
03Financial Statements
Note 7: Other Information
7.1: Reporting of Outcomes
The Corporation has one outcome – to facilitate increased flows of finance into Australia’s clean energy sector, applying commercial rigour to investing in renewable energy, low-emissions and energy efficiency technologies, building industry capacity, and disseminating information to industry stakeholders.
|
Outcome 1 2016 |
Outcome 1 2015 |
Total 2016 |
Total 2015 |
---|---|---|---|---|
Departmental |
|
|
|
|
Expenses |
29,750 |
23,622 |
29,750 |
23,622 |
Own-source income |
50,887 |
54,777 |
50,887 |
54,777 |
Net return from outcome delivery |
21,137 |
31,155 |
21,137 |
31,155 |
7.2: Budgetary Reports and Explanation of Major Variances
The following tables provide a comparison of the original budget as presented in the 2015-16 Treasury Portfolio Budget Statements (PBS) to the 2015-16 final outcome as presented in accordance with AAS for the Corporation. The Budget is not audited.
7.2A: Budgetary Reports
The budgeted financial statements for 2015-16 were prepared on the basis of the Australian Government’s intention to abolish the CEFC. Legislation to abolish the CEFC and transfer the CEFC’s existing assets and liabilities to the Commonwealth was before Parliament at that time. Given the uncertainty regarding the timing of the passage of legislation, the budgeted financial statements assumed the CEFC was to be abolished from 1 July 2015. Accordingly, the 2015-16 Budget assumed:
- no new investments would be entered into by the CEFC post 30 June 2015;
- revenue from those contracts planned to be executed prior to 30 June 2015 was forecast to continue through the life of the investments (including revenue associated with the unwind of previously recorded concessionality charges);
- no additional concessionality charges were forecast to be incurred (consistent with the assumption of no new investments being entered into by the CEFC post 30 June 2015);
- all operational expenses (employee benefits and supplier costs) were anticipated to cease effective 30 June 2015;
- an allowance for possible loan impairment was provided in each period of the forward estimates in relation to the existing investment portfolio; and
- all outstanding liabilities to suppliers and employees were assumed to be settled at 30 June 2015.
The Corporation was not abolished at 1 July 2015, and therefore has continued to fulfil its obligation to invest in accordance with the CEFC Act. There has been no material change in the approach of the Corporation or the operations of the Corporation during the 2015-16 financial year, and as a consequence there are a large number of material variances to a budget that was based on assumption of abolition on the first day of the financial period. In explaining variances to the budget, the Corporation has therefore focussed on those items which are considered of most significance to the operations of the CEFC.
Statement of Comprehensive Income
for the period ended 30 June 2016
|
Actual $’000 |
Budget1 $’000 |
Variance2 $’000 |
---|---|---|---|
NET COST OF SERVICES |
|||
EXPENSES |
|
|
|
Employee benefits |
17,570 |
9,435 |
8,135 |
Suppliers |
4,865 |
3,764 |
1,101 |
Depreciation and amortisation |
534 |
624 |
(90) |
Concessional loan charges |
6,876 |
- |
6,876 |
Write-down and impairment of assets |
83 |
4,761 |
(4,678) |
Provision for irrevocable loan commitments |
(178) |
- |
(178) |
Total expenses |
29,750 |
18,584 |
11,166 |
Own-Source Income |
|
|
|
Own-source revenue |
|
|
|
Interest and loan fee revenue |
51,013 |
49,250 |
1,763 |
Other revenue |
30 |
- |
30 |
Total own-source revenue |
51,043 |
49,250 |
1,793 |
Gains |
|
|
|
Other (losses) / gains |
(156) |
- |
(156) |
Total (losses) / gains |
(156) |
- |
(156) |
Total own-source income |
50,887 |
49,250 |
1,637 |
Net contribution by / (cost of) services |
21,137 |
30,666 |
(9,529) |
Revenue from Australian Government |
- |
- |
- |
Surplus from continuing operations |
21,137 |
30,666 |
(9,529) |
|
Actual $’000 |
Budget1 $’000 |
Variance2 $’000 |
---|---|---|---|
OTHER COMPREHENSIVE INCOME |
|||
Items subject to subsequent classification to net cost of services |
|
|
|
Gains on available-for-sale financial assets |
5,885 |
- |
5,885 |
Total other comprehensive income |
5,885 |
- |
5,885 |
Total comprehensive income |
27,022 |
30,666 |
(3,644) |
- The Corporation’s original budgeted financial statement that was first presented to Parliament in respect of the reporting period (i.e. from the Corporation’s appearance in the 2015-16 Treasury PBS).
- Difference between the actual and original budgeted amounts for 2015-16. Explanations of major variances are provided further below.
Statement of Financial Position
as at 30 June 2016
|
Actual $’000 |
Budget1 $’000 |
Variance2 $’000 |
---|---|---|---|
ASSETS |
|||
Financial assets |
|
|
|
Cash and cash equivalents |
232,778 |
- |
232,778 |
Trade and other receivables |
3,853 |
2,991 |
862 |
Loans and receivables at amortised cost |
402,225 |
530,115 |
(127,890) |
Available for sale financial assets |
277,694 |
118,045 |
159,649 |
Other financial assets |
306,594 |
330,033 |
(23,439) |
Total financial assets |
1,223,144 |
981,184 |
241,960 |
Non-financial Assets |
|
|
|
Property, plant and equipment |
1,021 |
269 |
752 |
Computer software |
509 |
177 |
332 |
Prepayments |
539 |
- |
539 |
Total non-financial assets |
2,069 |
446 |
1,623 |
Total assets |
1,225,213 |
981,630 |
243,583 |
|
Actual $’000 |
Budget1 $’000 |
Variance2 $’000 |
---|---|---|---|
LIABILITIES |
|||
Payables and unearned income |
|
|
|
Suppliers |
1,324 |
- |
1,324 |
Unearned income |
5,536 |
7,364 |
(1,828) |
Other payables |
4,588 |
- |
4,588 |
Total payables and unearned income |
11,448 |
7,364 |
4,084 |
Provisions |
|
|
|
Employee provisions |
1,199 |
- |
1,199 |
Other provisions |
13,435 |
- |
13,435 |
Total provisions |
14,634 |
- |
14,634 |
Total liabilities |
26,082 |
7,364 |
18,718 |
Net assets |
1,199,131 |
974,266 |
224,865 |
EQUITY |
|
|
|
Contributed equity |
1,108,363 |
879,819 |
228,544 |
Reserves |
7,023 |
2,793 |
4,230 |
Retained surplus |
83,745 |
91,654 |
(7,909) |
Total equity |
1,199,131 |
974,266 |
224,865 |
- The Corporation’s original budgeted financial statement that was first presented to Parliament in respect of the reporting period (i.e. from the Corporation’s appearance in the 2015-16 Treasury PBS).
- Difference between the actual and original budgeted amounts for 2015-16. Explanations of major variances are provided further below.
Statement of Changes in Equity
for the period ended 30 June 2016
|
Retained Surplus |
Reserves |
Contributed Equity |
Total Equity |
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Actual $’000 |
Budget1 $’000 |
Variance2 $’000 |
Actual $’000 |
Budget1 $’000 |
Variance2 $’000 |
Actual $’000 |
Budget1 $’000 |
Variance2 $’000 |
Actual $’000 |
Budget1 $’000 |
Variance2 $’000 |
Opening balance |
|
|
|
|
|
|
|
|
|
|
|
|
Balance carried forward from previous period |
62,608 |
60,988 |
1,620 |
1,138 |
2,793 |
(1,655) |
1,168,363 |
1,168,362 |
1 |
1,232,109 |
1,232,143 |
(34) |
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
Surplus for the period |
21,137 |
30,666 |
(9,529) |
- |
- |
- |
- |
- |
- |
21,137 |
30,666 |
(9,529) |
Other comprehensive income |
- |
- |
- |
5,885 |
- |
5,885 |
- |
- |
- |
5,885 |
- |
5,885 |
Total comprehensive income |
21,137 |
30,666 |
(9,529) |
5,885 |
- |
5,885 |
- |
- |
- |
27,022 |
30,666 |
(3,644) |
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
|
|
Distributions to owners |
|
|
|
|
|
|
|
|
|
|
|
|
Return of equity to |
- |
- |
- |
- |
- |
- |
(60,000) |
(288,543) |
228,543 |
(60,000) |
(288,543) |
228,543 |
Contributions by owners |
|
|
|
|
|
|
|
|
|
|
|
|
Equity injection from |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Total transactions with owners |
- |
- |
- |
- |
- |
- |
(60,000) |
(228,543) |
228,543 |
(60,000) |
(288,543) |
228,543 |
Closing balance as at 30 June |
83,745 |
91,654 |
(7,909) |
7,023 |
2,793 |
4,230 |
1,108,363 |
879,819 |
228,544 |
1,199,131 |
974,266 |
224,865 |
- The Corporation’s original budgeted financial statement that was first presented to Parliament in respect of the reporting period (i.e. from the Corporation’s appearance in the 2015-16 Treasury PBS).
- Difference between the actual and original budgeted amounts for 2015-16. Explanations of major variances are provided further below.
Cash Flow Statement
for the period ended 30 June 2016
|
Actual |
Budget1 |
Variance2 |
---|---|---|---|
OPERATING ACTIVITIES |
|
|
|
Cash received |
|
|
|
Interest and fees |
45,254 |
44,925 |
329 |
Distributions from equity investments |
9 |
- |
9 |
Total cash received |
45,263 |
44,925 |
338 |
Cash used |
|
|
|
Employees |
16,186 |
9,434 |
6,752 |
Suppliers |
4,133 |
7,611 |
(3,478) |
Total cash used |
20,319 |
17,045 |
(3,274) |
Net cash from operating activities |
24,944 |
27,880 |
(2,936) |
INVESTING ACTIVITIES |
|
|
|
Cash received |
|
|
|
Principal loan repayments received |
133,680 |
204,349 |
(70,669) |
Redemption of short-term investments |
200,000 |
100,000 |
100,000 |
Redemption of other financial assets |
453,226 |
166,836 |
286,390 |
Redemption of AFS financial assets |
434 |
- |
434 |
Total cash received |
787,340 |
471,185 |
316,155 |
Cash used |
|
|
|
Purchase of property, plant and equipment |
971 |
- |
971 |
Purchase of computer software |
452 |
- |
452 |
Loans made to other parties |
208,015 |
219,986 |
(11,971) |
Purchase of AFS financial assets |
197,645 |
20,000 |
177,645 |
Purchase of short-term investments |
100,000 |
- |
100,000 |
Acquisition of other financial assets |
162,000 |
- |
162,000 |
Total cash used |
669,083 |
239,986 |
429,097 |
Net cash from investing activities |
118,257 |
231,199 |
(112,942) |
FINANCING ACTIVITIES |
|
|
|
Cash used |
|
|
|
Return of equity |
60,000 |
288,543 |
(228,543) |
Total cash used |
60,000 |
288,543 |
(228,543) |
Net cash used by financing activities |
(60,000) |
(288,543) |
228,543 |
|
Actual $’000 |
Budget1 $’000 |
Variance2 $’000 |
---|---|---|---|
Net increase in cash held |
83,201 |
(29,464) |
112,665 |
Cash and cash equivalents at the beginning of the |
149,577 |
29,464 |
120,113 |
Cash and cash equivalents at the end of the |
232,778 |
- |
232,778 |
- The Corporation’s original budgeted financial statement that was first presented to Parliament in respect of the reporting period (i.e. from the Corporation’s appearance in the 2015-16 Treasury PBS).
- Difference between the actual and original budgeted amounts for 2015-16. Explanations of major variances are provided further below.
7.2B: Major Budget Variance for 2015-16
Affected Line Items |
Explanations of Major Variances |
---|---|
Statement of Comprehensive Income: |
|
Employee Benefits |
Since the Corporation was not abolished effective 30 June 2015 (as anticipated in the Budget), employee benefit costs were incurred for the full 2015-16 financial year. In order to meet the obligations of the CEFC Act, it was necessary for the Corporation to continue to employ executives and staff across all key functions including investment, legal, risk management, finance, corporate affairs, human resources, etc. |
Suppliers |
Since the Corporation was not abolished effective 30 June 2015 (as anticipated in the Budget), supplier costs were incurred in the normal course of operations of the Corporation for the full 2015-16 financial year. |
Concessional loan charges |
Since the Corporation was not abolished effective 30 June 2015 (as anticipated in the Budget), additional concessional loan charges were incurred on a number of new investments made during the 2015-16 financial year. The budget had assumed that no new investments would be made after 1 July 2015. |
Write-down and impairment of assets |
During the 2015-16 financial year a number of long term loans in the CEFC portfolio were refinanced by the private sector. The loans that were refinanced tended to be the higher yielding facilities, but consequently also the higher risk facilities, including a significant portion of sub-debt. In addition, the Corporation has invested in a higher proportion of AFS financial assets in the 2015-16 financial year and these are accounted for at fair value rather than amortised cost. With the removal of certain higher risk facilities from the Corporation’s portfolio and a larger proportion of new investments being made in AFS financial assets, the provision for impairment of assets has not had to increase at the rate forecast in the Budget. |
Interest and loan fee revenue |
Since the Corporation was not abolished effective 30 June 2015 (as anticipated in the budget), the Corporation continued to make new investments to generate income for the Corporation that more than offset the reduction from facilities being refinanced unexpectedly during the financial year. |
Changes in gains/(losses) on AFS financial assets |
As stated above, the Corporation has invested in a significant number of AFS financial assets in the 2015-16 financial year and these are accounted for at fair value through other comprehensive income. The fall in interest rates during the 2015-16 financial year has also benefited the fair value of the AFS financial assets held by the Corporation as most of the Corporation’s AFS financial assets are fixed interest rate facilities. |
Statement of Financial Position: |
|
Cash and cash equivalents; |
Since the Corporation was not abolished effective 30 June 2015 (as anticipated in the Budget), funds held for new investments were not returned to the CEFC Special Account held by the Department of the Environment and Energy but instead were held to fund new investment commitments by the Corporation. |
Loans and receivables at amortised cost |
A number of significant investments made by the Corporation in prior years were able to be refinanced by third party commercial banks during the 2015-16 financial year. |
Available for sale financial assets |
Since the Corporation was not abolished effective 30 June 2015 (as anticipated in the Budget), the Corporation continued to make new investments in 2015-16. As stated above, the Corporation has invested in a larger proportion of AFS financial assets in the 2015-16 financial year, so while loans and receivables were being refinanced by the private sector, new AFS financial assets were being brought onto the Corporation’s statement of financial position. The largest components of the variance to Budget in available for sale financial assets were investments made during 2015-16 in Climate Bonds issued by a major Australia bank and a corporate entity, together with longer tenor corporate bonds issued by the major banks which the Corporation acquired in conjunction with the targeted CEFC energy efficiency programs being deployed through these banks to their customers. |
Other financial assets |
The other financial assets are lower than Budget as new investments have been made a slower rate than the repayment of these facilities and a number have repaid more rapidly than forecast in 2015-16. This is because the Corporation has not been required to ‘cash back’ new loans to the same extent in 2015-16 given the greater certainty afforded through the decision by the Australian Government to retain the Corporation. |
Non-financial assets |
Since the Corporation was not abolished effective 30 June 2015 (as anticipated in the Budget), new property, plant & equipment and computer software additions were purchased to enable the Corporation to continue operating effectively. Prepayments were also incurred in the normal course of operations. |
Payables and unearned income |
Since the Corporation was not abolished effective 30 June 2015 |
Other provisions |
The variance to Budget in other provisions is due to the status of various investments in the Corporation’s portfolio at 30 June 2016. Once an investment draws-down, the provision for concessionality is classified as an offset to the loan and receivable. In preparing a budget it is not possible to anticipate exactly at what stage each investment will be at at any given point in time. |
Contributed equity |
Since the Corporation was not abolished effective 30 June 2015 (as anticipated in the Budget), funds held for new investments were not returned to the CEFC Special Account held by the Department of the Environment and Energy but instead were held to fund new investments by the Corporation. This meant that returns of equity to the CEFC Special Account held by the Department of the Environment and Energy were lower than budgeted. |
Retained surplus |
Since the Corporation was not abolished effective 30 June 2015 (as anticipated in the Budget), it continued to incur costs associated with operations. The assumption in the Budget was that the Corporation would continue to generate income for the full year but the associated costs of managing the portfolio were not included in the Budget. |
Statement of Changes in Equity: |
|
Reserves |
Since the Corporation was not abolished on 30 June 2015 (as anticipated in the Budget), it has invested in a significant number of AFS financial assets in the 2015-16 financial year and these are accounted for at fair value through other comprehensive income and reserves in the Statement of Financial Position. The fall in interest rates during the 2015-16 financial year has also benefited the fair value of the AFS financial assets held by the Corporation as most of the Corporation’s AFS financial assets are fixed interest rate facilities. |
Contributed equity |
Since the Corporation was not abolished effective 30 June 2015 (as anticipated in the Budget), funds held for new investments were not returned to the CEFC Special Account held by the Department of the Environment and Energy but instead were held to fund new investments by the Corporation. This meant that returns of equity to the CEFC Special Account held by the Department of the Environment and Energy were lower than budgeted. The only return of equity in 2015-16 was an amount of $60 million from investments that had been realised during the normal course of operations. |
Cash Flow Statement: |
|
Employees |
Since the Corporation was not abolished effective 30 June 2015 (as anticipated in the Budget), employees were retained in the Corporation and employment related payments were made throughout the 2015-16 financial year in the normal course of the Corporation fulfilling its investment obligations under the CEFC Act. |
Suppliers |
Since the Corporation was not abolished effective 30 June 2015 (as anticipated in the Budget), supplier costs were paid throughout the 2015-16 financial year for costs associated with operating the Corporation in the normal course. |
Redemption of other financial assets; and acquisition of other financial assets |
Since the Corporation was not abolished effective 30 June 2015 (as anticipated in the Budget), the Corporation continued to make new investments in 2015-16 and this is reflected in the redemption and acquisition of other financial assets in the Cash Flow Statement. |
Principal loan repayments received |
A number of significant investments made by the Corporation in prior years were able to be refinanced by third party commercial banks during the 2015-16 financial year. |
Loans made to other parties |
A number of significant investments made by the Corporation in prior years were able to be refinanced by third party commercial banks during the 2015-16 financial year. This resulted in lower than budgeted draw-downs against contracted facilities for the year. |
Purchase of AFS financial assets |
Since the Corporation was not abolished effective 30 June 2015 (as anticipated in the Budget), the Corporation continued to make new investments in 2015-16. A greater proportion of these new investments in 2015-16 involved the purchase of AFS financial assets. |
Redemption of short-term investments; and purchase of short-term investments |
Since the Corporation was not abolished effective 30 June 2015 (as anticipated in the Budget), funds held for new investments were not returned to the CEFC Special Account held by the Department of the Environment and Energy but instead were used to fund short-term investments and then subsequently redeemed by the Corporation to funds loans made to other parties, purchases of AFS financial assets and acquisitions of other financial assets. |
Return of equity; and cash and cash equivalents at the beginning of the reporting period |
Since the Corporation was not abolished effective 30 June 2015 (as anticipated in the Budget), funds held for new investments were not returned to the CEFC Special Account held by the Department of the Environment and Energy but instead were held to fund new investment commitments by the Corporation. |