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6.1 Deed of indemnity

A Deed of Indemnity between the Commonwealth Government, ANSTO and ANM, under which the government has formally agreed to indemnify ANSTO and ANSTO Officers, and ANM and ANM Officers, from any loss or liability arising from claims caused by ionising radiation, was signed by the Minister for Industry, Innovation and Science in April 2016. It will remain in place until April 2026.

6.2 Information relating to ANSTO (the parent entity)

2020

Restated 2019

2019

Restated 2018

$’000

$’000

$’000

$’000

Financial assets

261,397

161,353

161,353

170,525

Non-financial assets

1,208,404

1,225,683

1,225,683

1,226,892

Total assets

1,469,801

1,387,036

1,387,036

1,397,417

Payables

26,453

13,543

13,543

33,327

Provisions

751,596

916,492

655,187

565,962

Revenue in advance

36,128

33,363

33,363

20,686

Operating leases

3,750

-

-

-

Total liabilities

817,927

963,398

702,093

619,975

Net assets

651,874

423,638

684,943

777,442

Contributed equity

900,869

819,675

819,675

791,214

Asset revaluation reserve

385,577

388,232

388,232

442,077

Other reserves

9,677

9,677

9,677

9,677

Accumulated deficit

(644,249)

(793,946)

(532,641)

(465,526)

Total equity

651,874

423,638

684,943

777,442

Surplus/(deficit) of the parent entity

149,697

(328,420)

(159,540)

(292,827)

Other comprehensive expense of the parent entity

-

(53,845)

(53,845)

(55,842)

Total comprehensive surplus/(deficit) of the parent entity

149,697

(382,265)

(213,385)

(348,669)

The lease commitments shown in Note 2.3D only relate to ANSTO.

Interest rate

Maturity date

2020

2019

$

$

$15 million unsecured loan facility from ANSTO to ANM

CommSec Variable Rate 6.03%

(2019: 6.28%)

31.12.21

(2019: 31.12.20)

5,573,447

8,322,377

Total unsecured loan from ANSTO to ANM

5,573,447

8,322,377

Interest on unsecured loan facility

437,448

322,040

There are transactions between ANSTO and its subsidiaries for operating leases, purchases and sales of goods and services. These transactions are on normal commercial terms and conditions no more favourable than those available to other parties.

Investment in subsidiaries

The current carrying value of ANSTO’s subsidiaries at 2020 are set out below. Unless otherwise stated, share capital consists solely of ordinary shares that are held directly by ANSTO, and the proportion of ownership interests held equals the voting rights held by the group. The country of incorporation is also their principal place of business.

2020

2020

2019

Name

Place of incorporation

%

$

$

PETTECH Solutions Pty Ltd (a)

Australia

100

2,965,588

2,965,588

ANSTO Inc. (b)

USA

100

-

-

ANSTO Nuclear Medicine Pty Ltd (c)

Australia

99.9

13,938,100

13,938,100

Australian Synchrotron Holding Company Pty Ltd (d)

Australia

100

-

-

Total investment in subsidiaries

16,903,688

16,903,688

a. ANSTO continues to own 100% of PETTECH Solutions Pty Ltd (PETTECH). To 2 January 2019, when its business was sold, its principal activities were manufacturing, sale and distribution of FluoroDeoxyGlucose (FDG) and Fluorine 18 (F18) for use in the Australian market. Subsequent to the sale of the business, PETTECH's primary activity is the ownership of infrastructure for the manufacture of FDG.

During FY20 PETTECH recognised a right of use asset of $0.5 million resulting from a lease with ANSTO. The NBV as at 30 June 2020 was $0.5 million.

b. ANSTO continues to own 100% of ANSTO Inc. its principal activity is to promote the commercialisation of ANSTO Technology in the USA. For the financial year ended 30 June 2020 the financial statement were audited by Wipfli LLC.

c. ANSTO owns 100% of the B class and C class shares on issue of ANM. The B class shares, 101 are not entitled to any dividends but do have operational control. The C class shares, 110,300,000 were issued as consideration for the Mo-99 manufacturing facility. There was one A class share issued to the Minister of Industry, Innovation and Science on behalf of the Commonwealth. The A class share is entitled to dividends. ANM’s principal activities are to own and operate the new Molybdenum 99 (Mo-99) and Synroc Waste Treatment facilities.

At 30 June 2020 ANSTO’s investment in ANM was impaired by $96.3 million (2019: $96.3 million). ANSTO has undertaken to not call on ANM to pay for the operational readiness capital costs until ANM has sufficient incremental cash flows to pay these costs, as agreed by both parties. This will be no earlier than 12 months from the date of signing the ANM FY20 financial statements.

The Mo-99 manufacturing facility had the production restrictions on its operating licence lifted on 27 March 2020, however, the social distancing arrangement in place to ensure that safe and continued production during COVID-19 restrictions resulted in specific export production not commencing until August 2020.

During FY20 ANM recognised a right of use asset of $9.3 million resulting from a lease with ANSTO. The NBV as at 30 June 2020 was $9.2 million.

d. Australian Synchrotron Holding Company Pty Ltd (ASHCo) was deregistered on 12 June 2019.

6.3 Events after reporting date

The Overview note details the impact of COVID-19 on ANSTO’s liquidity to date.

At this stage, the impact on ANSTO and result has not been significant and based on our experience to date it is expected this to remain the case. ANSTO operates in the nuclear medicine and research industries.

We will continue to follow the various government policies and advice and, in parallel, we will do our utmost to continue our operations in the best and safety possible way without jeopardising the health of our people and safeguarding the supply of nuclear medicine into the Australian market.

6.4 Budgetary reports and explanations of major variances

The following tables provide a comparison between the 2019–20 Portfolio Budget Statements (PBS) budget and the final financial outcome in the 2019–20 financial statements. The Budget is not audited and does not reflect additional budget estimates provided in the 2019–20 Portfolio Additional Estimates Statements (PAES). However, major changes in budget have been explained as part of the variance analysis where relevant.

The ANSTO PBS does not include ANM, the $168.8 million nuclear medicine initiative, as it is a Public Non-Financial Corporation (PNFC) but does contain ANSTO’s other controlled entities. PNFC’s do not form part of the General Government Sector and are outside of the scope of AASB 1055 Budgetary Reporting. ANM is included in the Actual figures in the financial statements as it is controlled by ANSTO.

A budget has not been provided in the PBS for non-cash items such as asset revaluations, foreign exchange, sale/impairment of asset adjustments and the change in parameters used in the calculation of provisions. Unless the variance is considered to be ‘major’, no explanation has been provided.

Explanation of major variances

Event impacting financial statements

Affected consolidated statements and line items

The ANM project is reported differently in the budget compared to the Actual figures. ANM is a subsidiary of ANSTO, it is consolidated into the financial statements and the costs associated with the construction of the ANM facilities are reflected in Property, Plant and Equipment net of impairment, $51.3M (2019: $28.9M). However, for budget purposes ANM does not form part of the PBS and is reflected as an investment. As at 30 June 2020 the value of the ANM Mo-99 production facility is $18.6M (2019: $18.6M).

The nuclear waste management expense and provision relate to ANM’s production of Mo-99.

ANM operated under a restricted operating licence until March 2020. Production was limited to ensuring domestic demand for Mo-99 was met. ANSTO holds the inventory of target plates used by ANM to produce Mo-99.

As a result of a letter of support, ANSTO paid the costs of ANM until ANM was specifically producing for export. This support was in place from 1 September 2019 to 30 June 2020 and resulted in $21.9 million of support.

Statement of Comprehensive Income:

Supplier expenses

Nuclear waste management expense

Sale of goods and rendering of services

Statement of Financial Position:

Investments

Inventories

Property, plant and equipment

Nuclear waste management provision

Statement of Cash Flows:

Sales of good and rendering of services

Payments to suppliers

ANSTO received $49.5M of additional funding in the 2019-20 PAES. $47.1M was received as revenue from Government and $2.4M as an equity injection. $33.7M was to support nuclear medicine production.

Statement of Comprehensive Income:

Revenue from Government

Statement of Financial Position:

Investments

Contributed equity

Statement of Cash Flows:

Receipts from Government

Proceeds from investment sales/maturities

Purchase of investments

ANSTO have taken a number of measures to monitor and mitigate the effect of COVID-19, such as safety and health measures for staff (such as social distancing and working from home) and securing the supply of materials that are essential to our production process. Capital works, such as the Bright project, have also been delayed through the closure of manufacturers of equipment and the closure of borders impacting the installation of equipment.

Grants received for the Bright project at the Australian Synchrotron are recognised as revenue when the capital expenditure is incurred. The delay in this expenditure arising from COVID-19 has had a corresponding delay in the recognition of income.

Statement of Comprehensive Income:

Supplier expenses

Sales of goods and rendering of services

Grant income

Statement of Financial Position:

Trade and other receivables

Investments

Property, plant and equipment

Suppliers

Revenue in advance

Statement of Cash Flows:

Sales of goods and rendering of services

Payments to suppliers

Purchase of property, plant and equipment

ANSTO manages its cash through the use of term deposits. The term of each deposit is dependent on the cash needs of the business and the interest rates prevailing at the time. Changes in either the cash needs or interest rates impacts on the number of times a deposit is ‘rolled’ in the period.

Statement of Cash Flows:

Proceeds from investment sales/maturities

Purchase of investments

Each year at 30 June ANSTO assesses its obligation to decommission facilities and manage waste from its operations. In accordance with the Australian Accounting Standards, the decommissioning provision is assessed for the timing of payments, anticipated costs and discount, exchange and inflation rates. A certainty of funding that has been achieved in FY20 has impacted the schedule of decommissioning works and the timing of payments. The actual inflation and discount rates as at 30 June 2020 were lower than those used to calculate the provision when the 2019-20 PBS was completed in April 2019.

Statement of Comprehensive Income:

Finance costs

Decommissioning provisions gains

Statement of Financial Position:

Provision – Decommissioning