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5.1 Aggregate Assets and Liabilities





Assets expected to be recovered in:

No more than 12 months



More than 12 months



Total assets



Liabilities expected to be settled in:

No more than 12 months



More than 12 months



Total liabilities



5.2 Assets Held in Trust





Cash held in Locked Boxes

Balance as at 1 July









Balance as at 30 June



Total monetary assets held in trust3



This note should be read in conjunction with Note 1.1C: Grants. The transaction values mentioned above are not linked to any other Statement or Note within these documents.

This note has been added to the Financial Statements for information purposes only. It provides the reader with an indication of Locked Box funding levels where ARENA continues to be responsible and accountable for ensuring that the funds are only released when conditions specified in the grant funding agreement have been met.

1 Receipts are the amounts paid into Locked Boxes by ARENA. These amounts include interest received from the balances of the Locked Boxes.

2 Payments are those amounts which have been withdrawn by the projects in accordance with agreed milestones.

3 There is a restatement of prior year amounts as one of the project's USD balance was incorrectly reported as AUD in the 2017-18 financial statements. The total balance of monetary assets held in trust reported in the 2017-18 financial statements was $20.5 million instead of $24.9 million.

5.3 Budget Variance Commentary

ARENA’s financial performance is measured against its original budget as published in the 2018-19 Portfolio Budget Statements.

Variances are considered to be ‘major’ if they are core to ARENA’s activities and based on the following criteria:

  • the variance between budget and actual is greater than +/- 10% of the original budget for a line item; and
  • the variance between budget and actual is greater than $1,000,000; or
  • an item is below this threshold but is considered important for the reader’s understanding or is relevant to an assessment of the discharge of accountability and to an analysis of the ARENA’s performance.

Budget Variance Commentary

Affected statements and line items

Due to the complex nature of ARENA’s projects, which deal with emerging and developing technologies, there are regular project variations. These variations are difficult to predict and therefore material variances to original budget are possible.

Cash and cash equivalents include cash held in operating bank account and surplus cash placed, in accordance with s59 of the PGPA Act, in demand deposits in Australian bank accounts. The significant increase in cash balance against budget was due to a large drawdown of funds from Government at the end of June to meet significant grant payments due in early July.

Additional variances to budget are due to the termination of $16.8 million worth of funding agreements and $11.6 million of project slippages. There were also a number of projects included in the budget at $47.3 million in total that were unable to progress.

The supplier variance is impacted by lower grant expenditure as the costs associated with administering grants decreases.

Revenue from Government is accounted for on a cash basis and is drawn down as required. A reduction in expenditure and cash paid results in a corresponding reduction in receipts from Government.

Grants payable were higher than anticipated at the time of budget due to an unusually high number of project milestones approved close to the end of financial year.

Statement of Comprehensive Income:

  • Suppliers
  • Grants
  • Revenue from Government

Statement of Financial Position:

  • Cash and cash equivalents
  • Grant payable

Cash Flow Statement:

  • Receipts from Government
  • Grants cash used

Due to the write-off of the Grants Management System (GMS) last financial year and the transition of GMS to software as a service (SaaS) distribution model, amortisation is significantly lower than budgeted.

Statement of Comprehensive Income:

  • Depreciation and amortisation

Interest received is lower than expected due to a decrease in the cash interest rate during the year. ARENA saw a decline in the interest rates offered by banks for the demand deposits that are currently being held.

The decline is offset by an increase in Other revenue. During 2018-19 ARENA received refunds of grants totalling $5.056 million.

Statement of Comprehensive Income:

  • Interest
  • Other revenue

No investments in the Renewable Energy Venture Capital Fund other than for management fees were made during the year. The principal activity of the Fund is to invest in the commercialisation of renewable energy companies. Movement in fair value of the investment is driven by market and is not budgeted.

All investment decisions are to be made by the Fund Manager within an agreed timeframe ending in 2024. Actual investments made from year to year may vary from budget.

Statement of Comprehensive Income:

  • Decrease in the value of investment

Statement of Financial Position:

  • Other investments

ARENA owns leasehold improvement assets in its three offices. The zero value in the budget was due to a reporting error categorising leasehold improvement assets as part of computer software.

At the time of budget ARENA carried the historical cost of its major IT system as intangible asset and there were plans for upgrade and enhancements. The budget for computer software reflected the accounting approach at the time. ARENA has since decided to write off the remaining value of the intangible asset and expense costs of subsequent work on the system in accordance with relevant accounting standards.

Statement of Financial Position:

  • Leasehold improvements
  • Computer software

Net GST received was not separated out from cash used for Suppliers and Grants at the time of budget.

Cash used for employee costs were much less than budget due to an overestimation of board fees for the year and the build-up of a large payable of income tax withheld due to technical issues with the ATO payment system.

Cash Flow Statement:

  • Net GST received
  • Employees cash used