APA Group (APA) 2004年年度報告「ASX」.pdf

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1、Australian PipelineTrustARSN 091 678 778ANNUAL REPORT 2004Focused on GrowthAustralian Pipeline Trust is listed on the Australian Stock Exchangeunder the ticker symbol APA.APA is an industry leader in gas transmission infrastructure.APA has an interest in more than7,500km of pipelines and a 25%share

2、of Australias natural gastransmission market.APA had 250,335,769 units on issue at 30 June 2004,held by 28,464 unitholders.4Australian Pipeline Trust ANNUAL REPORT 2004ContentsYear at a GlanceCorporate ReviewCorporate Highlights1Chairmans Report2Managing Directors Report4Acquisitions6The Management

3、Team8Directory and Financial CalendarInside Back CoverAnnual Financial Report 2004Corporate Governance9Directors Report17Statement of Financial Performance26Statement of Financial Position27Statement of Cash Flows28Notes to the Financial Statements29Directors Declaration59Independent Audit Report60A

4、dditional Stock Exchange Information62Unitholder Information63Glossary of Terms and Abbreviations64 Net profit after tax andminorities was$121.292million,up 195.50%on theprevious corresponding period(“pcp”)of$41.046 million.Excluding non-recurringitems of$76.308 million net operating profit aftertax

5、 and minorities was$44.984 million,an increaseof 9.59%on the pcp.5Australian Pipeline Trust ANNUAL REPORT 2004Total revenue of$278.108million,excluding non-recurringitems,was$6.196 million,2.28%above the pcp.EBIT of$111.368 million,excluding non-recurring items,was down$2.356 million,(2.07%)from the

6、 pcp.Pipeline revenue,excludingnon-recurring items andOther pipeline revenuewhich is in the nature ofpassthrough revenue,was$185.591 million,down$3.619 million,(1.91%)from the pcp.1Australian Pipeline Trust ANNUAL REPORT 2004KEY OPERATING HIGHLIGHTSICoverage of the Moomba to Sydney Pipeline(“MSP”)un

7、der the National Gas Access Code was revoked between Moomba and Mardsen.Marsden to Wiltonremains covered;IAustralian Competition Tribunalrejects the ACCC valuationmethodology under accessarrangement on the MSP.The ACCC has now appealed to the Federal Court of Australia;IEntered into agreement withEn

8、ergex to transport gas on a spot basis to existing peaking gas fired power stations locatedalong Roma to Brisbane Pipeline;IAcquisition in August 2004,ofremaining 45%interest in SCPInvestments(No.1)Pty Limited,which owns 88.2%of Goldfields Gas Transmission Pipeline and 100%of Parmelia gas business.C

9、orporate HighlightsFINANCIAL SUMMARYYear endedYear endedYear endedYear ended30 June 200430 June 200330 June 200230 June 2001Category$m$m$m$mRecurring ItemsPipeline Revenue185.6189.2180.4173.8Other Pipeline Revenue74.668.061.161.5Other Revenue17.914.713.914.0Total Revenue(normalised)278.1271.9255.424

10、9.3EBITDA133.9137.8132.2127.5EBIT111.4113.7105.9103.6Pre-Tax Profit65.065.159.153.3Income Tax Expense(19.8)(23.8)(21.7)(22.3)Operating Profit after Tax and Minorities45.041.037.130.7Non-Recurring Items76.3Net Profit after IncomeTax and Minorities121.341.037.130.7Earning per Unit(cents)49.216.815.212

11、.6Net Tangible Asset Backing per Unit(after capital distributions)$2.08$1.79$1.76$1.82Operating Cash Flow per Unit excludinginterest(cents)47.256.453.259.1Interest Cover Ratio2.32.42.42.1Gearing Ratio(%)59.163.363.461.92Australian Pipeline Trust ANNUAL REPORT 2004Chairmans ReportI am pleased to advi

12、se that Australian Pipeline Trust(“APA”)has again returned a strong profit result.This year,our net profit after tax and minorities was$121.292 million,an increase of 195.50%on the previous correspondingperiod(“pcp”).After removing the various non-recurring items(primarilythe inclusion of the benefi

13、t of electing to enter taxconsolidation,the write-off against the carrying value of the Mid West Pipeline and the costs to date in pursuingvarious acquisition projects),the normalised operatingprofit after tax and minorities was$44.984 million which is a healthy increase of 9.59%on pcp.APAs underlyi

14、ng business has continued to perform as expected.While revenue on the Moomba to Sydney Pipeline system(“MSP”)continued to decline,due to contracted payments under the Gas TransportationDeed,other pipelines performed well.Overall expenseswere lower due to a combination of lower operating costs,reduce

15、d interest expense and lower depreciation andamortisation charges.The APA Distribution Reinvestment Plan(“DRP”)has been well received.After four offers under the DRP,6.336 million units have been issued,raising$16.374million in additional equity,net of costs.Our business was very productive during t

16、he 2004 financialyear,and much of the planning and strategy outlined overthe past years has come to fruition.While keeping theunderlying business operating efficiently,APA alsoaddressed major regulatory issues,gas transmissionindustry policy considerations and pursued acquisitionopportunities arisin

17、g from industry rationalisation.Our business was very productive during the 2004 financial year.3Australian Pipeline Trust ANNUAL REPORT 2004During the past financial year,coverage of the MSP by the National Gas Access Code was finally settled,with the Hon Ian Macfarlane MP,Minister for Industry,Tou

18、rism and Resources,deciding that the MSP should be partially uncovered and that competition with theEastern Gas Pipeline existed.APA welcomes finalisation of the revocation process,which will now enable APAto support and enhance regional development and pipeline competition.APA is preparing a revise

19、d access arrangement for the balance of the MSP system(which may include theCentral West Pipeline,the interconnect with VictoriasGasNet system and future spur lines or extensions).This will be identified as the NSW/ACT Regional GasTransmission Grid.APA was also successful in having the AustralianCom

20、petition Tribunal(“Tribunal”)set aside the ACCCsvaluation methodology used in the access arrangement on the MSP.The Tribunal found that the ACCCs valuation of the pipeline,which affects the tariff that could be charged,had fundamental errors in principle.On 4 August 2004,ACCC lodged an appeal agains

21、t theTribunals decision with the Federal Court of Australia.APA is confident that the Tribunal decision is right and will be upheld.As predicted,the gas transmission industry underwentrationalisation over the past year.APA has pursued theresultant assets sales vigorously throughout the year.Major co

22、sts have been incurred in pursuing these assets sales.We have had significant success since 30 June 2004.In July,APA signed an agreement to acquire the remaining45%interest in SCP Investments(No.1)Pty Limited andthe Parmelia gas business.SCP Investments(No.1)PtyLimited is the company that owns 88.2%

23、of the GoldfieldsGas Transmission Pipeline.Both these assets have growthopportunities and allow APA to diversify itself from reliance on MSP revenues.The acquisition,for$206 million including transaction costs,plus any working capital adjustments was right onstrategy for APA and underscores our disc

24、iplined approachto purchasing major assets.We have not always been successful,but our approach has not changed.We will not buy assets“at any price”.Consequently,we were not successful in acquiring any ofthe Duke assets,nor the South West Queensland Pipelineor Pilbara Pipeline.We were also unsuccessf

25、ul in biddingfor the Telfer pipeline project.In early September 2004,the receivers of the Dampier toBunbury Natural Gas Pipeline announced that they hadchosen another party as preferred bidder for the pipeline.While disappointed,we remain firm in our approach thatAPA will not“buy at any price”.For t

26、he future,APA intends to continue to implement itsstrategies of increasing utilisation of our existing pipelines,acquiring minorities,participating in the remaining industryrationalisation and diversifying asset risk.APA is confident that we will be able to benefit fromopportunities that result as t

27、he impact of full retailcontestability is felt in the gas markets of NSW,and we will be strongly participating in the expansion of the natural gas market in Queensland.We continue to pursue the remaining minority interest inour pipelines.Our unitholders can be justly proud of APAs achievementsover t

28、he past year.On behalf of the board,I thank management and staff for their efforts and thank all unitholders for their support.George H BennettChairman4Australian Pipeline Trust ANNUAL REPORT 2004Managing Directors Report2004 has been an exciting and eventful year and AustralianPipeline Trust(“APA”)

29、has again performed well.I continueto be proud of APAs achievements and am excited by theprospects.I am generally pleased with the performance of our suite of natural gas pipelines.In particular,theperformance of our Western Australian and Queenslandpipelines continues to be strong.I have been in th

30、e natural gas industry for about 35 years,nearly 18 in gas pipelines.I am amazed at the changeswhich have occurred to this relatively new industry in themere four years since APA listed,and I am pleased with ouractive role in those changes.Rationalisation Last year,in my report to you,I spoke of the

31、 emergence ofindustry rationalisation.Our goal was to acquire pipelinesoffered for sale,and at the right price.We have been successful.Our recent acquisition of theremaining interest in SCP Investments(No.1)Pty Limited(“SCP”)and the Parmelia gas business met our investmentcriteria,and is right on st

32、rategy.APA previously held 55%ofSCP,which is the entity that owns 88.2%of the GoldfieldsGas Transmission Pipeline(“GGT”).The total cost of$206 million,including transaction costs,plus any working capital adjustments,makes the acquisitionvery reasonably priced.Among the other benefits of theacquisiti

33、on is the operational control of the GGT,and theopportunities which the Parmelia gas business brings.GGT is fully contracted with strong and stable counterparties.There is also the potential for capacity enhancement on thepipeline.With Parmelia,which delivers gas from the PerthBasin to industrial cu

34、stomers,APA also gains access to relatedbusinesses gas storage and retail gas.The Parmelia Gas Pipeline is ideally suited to assist in thedevelopment of a spot market as market conditions tightenand peak demand controls are required in the WesternAustralian power market.Because our stated aim is onl

35、y to pay a commerciallyreasonable amount,APA does not regret that it wasunsuccessful in our bid to acquire the South WestQueensland Pipeline,Pilbara Pipeline and the Duke Roma to Gladstone Pipeline.For the same reason,APA was notsuccessful in its bid for the right to build the$100 millionTelfer pipe

36、line project to construct a pipeline from PortHedland to the Telfer Gold Mine in Western Australia.Our recent acquisition of the remaining interestin SCP Investments(No.1)Pty Limited and theParmelia gas business met our investmentcriteria,and is right on strategy.5Australian Pipeline Trust ANNUAL RE

37、PORT 2004DiversificationThe acquisition of the GGT and Parmelia gas businessaddresses our strategy to diversify asset risk.With thisacquisition,revenue from SCP will now be equal to revenuefrom the Moomba to Sydney Pipeline(“MSP”).APA intendsto continue to diversify its portfolio and pursue acquisit

38、ionsof remaining minority interests or externally-owned gaspipelines which add value to our bottom line.Regulation The Chairmans Report has already addressed regulation at some length.I would add that the industry needs theAustralian Governments response to the ProductivityCommissions Report on the

39、National Gas Access Code(“code”).The final report was released in August 2004,and indicates that the Productivity Commission clearlyunderstands the case presented by industry that changes to the application of the code are necessary.We are hopeful that the Australian Government will implement the re

40、commendations arising from the report.Another year has gone by during which the ACCC decisions have been subject to revision and appeal to theAustralian Competition Tribunal(“Tribunal”).This aloneunderscores the need to preserve and expand the appealsprocess.In the case of the MSP access arrangement

41、,theTribunal was critical of the interpretation of the code by theACCC,the argument your business has been raising sincethe code was introduced.The ACCC is appealing the decision before the FederalCourt of Australia,and once again your business will berequired to present its arguments and seek suppo

42、rt inanother forum.It is interesting to note,and the ACCC agrees,that thedecision which is being appealed,now applies to only 40%of the MSP,as the pipeline from Moomba to Marsdenis unregulated.We do not seek to have no regulation of our pipelines.Wehave consistently argued for better regulation and

43、consistentand fair interpretation.That is,and remains,our claim.Gas supply to south-east AustraliaThroughout the last year,APA continued to address thequestion of future natural gas supplies to south-eastAustralia from the end of this decade.Since my last report,coal bed methane(“CBM”)producers are

44、increasinglybecoming optimistic of the commercial sustainability ofCBM fields under development,and contracts have beenannounced.It is understood that the Origin/Santos gasswaps announced earlier this year reflect Originsconfidence in its ability to source CBM in Queensland.Again,it is worth noting

45、that the Enertrade Pipeline to theTownsville Power Station is now almost complete,and isexpected to be wholly supplied by CBM.Discussion is well advanced for APA to install a prototype gas treatment and compression facility in Central Queensland CBM fields to provide further diversity to our busines

46、s.The firming of CBM as an alternative to natural gas from the Moomba Basin has reduced the immediatenecessity to find alternative supplies from northernAustralia.Notwithstanding,APA still believes that a pipeline delivering natural gas from northern sources isessential for the provision of competit

47、ive natural gassupplies past this decade.Gas and the futureNatural gas continues to be a cleaner fossil fuel option than coal and we have long argued that Australia needs anenergy policy which recognises natural gas in its energymix.We welcome the Australian Governments release of its energy policy

48、by the Prime Minister in March 2004.However,as champions of natural gas,we are somewhatfrustrated by some of the policy directions.If we are to believe the weight of scientific evidence thatcarbon dioxide emissions are a serious contributor to globalclimate change,it is our view that carbon must be

49、a balancesheet item for not only corporate Australia,but also the world.The Australian Government policy gives coal the opportunityto prove a claim by the coal lobby that sequestration ofcarbon dioxide is technically practical and economicallyfeasible.We believe that it is technically practical,but

50、certainto be extremely expensive.The proponents of sequestrationmust be given a limited time to prove their theories andnatural gas must be given the opportunity to furthercontribute to the energy mix in Australias marketplace.It is our view that we should aim towards an internationalcarbon-trading

51、scheme where the true negative value ofcarbon dioxide on our environment will be recognised onglobal balance sheets.In closing,I thank unitholders for your continuing supportand extend my thanks to our staff for their continuingdedication to their work and contribution to our success.J K McDonaldMan

52、aging Director6Australian Pipeline Trust ANNUAL REPORT 2004AcquisitionsAcquisition of Goldfields and Parmelia PipelinesAPA has acquired the remaining 45%interest inSCP,88.2%owner of the Goldfields GasTransmission Pipeline(“GGT”)and 100%of theParmelia gas business,comprising pipeline,processing,stora

53、ge assets and retail.The acquisition cost was$206 million,inclusive of all transaction costs,plus any working capitaladjustments.Earnings per unit and cash flow per unit will beaccretive from day one.The vendor,CMS,approached APA managementto provide a firm and binding offer for theGoldfields and Pa

54、rmelia assets within two weeksfrom the date of approach.APA staff togetherwith its advisers completed the project in theextremely short time available.This was a verydisciplined effort for both our staff and advisers.The acquisition was funded by cash,debt and anequity raising of some$61 million.Giv

55、en the time to completion of the purchase,your boardelected to offer a placement to institutionalinvestors to secure the$61 million.WADONGARAPROCESSINGFACILITYPARMELIAGAS PIPELINEMONDARRAFACILITYNORTH WESTSHELFBroomePort HedlandNewmanEsperanceKalgoorliePERTHMt MagnetGeraldtonCarnarvonOnslowDampierWi

56、ndimurraGOLDFIELDS GASTRANSMISSIONPIPELINEThe acquisition cost was$206 million,inclusive of all transaction costs,plus anyworking capital adjustments.7Australian Pipeline Trust ANNUAL REPORT 2004GGT growth potentialISeveral projects under active discussionIEsperance lateral opportunities IParaburdoo

57、 iron ore expansionIMurrin Murrin nickel stage 2IWA economy gas drivenISupplies world class mineral provinceParmelia growth potentialISpot market developmentIConnection to Alinta network plannedIPipeline connection between Perth basin to Perth and southern industrial centresAsset overview of GGTIPip

58、eline built in 1996ITotal length:1,380kmIDiameter:356mm spanning 860km and 406mm spanning 520kmITransports competing gas streams from Harrietand East Spar,NW Shelf to North Eastern andEastern Goldfields region of WAICapacity of 105 TJ/d increasing to 164 TJ/d under full compressionAsset overview of

59、ParmeliaIParmelia Gas Pipeline,Dongara gas processing and Mondarra storage facilitiesIUnregulatedIPipeline built in 1971ITotal length:416kmIDiameter:356mm ICurrent pipeline capacity of 70 TJ/dMoomba to Sydney Pipeline 41%Amadeus Gas Trust 9%Roma to Brisbane Pipeline 12%Carpentaria Gas Pipeline 12%Go

60、ldfields Gas Transmission Pipeline 22%Other 4%(55%SCPRevenueShare)(100%SCPRevenueShare)Moomba to Sydney Pipeline 32%Amadeus Gas Trust 7%Roma to Brisbane Pipeline 10%Carpentaria Gas Pipeline 9%Goldfields Gas Transmission Pipeline 32%Parmelia Gas Pipeline 7%Other 3%Effect of Goldfields andParmelia gas

61、 business on asset diversityAPA Revenues Proforma Pre-acquisitionAPA 2004 Revenues Proforma Post-acquisitionNote:GGT revenues are shown on an equity share consolidatedbasis pre-and post-acquisition for accurate comparison.Revenues exclude passthrough revenue.8Australian Pipeline Trust ANNUAL REPORT

62、2004The Management TeamJames K McDonald FAICDManaging Director Executive DirectorRead Mr McDonalds particulars with the Corporate Governance Statement on page 13.Kevin F Dixon BE(Elec),FIEAust,FAICDGeneral Manager Strategic PlanningMr Dixon is responsible for developing medium and long-term strategi

63、es for Australian PipelineTrust(“APA”)to ensure it remains the leading natural gas transmission business in Australia.Hehas had various management and board roles in the energy industry including over 20 years withEsso Australia Limited.His most recent assignments include coal marketing and corporat

64、e affairswith Exxon Coal and Minerals Australia Pty Limited.Mr Dixon is a Fellow of the Institute ofEngineers Australia,and a Fellow of the Australian Institute of Company Directors.He is a member of the board of the Australian Council for Infrastructure Development.Austin J V James LLBCompany Secre

65、tary/General Manager CorporateMr James is responsible for the management of corporate services functions including publicand unitholder relations,legal services and administration,and is also the company secretary of APA.Mr James has substantial experience in corporate,legal and regulatory roles.Pri

66、or toAPA,Mr James worked for The Australian Gas Light Company(“AGL”),where he held seniormanagement positions including manager finance and planning,manager taxation and managerdevelopment projects.Mr James has been admitted to the Supreme Court of New South Walesas a barrister.Michael J McCormackBS

67、urv,GradDipEng,MBA,FAICDGeneral Manager CommercialMr McCormack is responsible for the commercial and operational performance of APA,which includes marketing,contract management,regulatory affairs,expansions,operations andacquisitions.Mr McCormack has extensive senior management experience in all asp

68、ects of gastransmission in Australia.Mr McCormack holds office in various joint venture committees andsubsidiary boards.Prior to joining APA on its float in 2000,Mr McCormack was responsible forregulatory management of AGLs pipelines.Mr McCormack has tertiary qualifications in science,engineering an

69、d management and is a Fellow of the Australian Institute of Company Directors.Graeme N Williams CPAChief Financial OfficerMr Williams is responsible for the financial management of APA.This includes accounting,treasury and taxation functions.Mr Williams has more than 30 years accounting experiencein

70、cluding 11 years in public accounting.Mr Williams was previously chief financial officer andexecutive director of Lucent Technologies Australia Pty Limited and had spent eight years aschief financial officer and company secretary of JNA Telecommunications Limited.From Top to Bottom:James K McDonald,

71、Kevin F Dixon,Austin J V James,Michael J McCormack,Graeme N Williams.9Australian Pipeline Trust ANNUAL REPORT 2004CorporateGovernanceThe board of directors(“board”or“directors”)of AustralianPipeline Limited(“APL”or“responsible entity”),as responsibleentity for Australian Pipeline Trust(“APA”or“Trust

72、”)and itscontrolled entities(together“consolidated entity”)is responsiblefor the consolidated entitys corporate governance practices.The board has conducted a review of the corporate governancepractices following the publication of the Australian StockExchanges“Principles of Good Corporate Governanc

73、e and BestPractice Recommendations”(“Principles”),which becameeffective for the financial years commencing after 1 January 2003.For maximum transparency,each of the 10 Principles issued bythe Australian Stock Exchange(“ASX”)has been responded toin turn:Principle 1:Lay solid foundations for managemen

74、tand oversight by the boardThe boards responsibilities are encompassed in a charter,which is published on APAs website(“website”).The majorroles it has defined to fulfil its responsibilities to APAunitholders(“unitholders”)and the community are to:(a)set the strategic direction of the consolidated e

75、ntity withmanagement and monitor managements implementationof that strategy;(b)select and appoint(and,if appropriate,remove from office)the managing director,determine his conditions of service and monitor his performance against established objectives;(c)ratify the appointment(and,if appropriate,th

76、e removalfrom office)of the chief financial officer and the companysecretary;(d)approve conditions of service and performance monitoringprocedures to apply to senior management;(e)monitor financial outcomes and the integrity of reporting,in particular approve annual budgets and longer-termstrategic

77、and business plans;(f)set specific limits of authority for management to commit tonew expenditure,enter contracts or acquire businesseswithout prior board approval;Annual FinancialsContents toAnnual Financial Report 2004Corporate Governance9Directors Report17Statement of Financial Performance26State

78、ment of Financial Position27Statement of Cash Flows28Notes to the Financial Statements29Directors Declaration59Independent Audit Report60Additional Stock Exchange Information62Unitholder Information63Glossary of Terms and Abbreviations64 10Australian Pipeline Trust ANNUAL REPORT 2004(g)ensure that e

79、ffective audit,risk management and compliancesystems are in place to protect the consolidated entitysassets and to minimise the possibility of APA operatingbeyond the constitution or beyond acceptable riskparameters;(h)establish and maintain a code of conduct(“code”);(i)monitor compliance with regul

80、atory requirements(includingcontinuous disclosure)and code;(j)review senior management succession planning anddevelopment on a regular basis;and(k)provide effective and timely reporting to unitholders.To assist it in carrying out its responsibilities,the board hasestablished several standing committ

81、ees of its members.They are:IAudit and Risk Management Committee;INominations Committee;andIRemuneration Committee.To date,directors have not received formal letters of appointment,though they have received less formal letters from the chairman inresponse to their letter of consent to act as a direc

82、tor.It is APAsintention to issue formal letters for future appointments.The board delegates responsibility for implementing the strategicdirection and for managing the day-to-day operations of theconsolidated entity to the managing director.There are clearlines of communication established between t

83、he chairman and managing director to ensure that the responsibilities andaccountabilities of each are clearly understood.The managing director,the chief financial officer and companysecretary(and other senior management)have service contractssetting out their duties,responsibilities,conditions of se

84、rvice and termination entitlements.Principle 2:Structure the board to add valueThe board determines its size and composition,subject to limitsimposed by APLs constitution.The constitution provides for aminimum of three directors and a maximum of 12.For the timebeing,the board has determined that the

85、re shall be sevendirectors,six of whom,including the chairman,are non-executive.The board is made up of three non-corporate directors(all independents),a representative of Petronas(also anindependent),two representatives of The Australian Gas Light Company(“AGL”)and the managing director.The current

86、 seven directors of APL were appointed by itsshareholders,there being no previous legal requirement to obtainthe approval of unitholders.In October 2003,the shareholders of APL decided that it was appropriate to bring the governancearrangements for APL and APA up to date with best practice for manag

87、ed investment schemes and to enhance the rights ofunitholders.These changes were implemented in June 2004.The new arrangements will provide unitholders with the ability to nominate and effectively elect some of the directors of APL.Under the new regime,the three non-corporate directors willretire on

88、 a rotating annual basis and may stand for re-election.In the first year,all three non-corporate directors will retire andstand for re-election.In August each year,commencing with2004,unitholders will be notified by announcement to ASX thatthey may nominate a person(s)for election to the APL board a

89、s anon-corporate director.Unitholders will have 15 days from thedate of announcement to ASX to lodge a nomination formtogether with the relevant consent to act as a director.Once nominations are received by the required date,APL willadvise unitholders of all candidates who have been validlynominated

90、 and present its nominations to unitholders at the APA annual meeting,which will generally be held in Octobereach year.A majority resolution by unitholders on nominations presented to the APA annual meeting will confirm unitholders intentions.The first APA annual meeting at which the new voting proc

91、edurewill be implemented will be held on 20 October 2004.Unitholders will not be able to vote for the one director appointed by Petronas,the two directors appointed by AGL,or the managing director.A majority of the current members of the board are“independent”within the ASX definition,to the extent

92、that thecomponents of that definition can be objectively assessed.Those members are Messrs G H Bennett(chairman of the board),R J Wright(chairman of the Audit and Risk ManagementCommittee),T C Ford and M Muhammad(the Petronasrepresentative).Messrs L J Fisk,J A Fletcher and R M Gersbachare not consid

93、ered to be independent by virtue of their positionsas directors appointed by AGL(which owns 30%of the units onissue in the Trust).Mr J K McDonald,the managing director,isalso not considered to be independent.During the financial year the Nominations Committee(“committee”)comprised three non-executiv

94、e directors,Messrs G H Bennett(chairman),L J Fisk and M Muhammad.Corporate Governance11Australian Pipeline Trust ANNUAL REPORT 2004The terms of reference of the committee are to:(a)review and make recommendations to the board on thecomposition of the board and the criteria for boardmembership;(b)ens

95、ure that a proper succession plan is in place and considerand nominate a panel of candidates with appropriateexpertise and experience for the positions of chairman,independent directors,managing director,chief financialofficer and company secretary for consideration by the board;(c)recommend to the

96、board the terms of appointment of anyproposed new non-executive director where considerednecessary;(d)review the membership of other committees and makerecommendations to the board;(e)consider and nominate a panel of candidates withappropriate expertise and experience for the referencedpositions to

97、be considered by the board;and(f)perform other related tasks as directed by the board,fromtime to time.The committee met once during the financial year,and themeeting was attended by all members.The committee may make use of external consultants if that is deemed appropriate.Succession planning for

98、the board is reviewed regularly,first bythe committee and then by the board.In considering potentialnew non-corporate directors to commend to shareholders of APLand unitholders,the board seeks to identify candidates withappropriate skills and experience to contribute to the effectivedirection of APL

99、,who can exercise an independent and informedjudgement on matters which come to the board,and who are freeof any business or other relationship that may interfere materiallywith the exercise of that independent judgement.The chairman is selected by the full board.The managing director is an executiv

100、e director of APL and chiefexecutive officer of the consolidated entity.The directors,at any time during the financial year,or since,arelisted below with a brief description of their qualifications,experience and special responsibilities:Mr G H Bennett FCA Independent ChairmanAppointed 11 February 2

101、000.Mr George Bennett is a companydirector with almost 40 yearsexperience at accounting servicesfirm KPMG.Mr Bennett retired asnational executive chairman of KPMGand chairman of the KPMG AsiaPacific board in 1993.His other directorships include BrazinLimited,Fantastic Holdings Limited,Macquarie Leis

102、ureManagement Limited and Macquarie Office Management Limited.Mr Bennett is chairman of the Remuneration Committee andNominations Committee.Mr L J Fisk FAICD,FCICS,FCPA Non-Executive DirectorAppointed 11 February 2000.Retired 26 August 2004.Mr Les Fisk is group managercorporate services and companys

103、ecretary with AGL.He wasappointed to this position in 1997,having joined AGL as company secretary in 1995.Prior to joining AGL,Mr Fisk had a 25 year career with QantasAirways Limited,culminating in the position of director ofcorporate services and company secretary.Mr Fisk is a director of Elgas Lim

104、ited.Mr Fisk was a member of the Nominations Committee and theRemuneration Committee.Mr J A Fletcher BSc,MBA Non-Executive DirectorAppointed 11 February 2000.Mr John Fletcher has over 30 yearsexperience in finance and commerceand retired in August 2003 after adistinguished career of 24 years withAGL

105、.During his time with AGL,Mr Fletcher held the position of groupgeneral manager-finance for seven years.Prior to that,Mr Fletcher held a number of senior positions including groupmanager-finance,group controller and treasurer.His most recentposition prior to retiring was as group manager,asset manag

106、ement.Mr Fletcher is a member of the Audit and Risk ManagementCommittee.Corporate Governance12Australian Pipeline Trust ANNUAL REPORT 2004Mr T C Ford FAICD Independent Non-ExecutiveDirectorAppointed 11 February 2000.Mr Tom Ford is an investment bankerand consultant,with over 30 yearsexperience in st

107、ockbroking andbanking.Mr Ford is chairman ofResimac Limited.He is also a directorof Amalgamated Holdings Limited and Resolute Mining Limited.Mr Ford is a member of Finance and Treasury Association Limitedand on the committee of Australian Business Economists.Mr Fordretired in 1991 as a senior execut

108、ive director of Capel CourtCorporation Limited and as an executive director of Capel CourtSecurities Limited.Mr Ford is a member of the Audit and Risk Management Committee.Mr R M Gersbach BBus,CPA Non-Executive DirectorAppointed 26 August 2004.Mr Ross Gersbach is group manager,infrastructure investm

109、ents with AGL.Mr Gersbach was appointed to thisposition in 2004,prior to which heheld the position of group manager,corporate development.Mr Gersbach has been with AGL since 1986 and has had seniorroles across a number of AGLs operating units,including AGLspipeline division.Mr Gersbach is a director

110、 of Elgas Limited and a number of AGLinvestment subsidiaries.Mr Gersbach replaces Mr Fisk as AGLs representative on theboard and also on the Remuneration Committee and theNominations Committee.There are no details relating to Mr Gersbachs remuneration orattendance at meetings as he was appointed aft

111、er financial year end.Mr M Muhammad MSc Independent Non-ExecutiveDirectorAppointed 8 March 2000.Mr Muri Muhammad retired fromPetronas in August 2002 and iscurrently serving as adviser-gasbusiness in the Presidents office.He brings to the responsible entity 30 years experience in the chemicals and pe

112、troleum industryas well as expertise in the domestic and international gastransmission and distribution,gas utilisation,co-generation and conversion businesses where he has held various seniorexecutive positions.He was appointed vice president for gasbusiness in 1998 until his retirement in August 2

113、002.As vicepresident-gas business,he was involved in Petronas gasdevelopment projects in Iran,India,Algeria,Myanmar,Pakistan,Vietnam and China.He has held several directorshipsincluding chairman of the board of Petronas subsidiaries andassociate companies in Malaysia and abroad.He was involvedin dis

114、trict cooling co-generation,pipeline gas transmission anddistribution,liquefied natural gas production and marketingand urea/ammonia production and marketing.He currently sitson the boards of Transportadora de Gas Del Norte(Argentina),Trans-Thai Malaysia(Thailand)and Petronas Gas Berhad.Mr Muhammad

115、is a member of the Nominations Committee andthe Remuneration Committee.Mr R J Wright BCom,FCPA Independent Non-ExecutiveDirectorAppointed 11 February 2000.Mr Robert Wright has 30 yearsfinancial management experience.He has held a number of chief financial officer positions includingfinance director

116、of David Jones Limited from 1990 to 1999.Between 1991 and 1995,he was also an executive director of The Adelaide Steamship CompanyLimited,and was a director of Tooth&Co Limited,IndustrialEquity Limited,Woolworths Limited and National ConsolidatedLimited.Mr Wright sits on the boards of Harris Scarfe

117、Australia PtyLtd,SAI Global Limited and Super Cheap Auto Group Limited.Mr Wright is the chairman of the Audit and Risk ManagementCommittee.Corporate Governance13Australian Pipeline Trust ANNUAL REPORT 2004Mr Ed Osman Ridzwan BSc,MBA Alternate Non-ExecutiveDirector(Alternate for Mr MMuhammad)Appointe

118、d 25September 2003.Mr Ed Osman Ridzwan has beenwith Petronas for more than 17years.His career has included roles as process engineer in Asean Bintulu Fertilizers ammonia plant in Sarawak,manager forliquid natural gas marketing and sales in Malaysia LNG Sdn Bhdand manager in Petronas business evaluat

119、ion unit,which hasprovided him with sound knowledge and experience in the oil and gas industry,especially in the area of strategy anddevelopment of global liquid natural gas.In 2002,Mr Ridzwan joined Petronas corporate strategy studyinitiative.In June 2003,he was promoted to general manager ofbusine

120、ss development unit,corporate planning and developmentdivision,a position he currently holds.As general manager,Mr Ridzwan co-ordinates Petronas mergersand acquisition efforts and is responsible for the evaluation anddevelopment of business opportunities worldwide and inaccordance with Petronas corp

121、orate strategies and targets.Mr Ridzwan sits on the boards of several of Petronas domesticand international subsidiaries and associate companies either as afull or alternate member.Mr R A Casamento CPA Alternate Non-Executive Director(Alternate for Mr J A Fletcher from 3 September 2003 to 20 January

122、 2004).Mr Robert(Joe)Casamento has over 30 years experience inaccounting and finance and has worked in a variety of accountingand finance roles within AGL during that time.Mr Ng Chong Wah BE Alternate Non-Executive Director(Alternate for Mr M Muhammad)Appointed 8 August 2000.Retired 25 September 200

123、3.Mr Ng Chong Wah graduated in Chemical Engineering from theUniversity of Malaya,Malaysia.Mr Ng Chong Wah retired fromPetronas in June 2003 after being employed in many seniorpositions over almost 30 years.Mr J K McDonald FAICD Managing DirectorAppointed Managing Director 3 June 2002.Mr James(Jim)Mc

124、Donald carriesoverall responsibility for themanagement team.Mr McDonald has extensiveexperience in general management inthe gas transmission industry.He joined APA from AGL,where hewas divisional general manager-pipeline operations in Australia.Prior to his roles with AGL,Mr McDonald spent 15 years

125、withEsso Australias Gippsland Production Group,including severalyears in senior management positions.Mr McDonald was president and is a member of the PipelineOwners Committee of Australian Pipeline Industry Association(“APIA”),having served as past chairman of the EnvironmentAffairs Committee of API

126、A.He was also a member of the board ofAustralian Gas Association(“AGA”)and Australian Council forInfrastructure Development.He was past chairman of the GasTransmission Committee of AGA.Principle 3:Promote ethical and responsible decision makingAPAs practice does not depart from the Principle in anys

127、ignificant way.It has policies on unit trading by directors andsenior managers and on conflicts of interest.APAs Code ofConduct(“code”),which applies to directors as well asemployees,is available on the website.The code is important,but equally important is theencouragement of ethical conduct not ju

128、st by edict,but also by example,from all involved in APA.It is the boards objective that all dealings with staff,customers,regulatory authorities and the community,should be conductedhonestly,fairly,diligently and in accordance with all applicablelaws.Any departure from such practice is treated very

129、 seriously.APA has a formal policy on dealing in units.The policy providesthat directors and staff may buy and sell APA units only duringthe four-week period following the release of the half-year andfull-year results unless exceptional circumstances apply.In anycase,directors and staff are preclude

130、d from buying or sellingunits at any time if they are aware of any price-sensitiveinformation which has not been made public.Corporate Governance14Australian Pipeline Trust ANNUAL REPORT 2004Principle 4:Safeguard integrity in financial reportingAPA complies with all the ASX recommendations under thi

131、s Principle.The managing director and the chief financial officer have,formany years,supplied detailed written undertakings to the boardproviding assurances that the consolidated entitys financialreports present a“true and fair view”and are in accordance withrelevant accounting standards.The board h

132、as established an Audit and Risk ManagementCommittee(“committee”),comprising three non-executivedirectors,all with appropriate experience.They are Messrs R JWright(chairman),T C Ford,and J A Fletcher.Their qualificationsare disclosed on pages 11 to 13 under Principle 2.The managing director,chief fi

133、nancial officer,company secretary/general manager-corporate,general manager-commercial and theexternal auditor attend committee meetings at the discretion ofthe committee.The committee also meets privately with theexternal auditor without management presence.The minutes of each committee meeting are

134、 reviewed at thesubsequent meeting of the board and the chairman of thecommittee reports on the committees conclusions andrecommendations.The committee held five meetings during the financial year.The details of meetings attended by eachmember are set out in the Directors Report on page 23.The role

135、and responsibilities of the committee are to:(a)recommend to the board the appointment of the externalauditor and its fees;(b)review and/or evaluate:Ithe audit plan of the external auditor;Ithe performance of the external auditor;Ithe provision of non-audit services by the external auditor,including

136、 the quantum of fees and the types of activitiesperformed;Ithe effectiveness of the internal review processes;Ithe management letters from the external auditor andmanagements responses;Ithe adequacy and effectiveness of the reporting andaccounting controls of the consolidated entity;Ithe financial r

137、eports to be made to unitholders and/or thepublic prior to their release;Ithe consolidated entitys exposure to business risks;Ithe reports from management,the compliance serviceprovider and/or the external auditor concerning any significant regulatory,accounting or reportingdevelopment to assess pot

138、ential financial reporting issues;Ithe adequacy of risk management strategies in relation to themaintenance,operations or replacement of assets of theconsolidated entity(and make recommendations to theboard);andIthe adequacy of risk management strategies in relation toany statutory or policy require

139、ments,including environment,and occupational health and safety(and makerecommendations to the board);(c)approve and recommend acceptance to the board of:Iall significant accounting policy changes;Ithe consolidated entitys taxation position;andIhalf-yearly and annual financial statements;(d)determine

140、 that no restrictions are being placed upon eitherthe internal review processes or the external auditor;(e)monitor the standard of corporate conduct in areas such asarms-length dealings and likely conflicts of interest;(f)direct any special projects on investigations deemednecessary by the board;and

141、(g)perform other duties as directed by the board,from time to time.Principle 5:Make timely and balanced disclosureA continuous disclosure regime operates throughout APA.Thecontinuous disclosure policy is posted on the website.Policiesand procedures are in place to ensure matters that a person couldr

142、easonably expect to have a material effect on the unit price areannounced to ASX in a timely manner.The company secretary isthe nominated continuous disclosure officer and he reports to theboard quarterly on matters notified to ASX.In addition,direct reports to the managing director also confirm inw

143、riting to the board,on a quarterly basis,that matters whichmight need to be disclosed have been brought to the attention ofthe continuous disclosure officer for review.In the event a decision is made not to notify ASX of a particularevent or development,the reasons for non-notification areadvised to

144、 the board.Directors receive copies of allannouncements immediately after notification to ASX.All announcements are posted on the website.Corporate Governance15Australian Pipeline Trust ANNUAL REPORT 2004Principle 6:Respect the rights of unitholdersAPA endeavours to keep its unitholders fully inform

145、ed of matterslikely to be of interest to them.It does this through:a)reports to ASX and the press;b)half-year and full-year profit announcements;c)a regular newsletter;d)annual reports;e)release to ASX of information provided to analysts;andf)webcasting of half-year and full-year accounts presentati

146、ons.All the above are notified on the website.Unitholders are given theopportunity to provide their email addresses to APA to enable themto receive reports and announcements made to ASX without delay.At the annual meeting,the chairman encourages questions andcomments from unitholders and seeks to en

147、sure the meeting ismanaged to give the maximum number of unitholders anopportunity to participate.In the interests of clarity,questions onoperational matters may be answered by the managing directoror another appropriate member of senior management.The external auditor attends APAs annual meeting an

148、d is availableto respond to questions about the conduct of the audit and thepreparation and content of the Independent Audit Report.Principle 7:Recognise and manage riskAny business faces a wide variety of risks,depending on thenature of its operations and the regions within which it operates.APA ha

149、s a formal enterprise-wide risk program based onStandards Australias AS/NZS 4360:1999(Risk Management).This program is supported by APAs Risk ManagementStatement,which has been endorsed by the board on therecommendation of the managing director and the Audit and Risk Management Committee.All outstan

150、ding audit issues are monitored through to satisfactorycompletion.The external auditor also reports findings on relevantrisk issues to the Audit and Risk Management Committee and tothe board on a half-yearly basis.Current processes provide a mechanism for assessing the overalleffectiveness of APAs r

151、isk management compliance and controlsystems.This assessment is presented to the board by,or underthe authority of,the managing director following consultationwith the chief financial officer.Principle 8:Encourage enhanced performanceAPA has processes in place to review the performance of seniormana

152、gement.Arrangements are formal and quantitative.Eachsenior manager,including the managing director,has personalobjectives as well as objectives related to business units and APAas a whole.They are assessed against those objectives on anannual basis,or more frequently if that is indicated.The assessm

153、ent and monitoring of the managing director ishandled by the chairman with the assistance of the RemunerationCommittee.A full report is provided to,and discussed in detailby,the board.Assessment and monitoring of other seniormanagers is handled by the managing director who reports indetail to the ch

154、airman and the Remuneration Committee.There is currently no formal review process to assess boardperformance.It is proposed that an informal process for reviewwill be implemented during the 2005 financial year.Each year,the board devotes time to consideration of broadcorporate governance matters,inc

155、luding the continuingrelevance of existing committees etc and to reviewing its ownperformance.The chairman is responsible,in the first instance,for monitoring the contribution of individual directors andcounselling them on any areas for improvement.Subject to normal privacy requirements,directors ha

156、veunfettered access to the consolidated entitys records andinformation,and to the company secretary and other relevantsenior officers.They receive regular detailed reports on financialand operational aspects of APAs business and may requestelaboration or explanation of those reports at any time.Each

157、director has the added right to seek independent professionaladvice at APAs expense.Prior approval of the chairman isrequired,but this may not be unreasonably withheld.Directors and senior management are encouraged to broadentheir knowledge of APAs business and to keep abreast ofdevelopments in busi

158、ness more generally by attendance atrelevant courses,seminars,conferences etc both in Australia andoverseas.APA meets expenses involved in such activities.Principle 9:Remunerate fairly and responsiblyThe board has established a Remuneration Committee toconsider and report on,among other things,remun

159、erationpolicies and packages applicable to board members and to seniorCorporate Governance16Australian Pipeline Trust ANNUAL REPORT 2004managers of APA.Three non-executive directors,Messrs G HBennett(chairman),L J Fisk and M Muhammad were members ofthe Remuneration Committee(“committee”)which meets

160、at leastonce during each year.Details of attendance of committeemembers and remuneration of directors and executives are setout in pages 23,24 and 25 respectively of the Directors Report.On 26 August 2004,Mr Fisk resigned as a member of thecommittee and was replaced by Mr Gersbach.The primary functi

161、ons of the committee are to:(a)review and recommend to the board:Ithe remuneration of the directors of the responsible entity;Ithe remuneration for the managing director;Ithe remuneration for the executives of the consolidated entity;Iproposals for the issue of units to staff;Iproposals for executiv

162、e unit plans and other long-termincentive programs;Iproposals for other reward initiatives including incentiveplans for the managing director,executives and other staff ofthe consolidated entity;Inew superannuation plans or amendments to existingsuperannuation plans;Ithe succession plans for the dir

163、ect reports and otherpositions considered to be of corporate significance;andIemployment contracts and letters of appointment inaccordance with policy and prevailing industrial relationslegislation;(b)keep abreast of all human resource policy initiatives affectingthe basis and nature of all employee

164、s relationships with theconsolidated entity;and(c)perform other duties as directed by the board,from time to time.The managing director attends meetings of the committee byinvitation when required to report on,and discuss,seniormanagement performance,remuneration matters etc.The committee is empower

165、ed to seek external professionaladvice on any matter within its terms of reference.Non-executive directors receive fees determined by the board.External professional advice is sought in determining directorsfees to ensure they are appropriate relative to fees paid bycomparable listed companies.The b

166、oard has available to it dataon fees paid by a wide range of companies.Non-executive directors do not receive incentive payments of any type.Three of the directors,Messrs G H Bennett,T C Ford and R J Wright,had as a condition of their service with APA,anentitlement to a deferred benefit payable at r

167、etirement from theboard.After three years service,a director was entitled to theequivalent of the emoluments received over the most recent 12 months.After 10 years service,the entitlement rose to theequivalent of emoluments received during the most recent three years.No additional entitlement accrue

168、d after 10 years.For periods between three and 10 years,the entitlement wascalculated on a pro-rata basis.During the 2003 financial year,the board terminated theretirement benefit program.The benefits that have alreadycrystallised under the program are now payable on retirement ofthe directors who p

169、articipated in the retirement benefit program.All staff of APA receive a combination of fixed and variable(“at risk”)remuneration.The proportions vary at different levelswithin APA,reflecting the capacity of the staff to influence theoverall outcome of APAs operations and returns to unitholders.The

170、variable component is based on the financial performance of APA and a series of personal key performance indicators.The variable remuneration is in the form of a short-term incentive,payable in cash.The aggregate of short-term incentives is subjectto a maximum limit.No options are issued to APL dire

171、ctors or APA employees.Principle 10:Recognise the legitimate interests of stakeholdersAPAs code sets out the behaviour required of directors,employees and contractors.The code provides a mechanism toenable employees to report breaches of the code without anyfear of retribution.The full code is publi

172、shed on the website.Corporate Governance17Australian Pipeline Trust ANNUAL REPORT 2004The directors of Australian Pipeline Limited(“APL”or“responsible entity”)submit herewith the annual financial report of Australian PipelineTrust(“APA”or“Trust”)and its controlled entities(together“consolidated enti

173、ty”)for the financial year ended 30 June 2004(“financial year”or“current financial year”).In order to comply with the provisions of the Corporations Act 2001,the directors report as follows:DirectorsThe names of the directors of the responsible entity during and since the end of the financial year a

174、re as follows.The directors held officefor the entire period,unless stated otherwise:Mr G H Bennett(chairman)Mr L J Fisk(retired 26 August 2004)Mr J A FletcherMr T C FordMr R M Gersbach(appointed 26 August 2004)Mr M MuhammadMr R J WrightMr R A Casamento(appointed from 3 September 2003 to 20 January

175、2004 as alternate for Mr J A Fletcher)Mr Ed Osman Ridzwan(appointed 25 September 2003 as alternate for Mr M Muhammad)Mr Ng Chong Wah(retired 25 September 2003 was alternate for Mr M Muhammad)Mr J K McDonald(managing director)The directors qualifications,experience and special responsibilities are pr

176、ovided in the Corporate Governance statement on pages 11 to 13.Principal ActivitiesThe principal activity of the consolidated entity during the course of the financial year was the ownership of gas transmission pipelineslocated throughout Australia.The consolidated entity undertook the sale of trans

177、portation and related services to the producers,consumers and aggregators of gas through these gas transmission pipelines.There has been no significant change in the activities of the consolidated entity during the financial year.Review of OperationsDistribution to UnitholdersOn 26 August 2004,the d

178、irectors declared a final profit distribution in respect of the financial year of 6.5 cents per unit(“cpu”)franked to40%at the corporate income tax rate.This takes the total distribution for the financial year to 21.5 cpu,which is consistent with theprevious corresponding period(“pcp”).The profit co

179、mponent of the distributions was 15.1 cpu with the capital component being 6.4 cpu.Following APAs entry into the tax-consolidation regime and the consequent increase in tax-base of pipeline assets,APA expects todeclare partially franked distributions going forward.As a consequence of APA entering in

180、to tax-consolidation,future distributions will firstly be made out of consolidated retained profits,tothe extent that they are available.Financial PerformanceAPA had a substantial increase in net profit after tax and minorities(“NPATM”),following improved operating results and significant netbenefit

181、 from various non-recurring items.The NPATM for the financial year was$121.292 million,an increase of 195.50%on the pcp.On an operating basis excluding the non-recurring items,the NPATM was$44.984 million,an increase of 9.59%on the pcp.The improvedresult was achieved,despite the contractual reductio

182、n in revenue from Moomba to Sydney Pipeline(“MSP”)under the Gas TransportationDeed(“GTD”),through increased pipeline transportation revenue across all other assets and effective control of costs.Directors Report18Australian Pipeline Trust ANNUAL REPORT 2004HighlightsA summary of the major achievemen

183、ts during the financial year is set out below:Itwo major and far-reaching regulatory outcomes were achieved for the MSP.The first was the decision by the Hon Ian Macfarlane,Minister for Industry,Tourism and Resources to partially revoke coverage of the MSP under the National Gas Access Code,acceptin

184、gthat competition does exist,at least on part of the MSP.The second was the Australian Competition Tribunal(“Tribunal”)reviewwhich set aside the ACCCs valuation methodology used in the access arrangement over the MSP.In August 2004,the ACCCinitiated an appeal of this decision to the Federal Court of

185、 Australia;IAPA entered into a transportation agreement with Energex to transport gas on a spot basis to existing peaking gas fired powerstations located along the Roma to Brisbane Pipeline(“RBP”).Revenues will contribute to the results for year ending 30 June 2005;IAPA raised the equivalent of A$49

186、3.230 million,net of costs,in the United States Private Placement market through the issue of Guaranteed Senior Notes(“notes”),which had a tenure extending up to 15 years.The proceeds from the issue were used to re-finance existing syndicated bank debt;IAPA entered into tax-consolidation resulting i

187、n an“one-off”income tax benefit of$92.912 million.The reset tax asset base will increasethe depreciation deduction for tax purposes in future periods;Ithe board activated the Distribution Re-investment Plan(“DRP”)in August 2003.Four issues have been made under the DRP,raising$16.374 million in addit

188、ional equity,net of costs,through the issue of 6.336 million units;andIamendments were introduced by APL to allow unitholders of APA to effectively nominate and have elected,directors of theresponsible entity,(other than the two AGL directors,the Petronas director and the managing director).These ch

189、anges are intended to bring the governance arrangements for APL and APA up-to-date with best practice for managed investment schemes and toenhance the rights of unitholders.In addition to the above highlights,in July 2004 APA announced that it had agreed to acquire CMS Energy Corporations(“CMS”)inte

190、restin the Parmelia gas business and SCP Investments(No.1)Pty Limited(“SCP”)at a total cost of$206 million,including transaction costs,plus any working capital adjustments.The purchase was completed on 17 August 2004.Along with the acquisition made in the pcp,APA now has full ownership of SCP.This a

191、cquisition results in APA assuming operational control of Goldfields Gas Transmission Pipeline(“GGT”),which is 88.2%owned by SCP.To part fund the acquisition,APA raised equity of$61.190 million,net of costs,through aninstitutional placement.Significant EventsIStress corrosion cracking(“SCC”)was iden

192、tified on the MSP in a remote area of South Australia.Repairs have been effected on thepipeline in five locations by the installation of epoxy-filled steel sleeves to restore pipeline integrity.Further investigative work isplanned for next summer.This work may include the insertion of an“intelligent

193、 pig”into the pipeline which travels in the gas streamand records irregularities in the steel wall of the pipe.APA has a pressure management plan,which ensures that the MSP will be able to meet its contractual obligations to market.This hasinvolved the re-configuration of compressors at Bulla Park t

194、o permit them to run in series,thereby reducing upstream pressure andenhancing downstream pressure.A repair and rehabilitation plan is being prepared to manage SCC.IIn January 2004,a fire at the Moomba gas plant resulted in gas deliveries into the MSP being temporarily terminated.Domestic and small

195、user services were maintained throughout the crisis,however,supply to industrial users was temporarily interrupted.APA representatives worked with all stakeholders to assist in reducing the impact of interruption of supplies to all users and providing innovative use of the pipeline to increase the a

196、vailability of natural gas.All contractual obligations were met by APA during this period.APA did not suffer any revenue impact as the receipts are covered under the GTD.Directors Report19Australian Pipeline Trust ANNUAL REPORT 2004The following table provides a summary of key financial data,as appl

197、icable to the current financial year:Year ended Year ended30 June 2004 30 June 2003Change Compared to 2003$m$m$m%Operating resultsPipeline revenue185.591189.210(3.619)(1.91)Other pipeline revenue74.57767.9906.5879.69Other revenue17.94014.7123.22821.94Total revenue278.108271.9126.1962.28EBITDA133.935

198、137.807(3.872)(2.81)EBIT111.368113.724(2.356)(2.07)Pre-tax profit65.02165.128(0.107)(0.16)Income tax expense(19.825)(23.804)3.97916.72Operating profit after tax and minorities44.98441.0463.9389.59Non-recurring itemsDue diligence cost written off(5.763)(5.763)Mid West Pipeline written off(19.943)(19.

199、943)Tax consolidation benefit SCP group6.9646.964Non-recurring items before income tax(18.742)(18.742)Tax effect of non-recurring items2.1382.138Tax consolidation benefit APA92.91292.912Non-recurring items after tax76.30876.308Profit after income tax and minorities121.29241.046 80.246195.50Earnings

200、per unit49.20c16.82c32.38c192.51Non-Recurring ItemsThe results of the financial year were impacted by a number of non-recurring items,which had a net favourable impact.These items were:Iin order to benefit from the rationalisation that is occurring in the gas transmission industry,APA has been invol

201、ved in variousacquisition efforts.While APA has acquired CMSs Australian pipeline assets,some of the acquisition efforts were not successful.The acquisition process in relation to Dampier to Bunbury Natural Gas Pipeline in Western Australia was protracted.As at the end of the financial year,due dili

202、gence costs in relation to unsuccessful bids and ongoing projects were written off or fully allowedfor,resulting in a cost of$5.763 million;Ithe carrying value of Mid West Pipeline was written off following the closure of operation of a major customer of the pipeline atWindimurra.This resulted in a

203、cost of$19.943 million;Ithe SCP group elected to join a tax-consolidated group with effect from 1 July 2003.The tax-consolidated group so formed was ableto uplift the tax value of its assets.This uplift led to a decrease in the deferred income tax liability and resulted in an increase in APAsequity

204、accounted share by$6.964 million;andIAPA elected to be the head entity of a tax-consolidated group,effectively treating the group as a single entity for tax purposes.Entry into tax-consolidation resulted in uplifting tax values of pipeline assets,decreasing the deferred income tax liability andprovi

205、ding an income tax benefit of$92.912 million.The net after-tax impact of the non-recurring items is$76.308 million.Directors Report20Australian Pipeline Trust ANNUAL REPORT 2004The commentary below is focused on the operating results,which exclude the above items:RevenueThe Pipeline revenue decrease

206、d by$3.619 million to$185.591 million,which was the result of the following factors:Ilower transportation revenue on the MSP due to contractual reductions under the GTD with AGL.The revenue under GTD reducesover the next few years until December 2006,which reflects the view of negotiators of the GTD

207、 that,with the emergence ofcompetition and full retail contestability,alternate market participants will take up additional capacity.The delay in introduction ofcompetition reforms has meant that this process did not occur as anticipated.Recently,APA has experienced some shift in marketconditions wi

208、th enquiries from prospective customers;Iduring the pcp,APA received a settlement in relation to contract termination of$1.886 million in respect of the Westlime lateral.Excluding this one-off receipt,the revenue for the financial year was lower by$1.733 million;Ithe share of net profits of joint ve

209、nture entities increased to$16.026 million excluding the effect of the adjustment for tax-consolidation of SCP,an increase of$2.480 million,18.31%,over the pcp.The majority of this increase represents the additional 10%interest acquired during the pcp;andItransportation revenue in other pipelines in

210、creased as a consequence of capacity expansion programs undertaken in previousfinancial periods.ExpensesPipeline operation and management expenses of$42.521 million reduced by$0.415 million over the pcp,principally due to reversal ofexpenses overprovided in prior years following an understanding rea

211、ched with the beneficiaries of the Amadeus Gas Trust.Depreciation and amortisation expenses of$22.567 million were lower by$1.516 million,6.29%,compared to the pcp due to lowerthroughput on the MSP as a result of a mild winter and supply disruption following an incident at the Moomba plant in Januar

212、y 2004.Depreciation on pipeline assets is calculated on a throughput basis.The net interest and borrowing expense of$46.347 million reduced by$2.249 million,4.63%,compared to the pcp due to re-negotiationof various hedge contracts following the issue of notes in the United States Private Placement m

213、arket in September 2003.BorrowingsAs at the end of the financial year,APA had a total borrowing of$746.036 million under unsecured syndicated facility and notes.The notes issue in September 2003 increased the weighted average term of debt portfolio,which is consistent with the business profile of th

214、e consolidated entity ie involvement in long-life infrastructure assets.APA has a hedge policy in place and utilises derivative financialinstruments such as cross currency swap and interest rate swap contracts.The entire currency exposure under the notes has been fullyhedged to mitigate exchange ris

215、k and 92.36%of the variable interest rate exposure was also hedged.As at the end of the financial year,the gearing ratio was 59.05%,which is comfortably below requirements under various debt covenants.Excluding the impact of tax consolidation,the gearing ratio was 64.01%.Income TaxThe Business Tax R

216、eform,of which tax-consolidation is a part,is being enacted through a series of successive legislation.Following the Royal Assent to the legislation in June 2004 enabling APA,a trust,to act as head entity in a tax-consolidated group,theboard made a decision to enter tax-consolidation effective from

217、1 July 2003.As a part of the tax-consolidation process,the tax values ofpipeline assets were uplifted in accordance with an independent market valuation,which resulted in the release of deferred income taxliability and a corresponding income tax benefit of$92.912 million.Directors Report21Australian

218、 Pipeline Trust ANNUAL REPORT 2004Earnings per Unit Earnings per unit of 49.20 cpu increased by 192.51%over the pcp,reflecting increased profitability from operating and non-recurringitems as mentioned above.Earnings per unit excluding non-recurring items was 18.25 cpu,an increase of 8.50%over the p

219、cp.Cash FlowThe cash flow from operating activities of$82.315 million reduced by$8.274 million,9.13%,from the pcp.The reduction in the cash flow was principally a result of lower dividends received from SCP.The reduction in revenue from the MSP during the financial year also contributed to the lower

220、 cash flow from operating activities.The notes issue raised$493.230 million,net of costs,which was utilised to re-finance syndicated borrowing.The DRP issues raised$16.374 million,net of costs.An amount of$2.752 million was invested in additions to plant and equipment.A further$52.950 millionwas pai

221、d in distributions to unitholders.Regulatory MattersDiscussion with,and submissions to,governments and regulators on regulation of gas transmission pipelines,continued to have asignificant impact on APAs resources.Key regulatory matters addressed during the financial year included:Ithe Minister for

222、Industry,Tourism and Resources,the Honourable Ian Macfarlanes decision in November 2003 was that coverage ofthe MSP should be partially revoked under the National Third Party Access Code for Natural Gas Pipeline Systems.The Ministersdecision was affirmed after the matter was considered by the Tribun

223、al in April 2004;In due course,APA will be developing a revised access arrangement for the balance of the MSP system(possibly including CentralWest Pipeline,the interconnect with Victorias GasNet system and future spur lines or extensions).This will be identified as theNSW/ACT Regional Gas Transmiss

224、ion Grid;Iin July 2004,the Tribunal upheld APAs appeal against the ACCCs determination on the MSP access arrangement.The Tribunaldecision set aside the Determination,finding the ACCC valuation of the pipeline,which affected the tariff that could be charged,had fundamental errors in principle.In Augu

225、st 2004,the ACCC announced that it applied to the Federal Court of Australia seeking a judicial review of the Tribunals decision.APA will be applying the outcome of the Tribunals decision in its preparation of an access arrangement for the covered portion of the MSP;Ithe review of the Gas Access Reg

226、ime by the Productivity Commission is now complete.The inquiry has concluded and the finalreport has been forwarded to the Australian Government for its consideration and release.It is anticipated that the policy changessuggested by the Productivity Commission will be adopted by the Australian Gover

227、nment;Ithe National Competition Council has determined that the regulatory regime in Queensland is“ineffective”and that the derogationsin relation to the RBP and the Carpentaria Gas Pipeline should not apply.APA continues to contest the determination.There is noimmediate revenue impact arising from

228、the determination;andIthe Western Australian Economic Regulatory Authority has now released its further draft decision on the access arrangement for the GGT.APA will be pursuing amendments to the access arrangement which will reflect the impact of the Tribunal decision on the MSP access arrangement.

229、InvestmentAPA is conscious of the challenges that lie ahead and will actively seek opportunities to enhance unitholder value.APA intends to pursue major acquisitions over the coming financial periods,which are likely to arise from industry rationalisation and othermeans.These acquisitions will under

230、pin growth in future profitability and allow for long-term financial growth.Directors Report22Australian Pipeline Trust ANNUAL REPORT 2004Changes in State of AffairsDuring the financial year,there was no significant change in the state of affairs of the consolidated entity other than that referred t

231、o in thefinancial statements or notes thereto.Subsequent EventsOn 30 July 2004,APA agreed to acquire CMS Energy Corporations interests in SCP and the Parmelia gas business for$206 million,including transaction costs,plus any working capital adjustments.The purchase was completed on 17 August 2004.Th

232、e acquisitionincreases APAs holding in the GGT to 88.2%and gives it access to the Parmelia gas business which includes a 416 km pipeline thatsupplies gas from the Perth basin,associated gas processing and storage infrastructure,and a small gas retail business.To part fund theacquisition,APA raised e

233、quity of$61.190 million,net of costs,through an institutional placement.Future DevelopmentsDisclosure of information regarding likely developments in the operations of the consolidated entity in future financial years and theexpected results of those operations is likely to result in unreasonable pr

234、ejudice to the consolidated entity.Accordingly,this informationhas not been disclosed in this report.Environmental RegulationsAll pipeline assets owned by APA are designed,constructed,tested,operated and maintained in accordance with pipeline licences issuedby the relevant State and Territory techni

235、cal regulators.All licences require compliance with relevant Australian,State and Territoryenvironmental legislation and Australian standards.The licences also require compliance with the Australian Standard AS2885“Pipelines-Gas and Liquid Petroleum”,which has specificrequirements for the management

236、 of environmental matters associated with all aspects of the high pressure pipeline industry.Environmental plans satisfying Part A of the Australian Pipeline Industry Association Code of Environmental Practice(“Code”)are preparedand independently audited for construction activities.In accordance wit

237、h Part 3 of AS2885,environmental plans satisfying Part B of theCode are in place for all operating pipelines and are managed in accordance with APAs contracts and the terms and conditions of thelicences that APA has been issued.Ongoing monitoring of these requirements is achieved through an environm

238、ental audit process carriedout by an accredited independent auditor.The board reviews external audit reports and,on a monthly basis,the internal reports prepared relating to environmental issues.No breacheshave been reported during the financial year and APA has complied fully with the environmental

239、 management plans that are in place.DistributionsDuring the financial year,the following distributions were made to the unitholders:Profit DistributionaCapital DistributionRelevant PeriodDate Paidcpu$000cpu$000Final distribution for financial year ended 30 June 200325 September 20036.515,860Interim

240、distributions for the financial yearFirst interim distribution29 December 20035.012,286Second interim distribution29 March 20043.68,9021.43,462Third interim distribution24 June 20045.012,440aAll the profit distributions were unfranked.Directors Report23Australian Pipeline Trust ANNUAL REPORT 2004A f

241、inal profit distribution for the financial year of 6.5cpu and franked to 40%at the corporate income tax rate,was declared on 26 August2004.This distribution will be paid on 27 September 2004 and equates to a total cash distribution of$17.864 million in respect of units onissue at that time.Options G

242、rantedNo options were granted during or since the end of the financial year:(a)over unissued units in APA;and(b)to the responsible entity.No unissued units in APA were under option as at the date on which this report was made.No units were issued in APA during or since the end of the financial year

243、as a result of the exercise of an option over unissued units in APA.Indemnification of Officers and External AuditorDuring the financial year,the responsible entity paid a premium in respect of a contract insuring the directors of the responsible entity,theresponsible entitys secretary,Mr A J V Jame

244、s,and all executive officers of the responsible entity and of any related body corporate of APAagainst any liability incurred as such a director,secretary or executive officer to the extent permitted by the Corporations Act 2001.Thecontract of insurance prohibits disclosure of the nature of the liab

245、ility and the amount of the premium.The responsible entity has not otherwise,during or since the financial year,indemnified or agreed to indemnify an officer or externalauditor of the responsible entity or of any related body corporate of APA against a liability incurred as such an officer or audito

246、r.Directors Meetings The following table sets out the number of directors meetings(including meetings of committees of the directors)held during thefinancial year and the number of meetings attended by each director(while they were a director or a committee member).During thefinancial year,19 board

247、meetings(excluding two sub-committee meetings),one Remuneration Committee meeting,five Audit and RiskManagement Committee meetings and one meeting of the Nominations Committee were held:Audit and RiskBoard of RemunerationManagementNominationsDirectorsCommitteeCommitteeCommitteeDirectorsHeldAttendedH

248、eldAttendedHeldAttendedHeldAttendedG H Bennett21a211111L J Fisk19161111J A Fletcher151554T C Ford191855M Muhammad16151111R J Wright21a1955R A Casamentob4411Ed Osman Ridzwanc33Ng Chong WahcJ K McDonald21a2155aincludes 2 sub-committee meetings to approve the financial reports which had been reviewed b

249、y the board.balternate for Mr J A Fletcher.calternate for Mr M Muhammad.Directors Report24Australian Pipeline Trust ANNUAL REPORT 2004Directors Unitholdings The following table sets out each directors relevant interest in units of APA as at the date of this report:Fully Paid UnitsUnits AcquiredUnits

250、 Disposed ofFully Paid Unitsas atduring the during theas atDirectors30 June 2003Financial Year Financial Year30 June 2004G H Bennett15,0001,27616,276L J Fisk5,0004255,425J A Fletcher4,0003404,340T C Ford10,00010,000R M GersbachM Muhammad10,00055610,556R J Wright10,00085110,851R A CasamentoEd Osman R

251、idzwanNg Chong Wah2,0002,000J K McDonald15,0001,27516,275There are no contracts to which a director is a party or under which the director is entitled to a benefit and that confer a right to call for ordeliver interests in the scheme.Directors and Executives Remuneration The Remuneration Committee r

252、eviews the remuneration packages of all directors and executive officers on an annual basis and makesrecommendations to the board.Remuneration packages are reviewed with due regard to performance and other relevant factors.In order to retain and attract executives of sufficient calibre to facilitate

253、 the efficient and effective management of APAs operations,theRemuneration Committee seeks the advice of external advisers in connection with the structure of remuneration packages.Remuneration packages contain the following key elements:(a)primary benefits salary/fees,incentive payments and non-mon

254、etary benefits including the provision of motor vehicles;and(b)post-employment benefit superannuation contribution.The following table discloses the remuneration of the directors of the responsible entity for the financial year:PrimaryPost-EmploymentTotalSalary/FeesIncentive Scheme Non-MonetarySuper

255、annuation2004$Non-Executive DirectorsG H Bennett90,0008,10098,100L J Fisk45,00045,000J A Fletcher45,00045,000T C Ford45,0004,05049,050M Muhammad45,00045,000R J Wright50,0004,50054,500Ed Osman Ridzwan R A CasamentoNg Chong Wah Executive DirectorJ K McDonald358,673198,60552,21491,149700,641Directors R

256、eportThe following table discloses the remuneration of all the executives of the consolidated entity for the financial year:PrimaryPost-EmploymentTotalSalary/FeesIncentive Scheme Non-MonetarySuperannuation2004$G N Williams184,98580,08040,76236,859342,686M J McCormack190,30470,84045,08818,202324,434A

257、 J V James200,22971,10215,35327,075313,759K F Dixon209,21960,8581,45011,002282,529Fees paid to the responsible entity and its associates(including directors and secretaries of the responsible entity,related bodies corporateand directors and secretaries of related bodies corporate)out of APA property

258、 during the financial year are disclosed in this report andNote 39 to the financial statements.The responsible entity does not hold any units in APA.AGL,a 50%shareholder in the responsible entity,holds 30%of the units in APA.The number of units in APA issued during the financial year,withdrawals fro

259、m APA during the financial year,and the number of units inAPA at the end of the financial year are disclosed in Note 27 to the financial statements.The value of APAs assets as at the end of the financial year is disclosed in the statement of financial position in total assets,and the basis ofvaluati

260、on is included in Note 1 to the financial statements.Rounding APA is an entity of the kind referred to in Australian Securities and Investments Commission(“ASIC”)Class Order 98/0100,dated 10 July 1998,and in accordance with that Class Order amounts in this report and the financial report are rounded

261、 off to the nearestthousand dollars.Signed in accordance with a resolution of the directors of the responsible entity made pursuant to section 298(2)of the Corporations Act 2001.On behalf of the directorsG H BennettR J WrightChairmanDirectorSYDNEY,26 August 200425Australian Pipeline Trust ANNUAL REP

262、ORT 2004Directors Report26Australian Pipeline Trust ANNUAL REPORT 2004Statement of Financial Performancefor the financial year ended 30 June 2004Consolidated Trust 2004200320042003Note$000$000$000$000Revenue from ordinary activities262,082258,3661,03864,064Share of net profits of joint venture entit

263、ies accounted for using the equity method22,99013,546285,072271,9121,03864,064Pipeline operation and management expenses(42,521)(42,936)Depreciation and amortisation expense(22,567)(24,083)Impairment of non-current assets(19,943)(1,480)Other pipeline costs(74,577)(67,990)Borrowing costs(63,084)(62,2

264、71)(20)(26)Other expenses from ordinary activities(16,101)(8,024)(1,012)(1,168)Profit from Ordinary Activities before Income Tax Expense246,27965,128662,870Income tax expense relating to ordinary activities475,225(23,804)(2)Profit from Ordinary Activities after Related Income Tax Expense121,50441,32

265、4462,870Net profit attributable to outside equity interests(212)(278)Net Profit Attributable to Unitholders of the Parent Entity121,29241,046462,870Total Changes in Equity other than those Resultingfrom Transactions with Unitholders as Owners121,29241,046462,870Earnings per unit:(cents per unit)Earn

266、ings used to calculate earnings per unit($000)121,29241,046Basic earnings per unit based on profit from ordinary activities after income tax expense attributable to unitholders of the parent entity49.2016.82Weighted average number of units(million)on issue used in the calculation of basic earnings p

267、er unit 246.50244.00Diluted earnings per unit is exactly the same as basic earnings per unit.Notes to the financial statements are included on pages 29 to 58.27Australian Pipeline Trust ANNUAL REPORT 2004Statement of Financial Positionas at 30 June 2004Consolidated Trust 2004200320042003Note$000$000

268、$000$000Current AssetsCash44,25116,316134104Receivables612,09519,5649687Inventories75075Other81,4721,185Total Current Assets57,86837,140230191Non-Current AssetsReceivables9134Investments accounted for using the equity method10171,137155,808Other financial assets11535,687487,641Property,plant and equ

269、ipment121,184,8621,222,117Intangibles136,1887,352Deferred tax assets1410,0776,53010,0771Other153,5382,841Total Non-Current Assets1,375,8031,394,682545,764487,642Total Assets1,433,6711,431,822545,994487,833Current LiabilitiesPayables1653,92951,25518,05218,117Interest-bearing liabilities17180218Curren

270、t tax liabilities185,9385,938Provisions191,902961Other207,3277,076Total Current Liabilities69,27659,51023,99018,117Non-Current LiabilitiesPayables2117,9387,4065,502Interest-bearing liabilities22730,225760,097Deferred tax liabilities2386,956167,60086,956Provisions24143136Other251,1271,299Total Non-Cu

271、rrent Liabilities836,389929,13294,3625,502Total Liabilities905,665988,642118,35223,619Net Assets528,006443,180427,642464,214EquityContributed equity27427,435426,963427,435426,963Retained profits28100,43916,19520737,251Parent Entity Interest527,874443,158427,642464,214Outside equity interests2913222T

272、otal Equity528,006443,180427,642464,214Notes to the financial statements are included on pages 29 to 58.28Australian Pipeline Trust ANNUAL REPORT 2004Consolidated Trust 2004200320042003Note$000$000$000$000Cash Flows from Operating ActivitiesReceipts from customers275,813270,5131,0021,173Payments to

273、suppliers and employees(162,483)(142,872)(1,087)(977)Dividends received7,66712,30162,870Interest received10,1297,4163621Interest and other costs of finance paid(45,942)(54,477)(20)(26)Income tax paid(2,869)(2,292)(1)Net Cash From/(Used in)Operating Activities40(c)82,31590,589(69)63,060Cash Flows fro

274、m Investing ActivitiesPayment for investments in joint venture entities(7)(24,322)Payment for property,plant and equipment(2,752)(16,715)Proceeds from sale of property,plant and equipment278177Net Cash Used in Investing Activities(2,481)(40,860)Cash Flows from Financing ActivitiesProceeds from borro

275、wing16,000221,000Repayment of borrowing(524,292)(217,235)Proceeds from issue of units16,49616,496Proceeds from issue of notes496,036Payment of unit issue costs(122)(122)Payment of note issue costs(2,806)Proceeds from repayment of related party receivables36,675Amounts advanced to related parties(10,

276、591)Distributions paid to:Unitholders of Trust(52,950)(52,460)(52,950)(52,460)Outside equity interests(261)(409)Net Cash(Used in)/From Financing Activities(51,899)(49,104)99(63,051)Net Increase in Cash Held27,935625309Cash at the beginning of the financial year16,31615,69110495Cash at the End of the

277、 Financial Year40(a)44,25116,316134104Notes to the financial statements are included on pages 29 to 58.Statement of Cash Flowsfor the financial year ended 30 June 200429Australian Pipeline Trust ANNUAL REPORT 20041.Summary of Accounting PoliciesFinancial Reporting FrameworkThis financial report is a

278、 general purpose financial report which has been prepared in accordance with the constitution,theCorporations Act 2001,applicable accounting standards and Urgent Issues Group Consensus Views,and complies with otherrequirements of the law.The financial report has been prepared on the basis of histori

279、cal cost and except where stated,does not take into account changing money values or current valuations of non-current assets.Cost is based on the fair values of the consideration given in exchange for assets.Significant Accounting PoliciesAccounting policies are selected and applied in a manner,whi

280、ch ensures that the resulting financial information satisfies theconcepts of relevance and reliability,thereby ensuring that the substance of the underlying transactions or other events is effectively reported.The following significant accounting policies have been adopted in the preparation and pre

281、sentation of the financial report:(a)Principles of ConsolidationThe consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the consolidated entity,being Australian Pipeline Trust(“parent entity”)and its controlled entities as defined in

282、 AccountingStandard AASB 1024“Consolidated Accounts”.A list of controlled entities appears in Note 35.Consistent accounting policies have been employed in the preparation andpresentation of the consolidated financial statements.The consolidated financial statements include the information and result

283、s of each controlled entity from the date on which APA obtains control and until such time as APA ceases to control such entity.In preparing the consolidated financial statements,all inter-entity balances and transactions,and unrealised profits arisingwithin the consolidated entity are eliminated in

284、 full.(b)PayablesTrade payables and other payables are recognised when the consolidated entity becomes obliged to make future paymentsresulting from the purchase of goods and services.(c)Acquisition of AssetsAssets acquired are recorded at the cost of acquisition,being the purchase consideration det

285、ermined as at the date ofacquisition plus costs incidental to the acquisition.In the event that settlement of all or part of the cash consideration given in the acquisition of an asset is deferred,the fair valueof the purchase consideration is determined by discounting the amounts payable in the fut

286、ure to their present values as at thedate of acquisition.(d)Interest-Bearing LiabilitiesBank loans and other loans are recorded at an amount equal to the net proceeds received.Interest expense is recognised on an accrual basis.Ancillary costs incurred in connection with the arrangement of interest-b

287、earing liabilities are deferred and amortised over theperiod of the interest-bearing liability.(e)Capitalisation of Borrowing CostsBorrowing costs directly attributable to assets under construction are capitalised as part of the cost of those assets.Notes to the Financial Statementsfor the financial

288、 year ended 30 June 200430Australian Pipeline Trust ANNUAL REPORT 20041.Summary of Accounting Policies(continued)(f)DepreciationDepreciation is provided for on property,plant and equipment,including freehold buildings but excluding land.Depreciation iscalculated on either a straight-line or throughp

289、ut basis depending on the nature of the asset so as to write off the net cost of eachasset over its estimated useful life.Leasehold improvements are depreciated over the period of the lease or estimated useful life,whichever is the shorter,using the straight-line method.The following estimated usefu

290、l lives are used in the calculation ofdepreciation:Ibuildings50 years;Icompressorsup to 25 years;Ipipelinesup to 65 years;andIother plant and equipment320 years.(g)IntangiblesGoodwill,representing the excess of the cost of acquisition over the fair value of the identifiable net assets acquired,isamo

291、rtised on a straight-line basis over a period of 20 years.The right to receive a pipeline tariff is being amortised on a straight-line basis until 2011,being the termination date of thecontract to which the right relates.(h)Derivative Financial InstrumentsThe consolidated entity uses derivative fina

292、ncial instruments(“derivatives”)to hedge exposures to interest rate and foreignexchange risk.In order to be designated as a hedge,at inception and during the term of the hedging instrument,it must beexpected that the hedge will be effective in reducing exposure to the risks being hedged.Derivatives

293、are not entered into forspeculative purposes.Interest RateInterest rate swaps are used to vary the consolidated entitys mix of fixed and variable rate borrowing.These derivatives areaccounted for on an accrual basis consistent with the accounting treatment of the underlying borrowing.Both payments a

294、ndreceipts under the swaps are included in interest expense.The related amount receivable from or payable to counterparties,isincluded in other receivables or other payables.Foreign ExchangeCross currency swaps are used to hedge foreign currency borrowing.Derivatives that hedge borrowing are measure

295、d at spotrate and included in non-current receivables or payables.Gains or losses are recognised in net profit or loss as they occur andoffset translation gains and losses on the underlying hedged item.If a derivative is terminated and the anticipated transaction isno longer probable,all gains and l

296、osses are recognised immediately in the statement of financial performance.Further detailsare disclosed in Note 43.(i)Employee BenefitsProvision is made for benefits accruing to employees in respect of wages and salaries,annual leave and long service leave when it is probable that settlement will be

297、 required and they are capable of being measured reliably.Provisions made in respect of wages and salaries,annual leave,and other employee benefits(long service leave)expected to be settled within 12 months,are measured at their nominal values using the remuneration rates expected to apply at the ti

298、me of settlement.Provisions made in respect of other employee benefits(long service leave)which are not expected to be settled within 12months are measured as the present value of the estimated future cash outflows to be made by the consolidated entity inrespect of services provided by employees up

299、to the end of the financial year.Notes to the Financial Statements for the financial year ended 30 June 200431Australian Pipeline Trust ANNUAL REPORT 20041.Summary of Accounting Policies(continued)(j)Financial Instruments Issued by APADebt and Equity InstrumentsDebt and equity instruments are classi

300、fied as either liabilities or equity in accordance with the substance of the contractualarrangement.Transaction Costs on the Issue of Equity InstrumentsTransaction costs arising on the issue of equity instruments are recognised directly in equity as a reduction of the proceeds ofthe equity instrumen

301、ts to which the costs relate.Transaction costs are the costs that are incurred directly in connection with theissue of those equity instruments and which would not have been incurred had those instruments not been issued.Interest and DistributionsInterest and distributions are classified as expenses

302、 or as distributions of profit consistent with the statement of financialposition classification of the related debt or equity instruments or component parts of compound instruments.(k)Foreign Currency TransactionsAll foreign currency transactions during the financial year are brought to account usi

303、ng the exchange rate in effect at the dateof the transaction.Foreign currency monetary items at reporting date are translated at the exchange rate existing at that dateand resulting exchange differences are recognised in the statement of financial performance in the period in which they arise.(l)Goo

304、ds and Services TaxRevenues,expenses and assets are recognised net of the amount of goods and services tax(“GST”),except:Iwhere the amount of GST incurred is not recoverable from the taxation authority,it is recognised as part of the cost ofacquisition of an asset or as part of an item of expense;or

305、Ifor receivables and payables which are recognised inclusive of GST,except for accrued revenue and accrued expense atbalance date which exclude GST.The net amount of GST recoverable from,or payable to,the taxation authority is included as part of receivables or payables.GST receivable or GST payable

306、 is only recognised once a tax invoice has been issued or received.Cash flows are included in the statement of cash flows on a gross basis.The GST component of cash flows arising from investingand financing activities which is recoverable from,or payable to,the taxation authority is classified as op

307、erating cash flows.(m)Income TaxTax-effect accounting principles have been adopted whereby income tax expense has been calculated on pre-tax profit afteradjustment for permanent differences.The tax-effect of timing differences,which occur when items are included or allowed forincome tax purposes in

308、a period different to that for accounting,is shown at current taxation rates in deferred tax liabilities anddeferred tax assets,as applicable.During the financial year,the directors elected that the Trust and all its wholly-owned Australian tax resident entities would joina tax-consolidated group.As

309、 a result,all income tax expenses,revenues,assets and liabilities of the members of the tax-consolidated group are recognised in the financial statements of the parent entity.Due to the existence of a tax-sharing agreement between the entities in the tax-consolidated group,the income taxexpense/reve

310、nue of APA includes the tax-contribution amounts paid or payable between the parent entity and subsidiaryentities made in accordance with the agreement.Further information about the tax-sharing agreement is detailed in Note 4.The current and deferred tax assets and liabilities of the parent entity a

311、re not reduced by any amounts owing from orto subsidiary entities in accordance with the tax-sharing agreement as these amounts are recognised as inter-companyreceivables and payables.Notes to the Financial Statements for the financial year ended 30 June 200432Australian Pipeline Trust ANNUAL REPORT

312、 20041.Summary of Accounting Policies(continued)(n)InventoriesInventories are valued at the lower of cost and net realisable value.Costs,including an appropriate portion of fixed and variableoverhead expenses,are assigned to inventories on hand by the method most appropriate to each particular class

313、 of inventories,with the majority being valued on a first-in,first-out basis.(o)InvestmentsInvestments in controlled entities are recorded at cost.Investments in joint venture entities have been accounted for under theequity method in the consolidated financial statements.Other investments are recor

314、ded at cost.Dividend revenue is recognised on a receivable basis.Interest revenue is recognised on an accrual basis.(p)Joint VenturesJoint Venture OperationsInterests in joint venture operations are reported in the financial statements by including the consolidated entitys share ofassets employed in

315、 the joint ventures,the share of liabilities incurred in relation to joint ventures and the share of any expensesincurred in relation to joint ventures in their respective classification categories.Joint Venture EntitiesInterests in joint venture entities,which are not partnerships,are accounted for

316、 under the equity method in the consolidatedfinancial statements and the cost method in APAs financial statements.(q)Leased AssetsLeased assets classified as finance leases are capitalised.The amount initially brought to account is the present value ofminimum lease payments.A finance lease is one wh

317、ich effectively transfers from the lessor to the lessee substantially all the risks and benefits incidental toownership of the leased property.Capitalised leased assets are amortised on a straight-line basis over the estimated useful life of the asset.Finance lease payments are allocated between int

318、erest expense and reduction of the lease liability over the term of the lease.The interest expense is determined by applying the interest rate implicit in the lease to the outstanding lease liability at thebeginning of each lease payment period.Operating lease payments are charged as an expense in t

319、he period in which they are incurred.(r)ProvisionsProvisions are recognised when the consolidated entity has a present obligation,the future sacrifice of economic benefits isprobable,and the amount of the provision can be measured reliably.When some or all of the economic benefits required to settle

320、 a provision are expected to be recovered from a third party,thereceivable is recognised as an asset if it is probable that recovery will be received and the amount of the receivable can bemeasured reliably.The amount recognised as a provision is the best estimate of the consideration required to se

321、ttle the present obligation at the endof the financial year,taking into account the risks and uncertainties surrounding the obligation.Where a provision is measuredusing the cash flows estimated to settle the present obligation,its carrying amount is the present value of those cash flows.(s)Distribu

322、tionsA provision is recognised for distributions only when they have been declared,determined or publicly recommended by the directors.(t)ReceivablesTrade receivables and other receivables are recorded at amounts due less any allowance for doubtful debts.Notes to the Financial Statements for the fin

323、ancial year ended 30 June 200433Australian Pipeline Trust ANNUAL REPORT 20041.Summary of Accounting Policies(continued)(u)Recoverable Amount of Non-Current AssetsNon-current assets are written down to recoverable amount where the carrying value of any non-current asset exceeds itsrecoverable amount.

324、In determining the recoverable amount of non-current assets,the expected net cash flows have beendiscounted to their present value,using discount rates in the range of 7.5%to 9.0%per annum(2003:7.5%to 9.0%per annum)depending on the risk profile of the particular assets,except for deferred tax assets

325、 where undiscounted cash flows have been used.(v)Revenue RecognitionDisposal of AssetsRevenue from the disposal of assets is recognised when the consolidated entity has passed control of the assets to the buyer.Rendering of ServicesRevenue from a contract to provide services is recognised by referen

326、ce to the stage of completion of the contract.2.Profit from Ordinary ActivitiesConsolidated Trust 2004200320042003$000$000$000$000Profit from ordinary activities before income tax expenseincludes the following items of revenue and expense:(a)Operating RevenueSales revenue:Pipeline transportation rev

327、enue169,565175,664Other pipeline revenue passthrough74,57767,990244,142243,654Interest revenue:Other entities 16,73713,6753621Dividends wholly-owned controlled entities62,870Share of net profits from joint venture entities accounted for using the equity method(Note 42)22,99013,546Other 9258601,0021,

328、173284,794271,7351,03864,064(b)Non-Operating RevenueProceeds from disposal of property,plant and equipment278177285,072271,9121,03864,064(c)ExpensesBorrowing costs:Interest:Other entities60,36060,6662026Amortisation of deferred borrowing costs1,9801,390Finance lease charges5849Other borrowing costs6

329、8637563,08462,4802026Less:amounts capitalised as part of the carrying value of pipeline assetsa(209)63,08462,2712026aCapitalisation rate applicable to funds borrowed generally in the financial year ended 30 June 20037.99%per annum.Notes to the Financial Statements for the financial year ended 30 Jun

330、e 200434Australian Pipeline Trust ANNUAL REPORT 20042.Profit from Ordinary Activities(continued)Consolidated Trust 2004200320042003$000$000$000$000(c)Expenses(continued)Net bad and doubtful debts/(recoveries)arising from other entities(137)(495)Depreciation of non-current assets:Property,plant and e

331、quipment21,22522,716Amortisation of non-current assets:Goodwill464464Leased assets178203Right to receive pipeline tariff70070022,56724,083Other pipeline costs passthrough:Operating lease rental expense15,34514,892Gas pipeline costs59,23253,09874,57767,990Net transfers to provisions:Employee benefits

332、8054(d)OtherProfit from sale of property,plant and equipment128633.Significant ItemsMid West Pipeline written off19,9431,480Due diligence costs on capital acquisition projects written off or provided for5,763Tax-consolidation benefit SCP(6,964)(Profit)/Loss from significant items before income tax18

333、,7421,480Income tax related to significant items(2,138)Tax-consolidation benefit APA(92,912)(Profit)/Loss from Significant Items after Related Income Tax(76,308)1,480Notes to the Financial Statements for the financial year ended 30 June 200435Australian Pipeline Trust ANNUAL REPORT 20044.Income TaxConsolidated Trust 2004200320042003$000$000$000$000(a)The prima facie income tax expense on pre-tax a