1、Annual Report 2003AustralianPipeline TrustARSN 091 678 778 AUSTRALIAN PIPELINE TRUST ANNUAL FINANCIAL REPORT 2002-2003“Our goal is clear Australian Pipeline Trustwill continue to berecognised as the leadingtransporter of natural gasin Australia while at thesame time exploringfurther ventures that ha
2、vethe potential to provide asound return to ourunitholders.”Jim McDonald,Managing DirectorAustralian Pipeline LimitedcontentsCorporate Highlights1Chairmans Report2Managing Directors Report4Key Issues6The Management Team8Glossary of Terms,Directory and Financial Calendar56Annual Financial Report 2003
3、Corporate Governance9Directors Report13Statement of Financial Performance22Statement of Financial Position23Statement of Cash Flows24Notes to the Financial Statements 25Directors Declaration52Independent Audit Report53Additional Stock Exchange Information54Unitholder Information55Photos:1.Road West
4、of Alice Springs,NT.2.Murrumbidgee River,Wagga Wagga,NSW.3.CanolaCrop Fields,Young,ACT.Year endedYear endedYear endedCategory30 June 200330 June 200230 June 2001$m$m$mPipeline Revenue189.2180.4173.8Other Pipeline Revenue68.061.161.5Other Revenue14.713.914.0Total Revenue271.9 255.4 249.3EBITDA137.813
5、2.2127.5EBIT113.7105.9103.6Pre-tax Profit65.159.153.3Income Tax Expense(23.8)(21.7)(22.3)Operating Profit after Tax and Minorities41.037.130.7Earnings per Unit16.8c15.2c12.6cNet Tangible Asset Backing per Unit(after capital distributions)$1.79$1.76$1.82Operating Cash Flow per Unit excluding interest
6、 56.4c53.2c59.1cInterest Cover Ratio2.42.42.1Gearing Ratio(%)63.363.461.9Key operating achievementsGConstruction of looping stage 6 on the Roma to BrisbanePipeline(Qld)to satisfy growing customer demandcommissioned in October 2002.GAgreeing to innovative interruptible and firm haulagecontracts with
7、existing customers on the Roma to BrisbanePipeline to increase throughput.GInstallation of a compressor on the Carpentaria Gas Pipeline(Qld)to increase throughput,commissionedin December 2002.GAcquisition of TransAlta Energy Corporations interestin Goldfields Gas Transmission Pipeline(WA)completedin
8、 April 2003.APAs effective ownership in GGT isnow 48.5%.GAgreement reached with AGL Wholesale Gas Limited totransport gas in the Moomba to Sydney Pipeline post 2006,in addition to quantities previously agreed under the GasTransportation Deed.Australian Pipeline Trust is listed on theAustralian Stock
9、 Exchange under the tickersymbol“APA”.APA is an industry leader in gas transmissioninfrastructure.APA has an interest in morethan 7,500km of pipelines and a 25%share ofAustralias natural gas transmission market.APA had 244 million units on issue at 30 June 2003,held by 28,180 unitholders.corporate h
10、ighlights01Financial Summary Year at a glanceGOperating profit after tax and minorities was$41.046million,up 10.63%on the previous correspondingperiod(“pcp”),of$37.101 million.GTotal revenue of$271.912 million was$16.5 million,(6.46%)above the pcp.GPipeline revenue,excluding Other Pipeline Revenue w
11、hichis in the nature of passthrough revenue,was$189.210million,$8.789 million(4.87%),up on the pcp.GEBIT of$113.724 million was$7.835 million(7.4%)up onthe pcp.Australian Pipeline Trust Annual Report 2003chairmans reportAustralian Pipeline Trust Annual Report 200302This year marks the third annivers
12、aryof my term as chairman of Australian PipelineTrust(“APA”)and the third year since APAwas floated on the Australian Stock Exchange.In each year,APA has been able to improveits performance and do so in a difficult andsometimes perplexing business environment.The board is truly proud of the achievem
13、entsof APA during this time.There is muchto be done and the task of continuing thesuccess of APA will not get any easier as timegoes by.That said,I recognise that the natural gasindustry generally,is undergoingrationalisation which will lead to even greaterchallenges for APA.When APA was formed,we w
14、ere two years into a regulatoryframework and disaggregation/privatisationwas essentially complete.My observation is,after three years of frustration,the industrydid not get it right and rationalisationhas become inevitable.There are issues that have remainedon the table since our inception,that are
15、yetto be resolved equitably.Certainly,there aremoves afoot to remove some of the inhibitorsto the growth of natural gas as a major energysource in this country,but the progresshas been slow and painful.While I am pleased that the ProductivityCommission is undertaking a reviewof the National Gas Acce
16、ss Code,I still havesevere misgivings about the regulatoryprocess in this country.Legislation OverloadAs an example,let me refer to a speech to theAustralian Pipeline Industry Association lastAustralian Pipeline Trust Annual Report 2003October by the Minister for Industry,Tourism and Resources,the H
17、onourableIan Macfarlane.He pointed out that theenergy industry both gas and electricity was subject to more than 130 piecesof legislation.One company,Origin Energy,hadrevealed that it was forced to comply with7,000(!)regulatory instruments just tooperate in the national energy market.The administrat
18、ive costs incurred by theindustry to meet these regulations areabout$100 million every year.This over-regulation is clearly not whatwas intended by our legislators.It is notpossible to develop the infrastructurenecessary to sustain a viable gas industrywhen we are dealing with these sortsof regulato
19、ry impediments.It seems to me that the time and energyof the gas industry is being divertedin protracted regulatory disputes andat enormous cost,rather than developingand growing an important national energyresource.The events surrounding the EpicEnergy pipeline regulatory case in WesternAustralia s
20、hould indicate to even the mostcynical critics of the gas industry,that theregulatory system requires rethinking.In this climate,it is little wonder thatinternational investors are reconsideringtheir position and new investors are likelyto be extremely thin on the ground and the losers?The losers ar
21、e the Australian people andthe industry consumers who could benefitfrom a guaranteed,stable,long-termsupply of natural gas.The environmentis also a loser as natural gas providessignificantly less carbon dioxide andgreenhouse gas emissions than mostcompeting fossil energy sources.Friendly and GreenIn
22、 our industry,we are proud of the“friendly”attributes of our natural gasproduct.It is clean and“green”andprovides some significant competitivebenefits compared with other formsof energy.It is also important becauseit has the potential to keep competitiveenergy sources honest on both pricingand suppl
23、y to consumers.It should be evident to all that natural gashas a vital place in the Australian energymix,but there must be reliability of supplyand a guarantee of infrastructure growthto meet future needs.At present,due to a short-sightednessof attitude and powerful sectoral interests,natural gas is
24、 being denied its rightful placein the national energy mix and thereforeis failing to fulfil its promise to the nation.To ensure continued growth of this cleanenergy source,we need investment andexpansion.If investors are to be found,they will require a reasonable return oninvestment and a degree of
25、 industrystability that can only come about by theremoval of impediments to investment.This critical situation has not yet changed.I hope that within a short time some realprogress will be made to create a viable andworkable regulatory framework for the naturalgas industry and the appropriate invest
26、mentincentives to see our industry flourish.I thank management and staff for theirefforts and thank all unitholders for theircontinued support.George H BennettChairman03“In each year,APA has been able to improve its performance and do so in a difficultand sometimesperplexing businessenvironment.“man
27、aging directors reportAustralian Pipeline Trust Annual Report 200304By any measure,APA has achieved its targetsand key objectives for all stakeholders and I am proud to lead a business that hasdelivered strong growth in net profit after taxover the last three years.Now the industryis at a crossroads
28、 and charting our courseover the next few years will determinethe long-term success of APA.There are a number of key factors that needto be considered as we look to the future.Industry Rationalisation QuickensIt is clear that rationalisation is now takingplace in the energy sector and relatedindustr
29、ies.As a result,we have anexpectation that opportunities will arisefor APA to further invest in the industry.As natural gas pipelines come up for sale,we will seek to buy them,at the right price.Our ownership“wish list”includes a suiteof pipelines,both regulated and non-regulated,with returns relate
30、d to risk,to ensure a significant diversification withinthis asset class.I believe that APA is wellpositioned to take advantage of furtherrationalisation in the industry.Diversifying Our BusinessIt is our belief that rationalisation in theenergy sector offers a number of keyopportunities for APA to
31、diversify itsoperations.Firstly,we need to diversifywithin our pipeline business to reduce theemphasis on the Moomba to Sydney Pipelinein the anticipated availability of competitivelypriced gas at Moomba.The rationalisationof the pipeline industry should provideopportunities for this to take place.S
32、econd,there is a need to diversify fromour current focus on pipelines to encompassassociated industries.Oil and gas productioncompanies are winding back from verticalintegration and are concentrating their capitalat the wellhead.As a result,we believe thereis an opportunity for us to invest in whatw
33、ould be traditionally seen as fieldor production infrastructure facilities.These opportunities include powergeneration and gas production infrastructurethat traditionally have been part of theproduction process and cover compressionmetering and drying plants.This is an areaof diversification we are
34、currentlycontemplating.As part of our strategy to generate future growthand to diversify the business,we also will look toinvest in a range of new assets.For instance,within the pipeline transmission sector,Australian Pipeline Trust Annual Report 2003oil pipelines are assets that would have realsyne
35、rgy with our current operations.Other fluid systems,such as waterpipelines,are also being considered.Power generation,linked to our pipelinesystems,is also an attractive possibility thatis complementary to our core business.In some of these businesses,for examplepower generation,we may wish to inves
36、tbut not seek to acquire the expertiseto operate them.A preferred positionis to seek partnerships with thosewho have those skills.It is also feasible that as we developour business and expand our balancesheet we will seek additional equityin the future.We intend to outline someof our equity raising
37、plans at the annualinformation meeting on 21 October 2003.Gas VolumesWe have a very real concern about thevolume of gas available for contractsout of the Moomba field.Despite claims bysome producers to the contrary,large usersare beginning to face the prospect of notbeing able to secure the gas they
38、 requireover the life of particular projects.We gain comfort from the knowledgethat coal bed methane(“CBM”)has been contracted by AGL for thefirst time to service southern marketsfrom Queensland.Securing Future Natural GasSuppliesWe will continue to look towards futurenatural gas supplies and the gr
39、owth of gasas a significant part of the national energymix.Our position is that gas from thenorth,such as from Papua New Guinea,will provide long term gas security forsouth east Australia at a competitive price,for all consumers.However,we believe that CBM fromQueensland is necessary as an alternati
40、vesupply into the south east Australian gaspipeline system as a short and perhapseven a medium-term supply solution.APA believes that CBM will addressa supply problem,but is not yet provento be a viable long-term alternative.In the future,we envisage somecompetition for the supply of gas intosouth e
41、ast Australia and believe that CBMwill allow us to compete in this marketuntil northern gas becomes a reality.The Regulatory MinefieldI have not yet touched on regulatory issuesin my report our position has been clearfor a number of years now.We are criticalof the complexities,the confusion,the cost
42、 and the distraction causedby the current regulatory maze.We remain hopeful that an efficientand much improved regulatory policyis at least,shall we say,in the pipeline.Minister Macfarlane has expressedthe view that an efficient and effectiveregulatory policy,that is fair to allstakeholders and prov
43、ides the necessarysecurity to generate private infrastructureinvestment,is in the national interest.We wish him every success and supportin this endeavour.In closing,I believe that the next 12 monthsare likely to be a watershed for APA andthe decisions we take during this periodwill shape our fate,w
44、ell into the future.We welcome the proposed review of theNational Gas Access Code and theemerging rationalisation of the gas pipelineindustry.With these levers in place,our organisation and the gas industryis well placed to grow into the future.JK McDonald James K McDonaldManaging Director05I believ
45、e thatAPA is wellpositioned totake advantageof furtherrationalisation inthe industry.key issuesAustralian Pipeline Trust Annual Report 200306Diversification of RiskAPAs business is characterised as havinga high quality portfolio of assets,strong cashflow underpinned by long-term contractswith high q
46、uality customers,and well-defined risks.The Moomba to Sydney Pipeline(“MSP”)system provides over 37%of APAs totalrevenue.This pipeline has predictablerevenue to 2007,and a measure of revenuecertainty to 2016 through the GasTransportation Deed(“GTD”)with AGLWholesale Gas Limited(“AGLWG”).Thenegotiato
47、rs of the GTD took into account thelikely consequences of competition reformand full retail contestability.The contractreflects conservative estimates of AGLWGscapacity and volume requirements for NewSouth Wales and the Australian CapitalTerritory following the introduction of fullretail contestabil
48、ity in the gas market.Consequently,over the next few years until2007,AGLWGs contracted position reduces,with a corresponding reduction in revenue.Now that full retail contestability is operating,though delayed,we anticipate eitheralternative gas aggregators or major gas userswill emerge and require
49、capacity,or AGLWGmay require additional capacity above thatwhich has been contracted under the GTD.While APA is exploring marketingopportunities to improve the contractedposition in the MSP,it is vital that APA looksto diversify its revenue base away fromreliance on MSP as the major revenuecontribut
50、or.In that context,the healthy increasein the contribution to revenue fromthe Queensland and Western Australianpipelines is relevant.Industry RationalisationIndustry rationalisation also presentsopportunities which APA is well positionedto pursue.Overseas asset owners,havingreassessed their investme
51、nt decisions withinAustralia,have decided to exit.In particular,the majority of the present owners of EpicEnergy(“Epic”)have indicated a desireto exit their investment.Epics assets includethe Dampier to Bunbury natural gas pipelineand the Pilbara East pipeline in WesternAustralia;the Moomba to Adela
52、ide pipelinein South Australia and the South WestQueensland pipeline in Queensland.A formal sales process should shortly beginto offer the Epic assets publicly and APA willbe pursuing the assets strongly but sensibly.Several minority interest pipeline ownersare considering divestiture.APA hasappoint
53、ed advisers and commenced a duediligence process in preparation for lodgingbids for the Epic assets and other minorityinterests as opportunities emerge.2002 IssuesA number of key industry and policy issuesrelevant to the longer term success of APA,outlined in the 2002 Annual Report,havebeen addresse
54、d during the past financialyear.Some success has been achieved.However,given the size and complexityof some of these issues,work will continueon them throughout the ensuing years.Gas Supply to South East AustraliaA new major natural gas supplyto complement the existing CooperEromanga Basin productio
55、n remainsa primary strategic issue for APA.The PapuaNew Guinea(“PNG”)gas producers continueto seek sufficient foundation customers towarrant development of the gas productionand treatment facilities in PNG and a gaspipeline into Australia and down to Moomba.They have not yet succeeded in this task.D
56、elivery of Timor Sea gas to south eastAustralian markets also appears to have lostmomentum.Indications are that the quantityof gas that would be available for south eastAustralian markets,after contracts for exportliquified natural gas and the NorthernTerritory market needs have been satisfied,is in
57、sufficient to underpin the developmentof a natural gas pipeline to Moomba.Additional discoveries and developmentare necessary.In Western Australia,there have beenpositive signs that the North West Shelfproducers and the Western AustralianGovernment agree on the developmentpotential of a trans-Austra
58、lian pipeline.It is possible that south and east Australiacould be supplied by North West Shelfgas within the next decade.Exploration continues in the hydrocarbonprovinces of Victoria.The imminentdevelopment of offshore Otway and Yollafields will assist in preventing a shortfall,but this is seen as
59、a stop-gap measure.In Queensland,APA is encouraged by thedevelopment of CBM as a complement tonatural gas.Our confidence about thispotential source of gas has increased withAGL contracting to acquire quantities of CBMfrom Queensland coupled with thetechnological improvements in deliverability.Austra
60、lian Pipeline Trust Annual Report 2003While we still believe that northern gas willeventually be brought to market,it is clearthat the necessary foundation loads andincentives to underpin the capital required tomake the dream a reality,are still not present.National Energy PolicyThe Minister for Ind
61、ustry,Tourism andResources,the Honourable Ian Macfarlane,has now announced the central principlesof a national energy policy which includedreference to the revision and administrationof the National Gas Access Code(“Code”).The Productivity Commission has beenappointed by the Minister to undertakea r
62、evision of the Code and terms of referencefor that review(“Inquiry”)have beenpublished.APA is active together with theAustralian Pipeline Industry and AustralianGas Associations,in representations to theInquiry with the objective of improving thequality,and reducing the cost,of regulationof natural
63、gas transmission.The terms of reference for the Inquiryare broad and provide a unique opportunityfor the environmental and economic benefitsof natural gas to be well understoodby the Productivity Commission.The Productivity Commission has set downa date in early September 2003 to beginhearings,and e
64、xpects to complete its workby June 2004.Industry is arguing for a national energypolicy which provides the correct incentivesfor investment in greenfields projects,as wellas delivering both the environmental benefitsand the long-term positioning of natural gasin Australias energy mix.Regulatory Issu
65、esOur regulatory system continues to hinderthe development of the gas transmissionindustry.The cost of meeting the ever-increasing demands of regulation grows withthe negative impact on business becomingmore pronounced.We are still awaiting a satisfactory outcometo our request for revocation of cove
66、rageof the MSP under the Code.The NationalCompetition Council(“NCC”)has recommended coverage of the MSP,notwithstanding that the Duke Energy ownedEastern Gas Pipeline,which operates in directcompetition with the MSP,is not subject to theCode.We consider that our case is compelling,and believe the NC
67、C arguments are flawed.The NCCs recommendation has been withthe Minister since November 2002.We awaithis decision before considering whetherfurther action is necessary in this matter.In Queensland,the NCC has recommendedto the Honourable Ian Campbell,Parliamentary Secretary to the Treasurer,that the
68、 agreements between the Stateof Queensland and APA subsidiarieson the Carpentaria Gas and Romato Brisbane Pipelines have resultedin“ineffective regimes.Both the Queensland Government and APAdisagree strongly with the NCC position.We believe that the effectiveness of thoseregimes will be fully explor
69、ed by theProductivity Commission in its Inquiry intothe application of the Code as it appliesto gas transmission.In Western Australia,we await a further draftdetermination under the Code on theGoldfields Gas Transmission Pipeline(“GGT”).In its first draft determination,the WesternAustralian Office o
70、f Gas Access Regulation(“OffGAR”)did not take into account certainconditions in the State Agreement.These weredesigned to protect the interests of the ownersof the pipeline from the commercial impact ofthe implementation of the Code.Followinga landmark Supreme Court decision in favourof Epic,OffGAR
71、has decided to issue anotherdraft determination on GGT.As a result,litigation which GGT joint venturers hadcommenced to protect their interests underthe State Agreement,has been deferredpending OffGARs revised draft determination.Building the Base for Natural Gas UsageThe National Electricity Market
72、 ManagementCompany report,released in July 2003,notesthat strong growth in demand is leadingto declining power reserves acrossall main regions.As recently as July 2003,the nationalbroadsheets were outlining the likely shortfallin power generation and rising power pricesto consumers.While coal-fired
73、power generationis one method of addressing the shortfall,we are all aware of the environmental costof carbon dioxide emissions.Natural gasprovides a more acceptable alternative,but needs a policy environment designedto allow it to compete against the relativelycheap cost of coal.As we said in the 2
74、002 Annual Report,an effective energy policy will provide theimpetus for the delivery of new suppliesof natural gas and for the market confidencenecessary for significant investmentin pipeline infrastructure to take place.Australian Government initiatives announcedby the Honourable Ian Macfarlane,ha
75、ve ledto the Council of Australian Governmentsconsidering a number of energyreform matters.APA supports the Australian Governmentsinitiatives to address the lack of effectivenational energy policy.It is hoped that earlyresolution will enable the nation to moveexpeditiously forward to a sensibleand p
76、ractical regime.07James K McDonald FAICDManaging Director Executive DirectorRead Mr McDonalds particulars with theDirectors Report on page 14.Kevin F Dixon BE(Elec),FIEAust General Manager,Strategic PlanningMr Dixon is responsible for developingmedium and long term strategies of the Trustto ensure i
77、t remains the leading natural gastransmission business in Australia.He has hadvarious management and board roles in theenergy industry including over 20 years withEsso Australia.Mr Dixon is a Fellow of theInstitution of Engineers,Australia.Graeme N Williams CPAChief Financial OfficerMr Williams is r
78、esponsible for the financialmanagement of the Trust.This includesaccounting,treasury and taxation functions.Mr Williams joined APA with 30 yearsaccounting experience,including 11 yearsin public accounting.Prior to joining APA,Mr Williams was Chief Financial Officerand Executive Director of LucentTec
79、hnologies Australia Pty Limited and hadspent eight years as Chief Financial Officerand Company Secretary of JNATelecommunications Limited.Michael J McCormackBSurv,GradDipEng,MBA,FAICDGeneral Manager,CommercialMr McCormack is responsible for thecommercial performance of APA whichincludes marketing,co
80、ntract management,regulatory affairs,capacity management andacquisitions.Mr McCormack has extensivesenior management experience in all aspectsof the gas transmission business,includingoperations and project development andin particular dealing with the Australiangas pipeline regulatory environment.M
81、r McCormack holds office in various jointventure committees and subsidiary boards.Prior to joining APA,Mr McCormack wasresponsible for regulatory managementof AGLs pipelines.Austin J V James LLBCompany Secretary/General Manager,CorporateMr James is responsible for the managementof corporate services
82、 functions includingpublic and unitholder relations,legal services,and administration,and is also the CompanySecretary of the responsible entity,AustralianPipeline Limited.Mr James has substantialexperience in corporate,legal and regulatoryroles.Mr James has been admittedto the Supreme Court of New
83、South Walesas a barrister.the management teamAustralian Pipeline Trust Annual Report 200308Kevin Dixon,Graeme Williams,Jim McDonald,Michael McCormack and Austin James.Committed to building an enduring and profitable business for our unitholders.annual financials contentsAustralian Pipeline Trust(ARS
84、N 091 678 778)andcontrolled entitiesAnnual Financial Report for theFinancial Year ended 30 June 2003corporate governance9directors report13statement of financial performance22statement of financial position23statement of cash flows24notes to the financial statements 25directors declaration52independ
85、ent audit report53additional stock exchange information54unitholder information55Australian Pipeline Trust Annual Report 2003The directors of Australian PipelineLimited(“responsible entity”)areresponsible for the corporate governancepractices of Australian Pipeline Trust(“APA”or“Trust”)and its contr
86、olledentities(together“consolidated entity”).This statement sets out the main corporategovernance practices that were inoperation throughout the financial yearor as indicated.In the light of the bestpractice recommendations released bythe Australian Stock Exchange(“ASX”)in March 2003,APA is undertak
87、ingan extensive review of its corporategovernance framework to ensure thatit addresses all best practicerecommendations.Duties of the Responsible EntityThe primary duties and obligations of theresponsible entity include:Gexercising its powers and performing itsfunctions under the constitution of APA
88、(“constitution”)dated 18 February 2000,as amended,diligently and in the bestinterest of unitholders;and Gensuring that the business of APA iscarried on and conducted in a properand efficient manner,with appropriaterisk management controls.The responsible entity fulfils its primaryduties and obligati
89、ons through theoperation of a suitably qualified boardof directors(“board”or“directors”),professional executive managementand an internal control framework.Thereis a clear distinction between the rolesand responsibilities of the board andexecutive management.The Board of DirectorsResponsibilitiesThe
90、 board is accountable to unitholdersfor the business and affairs of theconsolidated entity.Specifically,the boardsets the strategic direction of theconsolidated entity,establishes financialand non-financial goals for management,reviews the performance of the managingdirector and senior executives,an
91、densures that unitholders funds areprudently safeguarded.The directors ofthe responsible entity are under a fiduciaryduty to unitholders to act in unitholdersbest interests in relation to decisionsaffecting APA when they are voting as amember of the board.Day to day management of theconsolidated ent
92、itys affairs and theimplementation of the corporate strategyand policy initiatives are delegated by theboard to the managing director and seniorexecutives.Composition of the BoardThe board consists of seven directors.Sixof these directors,including the chairmanof the board,are non-executive director
93、s,with the managing director being anexecutive director.Directors are appointedby a majority vote of the board whichis ratified by the shareholders of theresponsible entity.Selection as a directoris based on skills,qualifications andexperience.The names and particularsof the directors and their atte
94、ndance atmeetings during the financial year are setout in the Directors Report on pages 13,14 and 19 respectively.09corporate governancecorporate governance Australian Pipeline Trust Annual Report 200310Directors IndependenceThe board is comprised of a majority ofindependent directors as defined und
95、er theCorporations Act 2001.APA has a policy toensure that matters which involve unitholderswith a significant interest,are addressed ina manner which is in the best interests of allunitholders,and which excludes interestedparties from the decision-making process.Entities connected with Mr L J Fisk
96、andMr J A Fletcher had business dealings withthe consolidated entity during the financialyear as described in Note 38 to the financialstatements.In accordance with board policy,the directors concerned declared theirinterests in those dealings with APA and tookno part in the decisions relating to the
97、m.Independent Professional AdviceWith the prior approval of the chairman,eachdirector has the right to seek independentlegal and other professional advice at APAsexpense concerning any aspect of APAsoperations or undertakings in order to fulfiltheir duties and responsibilities as directors.Conflict
98、of InterestPolicies exist to ensure that any conflictof interest which a director,officer or seniorexecutive may have in a transaction or matterin which APA is involved is disclosed andconsidered by the board prior to thetransaction or matter being determined.Board CommitteesThe board has establishe
99、d a number ofcommittees to assist in the execution of itsduties and to allow detailed consideration ofcomplex issues.The current committees areAudit and Risk Management,Remunerationand Nominations.Each committee iscomprised of non-executive directors andthe committee structure and membershipare revi
100、ewed on an on-going basis.TheNominations Committee was formed duringthe current financial year to recommendappointments of the independent chairmanand directors,managing director/chiefexecutive officer and chief financial officer.The Nominations Committee meets on a“needs”basis.Minutes of committee
101、meetings are tabled atthe immediately subsequent board meeting.The member details and responsibilities ofeach committee are discussed below.Audit and Risk Management CommitteeThe board has established an Audit and RiskManagement Committee(“committee”)consisting of three non-executive directors(a maj
102、ority of whom are independent).The current members of the committee are:Mr R J Wright(chairman);Mr J A Fletcher;andMr T C Ford.The managing director,chief financial officer,company secretary and the external auditorattend meetings at the discretion of thecommittee.The committee held 5 meetingsduring
103、 the financial year.The details ofmeetings attended by each member is set outin the Directors Report on page 19.The responsibilities of the committee are to:(a)recommend to the board theappointment of the external auditorsand their fees;(b)review and/or evaluate:Gthe audit plan of the external audit
104、or;Gthe performance of the external auditor;Gthe provision of non-audit servicesby the external auditor,includingthe quantum of fees and the typesof activities performed;Gthe effectiveness of the internal reviewprocesses;Gthe management letters from the externalauditor and managements responses;Gthe
105、 adequacy and effectiveness of thereporting and accounting controls of theconsolidated entity;Gthe financial reports to be made tounitholders and/or the public priorto their release;Gthe consolidated entitys exposureto business risks;Greports from management,thecompliance service provider and/or the
106、external auditor concerning anysignificant regulatory,accounting orreporting development to assesspotential financial reporting issues;Gthe adequacy of risk managementstrategies in relation to the maintenance,operations or replacement of assetsof the consolidated entity and makerecommendations to th
107、e board;Gthe adequacy of risk managementstrategies in relation to any statutoryor policy requirements,includingenvironment,and occupational healthand safety,and make recommendationsto the board;(c)approve and recommend acceptance tothe board of:Gall significant accounting policy changes;Gthe consoli
108、dated entitys taxationposition;Ghalf yearly and annual financialstatements;(d)determine that no restrictions are beingplaced upon either the internal reviewprocesses or the external auditor;(e)monitor the standard of corporateconduct in areas such as arms lengthdealings and likely conflicts of inter
109、est;(f)direct any special projects oninvestigations deemed necessaryby the board;and(g)perform other duties as directedby the board,from time to time.Australian Pipeline Trust Annual Report 2003Remuneration CommitteeThe board has established a RemunerationCommittee(“committee”)consisting of threenon
110、-executive directors(a majority of whomare independent).The current members ofthe committee are:Mr G H Bennett(chairman);Mr L J Fisk;andMr M Muhammad.The managing director and companysecretary attend at the discretion of thecommittee.The primary functions of the committee are to:(a)review and recomm
111、end to the board:Gthe remuneration of the directors of theresponsible entity;Gthe remuneration for the managingdirector;Gthe remuneration for the executivesof the consolidated entity;Gproposals for the issue of units to staff;Gproposals for executive unit plans andother long term incentive programs;
112、Gproposals for other reward initiativesincluding incentive plans for themanaging director,executives and otherstaff of the consolidated entity;Gnew superannuation plans or amendmentsto existing superannuation plans;Gthe succession plans for the directreports and other positions considered tobe of co
113、rporate significance periodically;Gemployment contracts and lettersof appointment in accordance with policyand prevailing industrial relationslegislation;(b)keep abreast of all human resource policyinitiatives affecting the basis and natureof all employees relationships with theconsolidated entity;a
114、nd(c)perform other duties as directed by theboard,from time to time.The committee may seek independent adviceon any matter brought to its attention forreview.The managing director is invitedto the committee meetings,as requiredto discuss direct reports performanceand remuneration packages.There were
115、 5 meetings of the committeeduring the financial year.The details ofattendance by committee members are setout on page 19 of the Directors Report.The details of directors and executivesremuneration are set out in the DirectorsReport on pages 20 and 21 and Note 36to the financial statements.Nominatio
116、ns CommitteeThe board has established a NominationsCommittee(“committee”)consisting of threenon-executive directors(a majority of whomare independent).The current membersof the committee are:Mr G H Bennett(chairman);Mr L J Fisk;andMr M Muhammad.The terms of reference of the committee are to:(a)revie
117、w and make recommendations tothe board on the composition of theboard and the criteria for boardmembership;(b)ensure that a proper succession planis in place and consider and nominatea panel of candidates with appropriateexpertise and experience for thepositions of chairman,independentdirectors,mana
118、ging director/chiefexecutive officer and chief financialofficer for consideration by the board;(c)recommend to the board the termsof appointment of any proposed newnon-executive director where considerednecessary;(d)review the membership of othercommittees and make recommendationsto the board;(e)con
119、sider and nominate a panel ofcandidates with appropriate expertiseand experience for the referencedpositions to be considered by the board;and(f)perform other related tasks as directedby the board,from time to time.The committee met once during the pastfinancial year,and the meeting was attendedby a
120、ll members.Risk ManagementA system of internal controls in relationto the operations of APA is set out in thecompliance plan of the responsible entity.The compliance plan provides a systemof regular reporting on the financial,management and operational systems of APAand the responsible entity to the
121、 board.Thecompliance plan is reviewed on an on-goingbasis by an external compliance manager andis audited annually in accordance with theCorporations Act 2001.In addition,the boardhas delegated authority to the Audit and RiskManagement Committee to investigate waysto improve existing risk management
122、practices.External AuditorThe board is required to appoint an externalauditor for APA for the purposes of auditingthe reports required under the constitutionand the Corporations Act 2001.The Audit and Risk Management Committeemonitors the adequacy of the external auditarrangements to ensure that the
123、y complywith the requirements of the constitutionand the Corporations Act 2001.11corporate governance Australian Pipeline Trust Annual Report 200312APA has a policy which prohibits,unlesspreviously authorised by the chairman of theAudit and Risk Management Committee,theengagement of its external aud
124、itor to performnon-audit related services on which it may berequested to offer an opinion at a later date.Continuous DisclosureA continuous disclosure regime operateswithin APA and throughout the consolidatedentity.The company secretary is thenominated continuous disclosure officerand reports to the
125、 board on matters notifiedto the ASX.In the event a decision is madenot to notify ASX of a particular event ordevelopment,the reason for non-notificationis advised to the board.Directors receivecopies of all announcements immediatelyafter notification to ASX.A quarterly report is required to be made
126、to the board identifying all matters whichrequired ASX notifications,or which wereconsidered not to require disclosure,duringthe previous quarter.Unitholder CommunicationUnitholder ReportingThe responsible entity aims to ensure thatunitholders are fully informed of all majordevelopments affecting AP
127、As state of affairs.Information is communicated to unitholdersthrough annual reports,unitholdernewsletters,unitholder informationmeetings,ASX releases in compliance withcontinuous disclosure policies,andmaintenance of a website.All informationdisclosed to ASX is posted to the website.Material used i
128、n analysts briefings on aspectsof the consolidated entitys operationsis released to ASX and posted onAPAs website.Unitholder MeetingsBecause APA is a registered ManagedInvestment Scheme under the ManagedInvestments Act 1998 rather than a listedpublic company,it is not obliged to holdan annual genera
129、l meeting unless requiredto do so by the constitution,or as requiredby unitholders under Part 2G.4 Division 1of the Corporations Act 2001.Theconstitution does not require an annualunitholder information meeting to be held,but allows the responsible entity to convenea meeting at any time.APA does not
130、 have a board of directors,rather the responsible entity has the powerto call meetings of the unitholders and mustact at all times in the interests of theunitholders.Appointment and removalof the directors is a matter for theshareholders of the responsible entity ratherthan unitholders of APA.APA wi
131、ll hold a unitholder meeting to discussits annual results and general strategy onTuesday 21 October 2003 at the AvillionHotel Sydney,at 11.30am.The responsible entity encourages fullparticipation of unitholders at the unitholdermeeting to enable a high level ofunderstanding and identification with A
132、PAsstrategies and goals.Unit Dealings by Directors or StaffPersons are not required to hold units in APAin order to be eligible to act as a director.A formal policy on unit dealings is in placeso that directors and staff may buy or sellAPA units only during the four week periodfollowing the release
133、of the half year resultsand the full year results unless exceptionalcircumstances apply.In any case,directorsand staff are precluded from buying or sellingunits at any time if they are aware of anyprice-sensitive information which has notbeen made public.The policy reinforcesthe prohibition on insid
134、er trading containedin the Corporations Act 2001.The currentunitholdings of directors are shown in theDirectors Report on page 20 and in Note 38to the financial statements.Corporate ReportingThe managing director has certified to theboard that the consolidated entitys financialreports are complete a
135、nd present a true andfair view,in all material respects,of thefinancial condition and operational resultsof the consolidated entity.The abovecertification is based on signedrepresentations by senior officers includingthe chief financial officer,and foundedon a sound internal control and riskmanageme
136、nt system which implementsthe policies adopted by the board.Corporate PracticeAPA maintains the highest standardsof corporate practice and conduct.Each director of the responsible entityand all executives,managers and employeesof the consolidated entity must satisfy thosestandards.As part of the on-
137、going corporategovernance review,a formalised code ofconduct applying to the responsible entity,its directors,and executives and officersof APA,is being prepared.Australian Pipeline Trust Annual Report 2003The directors of Australian PipelineLimited(“responsible entity”)submitherewith the annual fin
138、ancial report ofAustralian Pipeline Trust(“APA”or“Trust”)and its controlled entities(together“consolidated entity”)for the financial yearended 30 June 2003.In order to complywith the provisions of the CorporationsAct 2001,the directors report as follows.The names and particulars of the directorsof t
139、he responsible entity during or sincethe end of the financial year are:Mr G H Bennett FCAIndependent Chairman Appointed 11 February 2000Mr George Bennett is a director with almost40 years experience at accounting servicesfirm KPMG.Mr Bennett retired as NationalExecutive Chairman of KPMG and Chairman
140、of the KPMG Asia Pacific Board in 1993.Hisother directorships include Tempo ServicesLimited,Bank of Tokyo-Mitsubishi(Australia)Limited,Brazin Limited,Fantastic HoldingsLimited,Macquarie Leisure ManagementLimited,Macquarie Office ManagementLimited and was a director of Omni LeisureOperations Limited(
141、resigned on 22 July 2003).Mr Bennett is the Chairman of theRemuneration Committee and NominationsCommittee.Mr L J Fisk FCICS FCPA FAICDNon-Executive Director Appointed 11 February 2000Mr Les Fisk is Group Manager CorporateServices and Company Secretary with TheAustralian Gas Light Company(“AGL”).Hew
142、as appointed to this position in 1997 havingjoined AGL as Company Secretary in 1995.Prior to joining AGL,Mr Fisk had a 25 yearcareer with Qantas Airways Limited,culminating in the position of Director ofCorporate Services and Company Secretary.Mr Fisk is a director of Elgas Limited.Mr Fiskis a Fello
143、w of Chartered Institute of CompanySecretaries,a Fellow of CPA Australia anda Fellow of Australian Institute ofCompany Directors.Mr Fisk is a member of the RemunerationCommittee and the Nominations Committee.Mr J A Fletcher BSc MBANon-Executive Director Appointed 11 February 2000Mr John Fletcher is
144、Group ManagerInvestments with AGL.He has held thisposition since March 2003,prior to whichhe held a number of senior positionsincluding Chief Financial Officer,GroupController and Treasurer.Mr Fletcher joinedAGL in 1979 having previously workedin South Africa and Englandin various capacities.Mr Flet
145、cher was a director of Elgas Limited andNatural Gas Corporation Holdings Limited.Mr Fletcher is a member of the Audit andRisk Management Committee.Mr T C Ford FAICDIndependent Non-Executive Director Appointed 11 February 2000Mr Tom Ford is an investment banker andconsultant,with over 30 years experi
146、encein stockbroking and banking.Mr Fordis Chairman of RESIMAC Limited.He is alsoa director of Amalgamated Holdings Limitedand Resolute Mining Limited.Mr Ford is a Fellow of Australian Instituteof Company Directors,a member of Financeand Treasury Association Limited andon the committee of Australian
147、BusinessEconomists.Mr Ford retired in 1991 as aSenior Executive Director of Capel CourtCorporation Limited and as an ExecutiveDirector of Capel Court Securities Limited.Mr Ford is a member of the Audit and RiskManagement Committee.13directors reportMr G H BennettMr L J FiskMr J A FletcherMr T C Ford
148、directors report 14Mr M Muhammad MScIndependent Non-Executive Director Appointed 8 March 2000Mr Muri Muhammad retired from Petronas inAugust 2002 and is currently serving as Adviser-Gas Business in the Presidents Office(Petronas).He brings to the responsible entity,30 yearsexperience in the chemical
149、s and petroleumindustry as well as expertise in the domestic andinternational gas transmission and distribution,gasutilisation,co-generation and conversionbusinesses where he has held various seniorexecutive positions.He was appointed Vice President for Gas Businessin 1998 until his retirement in Au
150、gust 2002.As Vice President Gas Business,he was involvedin Petronas gas development projects in Iran,India,Algeria,Myanmar,Pakistan,Vietnam andChina.He has held several directorships includingChairman of the board of Petronas subsidiariesand associate companies in Malaysia and abroad.He has been inv
151、olved in district coolingcogeneration;pipeline gas transmission anddistribution;liquefied natural gas production andmarketing;and urea/ammonia production andmarketing.He currently sits on the board ofTransportadora de Gas Del Norte(Argentina)andis Chairman of Trans-Thai Malaysia(Thailand).Mr Muhamma
152、d is a member of the RemunerationCommittee and the Nominations Committee.Mr R J Wright B Comm FCPAIndependent Non-Executive Director Appointed 11 February 2000Mr Robert Wright has 30 years financial managementexperience.He has held a number of Chief FinancialOfficer positions including Finance Direc
153、tor of DavidJones Limited from 1990 to 1999.Between 1991 and1995,he was also an Executive Director of TheAdelaide Steamship Company Limited,and was adirector of Tooth&Co Limited,Industrial EquityLimited,Woolworths Limited and NationalConsolidated Limited.Mr Wright sits on the boardof Harris Scarfe A
154、ustralia Pty Limited.Mr Wright is the Chairman of the Audit and RiskManagement Committee.Mr Ng Chong Wah BEAlternate Non-Executive Director(Alternate for Mr M Muhammad)Appointed8 August 2000Mr Ng Chong Wah graduated in ChemicalEngineering from the University of Malaya,Malaysia.Mr Ng Chong Wah retire
155、d from Petronasin June 2003 after being employed in many seniorpositions over almost 30 years.Mr J K McDonald FAICDManaging Director Executive Director Appointed 3 June 2002 Mr James McDonald carries overall responsibilityfor the management team.Mr McDonaldhas extensive experience in general managem
156、entin the gas transmission industry in Australia.He joined APA from AGL,where he was DivisionalGeneral Manager Pipeline Operations in Australia.Mr McDonalds previous roles within AGLincluded General Manager East Australian PipelineLimited,and General Manager NT Gas Pty Limited.Prior to his role with
157、 AGL,Mr McDonald spent15 years with Esso Australias GippslandProduction Group,including several yearsin senior management positions.Mr McDonald is a Fellow of Australian Instituteof Company Directors.He was President andis a member of the Pipeline Owners Committeeof Australian Pipeline Industry Asso
158、ciation(“APIA”),having served as past chairman of theEnvironment Affairs Committee of APIA.He wasalso a member of the board of Australian GasAssociation(“AGA”)and Australian Council forInfrastructure Development.He was past chairmanof the Gas Transmission Committee of AGA.Mr M MuhammadMr R J WrightM
159、r Ng Chong WahMr J K McDonaldAustralian Pipeline Trust Annual Report 2003Principal ActivitiesThe principal activity of APA during the course of the financial year was the ownership of gas transmission pipelines located throughout Australia.The consolidated entity undertook the sale of transportation
160、 and related services to the producers,consumers and aggregators of gas throughthese gas transmission pipelines.There has been no significant change in the activities of the consolidated entity during the financial year.Review of OperationsDistribution to UnitholdersThe directors declared a final un
161、franked income distribution of 6.5 cents per unit(“cpu”)for the financial year ended 30 June 2003 on 3 September2003.This takes the total distribution for the financial year to 21.5 cpu,which is consistent with last financial year.The income component of thedistributions has increased from 15.5 cpu
162、in the the previous corresponding period(“pcp”)to 17 cpu,an increase of 9.68%,which reflects thehigher earnings during the financial year.As previously indicated,APA is not expected to generate significant franking credits until after 2004financial year.Financial PerformanceAPA has produced another
163、satisfactory full year result with net profit after tax and minorities of$41.046 million,an increase of$3.945 million,10.63%,on the pcp.Total revenue of$271.912 million was$16.500 million,6.46%,above the pcp.Pipeline revenue which excludes Other pipelinerevenue,which is in the nature of passthrough
164、revenue,was$189.210 million,up$8.789 million,4.87%,on the pcp.The full year result reflects additional revenue from haulage contracts on existing pipelines,expansion programs and acquisitions undertaken by APA.HighlightsA summary of the major achievements during the financial year is set out below:G
165、construction of looping stage 6 on Roma to Brisbane Pipeline(“RBP”)in Queensland to satisfy growing customer demand.The looping wascommissioned in October 2002;Gnegotiated innovative interruptible and firm haulage contracts with existing customers on the RBP to increase utilisation of the pipeline;G
166、installation of a compressor on the Carpentaria Gas Pipeline(“CGP”)in Queensland to increase throughput capacity on the pipeline.The compressor was commissioned in December 2002;Gacquisition of TransAlta Energy Corporations interest in Goldfields Gas Transmission(“GGT”)pipeline in Western Australia
167、was completedin April 2003.This acquisition takes APAs effective ownership in GGT from 39.7%to 48.5%;and Gagreement reached with AGL Wholesale Gas Limited to transport gas in the Moomba to Sydney Pipeline(“MSP”)post 2006,in additionto quantities previously agreed under the Gas Transportation Deed(“G
168、TD”).15directors report Australian Pipeline Trust Annual Report 200316The following table provides a summary of key financial data,as applicable to the current financial year:Year EndedYear EndedChange Compared 30 Jun 0330 Jun 02to 2002$m$m$m%Pipeline revenue189.210180.4218.7894.87Other pipeline rev
169、enue67.99061.0536.93711.36Other revenue14.71213.9380.7745.55Total revenue271.912 255.41216.5006.46EBITDA137.807132.2275.5804.22EBIT113.724105.8897.8357.40Pre-tax profit65.12859.0976.03110.21Income tax expense(23.804)(21.723)(2.081)9.58Operating profit after tax and minorities41.04637.1013.94510.63Ea
170、rnings per unit16.82c15.21c1.61c10.63RevenueThe increase in Pipeline revenue was a result of:Gincreased revenue on the RBP during the year,largely reflecting the first full year impact of the looping stage 5 expansion;Ghigher revenue on the CGP due to increased throughput to customers;Gthe equity pr
171、ofits from GGT investment was$13.546 million,an increase of$2.608 million,23.84%,over pcp on account of increasedunderlying profits and increased level of ownership of the pipeline;andGincrease in transportation revenue from the railway sleeper factories in the Northern Territory.During the financia
172、l year,APA received an amount of$1.886 million as settlement for the termination of contract on the Westlime lateral in WesternAustralia.The settlement with AGL Gas Trading Pty Limited,the customer on the lateral,was reached so as to take account of all costs associatedwith its closure,including the
173、 write-down of$1.480 million on asset value.The transaction had no impact on the consolidated entitys reportedprofit.Excluding the revenue from the settlement,Pipeline revenue increased to$187.324 million,up by$6.903 million,or 3.83%from the pcp.The above increases in revenue were offset by the effe
174、ct of predicted loss of revenue on the MSP,due to the impact of the Eastern Gas Pipeline(the competing pipeline in the Sydney and Canberra markets),and the temporary closure of the vanadium mine at Windamurra on the Mid WestPipeline.Prior to the closure,the mine was the largest customer on the pipel
175、ine.APA is confident that the rich mineralisation of the area willproduce additional load from future mining developments.Accordingly,no adjustment to the asset value of the Mid West Pipeline is considerednecessary at this stage.ExpensesPipeline operation and management expenses of$42.936 million in
176、creased by$2.440 million or 6.03%over the pcp,due to increases in insurancecosts and additional expenses associated with operations and management of capital expansions.Depreciation and amortisation expenses of$24.083 million were lower by$2.255 million or 8.56%,compared to the pcp due to lower thro
177、ughputon the MSP as a result of a mild winter,and an upward revision in lifetime throughput on the RBP following completion of looping stages 5 and 6.The net interest and borrowing expense was$1.804 million higher than the pcp due to general increase in interest rates,higher borrowing to fundcapital
178、 expansion projects and the expiry of certain hedges which were at favourable rates.The effective tax rate(ie.tax expense calculated as a percentage of pre-tax profit)of 36.55%is consistent with the pcp.The effective tax rateis higher than corporate tax rate of 30%as a consequence of the non-deducti
179、bility of interest on infrastructure bonds and certain depreciationand amortisation charges,for tax purposes.Australian Pipeline Trust Annual Report 2003BorrowingsAt 30 June 2003,the principal source of debt funding for APA was the unsecured bank borrowing of$758 million in term and revolving facili
180、ties.In order to limit the volatility to earnings that could be caused by fluctuations to interest rates,APA utilises derivative financial instruments,particularly interest rate swap contracts.As at end of the financial year,92.81%of the term loan facility was hedged.The gearing ratio was 63.32%,whi
181、ch is consistent with the business profile of APA ie.involvement with long-life infrastructure assets.TaxA significant item of liability in APAs balance sheet is Deferred tax liabilities,which represents the potential future tax payments resulting fromaccelerated tax depreciation compared to account
182、ing depreciation on transmission pipelines.Changes to tax legislation can have a material impacton future investment and cash flows of APA.In view of its significance,APA closely monitors and maintains dialogue with Government in relationto the changes that occur to the tax regime on long-life asset
183、s.As a part of the Business Tax Reform,the Australian Government has introduced consolidated income taxation for corporate groups,such as APA.The reform,referred to as the“Tax Consolidation System”,has been enacted through a series of successive legislation.Entry into the consolidationsystem is opti
184、onal.APA is assessing the impact of the legislation and will make a decision on joining the tax grouping once the impact study iscompleted.Earnings per Unit Earnings per unit increased by 10.63%to 16.82 cpu,reflecting increased profitability.Cash FlowThe cash flow from operating activities of$90.589
185、 million increased by$5.503 million or 6.47%over the pcp.This is in line with the increase inearnings before interest,tax,depreciation and amortisation.During the financial year,$41.037 million was invested in additions to plant and equipment and acquisitions.A further$52.460 million was paid indist
186、ributions to unitholders of APA.RegulatoryDiscussion with and submissions to governments and regulators on regulation of gas transmission pipelines,continued to have a significant impacton APAs resources.Key regulatory matters addressed during the financial year included:Greview of the National Gas
187、Access Code by the Productivity Commission with a final report due for release in June 2004.This review wasforeshadowed in the Review of Operations in last financial years annual report.APA welcomes the opportunity to participate in the reviewprocess,which is critical to ensuring that the future reg
188、ulatory environment is conducive to investment in gas transmission pipelines;Gsubmission on revocation of coverage over the MSP system following the Australian Competition Tribunals decision to revoke regulatorycoverage over the competing Eastern Gas Pipeline.In December 2002,the National Competitio
189、n Council made a final recommendationto the Minister for Industry,Tourism and Resources,the Honourable Ian Macfarlane,that the MSP should remain covered.At the timeof writing,the Minister was still considering the recommendation,with a decision expected in the near future;Grecommendation by the Nati
190、onal Competition Council to the Honourable Ian Campbell,Parliamentary Secretary to the Treasurer,thatthe Queensland Gas Access Regime is“not effective”.If the recommendation is upheld,it may override the existing contractual arrangementson the RBP and CGP.Both the Queensland Government and APA will
191、be vigorously opposing the recommendation;andGlitigation concerning the Western Australian Office of Gas Access Regulation(“OffGAR”),which did not take account of the existence of certainconditions in the State Agreement between the Western Australian Government and GGT in its regulatory review of t
192、he GGT.The StateAgreement was designed to protect the interest of the GGT owners.Litigation has been suspended while the GGT owners await a further draftdetermination by OffGAR.17directors report Australian Pipeline Trust Annual Report 200318InvestmentAlthough the operating outcome achieved during t
193、he current financial year was satisfactory,APA is conscious of the challenges that lie aheadand will actively seek opportunities to enhance unitholder value.APA intends to pursue major acquisitions over the coming financial year which are likely to arise from industry rationalisation.These acquisiti
194、onsare intended to improve profitability and allow for long-term financial growth.Changes 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 to in the financialstatements or notes thereto.Subsequent
195、 EventsThere has not been any matter or circumstance,other than that referred to in the financial statements or notes thereto,that has arisen since the endof the financial year,that has significantly affected,or may significantly affect,the operations of the consolidated entity,the results of thoseo
196、perations,or the state of affairs of the consolidated entity in future financial periods.Future DevelopmentsDisclosure of information regarding likely developments in the operations of the consolidated entity in future financial years and the expectedresults of those operations is likely to result i
197、n unreasonable prejudice to the consolidated entity.Accordingly,this information has not beendisclosed in this report.Environmental RegulationsAll pipeline assets owned by APA are designed,constructed,tested,operated and maintained in accordance with pipeline licences issued by therelevant State and
198、 Territory technical regulators.All licences require compliance with relevant Commonwealth,State and Territory environmentallegislation and Australian standards.The licences also require compliance with the Australian Standard AS2885,Pipelines-Gas and Liquid Petroleum,which has specific requirements
199、for the management 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
200、.In accordance with Part 3 of AS2885,environmental plans satisfying Part B of the codeare in place for all operating pipelines and are managed in accordance with APAs contracts and the terms and conditions of the licences that APAhas been issued.On-going monitoring of these requirements is achieved
201、through an environmental audit process carried out by an accreditedindependent auditor.The board reviews external audit reports and,on a monthly basis,the internal reports prepared relating to environmental issues.No breaches havebeen reported during the financial year and APA has complied fully wit
202、h the environmental management plans that are in place.DistributionsDuring the financial year,the following distributions were made to the unitholders:Relevant PeriodDate PaidIncome DistributionaCapital Distributionper Unit$000per Unit$000(cents)(cents)Final distribution for financial year ended 30
203、June 200230 September 20026.515,8601 July 2002 to 30 September 200220 December 20023.07,3202.04,8801 October 2002 to 31 December 200231 March 20033.07,3202.04,8801 January 2003 to 31 March 200326 June 20034.510,9800.51,220aThe income component of all the above distributions was unfranked.Australian
204、Pipeline Trust Annual Report 2003The final distribution for the financial year ended 30 June 2003,will be 6.5 cpu,comprised entirely of unfranked income distribution.This equatesto a total cash distribution of$15.860 million and will be paid on 25 September 2003.Options GrantedNo options were grante
205、d 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 as a result of the exercise
206、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,the responsible entitys secretary,Mr A J V James,and all executive officer
207、s 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.The contractof insurance prohibits disclosure of the nature of the liability and the amount of the
208、 premium.The responsible entity has not otherwise,during or since the end of 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 auditor.Directors Meet
209、ings The following table sets out the number of directors meetings(including meetings of committees of the directors)held during the financial yearand the number of meetings attended by each director(while they were a director or a committee member).During the financial year,12 boardmeetings(excludi
210、ng 2 sub-committee meetings),5 Remuneration Committee meetings,5 Audit and Risk Management Committee meetings and1 meeting of Nominations Committee were held:Board of DirectorsRemuneration Audit and Risk NominationsCommitteeManagement CommitteeCommitteeDirectorsHeldAttendedHeldAttendedHeldAttendedHe
211、ldAttendedG H Bennett14a135511L J Fisk12105511J A Fletcher121054T C Ford121154M Muhammad12105511R J Wright14a1455Ng Chong Wah 121(alternate for M Muhammad)J K McDonald14a13aincludes 2 sub-committee meetings to approve the financial reports which had been reviewed by the board.19directors report Aust
212、ralian Pipeline Trust Annual Report 200320Directors Unitholdings The following table sets out each directors relevant interest in units of APA or a related body corporate as at the date of this report:DirectorsFully Paid UnitsUnits Acquired Units Disposed of Fully Paid Units as atduring theduring th
213、eas at 30 June 2002Financial Year Financial Year30 June 2003G H Bennett15,00015,000L J Fisk5,0005,000J A Fletcher4,0004,000T C Ford10,00010,000M Muhammad10,00010,000R J Wright10,00010,000Ng Chong Wah2,0002,000J K McDonald15,00015,000There are no contracts to which a director is a party or under whic
214、h the director is entitled to a benefit and that confer a right to call for or deliverinterests in the management investment scheme.Directors and Executives Remuneration The Remuneration Committee reviews the remuneration packages of all directors and executive officers on an annual basis and makesr
215、ecommendations 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 the efficient and effective management of APAs operations,the remuneration committee seeks the advice
216、 of external advisers in connection with the structure of remuneration packages.Remuneration packages contain the following key elements:(a)salary/fees;(b)benefits including the provision of motor vehicle and superannuation benefits;and(c)incentive schemes including performance related bonuses.The f
217、ollowing table discloses the remuneration of the directors of the responsible entity:NameSalary/FeesBenefitsIncentive SchemesTotalNon-Executive DirectorsG H Bennett$90,000$8,100$98,100L J Fisk$45,000$45,000J A Fletcher$45,000$45,000T C Ford$45,000$4,050$49,050M Muhammad$45,000$45,000R J Wright$50,00
218、0$4,500$54,500Ng Chong WahExecutive DirectorJ K McDonald$361,447$139,853$166,950$668,250During the financial year(2003),the Remuneration Committee terminated the retirement benefit program that was instituted for non-executive,non-corporate appointee directors in 2002.The benefits that have already
219、crystallised under the program will now be payable on retirementof the directors.Australian Pipeline Trust Annual Report 2003The Remuneration Committee increased the fees of all the directors by 12.5%over the previous year effective from 1 July 2002.This is the firstincrease in directors fees since
220、the inception of APA in June 2000.Mr Wrights fee was increased by an additional$5,000 in recognition of hisresponsibilities as chairman of the Audit and Risk Management Committee.The following table discloses the remuneration of the 5 highest remunerated executives of the consolidated entity:NameSal
221、ary/FeesBenefitsIncentive SchemesTotalConsolidated EntityG N Williams$199,547$62,837$86,550$348,934M J McCormack$190,756$64,174$75,700$330,630A J V James$203,817$40,182$78,650$322,649K F Dixon$208,631$11,969$71,000$291,600I H Haddowa$150,183$13,027$16,953$180,163aformer General Manager,Technical who
222、 retired on 31 December 2002.Scheme Information in the Financial ReportFees 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 during the
223、 financial year are disclosed in this Directors Reportand Note 38 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 numberof units in APA issued during the financial year,withdrawals from
224、APA during the financial year,and the number of units in APA at the endof the financial year are disclosed in Note 26 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 basisof valuation
225、 is included in Note 1 to the financial statements.Rounding of AmountsAPA is an entity of the kind referred to in Australian Securities and Investments Commission Class Order 98/0100,dated 10 July 1998,andin accordance with that Class Order amounts in the Directors Report and the financial report ar
226、e rounded off to the nearest thousand 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,3 September 200321statement of financial p
227、erformanceAustralian Pipeline Trust Annual Report 200322Consolidated Trust 2003200220032002Note$000$000$000$000Revenue from ordinary activities258,366244,47464,06438,827Share of net profits of joint venture entities accounted for using the equity method13,54610,938Pipeline operation and management e
228、xpenses(42,936)(40,496)Depreciation and amortisation expense(24,083)(26,338)Other pipeline costs(67,990)(61,053)Borrowing costs(62,271)(59,741)(26)(40)Other expenses from ordinary activities(9,504)(8,687)(1,168)(967)Profit from Ordinary Activities before Income Tax Expense265,12859,09762,87037,820In
229、come tax expense relating to ordinary activities4(23,804)(21,723)Profit from Ordinary Activities after Income Tax Expense41,32437,37462,87037,820Net profit attributable to outside equity interests(278)(273)Net Profit Attributable to Unitholders of the Parent Entity41,04637,10162,87037,820Total Chang
230、es in Equity other than those Resulting from Transactions with Unitholders as Owners41,04637,10162,87037,820Earnings per Unit(cents per unit)Earnings used to calculate earnings per unit41,04637,101Basic earnings per unit based on profit from ordinary activities after income tax expense attributable
231、to unitholders of the parent entity(cents)16.8215.21Weighted average number of units(million)on issue used in the calculation of basic earnings per unit 244244Diluted earnings per unit is exactly the same as basic earnings per unit.Notes to the financial statements are included on pages 25 to 51.for
232、 the financial year ended 30 June 2003Australian Pipeline Trust Annual Report 2003Consolidated Trust Note2003200220032002$000$000$000$000Current AssetsCash16,31615,69110495Receivables619,56417,8108786Inventories77566Other81,1851,005Total Current Assets37,14034,572191181Non-Current AssetsReceivables9
233、34253Investments accounted for using the equity method10155,808130,240Other financial assets11487,641475,963Property,plant and equipment121,222,1171,232,010Intangibles137,3528,516Deferred tax assets146,5307,17611Other152,8414,102Total Non-Current Assets1,394,6821,382,297487,642475,964Total Assets1,4
234、31,8221,416,869487,833476,145Current LiabilitiesPayables1651,25549,85318,11717,925Interest-bearing liabilities17218209Current tax liabilities11Provisions 1896117,26615,860Other197,0767,316Total Current Liabilities59,51074,64518,11733,786Non-Current LiabilitiesPayables205,5024,415Interest-bearing lia
235、bilities21760,097756,025Deferred tax liabilities22167,600146,853Provisions23136131Other241,299468Total Non-Current Liabilities929,132903,4775,5024,415Total Liabilities988,642978,12223,61938,201Net Assets443,180438,747464,214437,944EquityContributed equity26426,963437,943426,963437,943Retained profit
236、s2716,19576937,2511Parent Entity Interest443,158438,712464,214437,944Outside equity interests282235Total Equity443,180438,747464,214437,944Notes to the financial statements are included on pages 25 to 51.statement of financial position23as at 30 June 2003statement of cash flowsAustralian Pipeline Tr
237、ust Annual Report 200324Consolidated Trust 2003200220032002Note$000$000$000$000Cash Flows from Operating ActivitiesReceipts from customers270,513267,6351,173988Payments to suppliers and employees(142,872)(148,211)(977)(943)Dividends received12,30110,45062,87037,820Interest received7,4166,9602120Inte
238、rest and other costs of finance paid(54,477)(51,747)(26)(40)Income tax paid(2,292)(1)(1)Net Cash Provided by Operating Activities39(d)90,58985,08663,06037,845Cash Flows from Investing ActivitiesPayment for investments in joint venture entities(24,322)Payment for property,plant and equipment(16,715)(
239、48,783)Proceeds from sale of property,plant and equipment177102Purchase of controlled entities,net of cash acquired39(c)(2,109)(2,109)Net Cash Used in Investing Activities(40,860)(50,790)(2,109)Cash Flows from Financing ActivitiesProceeds from borrowings221,000190,500Repayment of borrowings(217,235)
240、(169,717)Proceeds from repayment of related party receivables15,496Amounts advanced to related parties(10,591)Distributions and dividends paid(52,869)(51,625)(52,460)(51,240)Net Cash Used in Financing Activities(49,104)(30,842)(63,051)(35,744)Net Increase/(Decrease)in Cash Held6253,4549(8)Cash at th
241、e beginning of the financial year15,69112,23795103Cash at the End of the Financial Year39(a)16,31615,69110495Notes to the financial statements are included on pages 25 to 51.for the financial year ended 30 June 2003Australian Pipeline Trust Annual Report 20031.Summary of Accounting PoliciesFinancial
242、 Reporting FrameworkThis financial report is a general purpose financial report which has been prepared in accordance with the constitution,the Corporations Act2001,applicable Accounting Standards and Urgent Issues Group Consensus Views,and complies with other requirements of the law.The financial r
243、eport has been prepared on the basis of historical cost and except where stated,does not take into account changing moneyvalues 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 pol
244、icies are selected and applied in a manner which ensures that the resulting financial information satisfies the conceptsof relevance and reliability,thereby ensuring that the substance of the underlying transactions or other events is reported.The following significant accounting policies have been
245、adopted in the preparation and presentation of the financial report:(a)Principles of ConsolidationThe consolidated financial statements are prepared by combining the financial statements of all the entities that comprise theconsolidated entity,being Australian Pipeline Trust(the parent entity)and it
246、s controlled entities as defined in Accounting StandardAASB 1024“Consolidated Accounts”.A list of controlled entities appears in Note 34.Consistent accounting policies have been employed in the preparation and presentationof the consolidated financial statements.The consolidated financial statements
247、 include the information and results of each controlled entity from the date on which APA obtainscontrol 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 arising withinthe con
248、solidated entity are eliminated in full.(b)PayablesTrade payables and other payables are recognised when the consolidated entity becomes obliged to make future payments resultingfrom the purchase of goods and services.(c)Acquisition of AssetsAssets acquired are recorded at the cost of acquisition,be
249、ing the purchase consideration determined as at the date of acquisitionplus 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 discount
250、ing the amounts payable in the future to their present values as at the dateof acquisition.(d)Interest-Bearing LiabilitiesBank loans and other loans are recorded at an amount equal to the net proceeds received.Interest expense is recognisedon an accrual basis.Ancillary costs incurred in connection w
251、ith the arrangement of interest-bearing liabilities are deferred and amortised over the periodof 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.25for the financi
252、al year ended 30 June 2003notes to the financial statementsnotes to the financial statementsAustralian Pipeline Trust Annual Report 200326(f)DepreciationDepreciation is provided on property,plant and equipment,including freehold buildings but excluding land.Depreciation is calculatedon either a stra
253、ight line or throughput basis depending on the nature of the asset so as to write off the net cost of each asset over itsestimated useful life.Leasehold improvements are depreciated over the period of the lease or estimated useful life,whichever is theshorter,using the straight line method.The follo
254、wing estimated useful lives are used in the calculation of depreciation:Gbuildings50 years;Gcompressorsup to 25 years;Gpipelinesup to 65 years;andGother plant and equipment3 20 years.(g)IntangiblesGoodwill,representing the excess of the cost of acquisition over the fair value of the identifiable net
255、 assets acquired,is amortisedon 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 the contractto which the right relates.(h)Derivative Financial InstrumentsThe consolidated entit
256、y enters into derivative financial instruments including interest rate swap contracts to manage its exposure tointerest rate risk.Gains and losses on interest rate swap contracts are included in the determination of interest expense.Further detailsare disclosed in Note 42.(i)Employee BenefitsProvisi
257、on is made for benefits accruing to employees in respect of wages and salaries,annual leave and long service leave whenit is probable that settlement will be required and they are capable of being measured reliably.Provisions made in respect of wages and salaries,annual leave,and other employee bene
258、fits(long service leave)expectedto be settled within 12 months,are measured at their nominal values using the remuneration rates expected to apply at the timeof settlement.Provisions made in respect of other employee benefits(long service leave)which are not expected to be settled within 12 months a
259、remeasured as the present value of the estimated future cash outflows to be made by the consolidated entity in respect of servicesprovided by employees up to the end of the financial year.(j)Financial Instruments Issued by APATransaction Costs on the Issue of Equity InstrumentsTransaction costs aris
260、ing on the issue of equity instruments are recognised directly in equity as a reduction of the proceeds of theequity instruments to which the costs relate.Transaction costs are the costs that are incurred directly in connection with the issueof those equity instruments and which would not have been
261、incurred had those instruments not been issued.Interest and DistributionsInterest and distributions are classified as expenses or as distributions of profit consistent with the statement of financial positionclassification of the related debt or equity instruments or component parts of compound inst
262、ruments.for the financial year ended 30 June 20031.Summary of Accounting Policies(continued)Australian Pipeline Trust Annual Report 2003(k)Goods and Services TaxRevenues,expenses and assets are recognised net of the amount of goods and services tax(“GST”),except:Gwhere the amount of GST incurred is
263、not recoverable from the taxation authority,it is recognised as part of the cost of acquisitionof an asset or as part of an item of expense;orGfor receivables and payables which are recognised inclusive of GST,except for accrued revenue and accrued expense at balancedate which excludes GST.The net a
264、mount of GST recoverable from,or payable to,the taxation authority is included as part of receivables or payables.GST receivable or GST payable 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
265、of cash flows arising from investingand financing activities which is recoverable from,or payable to,the taxation authority is classified as operating cash flows.(l)Income TaxTax effect accounting principles have been adopted whereby income tax expense has been calculated on pre-tax profit afteradju
266、stment for permanent differences.The tax effect of timing differences,which occur when items are included or allowed forincome tax purposes in a period different to that for accounting,is shown at current taxation rates in deferred tax liabilities anddeferred tax assets,as applicable.(m)InventoriesI
267、nventories are valued at the lower of cost and net realisable value.Costs,including an appropriate portion of fixed and variableoverhead expenses,are assigned to inventory on hand by the method most appropriate to each particular class of inventories,with the majority being valued on a first in firs
268、t out basis.(n)InvestmentsInvestments in controlled entities are recorded at cost.Investments in joint venture entities have been accounted for under the equitymethod in the consolidated financial statements.Other investments are recorded at cost.Dividend revenue is recognised on a receivable basis.
269、Interest revenue is recognised on an accrual basis.(o)Joint VenturesJoint Venture OperationsInterests in joint venture operations are reported in the financial statements by including the consolidated entitys share of assetsemployed in the joint ventures,the share of liabilities incurred in relation
270、 to joint ventures and the share of any expenses incurredin relation to joint ventures in their respective classification categories.Joint Venture EntitiesInterests in joint venture entities,which are not partnerships,are accounted for under the equity method in the consolidated financialstatements
271、and the cost method in APAs financial statements.271.Summary of Accounting Policies(continued)notes to the financial statementsAustralian Pipeline Trust Annual Report 200328(p)Leased AssetsLeased assets classified as finance leases are capitalised.The amount initially brought to account is the prese
272、nt value of minimum leasepayments.A finance lease is one which effectively transfers from the lessor to the lessee substantially all the risks and benefits incidentalto ownership of the leased property.Capitalised leased assets are amortised on a straight line basis over the estimated useful life of
273、 the asset.Finance lease payments are allocated between interest 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 the beginningof each lease payment per
274、iod.Operating lease payments are charged as an expense in the period in which they are incurred.(q)ProvisionsProvisions are recognised when the consolidated entity has a present obligation,the future sacrifice of economic benefits is probable,and the amount of the provision can be measured reliably.
275、When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party,the receivable is recognised as an asset if it is probable that recovery will be received and the amount of the receivablecan be measured reliably.The amount recognised as a provi
276、sion is the best estimate of the consideration required to settle the present obligation at the endof the financial year,taking into account the risks and uncertainties surrounding the obligation.Where a provision is measured usingthe cash flows estimated to settle the present obligation,its carryin
277、g amount is the present value of those cash flows.(r)DistributionsA provision is recognised for distributions only when they have been declared,determined or publicly recommended by the directors.(s)ReceivablesTrade receivables and other receivables are recorded at amounts due less any allowance for
278、 doubtful debts.(t)Recoverable Amount of Non-Current AssetsNon-current assets are written down to recoverable amount where the carrying value of any non-current asset exceeds its recoverableamount.In determining the recoverable amount of non-current assets,the expected net cash flows have been disco
279、unted to their presentvalue,using discount rates in the range of 7.5%to 9.0%per annum(2002:7.5%to 9.0%per annum)depending on the risk profile of theparticular assets,except for intangibles,deferred tax assets and other assets where undiscounted cash flows have been used.(u)Revenue RecognitionDisposa
280、l 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 reference to the stage of completion of the contract.for the financial year ended
281、30 June 20031.Summary of Accounting Policies(continued)Australian Pipeline Trust Annual Report 2003(v)Changes in Accounting PoliciesIn accordance with Accounting Standard AASB 1044“Provisions,Contingent Liabilities and Contingent Assets”,on 1 July 2002 theconsolidated entity changed its policy for p
282、roviding for distributions.Under the new policy,a provision for distribution is recognisedonly when the directors have declared,determined or publicly recommended the distribution.The effect of this change in accountingpolicy is to adjust upwards opening retained profits for the consolidated entity
283、and APA by the amount of the distribution provisionas at 30 June 2002($15.860 million).2.Profit from Ordinary ActivitiesConsolidatedTrust2003200220032002$000$000$000$000Profit from ordinary activities before income tax expense includes the following items of revenue and expense:(a)Operating RevenueS
284、ales revenue:Pipeline transportation revenue175,664169,483Other pipeline revenue passthrough67,99061,053243,654230,536Interest revenue:Other entities 13,67512,9492119Dividends wholly-owned controlled entities62,87037,820Share of net profits from joint venture entities accounted for using the equity
285、method(Note 41)13,54610,938Other 8608841,173988271,735255,30764,06438,827(b)Non-Operating RevenueProceeds from disposal of property,plant and equipment177105271,912255,41264,06438,827(c)ExpensesBorrowing costs:Interest:Other entities60,66659,1812640Amortisation of deferred borrowing costs1,3901,390F
286、inance lease charges4940Other borrowing costs37539362,48061,0042640Less:amounts capitalised as part of the carrying value of pipeline assetsa(209)(1,263)62,27159,7412640aCapitalisation rate applicable to funds borrowed generally 7.99%per annum(2002:7.85%per annum).291.Summary of Accounting Policies(
287、continued)ConsolidatedTrust2003200220032002$000$000$000$000notes to the financial statementsAustralian Pipeline Trust Annual Report 200330(c)Expenses(continued)Net bad and doubtful debts/(recoveries)arising from other entities(495)567Recoverable amount write-downs:Property,plant and equipment1,48020
288、3Inventory:Write-downs and other losses119Depreciation of non-current assets:Property,plant and equipment22,71624,824Amortisation of non-current assets:Deferred expenditure155Goodwill464464Leased assets203195Right to receive pipeline tariff70070024,08326,338Other pipeline costs passthrough:Operating
289、 lease rental expense14,89215,735Gas pipeline costs53,09845,31867,99061,053Net transfers to provisions:Employee benefits54180(d)Revision of Accounting EstimatesDuring the financial year,the directors reassessed the lifetime throughput of one of the pipeline assets following major capitalexpenditure.
290、The financial effect of this reassessment in the current financial year was to decrease the depreciation expenseof the consolidated entity by$2.835 million.This reduction in depreciation expense will be expensed in future periods,over the usefullife of the pipeline asset.3.Sales of AssetsSales of as
291、sets in the ordinary course of business have given rise to the following profits and losses:Net ProfitsProperty,plant and equipment6382Net LossesProperty,plant and equipmentfor the financial year ended 30 June 20032.Profit from Ordinary Activities(continued)ConsolidatedTrust2003200220032002$000$000$
292、000$000Australian Pipeline Trust Annual Report 20034.Income Tax(a)The prima facie income tax expense on pre-tax accounting profit reconciles to the income tax expense in the financial statements as follows:Profit from Ordinary Activities65,12859,09762,87037,820Income tax expense calculated at 30%19,
293、53817,72918,86111,346Permanent Differences:Non-allowable depreciation2,0362,179Non-allowable interest expense2,0811,885Amortisation of intangible assets349349Equity share of joint venture entities net profit(less unfranked dividends received)(373)(146)Rebateable dividends(18,861)(11,346)Other173(273
294、)Income Tax Expense Attributable to Operating Profit23,80421,723(b)Future income tax benefits not brought to account as assets:Tax losses revenue 894684Tax losses capital 90,34190,34191,21391,025The taxation benefit of tax losses not brought to account will only be obtained if:Gthe consolidated enti
295、ty derives future assessable income of a nature and of an amount sufficient to enable the benefit from thedeductions for the loss to be realised;Gthe consolidated entity continues to comply with the conditions for deductibility imposed by tax legislation;andGno changes in tax legislation adversely a
296、ffect the consolidated entity in realising the benefit from the deductions for the loss.The tax liability pursuant to the current financial year income tax expense is included in the deferred tax liabilities in Note 22,as a result ofaccelerated tax depreciation on the consolidated entitys pipeline a
297、ssets.Tax Consolidation SystemLegislation to allow groups,comprising a parent entity and its Australian resident wholly-owned entities,to elect to consolidate and betreated as a single entity for income tax purposes was substantively enacted on 21 October 2002.This legislation,which includesmandator
298、y and elective elements,is applicable to APA.At the date of this financial report,the directors have not fully assessed the financial effect,if any,the legislation may have on APA and theconsolidated entity and,accordingly,the directors have not made a decision whether or not to elect to be taxed as
299、 a single entity.Accordingly,the financial effect of the implementation of the elective elements of the tax consolidation system on the consolidated entityhas not been recognised in the financial statements.31notes to the financial statementsAustralian Pipeline Trust Annual Report 2003325.Distributi
300、onsConsolidated and Trust20032002Cents perTotalCents perTotalUnit$000Unit$000Recognised Amounts:First interim distribution paid on 20 December 2002(2002:21 December 2001)Income distributiona3.07,3203.07,320Capital distribution 2.04,8802.04,880Second interim distribution paid on 31 March 2003(2002:28
301、 March 2002)Income distributiona3.07,3203.07,320Capital distribution 2.04,8802.04,880Third interim distribution paid on 26 June 2003(2002:26 June 2002)Income distributiona4.510,9803.07,320Capital distribution 0.51,2202.04,880Final distribution(2002:30 September 2002)Income distributiona6.515,860Capi
302、tal distribution 15.036,60021.552,460Unrecognised Amounts:Final distribution payable on 25 September 2003Income distributiona6.515,860Capital distribution6.515,860a Income distributions for 2002 and 2003 were unfranked.The final distribution in respect of the year ended 30 June 2003 has not been rec
303、ognised in this financial report because the finaldistribution was declared,determined or publicly recommended subsequent to 30 June 2003.On the basis that the directors will continueto publicly recommend distributions in respect of units subsequent to reporting date,in future financial reports the
304、amount disclosedas“recognised”will be the final distribution in respect of the prior financial year,and the interim distributions in respect of the currentfinancial year.ConsolidatedTrust2003200220032002$000$000b$000$000bAdjusted franking account balance(tax paid basis)2,65436211bDue to changes in A
305、ustralian income tax legislation,from 1 July 2002 franking accounts are maintained on a“tax paid”rather than an“after-tax distributable profits”basis.The comparative franking account balance as at 30 June 2002 has been restated on the“tax paid basis”so as to be comparable with the disclosure as at 3
306、0 June 2003.for the financial year ended 30 June 2003ConsolidatedTrust2003200220032002$000$000$000$000Australian Pipeline Trust Annual Report 20036.Current ReceivablesTrade receivables19,76018,532Less:allowance for doubtful debts(210)(753)19,55017,779Goods and services tax recoverable 8786Other rece
307、ivables143119,56417,81087867.Current InventoriesFinished goods at cost75668.Other Current AssetsPrepayments1,1851,0059.Non-Current ReceivablesOther receivables3425310.Investments Accounted for Using the Equity MethodJoint venture entities not quoted on stock exchange(Note 41)155,808130,24011.Other N
308、on-Current Financial Assets Shares in controlled entities at cost371,551371,551Non-trade receivables from:Wholly-owned controlled entities116,090104,412487,641475,96333notes to the financial statementsAustralian Pipeline Trust Annual Report 20033412.Property,Plant and EquipmentConsolidated($000)Free
309、hold LandLeaseholdPipelinePlant andWork in and BuildingsImprovementsAssetsEquipmentProgressat Costat Costat Costat Costat CostTotalGross Carrying AmountBalance at 30 June 20025,8564311,261,7465,8266,6641,280,523Additions29812,77569884914,620Disposals(59)(232)(291)Recoverable amount write-downs(1,666
310、)(1,666)Transfers5,995582(6,577)Balance at 30 June 20036,1544311,278,7916,8749361,293,186Accumulated DepreciationBalance at 30 June 2002(249)(294)(45,766)(2,204)(48,513)Depreciation expense(134)(136)(21,656)(993)(22,919)Disposals177177Recoverable amount write-downs186186Transfers Balance at 30 June
311、2003(383)(430)(67,236)(3,020)(71,069)Net Book ValueAs at 30 June 20025,6071371,215,9803,6226,6641,232,010As at 30 June 20035,77111,211,5553,8549361,222,117Trust($000)Freehold LandLeaseholdPipelinePlant andWork in and BuildingsImprovementsAssetsEquipmentProgressat Costat Costat Costat Costat CostTota
312、lGross Carrying AmountBalance at 30 June 2002AdditionsDisposalsRecoverable amount write-downsBalance at 30 June 2003Accumulated DepreciationBalance at 30 June 2002Depreciation expenseDisposalsRecoverable amount write-downsBalance as at 30 June 2003Net Book ValueAs at 30 June 2002As at 30 June 2003Th
313、e value of freehold land and buildings determined in accordance with independent valuations carried out by licensed valuers,on the basis of market value in use,performed in 2002 was$7.933 million.for the financial year ended 30 June 2003ConsolidatedTrust2003200220032002$000$000$000$000Australian Pip
314、eline Trust Annual Report 200313.IntangiblesGoodwill7,9167,916Less:accumulated amortisation(6,517)(6,053)1,3991,863Right to receive pipeline tariff15,67715,677Less:accumulated amortisation(9,724)(9,024)5,9536,6537,3528,516Aggregate amortisation allocated during the financial year is recognised as an
315、 expense in Note 2.14.Deferred Tax AssetsFuture income tax benefit:Tax losses revenue1,3261,532Timing differences5,2045,644116,5307,1761115.Other Non-Current AssetsDebt issue costs8,4508,450Less:accumulated amortisation(5,738)(4,348)2,7124,102Other1292,8414,102Aggregate amortisation allocated during
316、 the financial year is recognised as an expense in Note 2.16.Current PayablesTrade payables25,85322,0151218Other payables25,40227,83818,10517,90751,25549,85318,11717,92517.Current Interest-Bearing LiabilitiesFinance lease liabilitiesa(Note 32)218209aSecured by the assets leased,the current market va
317、lue of which exceeds the value of the finance lease liability.35ConsolidatedTrust2003200220032002$000$000$000$000notes to the financial statementsAustralian Pipeline Trust Annual Report 20033618.Current ProvisionsUnitholder distributionsa15,86015,860Employee benefits(Note 25)751702Other(Note 29)2107
318、0496117,26615,860aCurrent provision for unitholder distributions has not been recognised in 2003 as per the requirement of Accounting Standard AASB 1044“Provisions,ContingentLiabilities and Contingent Assets”which came into effect on 1 July 2002(Note 1(v).19.Other Current LiabilitiesUnearned revenue
319、 interest6,8696,560Unearned revenue other2077567,0767,31620.Non-Current PayablesNon-trade payables to:Wholly-owned controlled entities5,5024,4155,5024,41521.Non-Current Interest-Bearing LiabilitiesUnsecuredSyndicated bank borrowings758,000754,000SecuredBank borrowingsa1,6451,645Finance lease liabili
320、tiesb(Note 32)4523802,0972,025760,097756,025aSecured over buildings located in the Northern Territory.bSecured by the assets leased,the current market value of which exceeds the value of the finance lease liability.22.Deferred Tax LiabilitiesDeferred income tax167,600146,853for the financial year en
321、ded 30 June 2003ConsolidatedTrust2003200220032002$000$000$000$000Australian Pipeline Trust Annual Report 200323.Non-Current ProvisionsEmployee benefits(Note 25)13613124.Other Non-Current LiabilitiesUnearned revenue other1,29946825.Employee BenefitsThe aggregate employee benefit liability recognised
322、and included in the financial statements is as follows:Provision for employee benefitsCurrent(Note 18)751702Non-current(Note 23)136131887833ConsolidatedTrust2003200220032002No.No.No.No.Number of employees at the end of the financial year1414ConsolidatedTrust2003200220032002$000$000$000$00026.Contrib
323、uted EquityContributed EquityBalance at the beginning of the financial year437,943452,583437,943452,583Capital distributions(Note 5)(10,980)(14,640)(10,980)(14,640)Balance at the end of the financial year426,963437,943426,963437,943ConsolidatedTrust2003200220032002000000000000Fully Paid UnitsaBalanc
324、e at the beginning of the financial year244,000244,000244,000244,000Movements Balance at the end of the financial year244,000244,000244,000244,000aFully paid units carry one vote per unit and carry the right to distributions.37ConsolidatedTrust2003200220032002$000$000$000$000notes to the financial s
325、tatementsAustralian Pipeline Trust Annual Report 20033827.Retained ProfitsBalance at the beginning of the financial year7691,48811Adjustment to opening retained profits on initial adoption of Accounting Standard AASB 1044“Provisions,Contingent Liabilities and Contingent Assets”(Note 1(v):Write-back
326、of prior financial year distribution provision15,86015,860Net profit attributable to unitholders for the financial year41,04637,10162,87037,820Distributions provided for or paid(Note 5)(41,480)(37,820)(41,480)(37,820)Balance at the end of the financial year16,19576937,251128.Outside Equity Interests
327、Outside equity interests in controlled entities comprise:Issued capital44Retained profits1730Reserves11223529.ProvisionsConsolidated($000)Force MajeureDistributionaClaimsbOtherBalance at 30 June 200215,860404300Adjustment to retained profits on initial application of Accounting Standard AASB 1044“Pr
328、ovisions,Contingent Liabilities and Contingent Assets”(Note 1(v)(15,860)Additional provisions recognised249Reductions arising from payments/other sacrifices of future economic benefits(250)(339)Reductions resulting from the re-measurement of the estimated future sacrifice or the settlement of the pr
329、ovision without cost to the consolidated entity(154)Balance at 30 June 2003210Current(Note 18)210Non-current(Note 23)210for the financial year ended 30 June 2003Australian Pipeline Trust Annual Report 2003Trust($000)Force MajeureDistributionaClaimsbOtherBalance at 30 June 200215,860Adjustments to re
330、tained profits on initial application of AASB1044(Note 1(v)(15,860)Additional provisions recognisedReductions arising from payments/other sacrifices of future economic benefitsReductions resulting from the re-measurement of the estimated future sacrifice or the settlement of the provision without co
331、st to APABalance as at 30 June 2003Current(Note 18)Non-current(Note 23)aThe provision for distribution represents the aggregate amount of distributions declared,determined or publicly recommended on or before the end of the financialyear,which remains undistributed as at the end of the financial yea
332、r,regardless of the extent to which the distributions are expected to be paid in cash.bThe force majeure claims provision represents claims made by certain customers on the consolidated entity for disruption to their business by extraneous eventsin the 2001 and 2002 financial periods.The directors h
333、ad provided for these claims in full.During the current financial year,resolutions were reached with thecustomers concerned resulting in the reversal of the remaining provision.There were no force majeure claims against APA.ConsolidatedTrust2003200220032002$000$000$000$00030.Commitments for Expenditure(a)Capital Expenditure CommitmentsPlant and EquipmentNot longer than 1 year1,56212,671Longer than
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