Automotive Diversification Programme Round 3

Transcription

1 Autmtive Diversificatin Prgramme Rund 3 Versin July 2015

2 Cntents Purpse f this Guide... 3 Eligibility Test... 3 Eligible Perid... 4 Capital Equipment Items... 4 Recnfiguratin... 4 Activities Undertaken by Related Bdy Crprates... 5 Ineligible Expenditure... 5 Activities paid fr by nn-cash cnsideratin... 6 Cntact... 6 Rud 3 ADP - Eligible Expenditure Guidelines July 2015 Page 2 f 6

3 Purpse f this Guide This guide aims t assist successful Autmtive Diversificatin Prgramme (ADP) grant Recipients t understand the eligible expenditure parameters fr the prgramme. Eligibility Test The Prgramme Delegate has the final decisin in determining eligible expenditure and may issue additinal guidance regarding eligible expenditure n a case-by-case basis as required. Eligible expenditure fr ADP is currently limited t: 1. capital equipment, which means: new equipment, including devices, machines and tls; r state-f-the-art secnd-hand manufacturing plant and equipment, including devices, machines and tls, purchased thrugh an arm s-length transactin with a remaining ecnmic life f nt less than 70 per cent recrded as a fixed asset in the applicant s accunts, fr use in the peratin f the business and directly related t the prject t which the applicatin relates; and 2. recnfiguratin csts, which are limited t the remdelling r restructuring f a manufacturing prductin line. Other expenditure incurred by the Recipient, directly attributable t the prject, during the prject perid, and cnsistent with the ADP Ministerial Guidelines 2015 and the ADP Funding Agreement may be treated as eligible expenditure fr the purpses f a grant. Any items already claimed under ther gvernment grant prgrams are deemed t be ineligible. Expenditure n capital equipment may include equipment purchased using a finance lease, as well as capitalising the cmmissining r installatin f new plant and equipment. In general, t be cnsidered eligible, new r state-f-the-art secnd hand capital item claims fr reimbursed payment are limited t fixed assets, which has the meaning given by the Australian Accunting Standards (Australian Accunting Standards Bard item 116, title Prperty, Plant and Equipment). As such, they shuld satisfy all f the fllwing requirements: 1. The expenditure is fr an item capitalised in the Recipient s accunting system (i.e. it appears n the balance sheet); and 2. The item is listed n the Recipient s asset register; and 3. The item is directly linked t the prject (i.e. directly invlved in the prductin f the utput) and specific milestnes; 4. The item is purchased thrugh an arm s-length transactin by the Recipient; and 5. The item has a valuatin f a remaining ecnmic life f nt less than 70 per cent* (fr secnd-hand items nly). *Grantees may be required t prvide a frmal valuatin attesting t the remaining ecnmic life f secnd hand items f nt less than 70 per cent. In general, t be cnsidered eligible, recnfiguratin claims fr reimbursed payment are limited t csts where the expenditure is directly attributable t the agreed remdelling r restructuring f a manufacturing prductin line. Unlike new r state-f-the-art secnd hand capital item claims, recnfiguratin csts are nt limited t fixed assets, nr d they need t be refelected as assets within the Recipient s balance sheet. Rud 3 ADP - Eligible Expenditure Guidelines July 2015 Page 3 f 6

4 Eligible Perid The eligible perid fr expenditure t be incurred is n, r after the date the funding agreement is executed, r the agreed prject start date in the executed funding agreement if earlier. Eligible expenditure must als be incurred n r befre the prject end date, while an agreed prject end date cannt be lnger than 24 mnths frm the prject start date The date f expenditure being incurred is defined t be the earlier f either delivery date, r the date when the liability is recgnised i.e. invice date r rder date. Any expenditure incurred after the prject end date is ineligible. Fr any plant and equipment items that are nt cnsidered t be eligible expenditure, any related cmmissining and installatin csts als cannt be cnsidered eligible expenditure. Capital Equipment Items Capital equipment items means new equipment and state-f-the-art secnd-hand manufacturing plant and equipment purchased thrugh an arm s-length transactin with a remaining ecnmic life f nt less than 70 per cent (including devices, machines and tls) that are recrded in the applicant s accunts as a fixed asset, fr use in the peratin f the business and directly related t the prject t which the applicatin relates. Csts such as cmmissining, freight r special assciated sftware which are slely related t the purchase f the fixed assets are eligible nly if they are capitalised. Expenditure is nrmally deemed t be incurred when a purchase cntract fr capital items has been signed and a depsit paid. Hwever, if the capital item is purchased under a hire purchase agreement r finance lease, expenditure is taken t be incurred when the first instalment under the agreement r lease is paid, and the plant and equipment cmmissined. The Recipient must prvide, n request, apprpriate evidence f a valid hire purchase agreement r finance lease. Where items are purchased under a chattel mrtgage, r a hire purchase agreement, r a lease is used t finance the purchase, the cst f the item excluding interest must be capitalised t be classified as eligible prject expenditure. Therefre perating leases are nt eligible (as these are expensed and recrded ff the balance sheet) while finance leases that are recrded n the balance sheet and meet the parameters listed in the Eligibility Test sectin are eligible. Grant payments will be made upn the prvisin f the chattel mrtgage/lease/hire purchase agreement as well as satisfactry evidence f repayments. Recnfiguratin Eligible expenditure fr recnfiguratin csts are limited t csts where the expenditure is directly attributable t the agreed remdelling r restructuring f a manufacturing prductin line. In this instance csts d nt necessarily have t be capitalised and may either be incurred as an expense t the the business r via an arm s-length cntract with a third-party. Nte that general infrastructure csts are ineligible under the prgram. Prject management and direct labur csts are eligible nly where expenditure is incurred n directly implementing and/r cmmissining the agreed prject and where the expenditure is directly attributable t the prject. Salaries f ther peple specifically emplyed fr the purpse f managing the prject are als cnsidered t be eligible. Salaries f the current management team and administrative staff (such as CEOs, CFOs, accuntants, marketing staff and lawyers) fr time related t undertaking prject management tasks are nt cnsidered t be eligible expenditure. Salary csts based n an estimatin f the Rud 3 ADP - Eligible Expenditure Guidelines July 2015 Page 4 f 6

5 emplyee s wrth t the Recipient where n cash changes hands and n amunt is credited t a lan accunt r current accunt in the Recipient s accunts are nt eligible. Activities Undertaken by Related Bdy Crprates Grant funding is prvided strictly t supprt the prject and its cre activities. It is nt prvided fr the benefit r prfit f related bdy crprates f the Recipient. Related bdy crprates has the same meaning as in Sectin 50 f the Crpratins Act 2001 (Cth). Where prject activities are cnducted thrugh cntracting related bdy crprates f the grantee r ther nn-arm s length persns r entities, these csts may qualify as eligible expenditure nly if a reliable, measurable cst is incurred by the related bdy r assciated entity and a verifiable prcess is used t transfer that cst t the grantee with n prfit margin attached i.e. at cst. Where there is a mutual benefit arising frm prject activities, either t anther cmpany r fr anther prject, the Recipient shuld reasnably apprtin such csts s as t claim nly fr thse activities which directly apply t the funded prject. Ineligible Expenditure Expenditure n the fllwing is nt eligible fr grant funding. Even if it is related t eligible activities the fllwing listing is nt cnsidered eligible expenditure (this listing is nt exhaustive): capital equipment used in business as usual activities, including, but nt limited t: general infrastructure; financial management systems; quality cntrl; cllectin f infrmatin; vehicles and ffice fixtures, including general ffice equipment such as cmputers, printers and sftware, and furniture; capital equipment acquired by the Recipient using an peratinal lease; capital equipment acquired by the Recipient using nn-cash cnsideratin; and secnd hand capital equipment that has a remaining ecnmic life less than 70%. In additin t the abve, the fllwing items are als nt eligible: the csts f activities undertaken befre the prject cmmencement date; the csts f preparing the riginal grant applicatin, preparing any prject variatin requests, and preparing any prject reprts required under the ADP Funding Agreement including the prvisin f audit reprts; the cst f btaining resurces, cntractrs r permits fr the prject, including building permits, tendering csts, interest n lans, jb advertising and recruiting, and cntract negtiatins; pprtunity csts relating t fregne rent r lease revenue as a result f the prject; general business management, marketing, administratin, and ther csts nt directly related t the eligible prject such as insurance, warranties, cmmunicatins, Rud 3 ADP - Eligible Expenditure Guidelines July 2015 Page 5 f 6

6 accmmdatin, ffice cmputing facilities, printing and statinery, pstage, legal and accunting fees, and bank charges; travel expenditure; and business acquisitin and merger activities. This list is indicative and nt exhaustive. Other activities r specific expenditure may be ineligible because the Prgramme Delegate decides it des nt directly supprt the achievement f the prject utcmes r it is cntrary t the spirit and intentin f the ADP. Activities paid fr by nn-cash cnsideratin Activities paid fr by the Recipient using a nn-cash cnsideratin is nt cnsidered t be eligible expenditure. Nn-cash cnsideratins are cntributins t a prject that have the fllwing cmmn characteristics: n impact n entity cash flw; and n recrd in the entity s statement f financial perfrmance; and n impact n the entity s bank accunts. Examples include: the use f resurces whether internally r externally surced fr n cst t the prject; r issuing shares, bnds, r the use f barter and ther instruments in the payment fr prducts and services rendered. These arrangements are smetimes referred t as in-kind cntributins. Cntact Fr further infrmatin abut the ADP visit business.gv.au/adp, call r ADP@industry.gv.au. Rud 3 ADP - Eligible Expenditure Guidelines July 2015 Page 6 f 6