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9. Financial Assets and Financial Liabilities

ASC PTY LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —CONTINUED
For the year ended 30 June 2019

a. Cash and cash equivalents

June 2019 $'000

June 2018 $'000

Current assets

Cash at bank and on hand

125,578

183,287

Other cash and cash equivalents

78,527

132,140

204,105

315,427

The consolidated entity's exposure to interest rate risk is discussed in note 5.

Included in cash in operating accounts are amounts advanced to the Company and to ASC AWD Shipbuilder Pty Ltd, a subsidiary within the consolidated entity, by the Commonwealth of Australia (CoA) for the purposes of funding the working capital requirements of the ISSC and AWD projects respectively. The amounts advanced have certain contractual restrictions placed on the use of these funds. The funds maintained may only be applied to direct project expenditure incurred and claims for reimbursement from the CoA. The amount that exceeds the value of the direct project expenditure incurred and unbilled as at balance date is defined as restricted cash. At 30 June 2019, the balance of restricted cash was nil (2018: $62 million).

(i) Reconciliation to statement of cash flows
The above figures reconcile to the amount of cash shown in the statement of cash flows at the end of the financial year as follows:

June 2019 $'000

June 2018 $'000

Balances as above

204,105

315,427

b. Trade and other receivables

June 2019 $'000

June 2018 $'000

Current

Trade receivables

Trade receivables

132,084

112,677

Provision for doubtful debts

(2,251)

(1,374)

129,833

111,303

Other receivables

Other receivables

323

275

Interest receivable

95

246

418

521

130,251

111,824

Amounts recognised in profit or loss
The write-downs of receivables to net realisable value recognised during the year ended 30 June 2019 amounted to $0.9 million (2018: $1.6 million reversal of write down).

June 2019 $'000

June 2018 $'000

Accounts Receivable Ageing Profile

Trade receivables

Not past due

129,037

111,912

Past due 1-30 days

-

77

Past due 31-60 days

1,126

136

Past due 61-90 days

-

(308)

Past due 90+ days

88

7

130,251

111,824

c. Trade and other payables

June 2019 $'000

June 2018 $'000

Current liabilities

Trade payables

14,858

18,682

Other payables

72,833

67,290

87,691

85,972

d. Borrowings

Interest Bearing Liabilities

June 2019 $'000

June 2018 $'000

Current - Unsecured

Government advance

65,788

90,770

Government advance
Government advance represents the working capital advance provided by the CoA under both the ISSC and ABTIA.

ISSC advance
At 30 June 2019, the balance is $32 million (June 2018: nil). The advance paid by the CoA is in Australian dollars. The advance is part of the ASC North Tripartite agreement between CASG, the Company and ASC Engineering Pty Ltd (now known as Australian Naval Infrastructure Pty Ltd). It can only be used for the reimbursement of payment to the Company for direct project costs incurred for the ISSC activities.

The interest income from this advance funding will be deducted against the reimbursement claim of direct project costs.

ABTIA advance
At 30 June 2019, the balance is $33.8 million (June 2018: $90.8 million). Advances paid by the Commonwealth are both in Australian and foreign currencies and are required to be separately maintained in a Commonwealth of Australia interest bearing account.

Funds advances can only be used for the reimbursement of payment to ASC AWD Shipbuilder Pty Ltd, a subsidiary within the consolidated entity, for direct project costs incurred for the AWD project.

All interest and expenses that accumulate in the separate bank accounts, in relation to funds advanced, accrues to the benefit of the CoA. This advance is repayable on demand when certain criteria have been met or if the ABTIA is terminated.

ABTIA requires regular review of the advance amount which may be increased or decreased after consideration by the CoA as to the working capital requirements for the AWD project.

June 2019 $'000

June 2018 $'000

Non current - unsecured

Term loan

3

3

3

3

Term loan
The term loan is an interest free 99 year loan to ASC Pty Ltd from the Department of Manufacturing Industry, Small Business and Regional Development (SA), for expenditure on capital items and to assist with site development costs.

  • ASC Pty Ltd ($160,000): repayable in the year 2092 or at the option of the Company at any time prior to the year 2092.

The term loan to ASC Pty Ltd has been discounted to its fair value of $3,200 in total for the year ended 30 June 2019 (2018: $3,000) under AASB 139 Financial Instruments: Recognition and Measurement.