounts appropriated that are designated as "equity injections" for a year (less any formal reductions) are recognised directly in contributed equity in that year.

1.8 Employee Benefits

Liabilities for "short-term employee benefits" (as defined in AASB 119 Employee Benefits) and termination benefits due within 12 months of the end of reporting period are measured at their nominal amounts.

The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability.

Other long-term employee benefits are measured as the present value of the estimated future cash outflows to be made in respect of services provided by employees up to the reporting date.

Leave

The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of the Memorial is estimated to be less than the annual entitlement for sick leave.

The leave liabilities are calculated on the basis of employees' remuneration at the estimated salary rates that will be applied at the time the leave is taken, including the Memorial's employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.

The liability for long service leave is recognised and measured at the net present value of the estimated future cash flows to be made in respect of all employees at 30 June 2015. In determining the present value of the liability, including related on-costs, attrition rates, and pay increases through promotion and inflation have been taken into account.

Superannuation

The Memorial's staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), AustralianSuper, or the PSS accumulation plan (PSSap).

The CSS and PSS are defined benefit schemes for the Australian government. The PSSap is a defined contribution scheme.

The liability for defined benefits is recognised in the financial statements of the Australian government and is settled by the Australian government in due course. This liability is reported in the Department of Finance's administered schedules and notes.

The Memorial makes employer contributions to the employees' superannuation schemes at rates determined by an actuary to be sufficient to meet the current cost to the government. The Memorial accounts for the contributions as if they were contributions to defined contribution plans.

The liability for superannuation recognised as at 30 June represents outstanding contributions for the final fortnight of the quarter.

1.9 Leases

A distinction is made between finance leases and operating leases. Finance leases effectively transfer from the lessor to the lessee substantially all the risks and rewards incidental to ownership of leased assets. An operating lease is a lease that is not a finance lease. In operating leases, the lessor effectively retains substantially all such risks and benefits.

Operating lease payments are expensed on a straight-line basis which is representative of the pattern of benefits derived from the leased assets.

The Memorial does not hold any finance leases.

1.10 Cash

Cash is recognised at its nominal amount. Cash and cash equivalents include cash on hand and any deposits in bank accounts with an original maturity of three months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.

1.11 Financial Assets

The Memorial classifies its financial assets in the following categories:

• held-to-maturity investments
• receivables

The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Financial assets are recognised and derecognised upon trade date.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.

Income is recognised on an effective interest rate basis except for financial assets that are recognised at fair value through profit and loss.

Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the Memorial has the positive intent and ability to hold to maturity are classified as held-to-maturity investments. Held-to-maturity investments are recorded at amortised cost using the effective interest method less impairment, with revenue recognised on an effective yield basis.

Receivables

Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as "receivables". Receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest rate.

Impairment of financial assets

Financial assets are assessed for impairment at the end of each reporting period.

• Financial assets held at amortised cost — if there is objective evidence that an impairment loss has been incurred for receivables or held-to-maturity investments held at amortised cost, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the asset's original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is recognised in the Statement of Comprehensive Income.

1.12 Financial Liabilities

The Memorial classifies its financial liabilities as other financial liabilities. Financial liabilities are recognised and derecognised upon trade date.

Other Financial Liabilities

Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

1.13 Acquisition of assets

Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition. Significant donated National Collection items are recognised at the time of acquisition, and other donated collection items are brought to account at the time of revaluation.

1.14 Property, Plant and Equipment

Asset Recognition Threshold

Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $2,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items that are significant in total).

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located.

Revaluations

Fair values for each class of assets are determined as shown below.

Asset class	Fair value measured at:
Land	Market selling price
Buildings	Market selling price/depreciated replacement cost
Exhibitions	Depreciated replacement cost
Plant and Equipment	Market selling price/depreciated replacement cost

Following initial recognition at cost, property, plant and equipment were carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations were conducted with sufficient frequency to ensure that the carrying amounts of assets did not differ materially from the assets' fair values as at the reporting date. The regularity of independent valuations depended upon the volatility of movements in market values for the relevant assets.

Revaluation adjustments were made on a class basis. Any revaluation increment was credited to equity under the heading of asset revaluation reserve except to the extent that it reverses a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets were recognised directly in the surplus/deficit, except to the extent that they reversed a previous revaluation increment for that class.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the Memorial using, in all cases, the straight-line method of depreciation.

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current reporting period, or current and future reporting periods, as appropriate.

Depreciation rates applying to each class of depreciable asset are based on the following useful lives:

	2015	2014
Buildings and building improvements	10 to 175 years	10 to 175 years
Plant and equipment	2 to 30 years	2 to 30 years
Exhibitions	4 to 20 years	5 to 15 years

Impairment

All assets will be assessed for impairment at 30 June 2015. Where indications of impairment exist, the asset's recoverable amount is estimated and an impairment adjustment made if the asset's recoverable amount is less than its carrying amount.

The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset's ability to generate future cash flows, and the asset would be replaced if the Memorial were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

1.15 Heritage and Cultural Assets

The Memorial's collection of heritage and cultural assets comprises a wide range of objects relating to Australia's military history, including but not limited to:

Works of art (various mediums)	Film
Large technology objects	Military heraldry and technology items
Photographs	Audio
Official and private records	Ephemera

Pursuant to section 8 of the Australian War Memorial Act 1980, the Memorial has the authority to dispose of heritage and cultural items which are not required as part of the National Collection, or are unfit for inclusion. Section 8 of the Australian War Memorial Act 1980 dictates the appropriate approvals to dispose of National Collection assets.

The decision whether or not to acquire or retain an item for the National Collection is based on two criteria:

1. Assessment to establish that the item is of significance to Australian military history.

2. Assessment that the benefit and resource implications of acquiring or retaining the item are acceptable.

The evaluation process ensures that the history and provenance of objects is recorded at the time of acquisition and records the significance of the item to the Australian community, provides a systematic assessment of the values of objects against the existing collection and other collecting institutions, and assists in setting priorities for collection management and conservation resources.

The Memorial's Collection Development Plan for heritage and cultural assets can be found at:

/sites/default/files/collection_development_plan.pdf

The Memorial's preservation and curatorial policies for heritage and cultural assets can be found at:

http://www.awm.gov.au/collection/conservation

Revaluations

The National Collection is carried at fair value, which is measured at depreciated replacement cost or market selling price (for items where a market exists).

Following initial recognition at cost, the National Collection is carried at fair value less accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency such that the carrying amounts of assets do not differ materially from the assets' fair values as at the reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets.

Depreciation

All items in the National Collection are written off over their estimated useful life to the Memorial using the straight-line method of depreciation.

Depreciation rates (useful lives) have been estimated based on the condition and physical composition of items in each sub-class, and range from 5 to 600 years. Rates and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

1.16 Intangibles

The Memorial's intangibles comprise purchased software, which is carried at cost less accumulated amortisation and accumulated impairment losses.

Software is amortised on a straight-line basis over its anticipated useful life. The useful lives range from 2 to 10 years (2014: 2 to 10 years).

All software assets will be assessed for indications of impairment at 30 June 2015.

1.17 Inventories

The Memorial holds inventory for sale only, and this is reported at the lower of cost and net realisable value. Costs incurred in bringing each item of inventory to its present location and condition are assigned as follows:

• stores — average purchase cost; and
• finished goods and works-in-progress — cost of direct materials and labour plus attributable costs that are capable of being allocated on a reasonable basis.

Inventories acquired at no cost or at nominal consideration are initially measured at current replacement cost at the date of acquisition.

1.18 Commitments

Capital commitments include current undertakings and contractual payments related to the provision of items for National Collection works in progress. Other commitments are related to contracts for provision of casual staff, buildings and grounds maintenance and security services.

The Memorial in its capacity as a lessor of the property located at block 18 section 21 Mitchell (Treloar F) receives annual rent of $239,226 (adjusted for CPI annually in March). Monthly rental is payable in advance and the lease term is initially for five years with options to renew.

Commitments are GST inclusive where relevant.

The nature of operating lease commitments is as follows:

Nature of operating lease	General description of leasing arrangement
Agreements for the provision of motor vehicles	The lessor provides pool vehicles as required. There are no purchase options available to the Memorial, and no contingent rentals exist.
Lease of computer equipment	The lessor provides all computer equipment designated as necessary in the supply contract for three years plus a further year at the Memorial's option, with a reduction of fees available. The initial equipment has, on average, a useful life of three years from the commencement of the lease. The Memorial may take out additional leases at any time during the contract period. The Memorial has an option to purchase the equipment at the end of the lease.

1.19 Taxation

The Memorial is exempt from all forms of taxation except the Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

Revenues, expenses and assets are recognised net of GST except:

• where the amount of GST incurred is not recoverable from the Australian Taxation Office; and
• for receivables and payables.

2. Events after the reporting period

There was no subsequent event that had the potential to significantly affect the ongoing structure and financial activities of the Memorial.

3. Net cash appropriation arrangements

	2015	2014
	$	$
Total comprehensive income less depreciation/amortisation expenses previously funded through revenue appropriations	10 706 520	17 163 431
Plus: depreciation/amortisation expenses previously funded through revenue appropriation	10 388 240	10 206 372
Total comprehensive income — as per the Statement of Comprehensive Income	318 280	6 957 059

From 2010—11 the Government introduced net cash appropriation arrangements where revenue appropriations for the National Collection depreciation expenses ceased. The Memorial now receives a separate capital budget provided through equity appropriations. Capital budgets are to be appropriated in the period when cash payment for capital expenditure is required.

4. EXPENSES

4A. Employee benefits

Wages and salaries	17 685 281	19 073 010
Superannuation
Defined contribution plans	1 580 692	1 817 641
Defined benefit plans	1 875 252	1 954 690
Leave and other entitlements	886 205	1 971 309
Separation and redundancies	916 846	131 347
Other employee benefits	384 976	589 531
Total employee benefits	23 329 252	25 537 528

	2015	2014
	$	$
4B. Suppliers
Goods and services supplied or rendered
Property and support services	5 380 553	5 219 040
Professional services (contractors and consultants)	2 802 659	2 037 856
Staff support	3 373 980	3 134 168
Advertising and promotions	752 766	991 715
Cost of goods sold	1 570 927	1 607 643
IT services	871 425	1 037 093
Exhibitions	6 506 819	1 645 768
Travel	488 762	471 001
Other	1 982 616	1 883 512
Total goods and services supplied or rendered	23 730 507	18 027 796
Goods supplied in connection with
Related parties	5 222	172 690
External parties	2 532 697	2 924 386
Total goods supplied	2 537 919	3 097 076
Services rendered in connection with
Related parties	1 674 854	1 283 542
External parties	19 517 734	13 647 178
Total services rendered	21 192 588	14 930 720
Total goods and services supplied or rendered	23 730 507	18 027 796
Other supplier expenses
Operating lease rentals in connection with External parties — minimum lease payments
266 722	323 390
Workers compensation expenses	490 934	184 365
Total other supplier expenses	757 656	507 755
Total suppliers	24 488 163	18 535 551

4C. Depreciation and Amortisation
4D. Write-down and impairment of assets

	2015	2014
	$	$
Depreciation:
Buildings and building improvements	4 855 408	4 392 129
Property, plant and equipment	1 045 283	862 760
Heritage and cultural assets	10 388 240	10 206 372
Exhibitions	2 715 904	2 666 728
Total depreciation	19 004 835	18 127 989
Amortisation:
Intangibles (computer software)	819 762	764 470
Total amortisation	819 762	764 470
Total depreciation and amortisation	19 824 597	18 892 459

Asset write-downs and impairment from:
Impairment of receivables	19 854	205
Impairment of inventories	40 677	5 159
Total write-down and impairment of assets	60 531	5 364

5. INCOME

5A. Sale of goods and rendering of services

Sale of goods in connection with
Related parties	55 045	46 907
External parties	2 980 555	2 517 955
Total sale of goods	3 035 600	2 564 862
Rendering of services in connection with
Related parties	186 632	39 404
External parties	1 753 289	1 757 230
Total rendering of services	1 939 921	1 796 634
Total sale of goods and rendering of services	4 975 521	4 361 496

5B. Resources received free of charge

Resources received free of charge in relation to
Related parties	17 862	102 222
External parties	778 646	990 851
Total resources received free of charge	796 508	1 093 073

	2015	2014
	$	$

5C. Donations and sponsorships

Donations	4 719 365	2 188 869
Sponsorships	5 611 806	1 021 515
Donated collection items	488 701	208 150
Total donations and sponsorships	10 819 872	3 418 534

5D. Other revenue

Friends of the Memorial	150 372	162 449
Royalties and licensing income	108 546	40 949
Rental income	113 734	-
Other	8 014	10 000
Total other revenue	380 666	213 398

5E. Revenue from Government

Department of Veterans' Affairs

Corporate entity payment item	44 008 000	40 900 000
Total revenue from Government	44 008 000	40 900 000

6. Fair Value Measurements

The following tables provide an analysis of assets and liabilities that are measured at fair value. The different levels of the
fair value hierarchy are defined below.

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Memorial can access at measurement date.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability.

6A. Fair Value Measurements, Valuation Techniques and Inputs Used

	Fair value measurements at the end of the reporting period	For levels 2 and 3 fair value measurements
	2015	2014	Level	Valuation technique(s)1	Inputs used	Range (weighted average)2
	$	$
Non-financial assets
Land	12 385 520	9 700 000	2	Market approach	Recent sales of comparable land	N/A
Buildings on freehold land	131 104 289	130 169 189	2	Gross current cost	Current replacement cost and current reproduction cost	N/A
Exhibitions	42 548 119	18 369 583	3	Depreciated replacement cost	Original cost adjusted for CPI from date of acquisition Calculation of useful lives and market based residual values	Items are highly specialised with no comparable market
Heritage and cultural	590 304 801	591 164 050	2	Market approach	Auction prices of comparable items in Australia and overseas	N/A
427 967 143	429 115 705	3	Depreciated replacement cost	Professional appraisals of items	$0.7M to $117.2M $0.6M
Other property, plant and equipment	5 679 510	5 026 042	2	Market approach	Market prices of comparable items	N/A
Total non-financial assets	1 209 989 382	1 183 544 569
Total fair value measurements of assets in the Statement of Financial Position	1 209 989 382	1 183 544 569

There were no liabilities not measured at fair value in the Statement of Financial Position.

Fair value measurements

The highest and best use of all non-financial assets is the same as their current use.
1. No change in valuation technique occurred during the period.
2. Significant unobservable inputs only. Not applicable for assets or liabilities in the Level 2 category.

Recurring and non-recurring Level 3 fair value measurements — valuation processes

The Memorial procured independent valuation services from the Australian Valuation Office for property, plant and equipment, Herron Todd White for land and buildings, Simon Storey Valuers for the National Collection, and Asset Valuation Services for exhibitions. The Memorial has relied on valuation models provided by these valuers. The Memorial tests the procedures of the valuation model at least once every 12 months. All valuers have provided written assurance to the Memorial that the model developed is in compliance with AASB 13.

Recurring Level 3 fair value measurements — sensitivity of inputs

The significant unobservable inputs used in the fair value measurement of the Memorial's heritage and cultural assets are identical or similar items through recorded auction sales, catalogues and known private collections. Significant increases (decreases) in any of those inputs in isolation would result in a significantly higher (lower) fair value measurement.

Generally, a change in the assumption used for professional appraisals of similar iconic items is accompanied by a directionally similar change in the assumption used for private sales of similar iconic items.

6B. Level 1 and Level 2 Transfers for Recurring Fair Value Measurements

Recurring fair value measurements transferred between Level 1 and Level 2 for assets and liabilities

No assets were transferred between Levels 1 and 2 during the reporting period. The Memorial's policy for determining when transfers between levels are deemed to have occurred can be found in Note 1.3.

6C. Reconciliation for Recurring Level 3 Fair Value Measurements

Recurring Level 3 fair value measurements — reconciliation for assets

	Non-financial assets
	Exhibitions	Heritage and cultural1	Total
	2015	2014	2015	2014	2015	2014
	$	$	$	$	$	$
Opening balance 1 July	18 369 583	18 369 583	429 115 705	429 115 705	447 485 288	447 485 288
Purchases2	22 471 334	-	3 262 488	-	25 733 822	-
Revaluation	4 423 109	-	-	-	4 423 109	-
Depreciation	(2 715 907)	-	(4 411 050)	-	(7 126 957)	-
Closing balance	42 548 119	18 369 583	427 967 143	429 115 705	470 515 262	447 485 288

1. Heritage and Cultural assets contain Level 2 and Level 3 fair value measurements. The figures shown above are for Level 3 inputs only.

2. Purchases are inclusive of transfers from assets under construction.

7. Financial assets

	2015	2014
	$	$

7A. Cash and cash equivalents
7B. Trade and other receivables

Cash on hand	8 250	7 650
Deposits	7 101 317	5 701 992
Total cash and cash equivalents	7 109 567	5 709 642

Goods and services receivables in connection with
Related parties	98 689	98 688
External parties	970 259	1 031 019
Total goods and services receivables	1 068 948	1 129 707
Other receivables
GST receivable from the Australian Taxation Office	(4 903)	148 543
Other receivables	117	19
Total other receivables	(4 786)	148 562
Total trade and other receivables (gross)	1 064 162	1 278 269
Less impairment allowance (goods and services)	(18 949)	-
Total trade and other receivables (net)	1 045 213	1 278 269
Receivables are expected to be recovered in no more than 12 months (2014: no more than 12 months).
Current terms for receivables are net 30 days (2014: 30 days).
Trade and other receivables are aged as follows:
Not overdue	968 167	1 167 364
Overdue by:
— 0 to 30 days	23 858	99 743
— 31 to 60 days	10 773	3 262
— 61 to 90 days	42 415	7 900
— More than 90 days	18 949	-
Total trade and other receivables (gross)	1 064 162	1 278 269

Reconciliation of the impairment allowance
	Goods and services 2015	Goods and services 2014
	$	$
Opening balance	-	-
Amounts written off	206	160
Amounts recovered and reversed	957	-
(Increase) in provision for doubtful debts	(20 111)	(160)
Closing balance	(18 949)	-
7C. Investments The Memorial's investments represent term deposits held with Australian banks with terms greater than 90 days. Maturity dates range from July 2015 to June 2016. Effective interest rates range from 2.78 per cent to 3.65 per cent (2014: 3.55 per cent to 4.14 per cent).

8. Non-financial assets

8A. Land and Buildings

	2015	2014
	$	$
Land — at fair value	12 385 520	9 700 000
Buildings
Buildings — at fair value	138 423 419	132 632 911
Accumulated depreciation	(7 319 130)	(2 463 722)
Total buildings	131 104 289	130 169 189
Total land and buildings	143 489 809	139 869 189

No indicators of impairment were found for land and buildings.

No land and buildings are expected to be sold or disposed of within the next 12 months.

8B. Property, plant and equipment

Property, plant and equipment — at fair value	8 404 959	6 604 932
Accumulated depreciation	(2 725 449)	(1 578 890)
Total property, plant and equipment	5 679 510	5 026 042

No indications of impairment were found for property, plant and equipment.

No property, plant and equipment is expected to be sold or disposed of within the next 12 months.

8C. Heritage and Cultural Assets

Assets under construction — at cost	290 253	-
National Collection — at fair value	1 053 875 325	1 045 494 896
Accumulated depreciation	(35 603 381)	(25 215 141)
Total heritage and cultural assets	1 018 562 197	1 020 279 755

Assets under construction comprise commissioned artworks in progress.

No indicators of impairment were found for heritage and cultural assets.

No heritage and cultural assets are expected to be sold or disposed of within the next 12 months.

8D. Exhibitions

Assets under construction — at cost	26 450	9 992 066
Exhibitions — at fair value	43 928 954	27 429 349
Accumulated depreciation	(1 380 835)	(9 059 766)
Total exhibitions	42 574 569	28 361 649

No indicators of impairment were found for exhibition assets.

No exhibitions are expected to be sold or disposed of within the next 12 months.

Revaluations of non-financial assets

The Memorial's exhibitions were revalued as at 31 December 2014 by an independent valuer, in accordance with the policy stated in note 1.14. The fair value was determined by reference to the assets' depreciated replacement cost or market selling price (for items where a market exists). The carrying amount is included in the valuation figures above and is separately disclosed in Table 8F below.

A revaluation increment of $4,423,109 (2014: $0) for exhibitions was credited to the asset revaluation reserve by asset class and included in the equity section of the Statement of Financial Position; no increments were expensed (2014: nil expensed).

8E. Intangibles

	2015	2014
	$	$
Computer software:
Purchased	11 480 364	10 971 992
Accumulated amortisation	(6 816 260)	(6 022 751)
Total intangibles	4 664 104	4 949 241

No indicators of impairment were found for intangible assets.

No intangibles are expected to be sold or disposed of within the next 12 months.

8F. Reconciliation of the opening and closing balances of property, plant and equipment and intangibles (2014—15)

	Land	Buildings	Total land and buildings	Other property, plant and equipment	Heritage and cultural assets	Exhibitions	Intangibles	Total
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
As at 1 July 2014
Gross book value	9 700	150 496	160 196	6 605	1 045 495	37 422	10 973	1 260 691
Accumulated depreciation/amortisation	-	(20 327)	(20 327)	(1 579)	(25 215)	(9 060)	(6 024)	(62 205)
Net book value as at 1 July 2014	9 700	130 169	139 869	5 026	1 020 280	28 362	4 949	1 198 486
Additions	2 686	5 595	8 281	1 705	8 651	12 720	535	31 892
Revaluations recognised in other comprehensive income	-	-	-	-	-	4 423	-	4 423
Depreciation/amortisation expense	-	(4 855)	(4 855)	(1 045)	(10 388)	(2 716)	(820)	(19 825)
Other movements	-	195	195	15	19	(214)	-	15
Disposals	-	-	-	(21)	-	-	-	(21)
Net book value as at 30 June 2015	12 386	131 104	143 490	5 680	1 018 562	42 575	4 664	1 214 970
Net book value as at 30 June 2015 represented by:
Gross book value	12 386	156 287	168 673	8 289	1 054 165	54 351	11 508	1 296 985
Accumulated depreciation/amortisation	-	(25 183)	(25 183)	(2 609)	(35 603)	(11 776)	(6 844)	(82 015)
Total as at 30 June 2015	12 386	131 104	143 490	5 680	1 018 562	42 575	4 664	1 214 970

8F. (Cont'd) Reconciliation of the opening and closing balances of property, plant and equipment and intangibles (2013—14)

	Land	Buildings	Total land and buildings	Other property, plant, and equipment	Heritage and cultural assets	Exhibitions	Intangibles	Total
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
As at 1 July 2013
Gross book value	9 190	122 905	132 095	4 843	1 035 390	30 056	10 531	1 212 915
Accumulated depreciation/amortisation	-	(15 935)	(15 935)	(726)	(15 009)	(6 393)	(5 258)	(43 321)
Net book value as at 1 July 2013	9 190	106 970	116 160	4 117	1 020 381	23 663	5 273	1 169 594
Additions	-	6 987	6 987	1 796	10 105	11 579	440	30 907
Revaluations recognised in other comprehensive income	510	16 391	16 901	-	-	-	-	16 901
Depreciation/amortisation expense	-	(4 392)	(4 392)	(863)	(10 206)	(2 667)	(764)	(18 892)
Other movements	-	4 213	4 213	9	-	(4 213)	-	9
Disposals	-	-	-	(33)	-	-	-	(33)
Net book value as at 30 June 2014	9 700	130 169	139 869	5 026	1 020 280	28 362	4 949	1 198 486
Net book value as at 30 June 2014 represented by:
Gross book value	9 700	150 496	160 196	6 605	1 045 495	37 422	10 972	1 260 690
Accumulated depreciation/amortisation	-	(20 327)	(20 327)	(1 579)	(25 215)	(9 060)	(6 023)	(62 204)
Total as at 30 June 2014	9 700	130 169	139 869	5 026	1 020 280	28 362	4 949	1 198 486

	2015	2014
	$	$

8G. Other non-financial assets

Prepayments	656 804	1 158 581
Total other non-financial assets	656 804	1 158 581
Other non-financial assets expected to be recovered
No more than 12 months	395 219	1 158 581
More than 12 months	261 585	-
Total other non-financial assets	656 804	1 158 581

9. Payables

9A. Suppliers

Trade creditors	1 480 724	3 169 776
Total suppliers	1 480 724	3 169 776
Supplier payables expected to be settled within 12 months.
Supplier payables — related parties	251 848	19 000
Supplier payables — external parties	1 228 876	3 150 776
Total suppliers	1 480 724	3 169 776

Settlement was usually made within 30 days (2014: 30 days).

9B. Other payables

Wages and salaries	920 860	978 357
Payments received in advance	50 000	64 754
Paid parental leave	4 616	5 049
Customer orders not yet supplied	50 234	103 274
Total other payables	1 025 710	1 151 434

Other payables are expected to be settled in no more than 12 months (2014: no more than 12 months).

 

	2015	2014
	$	$

10. Provisions

10A. Employee provisions

Leave	7 977 313	8 631 512
Separations and redundancies	544 240	96 000
Other	482 933	482 933
Total employee provisions	9 004 486	9 210 445
Employee provisions are expected to be settled in:
No more than 12 months	5 151 320	6 630 793
More than 12 months	3 853 166	2 579 652
Total employee provisions	9 004 486	9 210 445

 

11. CASH FLOW RECONCILIATION

Reconciliation of cash and cash equivalents as per the Statement of Financial Position to Cash Flow Statement
Cash and cash equivalents as per:
Cash flow statement	7 109 567	5 709 642
Statement of financial position	7 109 567	5 709 642
Discrepancy	-	-

Reconciliation of net cost of services to net cash from operating activities:

Net cost of services	(48 112 829)	(50 843 956)
Add revenue from Government	44 008 000	40 900 000
Surplus (Deficit)	(4 104 829)	(9 943 956)
Adjustment for non-cash items
Depreciation and amortisation	19 824 597	18 892 459
Net write down of other assets	60 531	5 364
Loss (gain) from disposal of assets	(58 535)	20 707
Donated assets	(488 701)	(208 150)
Change in assets/liabilities
Decrease/(Increase) in net receivables	213 202	(469 945)
Decrease/(Increase) in inventories	44 943	(137 443)
Decrease/(Increase) in accrued interest	322 238	(282 664)
Decrease/(Increase) in other non-financial assets	500 906	(860 476)
(Decrease)/Increase in trade creditors	(1 336 567)	1 661 589
(Decrease)/Increase in other payables	(574 208)	325 743
(Decrease)/Increase in employee provisions	(109 959)	771 208
Net cash from operating activities	14 293 618	9 774 437

12. CONTINGENT assets and liabilities

Contingent assets and liabilities are not recognised in the statement of financial position but contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.

The Memorial has one quantifiable contingent asset in respect of a bequest $113,300 (2014: nil). This amount represents a distribution after the sale of property. There were no contingent liabilities in the current reporting period (2014: nil).

13. Senior MANAGEMent personnel remuneration

	2015	2014
	$	$
Short-term employee benefits
Salary	1 435 691	1 396 210
Performance bonuses	53 222	51 690
Motor vehicle and other allowances	108 013	128 498
Total short-term employee benefits	1 596 926	1 576 398
Post-employment benefits:
Superannuation	201 116	196 956
Total post-employment benefits	201 116	196 956
Other long-term employee benefits:
Annual leave	(104 123)	(123 562)
Long-service leave	(129 343)	34 994
Total other long-term employee benefits	(233 466)	(88 568)
Termination benefits	283 827	12 764
Total senior executive remuneration expenses	1 848 403	1 697 550

The total numbers of senior management personnel that are included in the above table are 21 (2014: 19). When senior executives are on extended leave, or act for the Director, their positions are back-filled. The above figures include payments made to staff acting in senior executive positions. The Memorial has one more senior executive than in 2014 and the membership of the Council has also increased by one member.

14. Related party disclosures

No loans or grants were made to any members of the Council, and no Council member has received or become entitled to receive a benefit by reason of a contract made by the Memorial with the Council member or an entity in which she/he has a substantial financial interest.

Council members are paid in accordance with Remuneration Tribunal determinations as provided by section 13 of the Australian War Memorial Act 1980.

 

15. Remuneration of auditors

	2015	2014
	$	$
Fair value of services received Financial statement audit services	59 000	57 000
Total fair value of services received	59 000	57 000
The Memorial's auditor is the Australian National Audit Office, which has retained Ernst & Young (Australia) to assist with the assignment. No other services were provided by the Australian National Audit Office or Ernst & Young (Australia).

16. FINANCIAL INSTRUMENTS

16A. Categories of financial instruments

Financial Assets
Held-to-maturity investments
Deposits on short-term investment	61 000 000	67 000 000
Total held-to-maturity investments	61 000 000	67 000 000
Loans and receivables
Cash at bank	7 101 317	5 701 992
Trade and other receivables	1 045 213	1 278 269
Accrued interest revenue	1 190 859	1 513 097
Total loans and receivables	9 337 389	8 493 358
Total financial assets	70 337 389	75 493 358
Financial Liabilities
At amortised cost:
Trade creditors	1 480 724	3 169 776
Total financial liabilities measured at amortised cost	1 480 724	3 169 776
Total financial liabilities	1 480 724	3 169 776

16B. Net gains or losses on financial assets

Held-to-maturity investments
Interest revenue	2 338 027	2 888 021
Net gains on held-to-maturity investments	2 338 027	2 888 021
Loans and receivables
Interest revenue	220 586	173 131
Impairment	(18 949)	-
Net gains on loans and receivables	201 637	173 131
Net gains on financial assets	2 539 663	3 061 152

16C. Fair value of financial instruments

Financial Assets

The net fair values of cash, short-term deposits and trade and other receivables approximate their carrying amounts.

None of the classes of financial assets are readily traded on organised markets in standardised form.

Financial Liabilities

The net fair values for trade creditors, which are short-term in nature, approximate their carrying amounts.

None of the classes of financial liabilities are readily traded on organised markets in standardised form.

16D. Credit risk

The Memorial's maximum exposures to credit risk at reporting date in relation to each class of recognised financial assets is the carrying amount of those assets as indicated in the Statement of Financial Position. The Memorial has no significant exposures to any concentrations of credit risk. The Memorial does not hold collateral or other security and therefore the figures for credit risk represent the maximum credit risk exposure.

The following table illustrates the Memorial's gross exposure to credit risk, excluding any collateral or credit enhancements.

	2015	2014
	$	$
Financial assets
Trade and other receivables	1 064 162	1 278 269
Cash at bank	7 101 317	5 701 992
Accrued interest revenue	1 190 859	1 513 097
Deposits on short-term investment	61 000 000	67 000 000
Total	70 356 338	75 493 358

Credit quality of financial instruments not past due nor individually determined as impaired.

	Not past due nor impaired 2015 $	Not past due nor impaired 2014 $	Past due or impaired 2015 $	Past due or impaired 2014 $
Financial assets
Deposits on short-term investments	61 000 000	67 000 000	-	-
Cash at bank	7 101 317	5 701 992	-	-
Trade and other receivables	968 167	1 513 097	95 995	110 905
Accrued interest revenue	1 190 859	1 167 364	-	-
Total	70 260 343	75 382 453	95 995	110 905

Ageing of financial assets that are past due but not impaired for 2015:

	0 to 30 days $	31 to 60 days $	61 to 90 days $	90+ days $	Total $
Trade and other receivables	23 858	10 773	42 415	-	77 045
Total	23 858	10 773	42 415	-	77 045

Ageing of financial assets that are past due but not impaired for 2014:

	0 to 30 days $	31 to 60 days $	61 to 90 days $	90+ days $	Total $
Trade and other receivables	99 743	3 262	7 900	-	110 905
Total	99 743	3 262	7 900	-	110 905

16E. Liquidity risk

The Memorial's financial liabilities are trade payables. The exposure to liquidity risk is based on the notion that the Memorial will encounter difficulty in meeting its obligations associated with financial liabilities. This is highly unlikely due to appropriation funding and internal policies and procedures put in place to ensure there are appropriate resources to meet the Memorial's financial obligations. All trade payables will mature within one year (2014: within one year).

16F. Market risk

The Memorial holds basic financial instruments that do not expose it to certain market risks. The Memorial is not exposed to "currency risk" or "other price risk".

Interest rate risk

Interest rate risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Memorial is exposed to interest rate risk primarily from held-to-maturity investments and cash at bank.

The table below details the interest rate sensitivity analyses of the Memorial at the reporting date, holding all other variables constant. A 40-basis-point change is deemed to be reasonably possible and is used when reporting interest rate risk.

			Effect on	Effect on
	Risk variable	Change in variable	Profit or loss 2015 $	Equity 2015 $	Profit or loss 2014 $	Equity 2014 $
Interest rate risk	Interest	+0.40% (2014: +0.60%)	272 405	272 405	436 212	436 212
Interest rate risk	Interest	-0.40% (2014: -0.60%)	(272 405)	(272 405)	(436 212)	(436 212)

The method used to arrive at the possible risk of 40 basis points was based on both statistical and non-statistical analysis. The statistical analysis has been based on the cash rate for the past five years issued by the Reserve Bank of Australia (RBA) as the underlying dataset. This information is then revised and adjusted for reasonableness under the current economic circumstances.

17. Financial assets reconciliation

	2015 $	2014 $
Financial assets
Total financial assets as per balance sheet	70 345 639	75 501 008
Less: non-financial instrument components	8 250	7 650
Total non-financial instrument components	70 337 389	75 493 358
Total financial assets as per financial instruments note	70 337 389	75 493 358

18. assets held in trust

The following monies are not available for other purposes of the Memorial and are not recognised in the financial statements.

18A. Florance Foundation Trust Fund — monetary asset

During 1979—80 an amount of $3,000 was provided by Mrs D. Florance of Bowral, New South Wales, on condition that it was invested and the interest be used to bring disadvantaged children to the Memorial. To this the Memorial added $5,000, bringing the total of the Florance Foundation to $8,000. In 1985—86 the Australian War Memorial paid a further $10,000 into the Florance Foundation so that sufficient interest was generated to ensure the purpose of the Florance Foundation can continue. The Florance Foundation's current financial position, which is reported on a cash basis, is as follows:

	2015	2014
	$	$
Total amount held at the beginning of the reporting period	20 783	21 507
Interest received	560	598
Payments made	(580)	(1 322)
Total amount held at the end of the reporting period	20 763	20 783

The current policy is for the trust fund to contribute the interest earned on the account towards the cost of fares associated with the transportation of disadvantaged children to the Memorial as part of the Anzac Day commemorations. The Legacy Coordinating Council and the Memorial together meet the balance of the fares' cost.

18B. Australian War Memorial Krait Trust Fund — monetary asset

In April 1985 the Memorial received the MV Krait and $50,000 from the Z Special Unit Association Krait Public Museum Fund. The monies, together with interest, are held in a separate bank account as provided for in the agreement with the trustees of the Krait Fund. These funds are for the conservation of the Krait. The interest earned is transferred to the National Maritime Museum for maintenance work on the Krait. The financial position of the fund, which is reported on a cash basis, is as follows:

	2015	2014
	$	$
Total amount held at the beginning of the reporting period	41 365	41 562
Interest received	1 094	1 160
Payments made	(1 173)	(1 357)
Total amount held at the end of the reporting period	41 286	41 365

 

19. REPORTING of OUTCOMES

19A. Outcome of the Memorial

The Memorial is structured to meet the following outcome:

Australians remembering, interpreting, and understanding the Australian experience of war and its enduring impact through maintaining and developing the national Memorial and its collection and exhibition of historical material, commemorative ceremonies, and research.

19B. Net cost of outcome delivery

	Outcome 1
	2015 $	2014 $
Expenses	67 709 304	62 991 609
Own-source income	19 596 475	12 147 653
Net cost (contribution) of outcome delivery	48 112 829	50 843 956

19C. Major Classes of Departmental Expense and Income by Outcome

	Outcome 1
	2015	2014
	$	$
Expenses	67 709 304	62 991 609
Income from non-government sector
Activities subject to cost recovery	4 733 844	4 275 186
Interest	2 558 612	3 061 152
Resources received free of charge — external entities	778 646	990 852
Donations and Sponsorships	10 819 872	3 418 534
Other	380 666	213 397
Total income from non-government sector	19 271 640	11 959 121
Other own-source income
Sale of goods and services — to related entities	241 677	86 310
Resources received free of charge — related entities	17 862	102 222
Other	-	-
Total other own-source income	259 539	188 532
Net cost (contribution) of outcome	48 178 125	50 843 956

The net costs shown include intra-government costs that were eliminated in calculating the actual Budget Outcome.

20. Budgetary reports and Explanations of major variances

20A. Budgetary Reports

STATEMENT OF COMPREHENSIVE INCOME for the period ended 30 June 2015
		Budget estimate
	Actual	Original1	Variance2
	2015	2015	2015
	$	$	$	%	Ref
EXPENSES
Employee benefits	23 329 252	25 898 000	2 568 748	10%
Supplier	24 488 163	23 019 000	(1 469 163)	(6%)
Depreciation and amortisation	19 824 597	20 580 000	755 403	4%
Write-down and impairment of assets	60 531	-	(60 531)
Losses from asset sales	6 761	-	(6 761)
Total expenses	67 709 304	69 497 000	1 787 696
OWN-SOURCE INCOME
Own-source revenue
Sale of goods and rendering of services	4 975 521	3 255 000	(1 720 521)	(53%)	(i)
Interest from deposits	2 558 612	2 470 000	(88 612)	(4%)
Resources received free of charge	796 508	-	(796 508)
Donations and sponsorships	10 819 872	5 700 168	(5 119 704)	(90%)	(ii)
Other revenue	380 666	138 832	(241 834)	(174%)	(iii)
Total own-source revenue	19 531 179	11 564 000	(7 967 179)
Gains
Gains from sale of assets	65 296	-	(65 296)
Total gains	65 296	-	(65 296)
Total own-source income	19 596 475	11 564 000	(8 032 475)
Net cost of services	48 112 829	57 933 000	9 820 171
Revenue from Government	44 008 000	47 808 000	3 800 000	8%	(iv)
(Deficit) Surplus	(4 104 829)	(10 125 000)	(6 020 171)
OTHER COMPREHENSIVE INCOME Items not subject to subsequent reclassification to profit or loss
Changes in asset revaluation surplus3	4 423 109	-	(4 423 109)
Total other comprehensive income	4 423 109	-	(4 423 109)
Total comprehensive (loss) income	318 280	(10 125 000)	(10 443 280)	103%

STATEMENT OF FINANCIAL POSITION As at 30 June 2015
		Budget estimate
	Actual	Original1	Variance2
	2015	2015	2015
	$	$	$	%	Ref
ASSETS
Financial assets
Cash and cash equivalents	7 109 567	1 202 000	(5 907 567)	(491%)	(v)
Trade and other receivables	1 045 213	876 000	(169 213)	(19%)	(vi)
Investments	61 000 000	61 000 000	-	-
Accrued interest	1 190 859	1 255 000	64 141	5%
Total financial assets	70 345 639	64 333 000	(6 012 639)
Non-financial assets
Land and buildings	143 489 809	139 456 000	(4 033 809)	(3%)
Property, plant and equipment	5 679 510	5 556 000	(123 510)	(2%)
Heritage and cultural assets	1 018 562 197	1 018 646 000	83 803	-
Exhibitions	42 574 569	42 546 000	(28 569)	-
Intangibles	4 664 104	4 241 000	(423 104)	(10%)
Inventories	734 047	687 000	(47 047)	(7%)
Prepayments	656 804	298 000	(358 804)	(120%)	(vii)
Total non-financial assets	1 216 361 040	1 211 430 000	(4 931 040)
Total assets	1 286 706 679	1 275 763 000	(10 943 679)
LIABILITIES
Payables
Suppliers	1 480 724	1 608 000	127 276	8%
Other payables	1 025 710	29 000	(996 710)	(3437%)	(vi)
Total payables	2 506 434	1 637 000	(869 434)
Provisions
Employee provisions	9 004 486	9 133 000	128 514	1%
Total provisions	9 004 486	9 133 000	128 514
Total liabilities	11 510 920	10 770 000	(740 920)
NET ASSETS	1 275 195 759	1 264 993 000	(10 202 759)
EQUITY
Contributed equity	96 152 000	96 152 000	-	-
Asset revaluation reserves	620 479 581	616 056 000	(4 423 581)	(1%)
Retained surplus	558 564 178	552 785 000	(5 779 178)	(1%)
Total equity	1 275 195 759	1 264 993 000	(10 202 759)

STATEMENT OF CHANGES IN EQUITY for the period ended 30 June 2015
	Retained earnings	Asset revaluation surplus	Contributed equity/capital	Total equity
		Budget estimate		Budget estimate		Budget estimate		Budget estimate
	Actual	Original1	Variance2	Actual	Original1	Variance2	Actual	Original1	Variance2	Actual	Original1	Variance2
	2015	2015	2015	2015	2015	2015	2015	2015	2015	2015	2015	2015
	$	$	$	$	$	$	$	$	$	$	$	$
Opening balance 1 July
Balance carried forward from previous period	562 669 006	562 910 000	240 994	616 056 472	616 056 000	(472)	83 708 000	96 152 000	12 444 000	1 262 433 478	1 275 118 000	12 684 522
Adjusted opening balance	562 669 006	562 910 000	240 994	616 056 472	616 056 000	(472)	83 708 000	96 152 000	12 444 000	1 262 433 478	1 275 118 000	12 684 522
Comprehensive Income
Surplus (Deficit) for the period	(4 104 829)	(10 125 000)	(6 020 171)	-	-	-	-	-	-	(4 104 829)	(10 125 000)	(6 020 171)
Other comprehensive income	-	-	-	4 423 109	-	(4 423 109)	-	-	-	4 423 109	-	(4 423 109)
Total comprehensive income attributable to the Australian Government	(4 104 829)	(10 125 000)	(6 020 171)	4 423 109	-	(4 423 109)	-	-	-	318 280	(10 125 000)	(10 443 280)
Transactions with owners
Contributions by owners
Equity injection	-	-	-	-	-	-	12 444 000	-	(12 444 000)	12 444 000	-	(12 444 000)
Total transaction with owners	-	-	-	-	-	-	12 444 000	-	(12 444 000)	12 444 000	-	(12 444 000)
Closing balance attributable to Australian Government	558 564 178	552 785 000	(5 779 178)	620 479 581	616 056 000	(4 423 581)	96 152 000	96 152 000	-	1 275 195 759	1 264 993 000	(10 202 759)

CASH FLOW STATEMENT for the period ended 30 June 2015
		Budget estimate
	Actual	Original1	Variance2
	2015	2015	2015
	$	$	$	%	Ref
Operating activities
Cash received
Receipts from Government	44 008 000	47 761 000	3 753 000	8%
Sales of goods and rendering of services	4 728 249	3 255 000	(1 473 249)	(45%)	(i)
Interest	2 880 850	2 470 000	(410 850)	(17%)
Net GST received	3 658 040	-	(3 658 040)
Donations and sponsorships	10 331 171	3 505 000	(6 826 171)	(195%)	(ii)
Other	266 931	2 034 000	1 767 069	87%	(iii)
Total cash received	65 873 241	59 025 000	(6 848 241)
Cash used
Employees	(23 439 211)	(25 901 000)	(2 461 789)	10%
Suppliers	(28 140 412)	(23 019 000)	5 121 412	(22%)	(viii)
Total cash used	(51 579 623)	(48 920 000)	2 659 623
Net cash from operating activities	14 293 618	10 105 000	(4 188 618)
Investing activities
Cash received
Proceeds from sales of property, plant and equipment	65 296	-	(65 296)
Investments	89 000 000	76 500 000	(12 500 000)	(16%)	(v)
Total cash received	89 065 296	76 500 000	(12 565 296)
Cash used
Purchase of property, plant, equipment and intangibles	(31 402 990)	(34 843 000)	(3 440 010)	10%
Investments	(83 000 000)	(64 500 000)	18 500 000	(29%)	(v)
Total cash used	(114 402 990)	(99 343 000)	15 059 990	(15%)
Net cash used by investing activities	(25 337 693)	(22 843 000)	2 494 693
Financing activities
Cash received
Contributed equity	12 444 000	12 444 000	-	-
Total cash received	12 444 000	12 444 000	-
Net cash from financing activities	12 444 000	12 444 000	-
Net (decrease) / increase in cash held	1 399 925	(294 000)	(1 693 925)
Cash and cash equivalents at the beginning of the reporting period	5 709 642	1 496 000	(4 213 642)
Cash and cash equivalents at the end of the reporting period	7 109 567	1 202 000	(5 907 567)

1. The Memorial's original budgeted financial statement that was first presented to parliament in respect of the reporting period (that is, from the Memorial's 2014—15 Portfolio Budget Statements (PBS)).

2. Between the actual and original budgeted amounts for 2015. Explanations for major variances are provided at Note 20B below.

3. No budget was developed for asset revaluation increments.

20B. Major Budget Variances for 2015

Affected line items (and statement)	Explanations of major variances
(i)	(53%)	Own-Source Revenue — Sale of goods and rendering of services (Statement of Comprehensive Income)	Increase in revenue through retail and online sales attributable to interest in the Centenary of Anzac and higher than expected visitor numbers.
(45%)	Operating Activities — Cash received — Sales of goods and rendering of services (Cash Flow Statement)
(ii)	(90%)	Own-Source Revenue — Donations and Sponsorships (Statement of Comprehensive Income)	Donations, sponsorships and bequests received that were not anticipated at the time of framing the budget.
(195%)	Operating Activities — Cash received — Donations and Sponsorships (Cash Flow Statement)
(iii)	(174%)	Own-Source Revenue — Other revenue (Statement of Comprehensive Income)	Increase in revenue attributable to increases in royalties and licensing income and rental income (Treloar F).
87%	Operating Activities — Cash received — Other (Cash Flow Statement)
(iv)	8%	Revenue from Government (Statement of Comprehensive Income)	Approved movement of funds to future years.
(v)	(491%)	Assets — Financial assets — Cash and cash equivalents (Statement of Financial Position)	Cash on hand transitions between operating accounts and decisions to place investments depend on cash liquidity requirements, and fluctuate during the period.
(16%)	Investing Activities — Cash received — Investments (Cash Flow Statement)
(29%)	Investing Activities — Cash used — Investments (Cash Flow Statement)
(vi)	(19%)	Assets — Financial assets — Trade and other receivables (Statement of Financial Position)	Increased interest in Centenary of Anzac activities has led to higher retail and online sales, which are often prepaid. Invoices for licensing fees for the use of the Memorial's centenary logo have also increased. Increased sales result in increased inventory purchases.
(3437%)	Liabilities — Payables — Other payables (Statement of Financial Position)
(vii)	(120%)	Assets — Financial assets — Prepayments (Statement of Financial Position)	The variation in the level of prepayments reflects the timing, period and the nature of the amounts being paid. In 2013—14 many prepayments for software support reached the final year of their arrangements, so the amount remaining as prepaid was minimal. As these arrangements were renewed in 2014—15 the level of prepayments increased.
(viii)	(22%)	Operating Activities — Cash used — Suppliers (Cash Flow Statement)	The final result reflects the timing and total value, excluding GST, of supplier invoices on hand at the year's end.

To provide advice to the Minister for Veterans' Affairs through the Chair.