Notes to and forming part of the financial statements
Overview
Objectives of the CSIRO and its Subsidiaries (the Group)
CSIRO is an Australian Government controlled not‐for‐profit entity and is classified as a Corporate Commonwealth entity under the Public Governance, Performance and Accountability Act 2013. CSIRO is a research enterprise that aims to deliver great science and innovative solutions for industry, society and the environment.
CSIRO is structured to meet the following outcome:
Provide innovative scientific and technological solutions to national challenges and opportunities to benefit industry, the environment and the community, through scientific research and capability development, services and advice.
The continued existence of CSIRO in its present form and with its present programs is dependent on Government policy and on continued funding by Parliament for CSIRO’s administration and programs.
The Basis of Preparation
The financial statements are required by section 42 of the Public Governance, Performance and Accountability Act 2013 and are general purpose financial statements.
CSIRO and the Group’s Consolidated Financial Statements have been prepared in accordance with:
- Public Governance, Performance and Accountability (Financial Reporting Rule) 2015 (FRR) for reporting periods ending on or after 1 July 2015; and
- Australian Accounting Standards and Interpretations – Reduced Disclosure Requirements 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 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 impacts of Coronavirus (“COVID‐19”) have been assessed by CSIRO and it is not expected to have a material impact on CSIRO operations or its ability to meet its objectives.
The financial statements are presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified.
Key Judgements and Estimates
In the process of applying the Group's accounting policies, management has made a number of judgements and applied estimates and assumptions to future events. Information around judgements and estimates which are material to the financial statements are found in the following notes:
- Note 3.1 Employee Provisions
- Note 4.3 Fair Value Measurement
CSIRO has a provision (under provisions) for remediation costs required at a remote and other CSIRO locations, based on estimates provided by internal and external qualified experts. The provision is predominantly based on externally provided costings, with additional amounts derived from comparable remediation works. The provision is based on the scope of work as it currently stands as at 30 June 2020. As remediation works progress, the scope and costs may be subject to change. The work is expected to take several years to reach completion. Provisions for remediation also includes a provision for the makegood costs at leased CSIRO sites which is based on rates provided by an expert valuer.
Consolidation
The consolidated financial statements comprise the financial statements of the CSIRO and its subsidiaries (referred to as ‘the Group’). The subsidiaries of CSIRO are the Science and Industry Endowment Fund (SIEF), the CSIRO Chile Research Fundación (Fundación), National ICT Australia (NICTA), the Innovation Fund and the US Office. WLAN Services Pty Ltd (WLAN) was deregistered in 2019. Refer to: 3.6 Related Party Disclosures.
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by CSIRO as at 30 June 2020 and the results of the controlled entities for the year then ended. Subsidiaries are consolidated from the date on which control is obtained through to the date on which control ceases. The Group applies consistent accounting policies and the effects of all transactions and balances between the entities are eliminated in full. The non‐controlling interest in the results and equity of subsidiaries is shown separately in the statement of comprehensive income, statement of financial position and statement of changes in equity of the consolidated Group.
Foreign Currency Translation
The functional currency of CSIRO and its Australian subsidiaries is Australian dollars. The Group has three overseas subsidiary entities, the Fundación and the US Office entities. On consolidation, those entities:
- Assets and liabilities are translated into Australian dollars at the rate of exchange prevailing at the reporting date; and
- The statement of comprehensive income is translated at average exchange rate.
The exchange rate differences arising are recognised in the net cost of services.
New Australian Accounting Standards
All new, revised and/or amending standards and/or interpretations that were issued prior to the signing of these statements and applicable to the current reporting period were adopted by CSIRO. This includes the following new standards:
Standard/Interpretation | Nature of change in accounting policy, transitional provisions, and adjustment to financial statements |
---|---|
AASB 15 Revenue from Contracts with Customers / AASB 2016‐8 Amendments to Australian Accounting Standards – Australian Implementation Guidance for Not‐for‐Profit Entities and AASB 1058 Income of Not‐For‐Profit Entities | AASB 15, AASB 2016‐8 and AASB 1058 became effective 1 July 2019. ASB 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance, including AASB 118 Revenue, AASB 111 Construction Contracts and Interpretation 13 Customer Loyalty Programmes. The core principle of AASB 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASB 1058 is relevant in circumstances where AASB 15 does not apply. AASB 1058 replaces most of the not‐for‐profit (NFP) provisions of AASB 1004 Contributions and applies to transactions where the consideration to acquire an asset is significantly less than fair value principally to enable the entity to further its objectives, and where volunteer services are received. The details of the changes in accounting policies, transitional provisions and adjustments are disclosed below and in the relevant notes to the financial statements. |
AASB 16 Leases | AASB 16 became effective on 1 July 2019. This new standard has replaced AASB 117 Leases, Interpretation 4 Determining whether an Arrangement contains a Lease, Interpretation 115 Operating Leases—Incentives and Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. AASB 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, together with options to exclude leases where the lease term is 12 months or less, or where the underlying asset is of low value. AASB 16 substantially carries forward the lessor accounting in AASB 117, with the distinction between operating leases and finance leases being retained. The details of the changes in accounting policies, transitional provisions and adjustments are disclosed below and in the relevant notes to the financial statements. |
Application of AASB 15 Revenue from Contracts with Customers / AASB 1058 Income of Not‐For‐Profit Entities
CSIRO adopted AASB 15 and AASB 1058 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at 1 July 2019. Accordingly, the comparative information presented for 2019 is not restated. It is presented as previously reported under the applicable standards and related interpretations.
Under the new income recognition model CSIRO first determines whether an enforceable agreement exists and whether the promises to transfer goods or services to the customer are ‘sufficiently specific’. If an enforceable agreement exists and the promises are ‘sufficiently specific’ (to a transaction or part of a transaction), CSIRO applies the general AASB 15 principles to
determine the appropriate revenue recognition. If these criteria are not met, CSIRO considers whether AASB 1058 applies.
In relation to AASB 15, CSIRO elected to apply the new standard to all new and uncompleted contracts from the date of initial application. CSIRO is required to aggregate the effect of all of the contract modifications that occur before the date of initial application.
In terms of AASB 1058, CSIRO is required to recognise volunteer services at fair value if those services would have been purchased if not provided voluntarily, and the fair value of those services can be measured reliably.
The impact on transition is summarised below:
Consolidated 1 July 2019 $'000 | CSIRO 1 July 2019 $'000 | |
---|---|---|
Impact on Transition of AASB 15 | ||
Assets | ||
Contract assets | 661 | 661 |
Total assets | 661 | 661 |
Liabilities | ||
Contract liabilities | 351 | 2,269 |
Total liabilities | 351 | 2,269 |
Total adjustment recognised in retained earnings | 1,012 | 2,930 |
Set out below are the amounts by which each financial statement line item is affected as at and for the year ended 30 June 2020 as a result of the adoption of AASB 15 and AASB 1058. The table shows amounts prepared under AASB 15 and AASB 1058, compared to what the amounts would have been had AASB 15 and AASB 1058 not been adopted, for both the Consolidated Group, and CSIRO only:
Consolidated | CSIRO | |||||
---|---|---|---|---|---|---|
AASB 15 / AASB 1058 | Previous AAS | Increase / (decrease) | AASB 15 / AASB 1058 | Previous AAS | Increase / (decrease) | |
$'000 | $'000 | $'000 | $'000 | $'000 | $'000 | |
Transitional Disclosure | ||||||
Expenses | ||||||
Employee benefits | 0 | 0 | 0 | 0 | 0 | 0 |
Suppliers | 0 | 3,941 | (3,941) | 0 | 3,941 | (3,941) |
Total Expenses | 0 | 3,941 | (3,941) | 0 | 3,941 | (3,941) |
Revenue | ||||||
Revenue from contracts with customers | 1,937 | 3,716 | (1,779) | 1,937 | 3,716 | (1,779) |
Grant income | 0 | 0 | 0 | 292 | 25 | 267 |
Total Revenue | 1,937 | 3,716 | (1,779) | 2,229 | 3,741 | (1,512) |
Net (cost of)/contribution by services | 1,937 | (225) | 2,162 | 2,229 | (200) | 2,429 |
Assets | ||||||
Contract assets | 899 | 1,823 | (924) | 899 | 1,823 | (924) |
Total Assets | 899 | 1,823 | (924) | 899 | 1,823 | (924) |
Liabilities | ||||||
Contract liabilities | 0 | 0 | 0 | 0 | 0 | 0 |
Other Payables | 217 | 181 | 36 | 1,869 | 181 | 1,688 |
Total Liabilities | 217 | 181 | 36 | 1,869 | 181 | 1,688 |
Retained earnings | 682 | 1,642 | (960) | (970) | 1,642 | (2,612) |
Application of ASSB 16 Leases
CSIRO adopted AASB 16 using the modified retrospective approach. Accordingly, the comparative information presented for 2019 is not restated, that is, it is presented as previously reported under AASB 117 and related interpretations.
CSIRO elected to apply the practical expedient to not reassess whether a contract is, or contains a lease at the date of initial application. Instead, for contracts entered into before the transition date the group relied on its assessment made in applying AASB 117. The definition of a lease under AASB 16 was applied only to contracts entered into or changed on or after 1 July 2019.
AASB 16 provides for certain optional practical expedients, including those related to the initial adoption of the standard. CSIRO applied the following practical expedients when applying AASB 16 to leases previously classified as operating leases under AASB 117:
- Exclude initial direct costs from the measurement of right‐of‐use assets at the date of initial application for leases where the right‐of‐use asset was determined as if AASB 16 had been applied since the commencement date;
- Reliance on previous assessments on whether leases are onerous as opposed to preparing an impairment review under AASB 136 Impairment of assets as at the date of initial application; and
- Applied the exemption not to recognise right‐of‐use assets and liabilities for leases with less than 12 months of lease term remaining as of the date of initial application.
As a lessee, CSIRO previously classified leases as operating or finance leases based on its assessment of whether the lease transferred substantially all of the risks and rewards of ownership. Under AASB 16, CSIRO recognises right‐of‐use assets and lease liabilities for most leases. However, CSIRO has elected not to recognise right‐of‐use assets and lease liabilities for some leases of low value assets based on the value of the underlying asset when new or
for short‐term leases with a lease term of 12 months or less.
On adoption of AASB 16, CSIRO recognised right‐of‐use assets and lease liabilities in relation to land and buildings and plant and equipment, which had previously been classified as operating leases. The lease liabilities were measured at the present value of the remaining lease payments, discounted using CSIRO’s incremental borrowing rate based on zero coupon yields as prescribed by the Department of Finance at 1 July 2019. The weighted‐average rate applied was 1.00%.
The right‐of‐use assets were measured at an amount equal to the lease liability, adjusted by the amount of any prepaid lease payments. The total Consolidated and CSIRO impact on transition is summarised below:
Consolidated | CSIRO | |
---|---|---|
1 July 2019 $'000 | 1 July 2019 $'000 | |
CSIRO & Consolidated entities | ||
Right-of-use assets - property, plant and equipment | 133,600 | 131,821 |
Prepayments | (6,204) | (5,757) |
Lease liabilities | 127,396 | 126,064 |
The following table reconciles the minimum lease commitments disclosed in the entity's 30 June 2019 annual financial statements to the amount of lease liabilities recognised on 1 July 2019: | ||
Minimum operating lease commitment at 30 June 2019 | 132,606 | 131,415 |
Less: short-term leases not recognised under AASB 16 | (591) | (591) |
Less: low value leases not recognised under AASB 16 | (5,463) | (5,361) |
Less: GST on minimum operating lease commitment at 30 June 2019 | (10,344) | (10,344) |
Less: other adjustments | (6,163) | (6,266) |
Plus: effect of extension options reasonably certain to be exercised | 20,917 | 20,917 |
Undiscounted lease payments | 130,962 | 129,771 |
Less: effect of discounting using the incremental borrowing rate as at the date of initial application | (3,566) | (3,707) |
Lease liabilities recognised at 1 July 2019 | 127,396 | 126,064 |
Taxation
In accordance with Section 53 of the Science and Industry Research Act 1949, CSIRO is exempt from all forms of Australian taxation except the fringe benefits tax (FBT) and the goods and services tax (GST). The Group pays applicable taxes in overseas countries.
Revenues, expenses, assets and liabilities 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.
The SIEF is exempt from income tax in Australia. WLAN and the Innovation Fund entities are subject to all applicable taxes in Australia. The Fundación is subject to all applicable taxes in Chile. The US Office is subject to taxes in the United States. NICTA is exempt from income tax however NICTA’s subsidiaries (including NICTA IPR Pty Ltd) are subject to applicable taxes in Australia.
Events after the Reporting Period
At the time of completion of these financial statements, the Group is not aware of any significant events occurring after the reporting date.
Future Events
CSIRO is exploring future commercial opportunities for the Ginninderra Field Station, a 701 hectare area of land which CSIRO owns in north Canberra. Due to rapid urban growth in the surrounding area, the site has become under‐utilised and the field station requires relocation to a more rural setting. As part of its focus on exploring the future possibilities for this site, CSIRO has successfully requested the National Capital Authority (NCA) to include the site as ‘Urban Area’ on the General Policy Plan for Metropolitan Canberra in the National Capital Plan draft Amendment 86. The Amendment became effective in November 2016.
This initial step in rezoning the land has allowed CSIRO to explore avenues to divest the Ginninderra land in a commercially beneficial way. The CSIRO proposes to divest Ginninderra east via a conditional sale. External advice has indicated that a sale would be more attractive to potential developers than partnering with the CSIRO in a joint venture development. The conditions on the sale are necessary to meet community expectations that the land will be developed with a significant componenet of science and sustainability. As this progresses, it is expected that there will be a material increase in the recorded value of the Ginninderra land.
1. Financial Performance
1.1 Expenses
Consolidated | CSIRO | |||
---|---|---|---|---|
2020 | 2019 | 2020 | 2019 | |
$'000 | $'000 | $'000 | $'000 | |
Note 1.1A: Employee Benefits | ||||
Wages and salaries | 594,433 | 563,969 | 590,762 | 561,042 |
Superannuation | ||||
Defined contribution plans | 53,661 | 22,764 | 53,661 | 22,764 |
Defined benefit plans | 43,933 | 73,413 | 43,839 | 73,281 |
Leave and other entitlements | 96,659 | 111,294 | 96,468 | 111,213 |
Separation and redundancies | 11,538 | (4) | 11,538 | (4) |
Gross employee benefits | 800,224 | 771,436 | 796,268 | 768,296 |
Less | ||||
Capitalised labour | (3,701) | (6,403) | (3,701) | (6,403) |
Employee cost recovery from subsidiary companies | (1,921) | (1,864) | (216) | (1,864) |
Total employee benefits | 794,602 | 763,169 | 792,351 | 760,029 |
Accounting policy
Accounting policy for employee related expenses is contained in 3. People and Relationships.
Note 1.1B: Suppliers | ||||
---|---|---|---|---|
Goods supplied | 91,264 | 103,314 | 91,037 | 102,827 |
Services rendered | 333,672 | 336,828 | 328,513 | 338,568 |
Total goods and services supplied or rendered | 424,936 | 440,142 | 419,550 | 441,395 |
Other suppliers | ||||
Property lease rental1 | 0 | 33,896 | 0 | 33,429 |
Other operating lease rentals1 | 0 | 5,631 | 0 | 5,631 |
Short-term lease rentals2 | 4,902 | 0 | 4,811 | 0 |
Low value leases | 0 | 0 | 0 | 0 |
Workers compensation expenses | 3,582 | 3,285 | 3,558 | 3,263 |
Total other suppliers | 8,484 | 42,812 | 8,369 | 42,323 |
Total Suppliers | 433,420 | 482,954 | 427,919 | 483,718 |
1CSIRO has applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117.
2CSIRO has short-term lease commitments of $0.5m as at 30 June 2020.
The above lease disclosures should be read in conjunction with the accompanying notes 1.1C, 1.2C, 2.2A and 2.4A.
Accounting Policy
Research and Development Expenditure and Intellectual Property
All research and development costs, including costs associated with protecting intellectual property (e.g. patents and trademarks), are expensed as incurred.
Short-term leases and leases of low-value assets
The Entity has elected not to recognise right-of-use assets and lease liabilities for short-term leases of assets that have a lease term of 12 months or less or leases of low-value assets (less than $10,000). The entity recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
Consolidated | CSIRO | |||
---|---|---|---|---|
2020 | 2019 | 2020 | 2019 | |
$'000 | $'000 | $'000 | $'000 | |
Note 1.1C: Finance Costs | ||||
Other interest payments | 122 | 0 | 93 | 0 |
Finance leases1 | 0 | 1,430 | 0 | 1,403 |
Interest on lease liabilities | 2,585 | 0 | 2,573 | 0 |
Total Finance costs | 2,707 | 1,430 | 2,666 | 1,403 |
1CSIRO has applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117.
The above lease disclosures should be read in conjunction with the accompanying notes 1.1B, 1.2C, 2.2A and 2.4A.
Note 1.1D: Impairment loss on financial instruments | ||||
---|---|---|---|---|
Asset write-downs and impairments from: | ||||
Bad debts written off | 659 | 925 | 659 | 925 |
Expected credit loss on trade and other receivables | 645 | (389) | 236 | (389) |
Total write-downs and impairments on financial instruments | 1,304 | 536 | 895 | 536 |
Note 1.1E: Write-down and impairment of other assets | ||||
---|---|---|---|---|
Asset write-downs and impairments from: | ||||
Property, plant and equipment | 12,188 | 13 | 12,188 | 13 |
Total write-down and impairment of other assets | 12,188 | 13 | 12,188 | 13 |
1.2 Revenue and Gains
Own Source Revenue
Consolidated | CSIRO | |||
---|---|---|---|---|
2020 | 2019 | 2020 | 2019 | |
$'000 | $'000 | $'000 | $'000 | |
Note 1.2A: Revenue from contracts with customers | ||||
Sale of goods | 14,494 | 0 | 14,494 | 0 |
Rendering of services | 406,341 | 0 | 419,657 | 0 |
Royalties and licence fees | 28,584 | 0 | 28,584 | 0 |
Total revenue from contract with customers | 449,419 | 0 | 462,735 | 0 |
Sale of goods and rendering of services1 | 0 | 410,432 | 0 | 435,475 |
Total sale of goods and rendering of services | 0 | 410,432 | 0 | 435,475 |
Royalties and licence fees1 | 0 | 34,427 | 0 | 34,427 |
Total royalties and licence fees | 0 | 34,427 | 0 | 34,427 |
Disaggregation of revenue from contracts with customers
CSIRO derives its revenue under AASB 15 from two main sources, being the sale of goods and rendering of services and royalties and licence fees. The sale of goods and rendering of services has been disaggregated based on the line of business, with each line providing similar services to CSIRO customers. No disaggregation is available for royalties and licence fees.
Revenue from contracts with customers - line of business: | ||
Impact Science | 329,855 | 342,313 |
National Facilities and Collections | 73,404 | 73,404 |
Services and Other | 46,160 | 47,018 |
449,419 | 462,735 |
Accounting Policy
Revenue from contracts with customers
Revenue from the sale of goods is recognised when control has been transferred to the buyer. A contract falls within the scope of AASB 15 when the criteria for accounting for a contract with a customer is met as per paragraph 9 of the standard. Performance obligations are required by an enforceable contract with the satisfaction of these performance obligations either measured over time or a point in time.
Disaggregation | Nature | Timing | Payment Terms |
Impact Science | CSIRO conducts and facilitates the uptake of scientific technology solutions to deliver a positive impact on Australia. | Performance obligations are typically satisfied over time, as the customer simultaneously receives and consumes the benefits associated with CSIRO conducting scientific research. The progress towards the completion of a performance obligation are typically measured using either milestones reached or time elapsed. In the absence of an observable output method, an input method is used to measure the progress towards the completion of the performance obligation. | Payment terms are specified in the contract but are generally 30 days after the customer has been billed over time or a point in time. |
National Facilities | CSIRO is a provider of a range of specialised laboratories, scientific and testing equipment, and other research facilities. The science-ready facilities are used by Australian and international researchers through application and user-funded arrangements. | Performance obligations are typically satisfied over time, as the customer simultaneously receives and consumes the benefits associated with using the science-ready facilities. The progress towards the completion of a performance obligation are typically measured using the time elapsed method. In the absence of an observable output method, an input method is used to measure the progress towards the completion of the performance obligation. | Payment terms are specified in the contract but are generally 30 days after the customer has been billed over time or a point in time. |
Services & Other | CSIRO is a subject matter expert and provides advisory services to a range of customers in addition to education and outreach to Australia. | Performance obligations are satisfied over time or a point in time depending on the services provided. The methods used to measure the progress towards completion of a performance obligation over time or at a point in time is dependent on the services provided. | Payment terms are specified in the contract but are generally 30 days after the customer has been billed over time or a point in time. |
Royalties & Licence Fees | CSIRO provides a licence to a customer which gives the customer a right to access or right to use of CSIRO developed Intellectual Property (“IP”). | If the licence provides the customer with the right to access CSIRO IP as it exists through the licence period, performance obligations are satisfied over time as time elapses. If the licence provides the customer with the right to use of CSIRO IP as it exists when the licence is granted, performance obligations are satisfied at a point in time. Control exists when the customer has a present right to payment for the granting of the licence. | Payment terms are specified in the contract but are generally 30 days after the customer has been billed over time or a point in time. |
The transaction price is the total amount of consideration to which CSIRO expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts or both.
Consolidated | CSIRO | |||
---|---|---|---|---|
2020 | 2019 | 2020 | 2019 | |
$'000 | $'000 | $'000 | $'000 | |
Note 1.2B: Bank and term deposits interest | ||||
Bank and term deposits | 5,772 | 13,501 | 4,251 | 10,536 |
Accounting Policy
Interest revenue is recognised using the effective interest method as set out in AASB 9 Financial Instruments.
Note 1.2C: Rental Income | ||||
---|---|---|---|---|
Operating lease | ||||
Rental income1 | 0 | 10,546 | 0 | 10,546 |
Lease income | 9,200 | 0 | 9,200 | 0 |
Total Rental Income | 9,200 | 10,546 | 9,200 | 10,546 |
Operating Leases
CSIRO has operating lease income receivables from the sub-leasing of offices and scientific research accommodation. The amounts below are GST inclusive.
Maturity analysis of operating lease income receivables
Consolidated | CSIRO | |
---|---|---|
2020 | 2020 | |
$'000 | $'000 | |
Within 1 year | 4,175 | 4,175 |
One to two years | 2,307 | 2,307 |
Two to three years | 1,625 | 1,625 |
Three to four years | 1,475 | 1,475 |
Four to five years | 909 | 909 |
More than 5 years | 2,119 | 2,119 |
Total undiscounted lease payment receivable | 12,610 | 12,610 |
The above lease disclosure should be read in conjunction with the accompanying notes 1.1B, 1.1C, 2.2A and 2.4A.
Consolidated | CSIRO | |||
---|---|---|---|---|
2020 | 2019 | 2020 | 2019 | |
$'000 | $'000 | $'000 | $'000 | |
Note 1.2D: Other revenues | ||||
Sale of primary produce | 1,044 | 1,989 | 1,044 | 1,989 |
Donation | 4,086 | 916 | 4,086 | 916 |
Capital contributions | 9,349 | 12,587 | 9,349 | 13,805 |
Education programs and subscriptions | 266 | 347 | 266 | 347 |
Other | 19,963 | 13,122 | 10,422 | 8,396 |
Total other revenues | 34,708 | 28,961 | 25,167 | 25,453 |
Note 1.2E: Foreign exchange gains | ||||
---|---|---|---|---|
Non-speculative gain/(loss) | 383 | 117 | (394) | 238 |
Note 1.2F: Gain/(loss) from asset sales | ||||
---|---|---|---|---|
Land and buildings | ||||
Proceeds from sale | 90,000 | 0 | 90,000 | 0 |
Carrying value of assets sold | (56,264) | (26) | (56,264) | (26) |
Selling expense | (1,375) | (8) | (1,375) | (8) |
Net gain/(loss) from sale of land and buildings | 32,361 | (34) | 32,361 | (34) |
Plant and equipment | ||||
Proceeds from sale | 399 | 987 | 399 | 987 |
Carrying value of assets sold | (3,076) | (3,758) | (3,076) | (3,758) |
Selling expense | (22) | (42) | (22) | (42) |
Net gain/(loss) from sale of plant and equipment | (2,699) | (2,813) | (2,699) | (2,813) |
Total losses from asset sales | 29,662 | (2,847) | 29,662 | (2,847) |
Note 1.2G: Revenue from Government | ||||
---|---|---|---|---|
Appropriations | 837,873 | 834,561 | 837,873 | 834,561 |
Accounting Policy
Other Revenue
Other revenues includes sale of CSIRO publications and products, conferences and ‘pass through’ funding for costs of suppliers and external service providers.
Revenues from Government
Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when the entity gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned. Approprations receivable are recognised at their nominal amounts.
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 this entity) is recognised as Revenue from Government by the corporate Commonwealth entity unless the funding is in the nature of an equity injection or a loan.
Approprations are received from the Australian Government Department of Industry and Science (appropriated to CSIRO as a corporate Commonwealth entity payment item).
1.3 Other Comprehensive Income
Consolidated | CSIRO | |||
---|---|---|---|---|
2020 | 2019 | 2020 | 2019 | |
$'000 | $'000 | $'000 | $'000 | |
Items that will not be classified to income or loss | ||||
Note 1.3A: Changes in asset revaluation reserves | ||||
Revaluation of plant and equipment | 0 | 30,943 | 0 | 30,943 |
Revaluation of heritage and cultural assets | 0 | 0 | 0 | 0 |
Net increase/(decrease) in asset revaluation reserves | 0 | 30,943 | 0 | 30,943 |
Items that may be reclassified to income and loss | ||||
---|---|---|---|---|
Note 1.3B: Change in other reserve | ||||
Net change in fair value of equity investments | 0 | (15,272) | 0 | (5,982) |
Net change arising from foreign exchange movements on conversion of subsidiary accounts | (176) | 16 | 0 | 0 |
Net increase/(decrease) in other reserve | (176) | (15,256) | 0 | (5,982) |
Accounting Policy
Reserves for equity valuation
Under AASB 9 Financial Instruments, changes in the fair value of CSIRO’s equity investment portfolio assets are recognised through Profit and Loss. Changes in the fair value of the Innovation Fund equity investment portfolio are recognised through Profit and Loss (refer 4.2 Financial Instruments and 4.3 Fair value measurement).
2. Financial Position
This section analyses CSIRO’s assets used to generate financial performance and the operating liabilities incurred as a result. Employee related information is disclosed in the People and Relationships section.
2.1 Financial Assets
Consolidated | CSIRO | |||
---|---|---|---|---|
2020 | 2019 | 2020 | 2019 | |
$'000 | $'000 | $'000 | $'000 | |
Note 2.1A: Cash and Cash equivalents | ||||
Cash at bank and on hand | 371,496 | 178,936 | 270,619 | 118,829 |
Term deposits | 32,000 | 141,139 | 32,000 | 80,000 |
Total cash and cash equivalents | 403,496 | 320,075 | 302,619 | 198,829 |
The closing balance of Cash does not include amounts held in trust: $7.6m in 2020 and $7.9m in 2019. See note 5.3. |
Accounting Policy
Cash is recognised at its nominal value. Cash and cash equivalents includes:
a) cash on hand;
b) demand deposits in bank accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value; and
c) cash in special accounts.
Note 2.1B: Trade and other receivables | ||||
---|---|---|---|---|
Goods and services receivable | ||||
Goods and services | 56,292 | 65,729 | 55,581 | 65,269 |
Statutory receivables | 0 | 5,764 | 0 | 4,311 |
Interest | 491 | 1,282 | 63 | 488 |
Contract assets1 | 31,853 | 0 | 31,853 | 0 |
Other receivables | 1,399 | 3,965 | 3,120 | 2,863 |
Total trade and other receivables (gross) | 90,035 | 76,740 | 90,617 | 72,931 |
Less: expected credit loss allowance for trade and other receivables | (1,090) | (445) | (681) | (445) |
Total trade and other receivables (net) | 88,945 | 76,295 | 89,936 | 72,486 |
Trade and other receivables (gross) aged as follows | ||||
Not overdue | 76,620 | 61,763 | 77,202 | 57,954 |
Overdue by | ||||
0 to 30 days | 6,460 | 11,790 | 6,460 | 11,790 |
31 to 60 days | 2,620 | 1,126 | 2,620 | 1,126 |
61 to 90 days | 1,589 | 770 | 1,589 | 770 |
More than 90 days | 2,746 | 1,291 | 2,746 | 1,291 |
Total receivables (gross) | 90,035 | 76,740 | 90,617 | 72,931 |
1Contract assets are associated with services that have been transferred to the customer by CSIRO but there are remaining services to be performed in order to invoice the customer.
Reconciliation of expected credit loss allowance | ||||
---|---|---|---|---|
Opening balance | 445 | 834 | 445 | 834 |
Increase /(decrease) recognised in net surplus | 645 | (389) | 236 | (389) |
Closing balance | 1,090 | 445 | 681 | 445 |
Accounting Policy
Trade and Other Receivables
Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance. Collectability of debts is reviewed on an ongoing basis and allowances are made before collectability of the debt is no longer probable and before the loss is incurred. All trade and other receivables are expected to be recovered in no more than 12 months.
Impairment of Financial Assets
Financial assets are assessed for impairment at the end of each reporting period. Where there is objective evidence that an impairment loss has been incurred for loans and receivables, 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.
Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment
Consolidated | CSIRO | |||
---|---|---|---|---|
2020 | 2019 | 2020 | 2019 | |
$'000 | $'000 | $'000 | $'000 | |
Note 2.1C: Other Investments | ||||
Listed companies | 13,063 | 9,188 | 13,063 | 9,188 |
Unlisted companies | 98,828 | 57,236 | 84,941 | 46,735 |
Innovation Fund | 183,723 | 70,472 | 70,587 | 60,503 |
Uniseed Investment | 8,876 | 8,909 | 8,876 | 8,909 |
Total investments | 304,490 | 145,805 | 177,467 | 125,335 |
Accounting Policy
CSIRO has investments in a number of unlisted start-up companies over which it does not have significant influence or control. These companies have been established for the purpose of commercialisation of CSIRO’s intellectual property. CSIRO also has some investments in companies which have been listed on the Australian Stock Exchange and in the Uniseed trust. CSIRO, as part of the National Innovation and Science Agenda, has also established and invested in an Innovation Fund to invest in the development of early stage technology opportunities. Refer to Note 3.6 Related Party Disclosures for more information.
CSIRO’s other investments are accounted for in accordance with AASB 9 Financial Instruments and AASB 10 Consolidated Financial Statements. See 4.2 Financial Instruments and 4.3 Fair value measurement for further information.
2.2 Non-Financial Assets
Note 2.2A: Reconciliation of the opening and closing balances of Land and Buildings, Plant and Equipment and Intangibles | |||||||
---|---|---|---|---|---|---|---|
(a) Reconciliation of the opening and closing balances of Land and Buildings, Plant and Equipment and Intangibles for 2020 - Consolidated | |||||||
Land | Buildings | Total land and buildings | Plant and equipment | Heritage and cultural | Intangibles | Total | |
$’000 | $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | |
As at 1 July 2019 | |||||||
Gross book value | 386,600 | 2,674,812 | 3,061,412 | 1,294,098 | 13,997 | 56,366 | 4,425,873 |
Accumulated depreciation and amortisation | 0 | (1,497,250) | (1,497,250) | (730,756) | (9,534) | (39,626) | (2,277,166) |
Net book value as at 1 July 2019 | 386,600 | 1,177,562 | 1,564,162 | 563,342 | 4,463 | 16,740 | 2,148,707 |
Recognition of right-of-use asset on initial application of AASB 16 | 0 | 132,168 | 132,168 | 1,432 | 0 | 0 | 133,600 |
Adjusted total as at 1 July 2019 | 386,600 | 1,309,730 | 1,696,330 | 564,774 | 4,463 | 16,740 | 2,282,307 |
Additions: | |||||||
By purchase | 0 | 34,449 | 34,449 | 69,159 | 0 | (1,578) | 102,030 |
Right-of-use assets | 0 | 224 | 224 | 1,510 | 0 | 0 | 1,734 |
Assets first recognised through a gain in net cost of services | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Reclassification | 0 | 271 | 271 | (1,928) | 0 | 1,657 | 0 |
Revaluations recognised in other comprehensive income | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Impairments recognised in net cost of services | 0 | (11,779) | (11,779) | 0 | 0 | (409) | (12,188) |
Write-offs and impairments on right-of-use assets recognised in net cost of services | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Depreciation expense | 0 | (67,824) | (67,824) | (70,572) | 0 | (2,592) | (140,988) |
Depreciation on right-of-use assets | 0 | (41,157) | (41,157) | (685) | 0 | 0 | (41,842) |
Total depreciation and amortisation | 0 | (108,981) | (108,981) | (71,257) | 0 | (2,592) | (182,830) |
Disposals | 0 | (2,265) | (2,265) | (2,907) | 0 | (167) | (5,339) |
Disposals of Right-of-Use Assets | 0 | 0 | 0 | (148) | 0 | 0 | (148) |
Other movements | (8,500) | (89,489) | (97,989) | (20) | 0 | (1) | (98,010) |
Other movements of right-of-use assets | 8,500 | 89,489 | 97,989 | 0 | 0 | 0 | 97,989 |
Net book value as at 30 June 2020 | 386,600 | 1,221,649 | 1,608,249 | 559,183 | 4,463 | 13,650 | 2,185,545 |
Net book value as at 30 June 2020 represented by: | |||||||
Gross book value | 386,600 | 2,817,200 | 3,203,800 | 1,341,527 | 13,997 | 52,628 | 4,611,952 |
Accumulated depreciation and amortisation | 0 | (1,595,551) | (1,595,551) | (782,344) | (9,534) | (38,978) | (2,426,407) |
Total as at 30 June 2020 | 386,600 | 1,221,649 | 1,608,249 | 559,183 | 4,463 | 13,650 | 2,185,545 |
Carrying amount of right-of-use assets | 8,500 | 180,724 | 189,224 | 2,109 | 0 | 0 | 191,333 |
(b) Reconciliation of the opening and closing balances of Land and Buildings, Plant and Equipment and Intangibles for 2020 - CSIRO | |||||||
---|---|---|---|---|---|---|---|
Land | Buildings | Total land and buildings | Plant and equipment | Heritage and cultural | Intangibles | Total | |
$’000 | $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | |
As at 1 July 2019 | |||||||
Gross book value | 386,600 | 2,674,812 | 3,061,412 | 1,293,251 | 13,997 | 56,366 | 4,425,026 |
Accumulated depreciation and amortisation | 0 | (1,497,250) | (1,497,250) | (730,108) | (9,534) | (39,626) | (2,276,518) |
Net book value as at 1 July 2019 | 386,600 | 1,177,562 | 1,564,162 | 563,143 | 4,463 | 16,740 | 2,148,508 |
Recognition of right-of-use asset on initial application of AASB 16 | 0 | 130,389 | 130,389 | 1,432 | 0 | 0 | 131,821 |
Adjusted total as at 1 July 2019 | 386,600 | 1,307,951 | 1,694,551 | 564,575 | 4,463 | 16,740 | 2,280,329 |
Additions | |||||||
By purchase | 0 | 34,449 | 34,449 | 69,028 | 0 | (1,578) | 101,899 |
Right-of-use assets | 0 | 224 | 224 | 1,510 | 0 | 0 | 1,734 |
Assets first recognised through a gain in net cost of services | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Reclassification | 0 | 271 | 271 | (1,928) | 0 | 1,657 | 0 |
Revaluations recognised in other comprehensive income | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Impairments recognised in net cost of services | 0 | (11,779) | (11,779) | 0 | 0 | (409) | (12,188) |
Write-offs and impairments on right-of-use assets recognised in net cost of services | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Depreciation expense | 0 | (67,824) | (67,824) | (70,436) | 0 | (2,592) | (140,852) |
Depreciation on right-of-use assets | 0 | (40,696) | (40,696) | (685) | 0 | 0 | (41,381) |
Total depreciation and amortisation | 0 | (108,520) | (108,520) | (71,121) | 0 | (2,592) | (182,233) |
Disposals | 0 | (2,265) | (2,265) | (2,907) | 0 | (167) | (5,339) |
Disposals of Right-of-Use Assets | 0 | 0 | 0 | (148) | 0 | 0 | (148) |
Other movements | (8,500) | (89,489) | (97,989) | 0 | 0 | (1) | (97,990) |
Other movements of right-of-use assets | 8,500 | 89,489 | 97,989 | 0 | 0 | 0 | 97,989 |
Net book value as at 30 June 2020 | 386,600 | 1,220,331 | 1,606,931 | 559,009 | 4,463 | 13,650 | 2,184,053 |
Net book value as at 30 June 2020 represented by: | |||||||
Gross book value | 386,600 | 2,815,421 | 3,202,021 | 1,340,678 | 13,997 | 52,628 | 4,609,324 |
Accumulated depreciation and amortisation | 0 | (1,595,090) | (1,595,090) | (781,669) | (9,534) | (38,978) | (2,425,271) |
Total as at 30 June 2020 | 386,600 | 1,220,331 | 1,606,931 | 559,009 | 4,463 | 13,650 | 2,184,053 |
Carrying amount of right-of-use assets | 8,500 | 179,406 | 187,906 | 2,109 | 0 | 0 | 190,015 |
Valuation of non-financial assets
All valuations were conducted in accordance with the revaluation policy at 4.3 Fair value measurement.
Consolidated | CSIRO | |||
---|---|---|---|---|
2020 | 2019 | 2020 | 2019 | |
$'000 | $'000 | $'000 | $'000 | |
Contractual commitments for fixed assets: | ||||
Capital commitments comprise outstanding payments for buildings under construction and commitments for purchase of plant and equipment. Commitments are reported inclusive of GST. | ||||
Land and buildings | 25,751 | 15,797 | 25,751 | 15,797 |
Plant and equipment | 12,999 | 4,170 | 12,999 | 4,170 |
Total commitments payable | 38,750 | 19,967 | 38,750 | 19,967 |
Within 1 year | 29,638 | 18,535 | 29,638 | 18,535 |
Between 1 to 5 years | 7,464 | 1,432 | 7,464 | 1,432 |
More than 5 years | 1,648 | 0 | 1,648 | 0 |
Total commitments payable | 38,750 | 19,967 | 38,750 | 19,967 |
Accounting Policy
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 considerations are initially recognised as assets and revenues at their fair value at the date of acquisition. Property, plant and equipment which are purchased from contract research funds and where the control and subsequent sale proceeds are refunded to contributors under the terms of the agreements, are expensed during the year of purchase.
Lease Right of Use (ROU) Assets
Leased ROU assets are capitalised at the commencement date of the lease and comprise of the initial lease liability amount, initial direct costs incurred when entering into the lease less any lease incentives received. These assets are accounted for by CSIRO as separate asset classes to corresponding assets owned outright, but included in the same column as where the corresponding underlying assets would be presented if they were owned.
On initial adoption of AASB 16 CSIRO has adjusted the ROU assets at the date of initial application by the amount of any provision for onerous leases recognised immediately before the date of initial application. Following initial application, an impairment review is undertaken for any right of use lease asset that shows indicators of impairment and an impairment loss is recognised against any right of use lease asset that is impaired. Leased ROU assets continue to be measured at cost after initial recognition in CSIRO, GGS and Whole of Government financial statements.
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 $5,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).
Revaluations
Following initial recognition at cost, property, plant and equipment, including assets under finance leases are carried at fair value less accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure the carrying amount of assets do not differ materially from the assets’ fair value as at reporting date. The regularity of valuation depends upon the volatility of movements in the market values for the relevant assets.
Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under 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 or deficit. Revaluation decrements for a class of assets are recognised directly through the statement of comprehensive income except to the extent that they reverse a previous revaluation increment for that class.
Any accumulated depreciation as at the revaluation date is restated proportionately with the change in the gross carrying amount of the asset so that the carrying amount of the asset after revaluation equals its revalued amount.
Fair value for each class of asset is determined as follows:
- Land, which will continue to be used for research activity, is valued by independent valuers at fair value (highest and best use). Highest and best use is determined from the perspective of market participants. An entity’s current use of a non-financial asset is presumed to be its highest and best use unless market or other factors suggest otherwise. Land underwent a full revaluation as at 30 June 2018 by Jones Lang LaSalle (JLL).
- Buildings and leasehold improvements, which will continue to be used for research activities, are valued by independent valuers at fair value (highest and best use). Building valuations include plant, fit-outs, fixtures and fittings, which form an integral part of buildings. Buildings underwent a full revaluation as at 30 June 2018 by JLL.
- Plant and equipment which will continue to be used for research activities are valued by independent valuers at fair value (highest and best use). Plant and equipment assets were revalued as at 30 June 2019 by JLL.
- Properties held for sale are valued at the lower of its carrying amount and fair value less costs to sell. An assessment is undertaken annually of any properties held for sale.
- Heritage and cultural assets are valued by independent valuers at their depreciated replacement cost. Heritage assets underwent a full revaluation as at 30 June 2018 by JLL.
In addition to independent valuations conducted, CSIRO makes an internal assessment at balance date considering any major events, market changes or indicators of impairment that may impact on fair value. Jones Lang LaSalle (JLL) was engaged to undertake a materiality review of CSIRO’s land and buildings and plant and equipment assets and also perform a desktop valuation of the Ginninderra land asset as at 30 June 2020, outside of the three-year full valuation cycle, in consideration of the potential impacts of COVID-19 on the fair value of assets. After undertaking qualitative, quantitative and uncertainty analyses for the asset classes, JLL are of the opinion that there are no significant material differences between the carrying amounts and fair values for the CSIRO’s assets. JLL note that their valuation is subject to significant valuation uncertainty, considering that the outbreak of COVID-19 may potentially result in market uncertainty and volatility. The potential impact on the market (if any) is unknown at this stage, until the wider/global situation can be controlled. The extent of the impact on asset vales will be mixed across the various market sectors, not only limited to the actual sale/transaction process but may extend considerably beyond the normal sale period, depending on the nature, market sector and size of the property.
Depreciation and Amortisation
Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives using, in all cases, the straight-line method of depreciation. Leasehold improvements are depreciated on a straight-line basis over the lesser of the estimated useful life of the improvements or the unexpired period of the lease. Land is not depreciated.
Depreciation/amortisation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.
Depreciation rates applying to each class of depreciable asset are based on the following useful lives:
Buildings on freehold land: 40 to 80 years
Leasehold improvements: Lease term
Buildings under lease: Lease term
Passenger vehicles: 7 years
Agricultural and transport equipment: 8 to 20 years
Computing equipment: 2 to 5 years
Scientific equipment: 5 to 20 years
Furniture and office equipment: 5 to 15 years
Workshop equipment: 20 to 25 years
Research vessel: 25 years
Australia telescope: 15 to 58 years
Heritage and cultural assets: Indefinite
Impairment
All assets were assessed for impairment as at 30 June 2020. Where indicators 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 to sell 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 entity were deprived of the asset, its value in use is taken to be its depreciated replacement cost.
There was no impairment recognised for the year ended 30 June 2020 with the exception of impairments disclosed in Note 1.1E.
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.
Heritage and Cultural Assets
Heritage and cultural items include buildings of historical or cultural significance. CSIRO has classified them as heritage and cultural assets as they are primarily used for purposes that relate to their cultural significance and original purpose. Heritage and cultural assets are stored and managed in ways to preserve their heritage and cultural value over time. Where conservation and preservation activities, specified in an asset's Heritage Management Plan, demonstrate that an asset will be maintained for an indefinite period, these items are considered to have indefinite useful lives and therefore, not subject to depreciation. Copies of the Heritage Management Plans may be obtained by contacting enquiries [at] csiro.au.
Intangibles
Intangibles are internally developed and acquired software for internal use. These assets are carried at cost, less accumulated amortisation and impairment losses, except where the estimated cost of software is less than the $250,000 threshold and expensed in the year of acquisition. Software are amortised on a straight-line basis over their anticipated useful lives. The useful lives are 2 to 10 years (2019: 2 to 10 years). All software assets were assessed for indications of impairment as at 30 June 2020.
CSIRO does not recognise its internally generated intellectual property as an asset on the Balance Sheet as it does not meet the recognition and measurement requirements under AASB 138 Intangible Assets. CSIRO's Intellectual property includes patents, inventions, trademarks, plant breeder's rights and registered designs.
Properties Held for Sale
Properties which are expected to be recovered primarily through sale rather than through continuing use are classified as ‘properties held for sale’. Immediately before classification, the properties are remeasured in accordance with the Group’s accounting policies. Thereafter, at reporting date the properties are measured at the lower of their carrying amount and fair value less cost to sell.
Impairment losses on initial classification as held for sale and subsequent gains or losses on re-measurement are recognised in the Statement of Comprehensive Income.
Consolidated | CSIRO | |||
---|---|---|---|---|
2020 | 2019 | 2020 | 2019 | |
$'000 | $'000 | $'000 | $'000 | |
Note 2.2B: Investment properties | ||||
Reconciliation of the opening and closing balances of investment properties | ||||
As at 1 July | 52,072 | 49,697 | 52,072 | 49,697 |
Net gain/(loss) from fair value adjustments | (2,699) | 2,375 | (2,699) | 2,375 |
Total as at 30 June | 49,373 | 52,072 | 49,373 | 52,072 |
No indicators of impairment were identified for investment properties.
Accounting Policy
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value. Gains or losses arising from changes in the fair values of investment properties are recognised in profit or loss in the year in which they arise.
Where an investment property is acquired at no cost or for nominal cost, its cost is deemed to be its fair value as at the date of acquisition.
Investment properties are derecognised either when they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or losses on disposal of an investment property are recognised in profit or loss in the year of disposal.
Investment properties were valued as at 30 June 2020 by JLL and they are of the opinion that there are no significant material differences between the carrying amounts of investment properties and fair value. JLL note that their valuation is subject to significant valuation uncertainty in the current environment, considering that the outbreak of COVID-19 may potentially result in market uncertainty and volatility. The potential impact on the market (if any) is unknown at this stage, until the wider/global situation can be controlled. The extent of the impact on asset values will be mixed across the various market sectors, not only limited to the actual sale/transaction process but may extend considerably beyond the normal sale period, depending on the nature, market sector and size of the property. Revaluation increments are recorded as a gain or loss in the Statement of Comprehensive Income. Rental income from investment properties is included in the lease income disclosed in Note 1.2 The Basis of Preparation and was $3.8m for 2020 (2019:$3.6m). Operating costs that are recoverable amounted to $1.15m (2019: $1.1m).
Note 2.2C: Other non-financial assets | ||||
---|---|---|---|---|
Contract research work in progress - at cost | 0 | 30,413 | 0 | 30,413 |
Other prepayments | 18,748 | 19,647 | 18,803 | 19,739 |
Total other non-financial assets | 18,748 | 50,060 | 18,803 | 50,152 |
In accordance with AASB 15 CSIRO recognises contract assets (refer Note 2.1 Financial Assets). As the modified retrospective approach was applied on adoption of the new standard, the comparative information presented for 2019 is not restated. No indicators of impairment were identified for other non-financial assets.
2.3 Payables
Consolidated | CSIRO | |||
---|---|---|---|---|
2020 | 2019 | 2020 | 2019 | |
$'000 | $'000 | $'000 | $'000 | |
Note 2.3A: Suppliers | ||||
Suppliers payable | 54,220 | 72,519 | 51,319 | 72,695 |
Contract liabilities1 | 160,801 | 0 | 158,881 | 0 |
Refund liabilities | 0 | 0 | 0 | 0 |
Total | 215,021 | 72,519 | 210,200 | 72,695 |
1Contract liabilities are associated with consideration that has been received from the customer but services are yet to be performed by CSIRO.
Note 2.3B: Other Payables | ||||
---|---|---|---|---|
Accrued salaries and wages | 12,267 | 7,195 | 12,153 | 7,167 |
Contract research revenue received in advance | 0 | 131,008 | 0 | 131,008 |
Other revenue received in advance | 0 | 5,294 | 0 | 6,728 |
Other creditors and accrued expenses | 142 | 8,105 | 956 | 336 |
GST payable to ATO | 5,387 | 0 | 5,492 | 0 |
Payment to the Commonwealth | 0 | 0 | 0 | 0 |
Total other payables | 17,796 | 151,602 | 18,601 | 145,239 |
Accounting Policy
Accounting policy for contract revenue received in advance is contained in Note 1.2 Revenue and Gains.
2.4 Interest Bearing Liabilities
Consolidated | CSIRO | |||
---|---|---|---|---|
2020 | 2019 | 2020 | 2019 | |
$'000 | $'000 | $'000 | $'000 | |
Note 2.4A: Leases | ||||
Lease liabilities | ||||
Buildings | 114,620 | 0 | 113,251 | 0 |
Plant and equipment | 2,120 | 0 | 2,120 | 0 |
Finance leases1 | 0 | 27,337 | 0 | 27,337 |
Total Leases | 116,740 | 27,337 | 115,371 | 27,337 |
1CSIRO has applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117.
The cash outflow for leases for the year ended 30 June 2020 was $39.9m for Consolidated and $39.5m for CSIRO.
Accounting Policy
Refer to the Overview section for accounting policy on leases.
Note 2.4B: Deposits | ||||
---|---|---|---|---|
Deposits represent monies held on behalf of third parties. If the amounts are not spent for their specified purpose they will be returned to the third party. | ||||
Total deposits held are: | 22,508 | 23,310 | 25,588 | 27,364 |
3. People and Relationships
This section describes a range of employment and post employment benefits provided to our people and our relationship with other key people.
3.1 Employee Provisions
Consolidated | CSIRO | |||
---|---|---|---|---|
2020 | 2019 | 2020 | 2019 | |
$'000 | $'000 | $'000 | $'000 | |
Note 3.1A: Employee Provisions | ||||
Annual leave | 67,101 | 61,274 | 66,917 | 61,150 |
Long service leave | 182,621 | 167,810 | 182,621 | 167,810 |
Severance pay | 8,036 | 7,419 | 8,036 | 7,419 |
Redundancies | 5,155 | 1,995 | 5,155 | 1,995 |
Total employee provisions | 262,913 | 238,498 | 262,729 | 238,374 |
Accounting Policy
Liabilities for short-term employee benefits (as defined in AASB 119 Employee Benefits) and termination benefits due within twelve months of the end of the reporting period are measured at their nominal amounts. The nominal amount is calculated with regard to the rate expected to be paid on settlement of the liability.
Other long-term employee benefit liabilities are measured at 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 provisions for annual leave, long service leave and severance payments. 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 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 apply at the time the leave is taken, including the 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 at 30 June 2020 for long service leave and annual leave has been determined by the short hand method and reference to the work of the Australian Government Actuary (AGA). The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.
Separation and Redundancy
Provision is made for separation and redundancy benefit payments. A CSIRO plan of termination is binding when the following criteria are met:
- actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made;
- the plan identifies the number of employees whose employment is to be terminated; and
- the plan established the termination benefits that employees will receive.
Superannuation
Employees of CSIRO are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), 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 by the Department of Finance as an administered item.
CSIRO makes employer contributions to the employee superannuation schemes at rates determined by an actuary to be sufficient to meet the cost to the Government of the superannuation entitlements of the Group’s employees. CSIRO accounts for the contributions as if they were contributions to defined contribution plans.
The liability for superannuation recognised as at 30 June 2020 represents outstanding contributions for the financial year.
3.2 Key Management Personnel Information
(a) Key Management Personnel Remuneration
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of CSIRO, directly or indirectly, including any director of CSIRO. Those key management personnel along with their remuneration are reported in table below.
CSIRO Key Management Personnel | Short Term Benefits | Post Employment Benefits | Other Long Term Benefits | Termination Benefits | Total Remuneration | ||||
Base Salary | Performance Payment | Other Benefits and Allowances | Super-annuation Contributions | Long Service Leave | Other Long Term Benefits | ||||
Position | $ | $ | $ | $ | $ | $ | $ | $ | |
Marshall, Larry | Chief Executive | 772,059 | 196,313 | 25,495 | 21,972 | 34,082 | 0 | 0 | 1,049,921 |
Zielke, Judi | Chief Operating Officer | 441,406 | 15,972 | - | 68,958 | 16,965 | 0 | 0 | 543,301 |
Mayfield, Peter | Executive Director - Environment, Energy & Resources | 484,929 | 26,475 | 18,114 | 61,344 | 22,610 | 0 | 0 | 613,472 |
Hill, Anita1 | Executive Director - Future Industries | 238,603 | 23,700 | 10,322 | 38,138 | 16,741 | 0 | 0 | 327,504 |
Zipper, Marcus1 | Executive Director - Future Industries | 138,805 | 0 | 7,125 | 9,613 | 6,473 | 0 | 0 | 162,016 |
Williams, David | Executive Director - Digital, National Facilities and Collections | 406,311 | 25,485 | 19,130 | 21,972 | 29,395 | 0 | 0 | 502,293 |
Total remuneration for CSIRO Key Management Personnel | 2,482,113 | 287,945 | 80,186 | 221,997 | 126,266 | 0 | 0 | 3,198,507 | |
CSIRO Subsidiary Key Management Personnel | |||||||||
Jimenez, Orlando | Fundacion CEO | 255,866 | 0 | 9,193 | 0 | 0 | 0 | 0 | 265,059 |
Total remuneration for Fundacion | 255,866 | 0 | 9,193 | 0 | 0 | 0 | 0 | 265,059 | |
Total Consolidated Remuneration for Key Management Personnel | 2,737,979 | 287,945 | 89,379 | 221,997 | 126,266 | 0 | 0 | 3,463,566 |
1During the reporting period ended 30 June 2020, CSIRO had five executives who meet the definition of key management personnel. All were employed for the full financial year, with the exception of Anita Hill, whose term as Executive Director ended 2 February 2020, and Marcus Zipper, whose term began 3 February 2020. Consolidated figures include the remuneration of the Fundacion CEO Orlando Jimenez. This note has been prepared on an accrual basis for substantive and long term acting senior management personnel during the period. Remuneration details for the non-executive members of the CSIRO Board are disclosed at note 3.4.
Performance payment amounts represent estimated amounts based on the contract amount allowable. Actual performance payments are decided by the Board following the end of financial year.
(b) Senior Executive Staff Remuneration
Short Term Benefits | Post Employment Benefits | Other Long Term Benefits | Average Termination Benefits | Average Total Remuneration | |||
---|---|---|---|---|---|---|---|
Average Base Salary | Average Performance Payment | Average Other Benefits and Allowances | Average Super-annuation Contributions | Average Long Service Leave | Average Other Long Term Benefits | ||
$ | $ | $ | $ | $ | $ | $ | $ |
104,619 | 10,977 | 4,795 | 13,043 | 4,498 | 0 | 0 | 137,932 |
218,757 | 11,527 | 17,448 | 26,169 | 8,878 | 0 | 0 | 282,779 |
224,548 | 20,691 | 19,687 | 33,865 | 8,787 | 0 | 0 | 307,578 |
237,366 | 16,887 | 17,159 | 44,727 | 17,173 | 0 | 0 | 333,312 |
283,866 | 16,770 | 0 | 51,964 | 16,080 | 0 | 0 | 368,680 |
294,690 | 13,108 | 16,781 | 38,441 | 15,013 | 0 | 0 | 378,033 |
305,620 | 21,882 | 17,448 | 51,085 | 10,740 | 0 | 0 | 406,775 |
335,778 | 0 | 42,715 | 47,176 | 5,262 | 0 | 0 | 430,931 |
During the reporting period ended 30 June 2020, CSIRO had twenty executives who meet the definition of senior executive staff. This note has been prepared on an accrual basis for substantive and long term acting senior management personnel during the period. Base Salary includes annual leave accrued in the period. Performance payment amounts represent estimated amounts based on the contract amount allowable. Actual performance payments are decided by the Board following the end of financial year.
(c) Remuneration of highly paid staff
Remuneration of other highly paid staff | Short Term Benefits | Post Employment | Other Long Term Benefits | Average Termination Benefits | Average Total Remuneration | ||||
---|---|---|---|---|---|---|---|---|---|
Remuneration Band | Number of Highly Paid Staff | Average Base Salary | Average Performance Payment | Average Other Benefits and Allowances | Average Super-annuation | Average Long Service Leave | Average Other Long Term Benefits | ||
$ | $ | $ | $ | $ | $ | $ | $ | ||
$225,001 - $245,000 | 72 | 176,541 | 2,722 | 4,760 | 31,376 | 8,782 | 0 | 9,643 | 233,824 |
$245,001 - $270,000 | 62 | 182,458 | 5,073 | 10,329 | 30,329 | 15,473 | 0 | 10,862 | 255,124 |
$270,001 - $295,000 | 26 | 205,602 | 11,281 | 16,783 | 34,873 | 8,814 | 0 | 5,066 | 282,419 |
$295,001 - $320,000 | 8 | 189,340 | 10,594 | 14,148 | 30,936 | 19,856 | 0 | 37,944 | 302,818 |
$320,001 - $345,000 | 1 | 290,117 | 0 | 0 | 21,972 | 8,386 | 0 | 0 | 320,475 |
$345,001 - $370,000 | 10 | 244,862 | 11,453 | 15,926 | 33,909 | 15,604 | 0 | 33,681 | 355,435 |
$370,001 - $395,000 | 5 | 261,864 | 15,812 | 23,359 | 28,668 | 11,552 | 0 | 40,757 | 382,012 |
$395,001 - $420,000 | 2 | 295,400 | 17,695 | 17,448 | 53,214 | 13,734 | 0 | 0 | 397,491 |
$420,001 - $445,000 | 1 | 126,882 | 0 | 0 | 22,784 | 77,916 | 0 | 203,450 | 431,032 |
$445,001 - $470,000 | 1 | 346,889 | 57,000 | 0 | 46,673 | 11,450 | 0 | 0 | 462,012 |
Base salary includes annual leave accrued in the period.
Performance payment amounts represent estimated amounts based on the contract amount allowable. Actual performance payments are decided by the Board following the end of financial year.
3.3 Remuneration of Auditors
Consolidated | CSIRO | |||
---|---|---|---|---|
2020 | 2019 | 2020 | 2019 | |
$ | $ | $ | $ | |
Amounts received or due and receivable by the Group's auditors for: | ||||
Audit of the financial statements | 378,909 | 327,759 | 255,000 | 215,000 |
Audit of projects | 0 | 10,709 | 0 | 0 |
378,909 | 338,468 | 255,000 | 215,000 |
The Group’s auditor (except for the Fundacion) is the Australian National Audit Office (ANAO) who has appointed RSM to assist with the assignment since 2015-16. The Fundacion is audited by Ernst & Young Chile, who conduct both financial statement and project audits for the Fundación.
3.4 Remuneration of Board Members
Short Term Benefits | Post employment benefits | |||||
---|---|---|---|---|---|---|
Base Salary | Other benefits and allowances | Super Contributions | Total 2019-20 Remuneration | |||
Name | Position | Term | $ | $ | $ | $ |
Michele Allan | Board member | 05/05/16 - 04/05/19; 05/05/19 - 04/05/24 | 70,717 | 8,195 | 7,498 | 86,410 |
Drew Clarke | Board member | 24/08/17 - 23/08/22 | 70,717 | 8,195 | 7,498 | 86,410 |
Edwina Cornish | Board member | 26/11/15 - 25/11/20 | 70,717 | 8,195 | 7,498 | 86,410 |
Kathryn Fagg | Board member | 02/08/18 - 01/08/23 | 70,717 | 6,820 | 7,366 | 84,903 |
Shirley In't Veld | Deputy Chairman | 28/06/12 - 27/06/15; 28/06/15 - 27/06/20 | 104,784 | 0 | 9,955 | 114,739 |
David Knox | Board member | 05/05/16 - 04/05/19; 05/05/19 - 04/05/24 | 70,717 | 8,373 | 7,514 | 86,604 |
Tanya Monro | Board member | 25/02/16 - 24/02/21 | 0 | 0 | 0 | 0 |
Peter Riddles | Board member | 24/04/14 - 23/04/17; 24/04/17 - 23/04/22 | 70,717 | 16,568 | 8,293 | 95,578 |
David Thodey | Chairman | 15/10/15 - 14/10/20 | 141,433 | 0 | 13,437 | 154,870 |
Total remuneration for CSIRO Board Members | 670,519 | 56,346 | 69,059 | 795,924 | ||
CSIRO Subsidiary Board Members (Chile Fundacion) | ||||||
Claudia Bobadilla | Board Member | 15/3/17-15/3/22 | 33,130 | 0 | 0 | 33,130 |
Maria Del Rosario Navarro | Board Member | 13/9/19-13/9/24 | 32,649 | 0 | 0 | 32,649 |
Total remuneration for CSIRO Subsidiary Board Members (Chile Fundacion) | 65,779 | 0 | 0 | 65,779 | ||
Total Consolidated Remuneration for CSIRO Group | 736,298 | 56,346 | 69,059 | 861,703 |
The remuneration of the Chief Executive Officer, who is also a CSIRO Board Member is reported under Note 3.2 Key Management Personnel Information.
3.5 Meetings of the Board and Board Committees
During the financial year 2019-20, 9 Board meetings (4 out of session), 5 Board Audit & Risk Committee meetings, 4 Board People & Safety Committee meetings and 4 Board Science Excellence Committee Meetings were held. The number of meetings attended by each of the Board members was as follows:
Board member | CSIRO Board | CSIRO Board Audit & Risk Committee | CSIRO Board People and Safety Committee | CSIRO Board Science Excellence Committee | ||||
---|---|---|---|---|---|---|---|---|
Number eligible to attend as a member | Number attended | Number eligible to attend as a member | Number attended | Number eligible to attend as a member | Number attended | Number eligible to attend as a member | Number attended | |
Michele Allan | 9 | 8 | 5 | 5 | 0 | 1 | 4 | 4 |
Edwina Cornish | 9 | 9 | 5 | 5 | 0 | 3 | 4 | 4 |
Shirley In't Veld | 9 | 7 | 5 | 5 | 4 | 4 | 0 | 0 |
David Knox | 9 | 8 | 0 | 0 | 4 | 4 | 4 | 4 |
Tanya Monro | 9 | 6 | 0 | 0 | 4 | 3 | 4 | 2 |
Kathryn Fagg | 9 | 8 | 4 | 5 | 4 | 4 | 0 | 3 |
Peter Riddles | 9 | 9 | 5 | 5 | 0 | 1 | 4 | 4 |
David Thodey | 9 | 9 | 0 | 5 | 0 | 4 | 0 | 4 |
Drew Clarke | 9 | 9 | 5 | 5 | 4 | 4 | 0 | 4 |
Larry Marshall | 9 | 9 | 0 | 5 | 0 | 4 | 0 | 4 |
3.6 Related Party Disclosures
(a) Controlled Entities
SIEF was established under the Science and Industry Endowment Act 1926. The principal activity of the SIEF Trust is to provide assistance to persons engaged in scientific research and in training of students in scientific research. The SIEF Trustee is the CSIRO Chief Executive and SIEF is a wholly controlled entity. The SIEF’s separate financial statements are reported in the CSIRO Annual Report.
The Fundación was established in October 2013. The Fundación is a controlled entity governed by a Board in accordance with the Constitution of the Fundación. The Fundación is working with industry and leading Chilean Universities to develop cutting-edge technologies to reduce the environmental impact of mining and increase productivity.
NICTA is Australia’s ICT Research Centre of Excellence and undertakes internationally recognised research in partnership with industry, government and researchers to create national benefit and wealth for Australia. NICTA is the parent entity of NICTA IPR Pty Ltd and a small number of minor proprietary limited companies that exist to hold intellectual property and commercialise research. CSIRO obtained full control of NICTA on 28 August 2015, when the members of the NICTA Board resolved to adopt a revised company constitution which provided CSIRO with effective control over NICTA.
CSIRO has established an Innovation Fund with Commonwealth funding support to invest in the development of early stage technology opportunities from the public research sector, to increase their translation into commercial opportunities to be taken up by Australian industry. The Fund has been established through a structure of entities whose purpose is to manage and operate the Fund. At 30 June 2020 a second Innovation Fund is in the process of being established, with new entities established but not yet operational in the 2019-20 year. The entities that comprose the Innovation Fund are:
- CSIRO Innovation Fund 1, LP is an incorporated limited partnership formed under the Partnership Act 1892 (NSW). It is registered by Innovation and Science Australia as an Early Stage Venture Capital Limited Partnership (ESVCLP). It was established in January 2017.
- CSIRO Management Partnership Pty LP is an incorporated limited partnership formed under the Partnership Act 1892 (NSW). It was established in January 2017 as a Venture Capital Management Partnership and acts as the General Partner of the CSIRO Innovation Fund 1, LP.
- CSIRO General Partner 2 Pty Ltd was established in December 2016 and is a small proprietary company limited by shares, which are solely held by CSIRO. This company acts as the general partner of CSIRO Management Partnership Pty LP.
- CSIRO Fund of Funds, LP is an incorporated limited partnership formed under the Partnership Act 1892 (NSW) and is registered by Innovation and Science Australia as an Australian Venture Capital Fund of Funds. It was established in May 2016.
- CSIRO General Partner Pty Ltd was established in May 2016 and is a small proprietary company limited by shares, which are solely held by CSIRO. It acts as the general partner of CSIRO Fund of Funds LP. It also acts as the trustee of CSIRO Innovation Holding Trust that was established in July 2018.
- CSIRO Financial Services Pty Ltd was established in December 2015 and is a small proprietary company limited by shares, which are solely held by CSIRO. The company has been issued an Australian Financial Services License by ASIC and acts as Manager of CSIRO Innovation Fund 1, LP.
- CSIRO Innovation Services Pty Ltd was established in October 2016 and is a small proprietary company limited by shares, which are solely held by CSIRO. It acts as trustee of a discretionary trust established to distribute some returns from CSIRO Innovation Fund 1, LP, and as trustee of a unit trust established to distribute some returns form CSIRO Innovation Follow-on Fund 1.
- CSIRO Innovation Holding Trust is a trust established in July 2018 to distribute returns from CSIRO Innovation Fund 1, LP according to an agreed distribution policy administered by CSIRO Innovation Services Pty Ltd.
- CSIRO Follow-on Services Pty Ltd was established in April 2018 and is a small proprietary company limited by shares, which are solely held by CSIRO. It serves as trustee of the CSIRO Innovation Follow-on Fund 1, a managed investment trust.
- CSIRO Innovation Follow On Fund 1 was established October 2018 and is structured as a Managed Investment Trust, formed to provide follow-on investment to companies supported by CSIRO Innovation Fund 1, LP.
- CSIRO Innnovation Fund Discretionary Trust was established in January 2017 to hold and distribute some of the returns from CSIRO Innovation Fund 1, LP according to an agreed distribution policy administered by CSIRO Innovation Services Pty Ltd.
- CSIRO Follow-on Sponsor Trust was established in June 2019 for the purpose of distributing carried interest from the CSIRO Innovation Follow-on Fund 1.
- CSIRO Innovation Fund 2, LP is an incorporated limited partnership formed under the Partnership Act 1892 (NSW). It is registered by Innovation and Science Australia as an Early Stage Venture Capital Limited Partnership (ESVCLP). It was established in March 2020.
- CSIRO Follow-on Services 2 Pty Ltd was established in March 2020 to serve as trustee of CSIRO Innovation Follow-on Fund 2, which is yet to be established and will be setup as a managed investment trust.
- CSIROGP Fund 2 Pty Ltd was established in March 2020 to serve as the General Partner of CSIRO Innovation Fund 2, LP.
- CSIRO Management Partnership 2, LP was established in March 2020 for the purposes of distributing some of the returns from CSIRO Innovation Fund 2, LP.
- CSIRO Custodial Services Pty Ltd was established in April 2020 for the purpose of providing custodial services under an Australian Financial Services Licence to the Innovation Fund entities.
All of the above Innovation Fund related companies are under the sole control of the CSIRO as at 30 June 2020. The above entities (with the exception of CSIRO Financial Services Pty Ltd; CSIRO Innovation Services Pty Ltd; and CSIRO Custodial Services Ptd Ltd) sit outside the General Government Sector.
CSIRO USA LLC and CSIRO Innovations LLC were established in February 2017 to support the establishment of a CSIRO presence in the United States. Both entities are incorporated within Delaware and are wholly controlled by the CSIRO.
(b) Related party relationships
The entity is an Australian Government controlled entity. Related parties to this entity are the Board, Key Management Personnel including the Portfolio Minister and Executive, and other Australian Government entities.
Transactions with related parties:
Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. Such transactions include the payment or refund of taxes, receipt of a Medicare rebate or higher education loans. These transactions have not been separately disclosed in this note.
Significant transactions with related parties can include the payments of grants or loans; purchases of goods and services; asset purchases, sales transfers or leases; debts forgiven; and guarantees. Giving consideration to relationships with related entities, and transactions entered into during the reporting period by the entity, it has been determined that there are no related party transactions to be separately disclosed.
4. Managing Uncertainties
This section analyses how CSIRO manages financial risk within its operating environment.
4.1 Contingent Assets and Liabilities
Consolidated | CSIRO | |||
---|---|---|---|---|
2020 | 2019 | 2020 | 2019 | |
$'000 | $'000 | $'000 | $'000 | |
Quantifiable Contingencies | ||||
Contingent assets | ||||
Insurance claims | 15,958 | 2,123 | 15,958 | 2,123 |
Bank guarantees received from suppliers | 5,237 | 4,879 | 5,237 | 4,879 |
Contingent revenue (equity instrument) | 0 | 500 | 0 | 0 |
Total contingent assets | 21,195 | 7,502 | 21,195 | 7,002 |
Contingent liabilities | ||||
Estimated legal claims | 6,000 | 6,000 | 6,000 | 6,000 |
Total contingent liabilities | 6,000 | 6,000 | 6,000 | 6,000 |
Total net contingent asset/(liability) | 15,195 | 1,502 | 15,195 | 1,002 |
A natural disaster (hailstorm) occurred on 20th January 2020 impacting the CSIRO Black Mountain site and operations. At 30 June 2020 the insurance claim for business interruption and costs incurred had not been settled and no monies had been received. Included in the above insurance claims contingent asset amount is $13.9m for the hailstorm claim.
Depending on the materiality of risks involved with certain commercial transactions, CSIRO has requested bank guarantees where necessary to mitigate risks, notably where substantial advance payments were made.
In June 2019, the Commonwealth Director of Public Prosecutions filed four charges in the Magistrates’ Court of Victoria, alleging the Commonwealth Scientific and Industrial Research Organisation failed in its duties under the Work Health and Safety Act 2011 in relation to an incident that occurred in a Melbourne research facility in 2017. If found to be guilty, each charge carries a maximum penalty of $1,500,000.
Unquantifiable contingencies
As disclosed in the Overview Note, a financial provision for the estimated costs in restoring and decontaminating land where a legal or constructive obligation has arisen has been recognised on the Statement of Financial Position. For cases where there is no legal or constructive obligation, the potential costs have not been assessed and are unquantifiable contingencies. CSIRO has no other identified unquantifiable contingencies to report.
Accounting Policy
Contingent liabilities and contingent assets are not recognised in the Statement of Financial Position. They may arise from uncertainty as to the existence of a liability or asset, or represent a liability or asset in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.
4.2 Financial Instruments
Consolidated | CSIRO | |||
---|---|---|---|---|
2020 | 2019 | 2020 | 2019 | |
$'000 | $'000 | $'000 | $'000 | |
Note 4.2A: Categories of financial instruments | ||||
Financial Assets | ||||
Financial assets at fair value through profit or loss | ||||
Investments | 304,490 | 75,333 | 177,467 | 64,832 |
Total financial assets at fair value through profit and loss | 304,490 | 75,333 | 177,467 | 64,832 |
Financial assets at fair value through other comprehensive income | ||||
Investments - Innovation Fund | 0 | 70,472 | 0 | 60,503 |
Total financial assets at fair value through other comprehensive income | 0 | 70,472 | 0 | 60,503 |
Financial assets at amortised cost | ||||
Cash at bank | 371,496 | 178,936 | 270,619 | 118,829 |
Term deposits | 32,000 | 141,139 | 32,000 | 80,000 |
Receivable for goods and services | 56,292 | 65,729 | 55,581 | 65,269 |
Other receivables | 1,890 | 5,247 | 3,183 | 3,351 |
Total financial assets at amortised cost | 461,678 | 391,051 | 361,383 | 267,449 |
Total financial assets | 766,168 | 536,856 | 538,850 | 392,784 |
Financial Liabilities | ||||
Financial liabilities measured at amortised cost | ||||
Trade creditors | 215,021 | 72,519 | 210,200 | 72,695 |
Research revenue received in advance | 0 | 131,008 | 0 | 131,008 |
Other creditors | 17,796 | 20,594 | 18,601 | 14,231 |
Lease liabilities | 116,740 | 27,337 | 115,371 | 27,337 |
Deposits | 22,508 | 23,310 | 25,588 | 27,364 |
Total financial liabilities at amortised cost | 372,065 | 274,768 | 369,760 | 272,635 |
Total financial liabilities | 372,065 | 274,768 | 369,760 | 272,635 |
Consolidated | CSIRO | |||
---|---|---|---|---|
2020 | 2019 | 2020 | 2019 | |
$'000 | $'000 | $'000 | $'000 | |
Note 4.2B: Net income and expense from financial assets | ||||
Financial assets at amortised cost | ||||
Interest revenue | 5,772 | 13,501 | 4,251 | 10,536 |
Impairment expense | (1,304) | (536) | (895) | (536) |
Net gain from financial assets at amortised cost | 4,468 | 12,965 | 3,356 | 10,000 |
Investments assets at fair value through profit or loss | ||||
Fair value changes | 101,503 | 14,660 | 43,915 | (1,497) |
Net gain/(loss) from investment assets at fair value through profit or loss | 101,503 | 14,660 | 43,915 | (1,497) |
Net gain/(loss) on financial assets | 105,971 | 27,625 | 47,271 | 8,503 |
Accounting Policy
Financial Assets
The entity classifies its financial assets under AASB 9 Financial Instruments in the following categories:
a) financial assets at fair value through profit or loss;
b) financial assets at fair value through other comprehensive income; and
c) financial assets measured at amortised cost.
The classification depends on both the entity's business model for managing the financial assets and contractual cash flow characteristics at the time of initial recognition. Financial assets are recognised when the entity becomes a party to the contract and, as a consequence, has a legal right to receive or a legal obligation to pay cash and derecognised when the contractual rights to the cash flows from the financial asset expire or are transferred upon trade date.
Financial Assets at Amortised Cost
Financial assets included in this category need to meet two criteria:
1. the financial asset is held in order to collect the contractual cash flows; and
2. the cash flows are solely payments of principal and interest (SPPI) on the principal outstanding amount.
Amortised cost is determined using the effective interest method.
Effective Interest Method
Income is recognised on an effective interest rate basis for financial assets that are recognised at amortised cost.
Financial Assets at Fair Value Through Other Comprehensive Income (FVOCI)
Financial assets measured at fair value through other comprehensive income are held with the objective of both collecting contractual cash flows and selling the financial assets and the cash flows meet the SPPI test. Any gains or losses as a result of fair value measurement or the recognition of an impairment loss allowance is recognised in other comprehensive income.
Financial Assets at Fair Value Through Profit or Loss (FVTPL)
Financial assets are classified as financial assets at fair value through profit or loss where the financial assets either don't meet the criteria of financial assets held at amortised cost or at FVOCI (i.e. mandatorily held at FVTPL) or may be designated. Financial assets at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest earned on the financial asset. CSIRO values it’s equity investment portfolio in listed companies, unlisted companies and in Uniseed Trust as FVTPL. CSIRO Innovation Fund values it’s equity investment portfolio in unlisted companies as FVTPL.
Impairment of Financial Assets
Financial assets are assessed for impairment at the end of each reporting period based on Expected Credit Losses, using the general approach which measures the loss allowance based on an amount equal to lifetime expected credit losses where risk has significantly increased, or an amount equal to 12‐month expected credit losses if risk has not increased.
The simplified approach for trade, contract and lease receivables is used. This approach always measures the loss allowance as the amount equal to the lifetime expected credit losses. A write-off constitutes a de-recognition event where the write off directly reduces the gross carrying amount of the financial asset.
Financial liabilities
Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’.
Financial Liabilities at Fair Value Through Profit or Loss
Financial liabilities at fair value through profit or loss are initially measured at fair value. Subsequent fair value adjustments are recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.
Financial Liabilities at Amortised Cost
Financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective interest basis.
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).
4.3 Fair value measurement
Note 4.3A: Fair value measurement | ||
---|---|---|
Fair value measurements at the end of the reporting period | ||
2020 | 2019 | |
$'000 | $'000 | |
Financial assets | ||
Other investments | 304,490 | 145,805 |
Total financial assets | 304,490 | 145,805 |
Non-financial assets | ||
Land | 386,600 | 386,600 |
Buildings | 1,221,649 | 1,177,562 |
Plant and equipment | 559,183 | 563,342 |
Investment properties | 49,373 | 52,072 |
Properties held for sale | 5,200 | 59,200 |
Heritage and cultural | 4,463 | 4,463 |
Total non-financial assets | 2,226,468 | 2,243,239 |
Financial liabilities | ||
Lease liabilities | 116,740 | 27,337 |
Deposits | 22,508 | 23,310 |
Total financial liabilities | 139,248 | 50,647 |
The above disclosure represents the consolidated financial position of the Group.
Significant Accounting Judgements and Estimates
In the process of applying the accounting policies listed in this note, CSIRO has made the following judgements that have the most significant impact on the amounts recorded in the financial statements:
- Properties classified as ‘properties held for sale’ are measured at the lower of the carrying amount and fair value less costs to sell (level 1 inputs), ‘investment properties’ has been taken to be the market value (level 2 inputs), of similar properties as determined by an independent valuer;
- The fair value of land which will continue to be used for research activities, and buildings held for specialised purposes and where there is no readily available market price has been taken to be Fair Value- Highest and Best Use (level 3 inputs), as determined by an independent valuer;
- The fair value of plant and equipment has been taken to be Fair Value – Highest and Best Use (level 2 and 3 inputs) as they mainly comprise of specialised research equipment. Fair value is determined by an independent valuer; and
- The fair value of listed companies is assessed at market value (level 1 inputs); whereas unlisted companies and commercial vehicles are assessed at fair value using the best information available (level 1 and 3 inputs). For investments in unlisted companies where there is no readily available market pricing, the fair value has been determined by applying valuation techniques in line with the generally accepted valuation guidelines 'International Private Equity and Venture Capital Valuation Guidelines (IPEV).' Where recent transactions for the unlisted companies' equity have taken place, these equity transaction prices are used to value CSIRO's investment. For unlisted companies that have not had any recent equity transactions, other IPEV valuation techniques are used such as discounted cash flows and share of net assets. Investments in special purpose entities are either valued at cost of share of net realisable assets since a reliable estimate of fair value cannot be established. These entities have been set up primarily to gain access to research facilities/networks, or to provide services to owners. Hence, there is not 'active market' for these equity investments.
No accounting assumptions and estimates have been identified that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting period.
5. Other information
5.1 Aggregate Assets and Liabilities
Consolidated | CSIRO | |||
---|---|---|---|---|
2020 | 2019 | 2020 | 2019 | |
$'000 | $'000 | $'000 | $'000 | |
Note 5.1A: Aggregate Assets and Liabilities | ||||
Assets expected to be recovered in: | ||||
No more than 12 months | 516,389 | 505,630 | 416,558 | 380,667 |
More than 12 months | 2,540,828 | 2,347,849 | 2,412,313 | 2,327,180 |
Total assets | 3,057,217 | 2,853,479 | 2,828,871 | 2,707,847 |
Liabilities expected to be settled in: | ||||
No more than 12 months | 350,743 | 261,732 | 346,086 | 256,896 |
More than 12 months | 324,692 | 292,554 | 326,860 | 295,133 |
Total liabilities | 675,435 | 554,286 | 672,946 | 552,029 |
5.2 Cooperative Research Centres (CRCs)
All CRCs have been classified as joint operations as the purpose is for the pursuit of collaborative scientific research where participants share in the scientific outcomes and outputs of the CRCs. In the event that CRC research results in a move to commercialisation, a separate legal entity is established and the CSIRO’s share of the new entity is treated either as subsidiary, joint venture or associate in the Statement of Financial Position as appropriate.
CRC grants provide successful applicants with access to grant funds for up to 10 years for collaborations from industry, research and community sectors to solve industry problems and improve the competitiveness, productivity and sustainability of the Australian industries. CRC-P grants support short term industry-led collaborations to develop important new technologies, products and services that deliver tangible outcomes.
CSIRO’s total cash and in-kind contribution (e.g. staff and use of assets) to CRCs from its own resources was $15.2 million and to CRC-Ps $3.2 million. Contributions made by CSIRO are expensed as incurred and these are included in the Statement of Comprehensive Income.
CSIRO was a participant in the following CRCs during 2019-20:
Name of CRC | Scheduled Termination Date |
---|---|
Alertness Safety & Productivity CRC (Alertness CRC) | 30-Jun-20 |
Autism CRC | 30-Jun-21 |
Bushfire and Natural Hazards CRC (BNHCRC) | 30-Jun-21 |
Cancer Therapeutics CRC (CTX) | 30-Jun-20 |
Contamination Assessment & Remediation of the Environment CRC (CRC Care) | 30-Jun-20 |
CRC for Developing Northern Australia: Establishing eye screening services | 30-Jun-21 |
CRC for Developing Northern Australia: Northern Australia aquaculture industry situational analysis study | 30-Apr-20 |
CRC for Developing Northern Australia: Northern Australian beef sector industry situational analysis study | 30-Apr-20 |
Cyber Security CRC | 01-Dec-24 |
Innovative Manufacturing CRC (IMCRC) | 30-Jun-22 |
MinEx CRC | 30-Jun-28 |
Optimising Resource Extraction (CRC ORE) | 30-Jun-21 |
Rail Manufacturing CRC | 30-Jun-20 |
SmartSat CRC | 30-Jun-26 |
Future Battery Industries CRC | 30-Jun-25 |
Blue Economy CRC | 30-Jun-29 |
CO2 CRC | 11-Dec-20 |
CSIRO was a participant in the following CRC-Ps during 2019-20:
Name of CRC-P | Scheduled Termination Date |
---|---|
CRC-P Automating data collection and analytics in underground mines using drones and AI | 31-Dec-21 |
CRC-P Implementing intelligent automated reporting in radiology practice | 30-Jun-21 |
CRC-P Kapunda In-Situ Copper and Gold Field Recovery Trial | 31-Dec-20 |
CRC-P Long-life alloy components for efficient hydrometallurgical processing | 31-Dec-20 |
CRC-P Optimal scheduling of air conditioning systems with renewable energy and thermal storage | 30-Jun-21 |
CRC-P Oventus (targeted therapy for sleep apnoea) | 20-Dec-19 |
CRC-P Smart Sensor & Deep Learning Behavioural Engine for Personalised Health Monitoring | 31-Mar-22 |
CRC-P Smart tools for agronomic crop insights using Machine learning (ML) and Artificial Intelligence (AI) | 01-Jan-22 |
CRC-P Transforming joint surgery rehabilitation with artificial intelligence in telehealth | 19-Jul-21 |
Developing Northern Australia: Developing sustainable cropping systems for cotton, grains and fodder | 01-Oct-20 |
Developing Northern Australia: New pastures to increase livestock productivity across the north | 30-Sep-20 |
CRC-P A novel process for producing battery grade nickel and cobalt sulphates | 30-Sep-21 |
CRC-P Future-proofing the salmon farming industry in the face of climate warming | 31-Mar-23 |
CRC-P Privacy-Preserving Analytics for the Education Technology Industry | 14-Aug-22 |
CRC-P Using AI and a hybrid ESS solution to fully integrate solar generation into the distribution system | 31-Aug-22 |
CRC-P Development of a new commercial-scale process for producing high purity graphite (>99.95%) | 31-Dec-21 |
Accounting Policy
Joint Operations – Cooperative Research Centres (CRCs)
The primary source of funding for CRCs is from the Australian Government and funding is progressively drawn down over the life of the CRCs and distributed to participants, including CSIRO and universities, for research and development purposes. CSIRO’s contributions to the CRCs are expensed as incurred and funds received from CRCs are recognised as revenue to the extent that work has been performed in the Statement of Comprehensive Income. CSIRO has been a participant in 17 CRCs and 16 CRC-Ps during the financial year.
5.3 Monies Held in Trust
2020 | 2019 | |||
---|---|---|---|---|
$'000 | $'000 | |||
Monies held in trust represented by cash, deposits and investments for the benefit of the Group which are not included in the Statement of Financial Position are: | ||||
The Sir Ian McLennan Achievement for Industry Award - established to award outstanding contributions by the Group's scientists and engineers to national development. | 366 | 422 | ||
The Elwood and Hannah Zimmerman Trust Fund - established to fund weevil research and the curation of the Australian National Insect Collection (ANIC) weevil collection. | 4,933 | 5,069 | ||
The Schlinger Trust - established to research the taxonomy, biosystematics, general biology and biogeography of Australasian Diptera conducted by the Australian National Insect Collection. | 2,273 | 2,371 | ||
Total monies held in trust as at 30 June | 7,572 | 7,862 | ||
McLennan | Zimmerman | Schlinger | Total | |
Summary of movements: | $'000 | $'000 | $'000 | $'000 |
Balance as at 1 July 2019 | 422 | 5,069 | 2,371 | 7,862 |
Adjustments | 0 | 0 | 0 | 0 |
Interest and distribution adjustments | (18) | 113 | 35 | 130 |
Expenditure in the period | (38) | (249) | (133) | (420) |
Balance as at 30 June 2020 | 366 | 4,933 | 2,273 | 7,572 |
5.4 Collections
CSIRO is the custodian of several collections used for scientific research. These collections have been established over time and document an extensive range of Australian flora and fauna species. The collections are irreplaceable, bear scientific and historical value and are not reliably measurable in monetary terms. Therefore, CSIRO has not recognised them as an asset in its financial statements.
The main collections held by CSIRO are:
- Australian National Herbarium (ANH) – With a focus on the Australian flora and that of neighbouring regions such as New Guinea and the Pacific, the ANH has over 1 million herbarium specimens, with additional holdings at the Australian Tropical Herbarium (ATH) in Cairns, Queensland. The ANH collections include the Dadswell Memorial Wood Collection and comprehensive holdings of a number of groups, including cryptogams, eucalypts and orchids.
- Australian National Insect Collection (ANIC) – Specialising in Australian terrestrial invertebrates, ANIC houses over 12 million specimens and is the world’s largest collection of Australian insects, as well as groups such as mites, spiders, earthworms, nematodes and centipedes. ANIC is an important research collection used by CSIRO researchers, university staff, and students, and scientists from Australian and international research organisations.
- Australian National Wildlife Collection (ANWC) – Specialising in terrestrial vertebrates, ANWC contains specimens of most species of Australian mammals, birds, reptiles, and amphibians. It is particularly rich in specimens of birds from New Guinea. ANWC is a valuable asset for biologists engaged in biodiversity research. Its research library holds 60,000 recordings of wildlife sounds, more than a thousand tissue samples, and the egg collections from more than 300 bird species.
- Australian National Fish Collection (ANFC) – Specialising in marine fishes, the ANFC contains almost 150,000 specimens representing more than 3,000 species from the Indo-Pacific region. It is an invaluable resource for biodiversity and biogeographic research on Australian and Indo-Pacific fishes. Its major strengths are sharks, rays, and deep-water fishes. It also contains a large collection of images and radiographs of Australian fishes.
- Australian Tree Seed Centre (ATSC) – The ATSC is managed as a collection and research centre for Australian native tree species. For over 50 years the centre has been collecting, researching and supplying quality, fully documented tree seed to both domestic and overseas customers. Collections of seed are sourced from wild populations and genetically improved seed from our domestication and improvement programs.
- Australian National Algae Culture Collection (ANACC) – The ANACC consists of more than 300 microalgae species and is a resource for research on algal diversity, distribution, richness, and taxonomic relationships, including those of economic importance and environmental concern. Aligned with the collection is the National Algae Supply Service, which provides microalgae strains as starter cultures to industry, research, organisations and educational institutions in over 70 countries.
6. Budgetary Reports and Explanations of Major Variances
The following provides a comparison of the original budget as presented in the 2019-20 Portfolio Budget Statements to the actual outcome reported for 2019-20. The intention of this variance analysis is to provide the reader with information relevant to assessing the performance of CSIRO, including the accountability for the resources entrusted to it.
Statement of Comprehensive Income | |||
---|---|---|---|
for the period ended 30 June 2020 | |||
Consolidated | |||
Actual | Original Budget | Variance | |
2020 | 2020 | 2020 | |
$'000 | $'000 | $'000 | |
NET COST OF SERVICES | |||
Expenses | |||
Employee benefits | 794,602 | 778,993 | (15,609) |
Suppliers | 433,420 | 495,889 | 62,469 |
Depreciation and amortisation | 182,830 | 159,351 | (23,479) |
Finance leases | 2,707 | 3,380 | 673 |
Impairment loss on financial instruments | 1,304 | 0 | (1,304) |
Write-down and impairment of other assets | 12,188 | 0 | (12,188) |
Loss on revaluation of investment properties | 2,700 | 0 | (2,700) |
Total expenses | 1,429,751 | 1,437,613 | 7,862 |
Own-Source Income | |||
Own-source revenue | |||
Revenue from contracts with customers | 449,419 | 478,248 | (28,829) |
Royalties and licence fees | 0 | 38,611 | (38,611) |
Bank and term deposits interest | 5,772 | 8,131 | (2,359) |
Rental income | 9,200 | 6,100 | 3,100 |
Other revenues | 34,708 | 17,936 | 16,772 |
Total own-source revenue | 499,099 | 549,026 | (49,927) |
Gains | |||
Gain/(loss) on foreign exchange - non speculative | 383 | 0 | 383 |
Gain/(loss from equity investments and intellectual property | 2,032 | 0 | 2,032 |
Gain/(loss) from asset sales | 29,662 | 6,000 | 23,662 |
Gain on valuation of equity investments | 101,503 | 0 | 101,503 |
Total gains | 133,580 | 6,000 | 127,580 |
Total own-source income | 632,679 | 555,026 | 77,653 |
Net cost of services | (797,072) | (882,587) | 85,515 |
Revenue from Government | 837,873 | 839,151 | (1,278) |
Surplus on continuing operation | 837,873 | 839,151 | (1,278) |
Surplus/(Deficit) | 40,801 | (43,436) | 84,237 |
OTHER COMPREHENSIVE INCOME | |||
Items not subject to subsequent reclassification to net cost of services | |||
Changes in asset revaluation reserves | 0 | 0 | 0 |
Items subject to subsequent reclassification to net cost of services | |||
Changes in other reserves | (176) | 0 | (176) |
Total other comprehensive income | (176) | 0 | (176) |
Total comprehensive income/(loss) | 40,625 | (43,436) | 84,061 |
Statement of Financial Position | |||
---|---|---|---|
as at 30 June 2020 | |||
Consolidated | |||
Actual | Original Budget | Variance | |
2020 | 2020 | 2020 | |
$'000 | $'000 | $'000 | |
ASSETS | |||
Financial Assets | |||
Cash and cash equivalents | 403,496 | 283,420 | 120,076 |
Trade and other receivables | 88,945 | 91,151 | (2,206) |
Other investments | 304,490 | 127,495 | 176,995 |
Total financial assets | 796,931 | 502,066 | 294,865 |
Non-Financial Assets | |||
Land and buildings | 1,608,249 | 1,601,934 | 6,315 |
Plant and equipment | 559,183 | 514,092 | 45,091 |
Heritage and cultural | 4,463 | 4,463 | 0 |
Intangibles | 13,650 | 18,173 | (4,523) |
Investment properties | 49,373 | 49,697 | (324) |
Inventories | 1,420 | 1,440 | (20) |
Other non-financial assets | 18,748 | 44,295 | (25,547) |
Total non-financial assets | 2,255,086 | 2,234,094 | 20,992 |
Properties held for sale | 5,200 | 0 | 5,200 |
Total assets | 3,057,217 | 2,736,160 | 321,057 |
LIABILITIES | |||
Payables | |||
Suppliers | 215,021 | 89,578 | (125,443) |
Other payables | 17,796 | 143,032 | 125,236 |
Total payables | 232,817 | 232,610 | (207) |
Interest Bearing Liabilities | |||
Leases | 116,740 | 0 | (116,740) |
Deposits | 22,508 | 0 | (22,508) |
Total Interest bearing liabilities | 139,248 | 80,664 | (139,248) |
Provisions | |||
Employee provisions | 262,913 | 224,807 | (38,106) |
Provision for remediation | 40,457 | 21,000 | (19,457) |
Total provisions | 303,370 | 245,807 | (57,563) |
Total liabilities | 675,435 | 559,081 | (197,018) |
Net assets | 2,381,782 | 2,177,079 | 124,039 |
EQUITY | |||
Contributed equity | 310,954 | 310,954 | 0 |
Asset revaluation reserves | 1,523,229 | 1,492,334 | 30,895 |
Other reserves | (203) | (203) | |
Retained surplus | 455,993 | 373,791 | 82,556 |
Non-controlling interest | 91,809 | 91,455 | |
Total equity | 2,381,782 | 2,177,079 | 204,703 |
Statement of Changes in Equity | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
for the period ended 30 June 2020 | ||||||||||||||||||
Retained earnings | Asset revaluation reserve | Other reserves | Contributed equity/capital | Non-controlling interest | Total equity | |||||||||||||
Actual | Original Budget | Variance | Actual | Original Budget | Variance | Actual | Original Budget | Variance | Actual | Original Budget | Variance | Actual | Original Budget | Variance | Actual | Original Budget | Variance | |
2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | |
$'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | |
Opening balance | 435,198 | 417,227 | 17,971 | 1,523,229 | 1,492,286 | 30,943 | (27) | 48 | (75) | 300,954 | 300,954 | 0 | 39,839 | 0 | 39,839 | 2,299,193 | 2,210,515 | 88,678 |
Adjustment on initial application of AASB15/AASB 1058 | (1,012) | (1,012) | ||||||||||||||||
Adjustment on initial application of AASB 16 | ||||||||||||||||||
Adjusted opening balance | 434,186 | 417,227 | 17,971 | 1,523,229 | 1,492,286 | 30,943 | (27) | 48 | (75) | 300,954 | 300,954 | 0 | 39,839 | 0 | 39,839 | 2,298,181 | 2,210,515 | 88,678 |
Comprehensive income | ||||||||||||||||||
Other comprehensive income | 0 | 0 | 0 | 0 | 0 | 0 | (176) | 0 | (176) | 0 | 0 | 0 | 0 | 0 | 0 | (176) | 0 | (176) |
Surplus/(deficit) for the period | 22,161 | (43,436) | 65,597 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 18,640 | 0 | 18,640 | 40,801 | (43,436) | 84,237 |
Total comprehensive income | 22,161 | (43,436) | 65,597 | 0 | 0 | 0 | (176) | 0 | (176) | 0 | 0 | 0 | 18,640 | 18,640 | 40,625 | (43,436) | 84,061 | |
Other Movements | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | - | ||
Contributions by owners | ||||||||||||||||||
Equity injection | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 10,000 | 10,000 | 0 | 32,976 | 0 | 32,976 | 42,976 | 10,000 | 32,976 |
Contributions by owners – other | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | - |
Closing balance | 456,347 | 373,791 | 83,568 | 1,523,229 | 1,492,286 | 30,943 | (203) | 48 | (251) | 310,954 | 310,954 | 0 | 91,455 | 0 | 72,815 | 2,381,782 | 2,177,079 | 205,715 |
Cash Flow Statement | |||
---|---|---|---|
for the period ended 30 June 2020 | |||
Consolidated | |||
Actual | Original Budget | Variance | |
$'000 | $'000 | $'000 | |
OPERATING ACTIVITIES | |||
Cash received | |||
Receipts from Government | 837,873 | 839,151 | (1,278) |
Sale of goods and rendering of services | 573,857 | 521,373 | 52,484 |
Interest | 6,563 | 7,985 | (1,422) |
Net GST received | 21,203 | (719) | 21,922 |
Deposits | 0 | 0 | 0 |
Other | 0 | 17,936 | (17,936) |
Total cash received | 1,439,496 | 1,385,726 | 53,770 |
Cash used | |||
Employees | 765,251 | 777,017 | 11,766 |
Suppliers | 520,701 | 496,452 | (24,249) |
Interest payments on lease liabilities | 2,585 | 0 | (2,585) |
Finance costs | 122 | 2,680 | 2,558 |
Deposits | 799 | 0 | 799 |
Other | 0 | 5,000 | (5,000) |
Total cash used | 1,289,458 | 1,281,149 | (16,711) |
Net cash from operating activities | 150,038 | 104,577 | 37,059 |
INVESTING ACTIVITIES | |||
Cash received | |||
Proceeds from sales of property, plant and equipment | 90,547 | 67,300 | 23,247 |
Proceeds from sales of equity investments and intellectual property | 6,842 | 0 | 6,842 |
Total cash received | 97,389 | 67,300 | 30,089 |
Cash used | |||
Purchase of property, plant and equipment | 103,765 | 179,291 | 75,526 |
Equity investments | 61,907 | 10,000 | (51,907) |
Other selling costs | 1,397 | 0 | (1,397) |
Total cash used | 167,069 | 189,291 | 22,222 |
Net cash used in investing activities | (69,680) | (121,991) | 52,311 |
FINANCING ACTIVITIES | |||
Cash received | |||
Contributed equity | 42,976 | 10,000 | 32,976 |
Other | 0 | 45,000 | (45,000) |
Total cash received | 42,976 | 55,000 | (12,024) |
Cash used | |||
Finance leases | 0 | 4,485 | 4,485 |
Principal payments of lease liabilities | 39,913 | 0 | (39,913) |
Total cash used | 39,913 | 4,485 | (35,428) |
Net cash from financing activities | 3,063 | 50,515 | (47,452) |
Net increase in cash held | 83,421 | 33,101 | 41,918 |
Cash and cash equivalents at the beginning of the reporting period | 320,075 | 320,075 | 0 |
Cash and cash equivalents at the end of the reporting period | 403,496 | 353,176 | 41,918 |
Explanation of Major Variances
Australian Accounting Standard AASB 1055 Budgetary Reporting requires variance explanations of major variances between the original budget as presented in the 2019-20 Portfolio Budget Statements and the actual outcome as reported in these financial statements. CSIRO considers that major variances are those greater than 10% of the original estimate and that are relevant to an assessment of the discharge of accountability and to an analysis of the performance of the entity. Variances below this threshold are not included unless considered significant by their nature.
It should be noted that the original budget was prepared before the 2018-19 actual figures were known. As a consequence the opening balance of the 2019-20 Statement of Financial Position needed to be estimated and in some cases, variances between 2019-20 actuals and budget numbers can be, at least in part, attributed to unanticipated movements in the prior period figures. Variances attributable to factors which would not reasonably have been identifiable at the time of the budget preparation, such as the revaluation of plant and equipment and investment properties, sale of equity investments, and impairment of assets, have not been included as part of the explanation.
The Budget is not audited.
Statement of Comprehensive Income
Depreciation and amortisation expense is above budget and Suppliers expense is below budget due to the application of AASB 16 Leases effective 1 January 2019. The budget estimates were updated to reflect this standard in the subsequent budget rounds.
Own source revenue is lower than budget due to the impact of the Coronavirus (“COVID-19”) on CSIRO and customers, as well as other unforeseen project delays which have impacted CSIRO’s ability to meet milestones.
Royalties and licence fees have been reclassified to revenue from contracts with customers on application of AASB 15 Revenue from Contracts with Customers.
Net gains are higher than budget due to the sale of the former site at Highett, Victoria exceeding expectations, and the increased value of the equity portfolio for both CSIRO and the CSIRO Innovation Fund.
Statement of Financial Position
Cash and cash equivalents are higher than budget due to the difference in basis of preparation between the PBS and the financial statements relating to the Innovation Fund investment. The Portfolio Budget Statements are prepared on the basis of only including General Government Sector (GGS) entities, whereas the Financial Statements for CSIRO include the results of CSIRO and all controlled entities, regardless of whether they are within the GGS or not. Therefore, there is a difference in the accounting treatment between the two, resulting in the budget containing the Innovation Fund investment as an Investment Accounted for using the Equity Method, while the Financial Statements account for this investment in the consolidation as Cash and cash equivalents held by a controlled entity.
Other investments are higher than budget due to the acquisition of a number of shares not foreseen at the time of preparing the budget, an increase in the valuation of the share portfolio, and the difference in basis of preparation between the PBS and the financial statements relating to the Innovation Fund investment.
Other non-financial assets are lower than budget as revenue contracts that are currently in the work-in-progress stage have been reclassified to Trade and other receivables on application of AASB 15 Revenue from Contracts with Customers.
Suppliers payable is higher and Other payables is lower than budget as contract liabilities associated with consideration received by the customer where services are yet to be performaned by CSIRO have been reclassified between the two categories on application of AASB 15 Revenue from Contracts with Customers.
Interest bearing liabilities are higher than budget due to the application of AASB 16 Leases , effective 1 January 2019. The budget estimates were updated to reflect this standard in the subsequent budget rounds.
The higher balance for Employee provisions is due to the decrease in the long-term government bond rate used to discount expected future employee benefit payments, as well as higher end of year leave balances than forecasted.
Provision for remediation is higher than budget reflecting higher than expected make-good, waste removal and site remediation costs.
Retained Surplus is higher than budgeted as the operating result for 2019-20 was positive in comparison to the budgeted loss.
The Non-controlling interest balance is higher than budget due to the difference in basis of preparation between the PBS and the financial statements relating to the Innovation Fund investment.
Cash Flow Statement
Variances relating to cash flows are a reflection of the factors detailed under Statement of Comprehensive Income and Statement of Financial Position.
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https://www.transparency.gov.au/annual-reports/commonwealth-scientific-and-industrial-research-organisation/reporting-year/2019-2020-43