FRD 21B
Disclosures of Responsible Persons,
Executive Officers and Other Personnel
(Contractors with Significant
Management Responsibilities) in the
Financial Report
Summary of Key
Requirements
1.1
Disclose in an entity’s financial report the remuneration and related
party transactions relating to responsible persons and executive officers,
and expenses (exclusive of GST) paid or payable to other personnel, i.e.
contractors charged with significant management responsibilities.
Purpose
2.1
To prescribe disclosure requirements of remuneration and related party
transactions in relation to responsible persons and executive officers, as
well as the disclosure of the expenses (exclusive of GST) incurred as a
result of the entity’s engagement with other personnel, i.e. contractors
charged with significant management responsibilities in the financial
report of all public sector agencies.
Application
3.1
This FRD applies to any ‘department’ as defined in Section 3 of the
Financial Management Act 1994 or ‘public body’ as defined in
Section 3 of the Financial Management Act 1994 (FMA). A public
sector entity classified as a public financial corporation or a public
non-financial corporation within the latest Financial Report for the
State of Victoria that does not meet the definition of a ‘public body’
is encouraged to refer to this FRD for guidance.
Operative Date
4.1
Reporting periods commencing on or after 1 July 2011, except for
paragraphs 5.4, 6.8, 7.4 and 7.5, which are applicable for reporting
periods commencing on or after 1 July 2012.
FRD 21A Responsible Person and Executive Officer Disclosures in
the Financial Report is withdrawn and superseded by FRD 21B
from 1 July 2011.
Requirement
5.1
Responsible persons
The financial report of a reporting entity (including consolidated
financial report in relation to an economic entity) must disclose the
following in relation to responsible persons at any time during the
reporting period:
(a) the number of responsible persons;
(b) the name of each person holding a position of responsible
person; and
(c) the total remuneration received within $10,000 bands
including related party transactions.
5.2
Ministers
The names of the relevant Ministers at any time during the
reporting period must be disclosed. Ministerial remuneration is
only to be disclosed in the financial report of the Department of
Premier and Cabinet.
FRD 21B (July 2012)
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FRD 21B
Disclosures of Responsible Persons,
Executive Officers and Other Personnel
(Contractors with Significant Management
Responsibilities) in the Financial Report
5.3
Executive officers
An entity shall disclose the following in relation to executive officers
as defined in paragraph 6.3:
5.4
(a)
the number of executive officers with total remuneration
received or receivable in connection to their position as an
executive officer exceeding $100,000 over the reporting
period, separately identifying base remuneration and total
remuneration. An executive officer’s base and total
remuneration should be disclosed within the income band of
$10,000 in a table format;
(b)
the total remuneration received or receivable by executive
officers identified in paragraph 5.3(a) over the reporting
period;
(c)
the total annualised employee equivalent (AEE) of executive
officers identified in paragraph 5.3(a) over the reporting
period; and
(d)
the reasons for significant variations between total and base
remuneration, and/or total remuneration variations between
current and previous reporting period.
Other personnel
An entity shall disclose in relation to other personnel as defined in
paragraph 6.8:
Definitions
(a)
the number of contractors charged with significant
management responsibilities, to whom the total expenses
paid or payable by the entity exceed $100,000 (exclusive of
GST) over the reporting period. Disclosure of contract
expenses is required to be presented within the expense
bands of $10,000;
(b)
the total expenses paid or payable to contractors identified
in paragraph 5.4 (a) over the reporting period; and
(c)
the reasons for significant variations of total expenses
between current and previous reporting period.
6.1
6.2
Accountable officer is defined in section 3 of the FMA.
Annualised employee equivalent (AEE) is calculated by dividing the
total number of ordinary hours that an employee worked over the
reporting period by the total number of full-time working hours per
annum (this is generally 38 hours per week for 52 weeks per year).
6.3
Executive officer is a person, other than a responsible person,
occupying a management role within the reporting entity, and does not
FRD 21B (July 2012)
Page 2 of 6
FRD 21B
Disclosures of Responsible Persons,
Executive Officers and Other Personnel
(Contractors with Significant Management
Responsibilities) in the Financial Report
include Governor-in-Council appointments as statutory office holders.
For a department, an executive officer includes a person employed
under Part 3 of the Public Administration Act 2004 (PAA), as a public
service body Head or other executive.
For a public body, an executive officer includes a person employed at an
annual compensation rate not less than the minimum remuneration of
the Victorian Public Service (VPS) EO-3 Band over the reporting
period.
6.4
Related party transactions include transactions between a responsible
person or a responsible person-related party and a department or a
public body, and include but are not limited to loans, loan repayments,
shares and share options within the economic entity.
6.5
Responsible person is
(a) in relation to a department, the Accountable Officer and the
responsible Minister or Ministers (in relation to the individual
Minister’s portfolio);
(b) in relation to a public body other than a department, the
responsible Minister, the accountable officer and members
of the governing boards, trustees or boards of
management; and
(c)
6.6
any other person occupying or acting in the position of Minister,
accountable officer or Board member in relation to a reporting
entity. Responsible persons of the reporting entity comprise, in
relation to the financial report of a reporting entity, the
responsible persons of the entity, and, in relation to the
consolidated financial report of an economic entity, the
responsible persons of the economic entity, which in normal
circumstances, comprise the responsible persons of the parent
entity in the economic entity.
6.7
Responsible person-related parties include the spouses of responsible
persons, children of such responsible persons or spouses, and any other
entity under the joint or several control or significant influence of such
responsible persons, spouses or children.
Remuneration – remuneration package and includes any money,
consideration or benefit received or receivable by the person as a
responsible person or executive officer but excludes reimbursement of
out-of-pocket expenses, including any amount received or receivable
from a related party transaction.
6.8
Other personnel means those who are:
(a) engaged by an entity as contractors; and
(b) charged with significant management responsibilities.
FRD 21B (July 2012)
Page 3 of 6
FRD 21B
Guidance
Disclosures of Responsible Persons,
Executive Officers and Other Personnel
(Contractors with Significant Management
Responsibilities) in the Financial Report
7.1
This section provides guidance on the disclosure requirements of this
FRD in relation to responsible persons, executive officers and other
personnel.
Responsible persons
7.2
The following should be disclosed in regard to responsible persons:
(a) The name of each person holding a position that meets the
definition of a responsible person of the reporting entity, at any
time during the reporting period;
(b) Where there is more than one responsible person during any
reporting period, the total remuneration of all responsible
persons received or receivable in connection to their position as
responsible person;
(c) An analysis of the remuneration of responsible persons in
income bands of $10,000, listing the number of responsible
persons whose actual remuneration for the period falls within
each income band; and
(d) A table disclosing the aggregate amount of related party
transactions (i.e. transactions between responsible persons and a
department/a public body, or between responsible personrelated parties and a department/a public body) at the reporting
date, including but not limited to the aggregate amount of
repayments, shares and share options, and other sources of
remuneration that do not come under the definition of any of
the above mentioned categories received by the responsible
person in addition to the base remuneration.
Executive officers
7.3
The following shall be disclosed in regard to executive officers:
(a) Total remuneration of all executive officers received or
receivable in connection to their position as an executive
officer, including the remuneration of executive officers acting
in the position of an accountable officer at any time during the
reporting period. To ensure disclosures for executive officer
remuneration are meaningful, additional information shall be
disclosed about the nature of such remuneration. For example,
annual bonuses may result in an increase in, or shifts in the
number of executive officers in each income band from one
period to the next. Without further explanation and analysis, it
is possible that such information could lead to erroneous
conclusions being drawn about the number and remuneration of
executives officers disclosed;
(b) The disclosure of the annualised employee equivalent (AEE)
applies to executive officers whose total remuneration received
or receivable exceed $100,000. When an entity elects to
FRD 21B (July 2012)
Page 4 of 6
FRD 21B
Disclosures of Responsible Persons,
Executive Officers and Other Personnel
(Contractors with Significant Management
Responsibilities) in the Financial Report
disclose executive officers whose total remuneration is below
the $100,000 threshold, the corresponding AEE for these
executive officers should also be disclosed to ensure alignment
between executives’ working hours and remuneration;
(c) To improve the usefulness of information disclosed about
executive officer remuneration, the base remuneration should be
disclosed separately from actual total remuneration. Any
significant variations between total and base remuneration,
and/or total remuneration variations between current and
previous reporting period, should be supported by explanatory
commentary; and
(d) Accrual principles apply in determining remuneration levels,
which requires that all amounts received or receivable in
connection to the position as an executive officer over the
reporting period are disclosed.
Other personnel
responsibilities)
7.4
(contractors
with
significant
management
An entity shall exercise judgement in determining whether a contractor
has been charged with significant management responsibilities for the
purpose of this FRD. Having the authority and responsibility for
planning, directing and controlling the activities, directly or indirectly,
of an entity is considered as undertaking significant management
responsibilities.
Further indicators may include participating in the formation of an
entity’s business/project plans, undertaking team/project leadership
roles or involvement in the entity’s operational decisions.
7.5
For the purpose of this FRD, holding financial and/or human resource
management delegation is not a pre-requisite for undertaking significant
management responsibilities.
Relevant
Pronouncements
Not applicable.
Background
FRD 21A Responsible Person and Executive Officer Disclosures in the
Financial Report was issued in 2005 to prescribe disclosure
requirements on remuneration and related party transactions in relation
to responsible persons and executive officers over the reporting period.
FRD 21B Disclosures of Responsible Persons, Executive Officers and
Other Personnel (Contractors with Significant Management
Responsibilities) in the Financial Report was issued with key
amendments including: (1) introducing a new measure, in the form of
‘annualised employee equivalent’ in addition to the headcount
disclosure for executive officers; and (2) extending the scope of
FRD 21A to contractors charged with significant management
FRD 21B (July 2012)
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FRD 21B
Disclosures of Responsible Persons,
Executive Officers and Other Personnel
(Contractors with Significant Management
Responsibilities) in the Financial Report
responsibilities in an entity. The amendments are expected to increase
the usefulness of information for the financial report users.
Appendices
Appendix A
Example disclosure for the financial report
FRD 21B (July 2012)
Page 6 of 6
Appendix A – Example disclosure for the financial report
Note XX.
Ministers and accountable officers
In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act
1994 (FMA), the following disclosures are made regarding responsible persons for the reporting period.
Names
The persons who held the positions of Ministers and Accountable Officers in the Department are as follows:
Minister for Technology
The Hon. John Bristol MP
1 July 20X1 to 30 June 20X2
Minister for Biotechnology
The Hon. Laura Toddington MP
1 July 20X1 to 30 June 20X2
Secretary
Ms Jane Smith
1 July 20X1 to 30 June 20X2
Remuneration
Remuneration received or receivable by the Accountable Officer in connection with the management of the Department
during the reporting period was in the range:
$460 000 – $469 000 ($460 000– $469 000 in 20X0-X1)
Related party transactions included in the reconciliation amount:
Ms Jane Smith
Loan balances
Loans made
Loan repayments
Shares held
Share options
Other
Total
20X2
$
10,000
(5,000)
12,000
8,000
25,000
20X1
$
40,000
20,000
(30,000)
5,000
35,000
Amounts relating to Ministers are reported in the financial statements of the Department of Premier and Cabinet.
OR
Other transactions (Alternative to table above)
Other related transactions and loans requiring disclosure under the Directions of the Minister for Finance have been
considered and there are no matters to report.
Note XX(a).
Remuneration of executives
Executive officers
The numbers of executive officers, and their total remuneration during the reporting period are shown in the
first two columns in the table below in their relevant income bands. The base remuneration of executive
officers is shown in the third and fourth columns. Base remuneration is exclusive of bonus payments, longservice leave payments, redundancy payments and retirement benefits. The total annualised employee
equivalent provides a measure of full-time equivalent executive officers over the reporting period.
Several factors have affected total remuneration payable to executives over the year. A number of
employment contracts were completed during the year and renegotiated and a number of executives received
bonus payments during the year. These bonus payments depend on the terms of individual employment
contracts. Some contracts provide for an annual bonus payment whereas other contracts only include the
payment of bonuses on the successful completion of the full term of the contract. A number of these contract
completion bonuses became payable during the year.
A number of executive officers retired, resigned or were retrenched in the past year. This has had a significant
impact on total remuneration figures due to the inclusion of annual leave, long-service leave and retrenchment
payments.
Income Band
$100,000 – 109,999
$110,000 – 119,999
$120,000 – 129,999
$130,000 – 139,999
$140,000 – 149,999
$150,000 – 159,999
$160,000 – 169,999
$170,000 – 179,999
$180,000 – 189,999
$190,000 – 199,999
$200,000 – 209,999
$210,000 – 219,999
$220,000 – 229,999
$230,000 – 239,999
$240,000 – 249,999
$250,000 – 259,999
Total number of executives
Total annualised employee
equivalent (AEE) (a)
Total amount
Total Remuneration
Base Remuneration
20X2
No.
20X1
No.
20X2
No.
20X1
No.
12
7
11
8
8
6
3
1
1
2
1
0
1
0
0
2
63
26
9
7
5
2
3
0
2
2
2
3
0
0
0
1
0
62
27
9
12
5
1
1
2
2
2
0
0
0
0
0
1
1
63
41
5
6
2
1
1
0
4
0
1
0
1
0
0
0
0
62
55.2
51.8
55.2
51.8
$8,915,851
$7,303,964
$7,287,310
$6,383,420
Note:
(a) Annualised employee equivalent is based on working 38 ordinary hours per week over the reporting period.
Note XX(b).
Payments to other personnel
Other personnel, i.e. Contractors with significant management responsibilities
[Please note that an entity is required to disclose information of contractors undertaking significant
management responsibilities from reporting periods commencing on or after 1 July 2012.]
The number of contractors charged with significant management responsibilities is disclosed within the
$10,000 expense band. These contractors are responsible for planning, directing or controlling, directly
or indirectly, the entity’s activities.
The change in total expenses from the 20X2 to 20X3 reporting period was mainly driven by new
functions being undertaken by the entity in the 20X3 reporting period.
Expense Band
$120,000 – 129,999
$140,000 – 149,999
$150,000 – 159,999
Total expenses (exclusive of GST)
Total expenses (exclusive of GST)
20X3
20X2
No.
No.
5
2
$1,032,000
3
1
$531,000