1、Australias leading energy transporterAnnual Report 2006Focused performanceCorporate Review 20061 Quality Assets Chairmans Report4 Managing Directors Report8 Asset Overview1 Board of Directors14 Management Team16 Sponsorships Annual Financial Report 2006 18 Corporate Governance Statement 5 Directors
2、Report 44 Income Statement 45 Balance Sheet 46 Statement of Changes in Equity 48 Cash Flow Statement 49 Notes to the Financial Statements 93 Directors Declaration 94 Auditors Independence Declaration 95 Independent Audit Report 96 Additional Stock Exchange Information 97 Unitholder Information 99 Gl
3、ossary of Terms and Abbreviations 100 Financial Calendar and DirectoryFront Cover Images:L to RRow 1 Compressor Aftercooler at Bulla Park(MSP),Right of Way(PGP)Row Mondarra Gas Storage Well,Aerial View of Compressors(Kogan North)Row 3 Cooling System and AC to DC Converter Stack,Red Cliffs,Pipe work
4、at Paraburdoo Compressor Station(CGT)Row 4 Aerial View of Red Cliffs,TiWest Delivery Station(PGP)Photo above:Red Cliffs High Voltage Transformer(Murraylink)3Solid Delivery2006 Key Operating HighlightsTotal Revenue Before Significant ItemsTotal AssetsNet Profit After Tax Before Significant ItemsCash
5、Flow OperatingTotal EquityDistributions20062005$m2004200305010015020025030035020062005$m2004200320062005$m200420030102030405060702002200620052004200302040608010012020022005$m20042003010020030040050060070020062005cpu200420030510152025Cash fow per unit(cents)Cash fow operating($m)ProftCapital200605001
6、0001500200025002002200220022002 4.4%increase in pipeline transportation revenue;1%increase in EBITDA;Part year revenue contribution from Murraylink and Kogan North;Reduced operating costs achieved primarily through the integration of APAs Western Australian Gas Business and reduction in fees payable
7、 to service providers;Expansion of Mondarra gas storage facility;Performance Highlights For the Past Five YearsStrong organic growth in revenue has been complemented by strategic acquisitions of natural gas and electricity transportation assets.Solid operating cash fl ow has supported increased dist
8、ributions to unitholders.Committed to Bonaparte Gas Pipeline in NT;Developing Daandine power station using CSG in Qld;Increase in annual distribution from.5 to 4.0 cpu and distribution reinvestment plan reactivated.Corporate Highlights4Financial Summary Operating Results before signifi cant itemsYea
9、r ended 30 June 06$mYear ended 30 June 05$mChange%Pipeline transportation revenue279.067.4.4Electricity transmission revenue3.2Other tolling revenue1.2Other pipeline revenuepassthrough85.789.3(4.0)Other revenue10.010.8(7.6)Total revenue379.0367.33.EBITDA200.4178.91.0EBIT161.614.513.4Pre-tax profi t9
10、0.478.015.9Income tax expense(29.4)(6.4)11.6Operating profi t after income tax and minorities before signifi cant items60.751.418.1Signifi cant items after income tax1.958.(96.8)Net profi t attributable to unitholders62.5109.5(4.9)Financial RatiosEarnings per unit(cents)before signifi cant items21.7
11、518.6716.5Earnings per unit(cents)after signifi cant items22.4339.81(43.7)Net tangible asset backing per unit$2.09$.18(4.1)Free cash fl ow per unit(cents)38.1837.591.6Interest cover ratio before signifi cant items2.34.33Gearing ratio(%)67.876.96 APAs unit price has increased by99.5%in value since fl
12、 oat in 2000.A$10,000 parcel of units purchased in 2000 would have a current value of$19,950excluding distributionsASX unit value$2.73average closing price for004 fi nancial yearASX unit value$2.61average closing price for003 fi nancial yearASX unit value$2.51average closing price for00 fi nancial y
13、earASX unit value$2.41average closing price for001 fi nancial yearAustralias leading energy transporterAnnual Report 2006ASX unit value$3.99average closing price for006 fi nancial yearASX unit value$3.29average closing price for005 fi nancial yearWestern AustraliaNorthern TerritorySouth AustraliaQue
14、enslandNew South WalesVictoriaPerthDarwinBrisbaneSydneyCanberraMelbourneAdelaideExisting APA AssetsTasmaniaHobart Western AustraliaSouth AustraliaVictoriaPerthMelbourneAdelaideNorthern TerritoryQueenslandNew South WalesTasmaniaBrisbaneDarwinSydneyHobartCanberraMELBOURNEWestern AustraliaSouth Austral
15、iaVictoriaPerthMelbourneAdelaideNorthern TerritoryQueenslandNew South WalesBrisbaneSydneyCanberraMELBOURNEWestern AustraliaSouth AustraliaVictoriaPerthMelbourneAdelaideNorthern TerritoryQueenslandNew South WalesBrisbaneSydneyCanberraKogan North Gas Processing FacilityBonaparte GasPipeline ProjectMon
16、darra Gas Storage FacilityMurraylink“In the 006 financial year,APA has tapped into new revenue streams within the energy infrastructure sector.On 30 March 006,APA acquired the Murraylink assets.By applying our skill sets and experience to these types of acquisitions,we have the opportunity to enhanc
17、e APAs ability to pay increased distributions in the future.This approach is a natural progression for APA as we look towards securing a future of solid yields from a diverse portfolio of energy infrastructure assets.”Mick McCormackQuality assets1Chairmans ReportI am pleased to present my sixth chai
18、rmans report to the unitholders of Australian Pipeline Trust(“APA”).APAs main objective is to focus on investments in energy transmission infrastructure which enhance our ability to increase unitholder distributions by,at least,CPI annually.The Board remains positive and enthusiastic about the futur
19、e of APA and the role of natural gas in the Australian energy mix.Financial PerformanceAPA has again delivered.Operating profit after tax and minorities but before significant items increased 18.1%to$60.7 million,compared with$51.4 million for the year ended 30 June 005.The improved performance resu
20、lted from a full 1 month contribution from two major acquisitions in the previous year,increased pipeline transportation revenue and a reduction in operating costs arising from the integration of the WA gas business.When significant items are included,net profit attributable to unitholders of APA fo
21、r the financial year was$6.5 million(005:$109.5 million).A Year of Consolidation and New DirectionThis past year was again one of substantial change in the energy industry,with major players in the industry moving to reorganise their respective businesses.Nevertheless,APA was able to successfully im
22、plement its growth strategy.APA has more than doubled in market capitalisation since listing in 000,based on successfully executing a program of buying out minority interests in our assets,and building on our existing energy transmission assets.Given this framework,it was timely for the Board and se
23、nior management of APA to look anew at the longer term strategy and objectives of APA.Managing Director(“MD”)and Chief Executive Officer Michael(“Mick”)McCormack,outlines in more detail the new approach in his interview on pages 4 to 7,but I would like to make the point that it is firmly based on th
24、e belief that quality assets,soundly managed,deliver value over the long term.APA has delivered excellent results to unitholders by taking a strategic and long term view of our assets,while at the same time seeking to maximize leverage from the capabilities we have developed.In the last 1 months,APA
25、 has acquired or entered into arrangements to develop a number of assets complementary to our existing gas pipelines.Our growing asset base further underpins our strong cash flows,enabling us to deliver on our primary strategic goal,to increase distributions to unitholders by at least CPI annually.O
26、ne of the most significant of these transactions occurred just before the end of the financial year,namely APAs joint bid with Babcock&Brown Infrastructure(“BBI”)for GasNet Australia Group(“GasNet”).Since then,the bidding agreement between APA and BBI lapsed and APA has made a full cash offer of$3.1
27、0 per unit for GasNet.I am pleased to advise that the GasNet Board has recommended the offer and we are now proceeding to acquire 100%of GasNet.The acquisition of GasNet is strategically and financially compelling for APA.The GasNet business is highly complementary with APAs business,enables APA to
28、further develop a gas transmission grid on the eastern seaboard and will assist APA to realise its intention to offer a seamless tariff for gas delivered into Queensland,New South Wales,ACT and Victoria.APA continues to deliver on its strategy of acquiring and developing assets that enhance its abil
29、ity to pay increasing distributions to all unitholders.The AGL/Alinta MergerIt is proposed that AGL and Alinta will“merge”.If the merger is implemented,the units in APA held by AGL will form part of the Alinta group.Alinta has given the ACCC court enforceable undertakings which aim to ensure:continu
30、ed competition between gas pipelines owned by APA and those owned or controlled by Alinta;the independence of APA from Alinta;and a sale of its units in APA and shares in APL within a specified(confidential)period.(AGL has some rights which may see it buy these from Alinta)On 8 September 006,Alinta
31、submitted proposed new undertakings to the ACCC,which would allow Alinta to keep its interests in APA if APA sells certain assets(including the Moomba to Sydney Pipeline,Parmelia Gas Pipeline and interests in GasNet).APA does not support these proposed replacement undertakings.It is not certain if t
32、hey will be accepted by the ACCC in this form or at all.Recently Alinta acquired a stake of 10.5%in APA.The matter is now before the Takeovers Panel and the Federal Court.APA is seeking a disposal of this stake.Alinta was ordered to cease trading in APA units by the Takeovers Panel,and has been orde
33、red to divest the 10.5%stake(as the Panel declared that they were acquired in unacceptable circumstances).A Review of this decision is underway.Left:Scraper Station at Bulla Park on the MSPRight:Compressor at Kogan North in QldCourt action is continuing and the situation is highly fl uid.By the time
34、 unitholders receive this annual report,or by the time of the annual meeting,circumstances may have changed.Unitholders should continue to monitor public announcements by APA of developments.Regulatory EnvironmentThe regulatory environment affecting our assets continues to be a focus for APA.Regulat
35、ory reform is critical to creating a better environment for the necessary investment in energy infrastructure needed over the next decade.We have been engaged in a long-running debate as to the regulatory value of our Moomba to Sydney Pipeline.In 004,the Australian Competition Tribunal(“Tribunal”)ac
36、cepted our argument that the ACCC had acted unreasonably in rejecting APAs proposed Access Arrangement.The ACCC appealed to the Federal Court against that decision,and the Federal Court decided that the Tribunal made errors of law in its interpretation of the Gas Code.The Federal Court has now order
37、ed that the matter be returned to the Tribunal for reconsideration.A Single Voice for Natural GasDebates about energy are constantly changing,as we have witnessed with the recent discussions around nuclear energy in Australia.This debate has only strengthened our belief in the need for a peak body t
38、o champion the benefi ts of“clean”natural gas as part of the energy mix for Australia.Natural gas needs a single voice of representation if it is to maximise its role in contributing to the regions energy needs.We continue to promote the importance of“clean”natural gas,especially to the outlying and
39、 isolated parts of the country where natural gas and pipelines deliver jobs and growth.To this end the acquisition of GasNet will enable increased trading in natural gas along the eastern seaboard.We are proud that APA is taking a lead role in facilitating“gas on gas”competition for the benefi t of
40、the Australian economy.People and ManagementAPAs success is due to the calibre and enthusiasm of our people.We are an energy infrastructure business,and our staff has long experience in the energy industry,and pipeline infrastructure in particular.In his fi rst full year as Chief Executive Offi cer,
41、Mick McCormack clearly demonstrated his broad experience in the energy transmission industry.Mick and his team are performing well in executing the long term strategy of our Business.OutlookLooking forward,we continue to support the development of a northern gas supply option to meet the projected g
42、as demand over the next decades.The Papua New Guinea(“PNG”)Gas Project provides an opportunity to link the east coast gas market to northern gas and create the long touted“east coast gas grid”.The PNG Gas Project is an immense and complex undertaking and there are many issues which are yet to be res
43、olved.However,addressing the gas supply issues facing south-eastern Australia over the next decade remains a priority for Australia.We look forward to greater certainty emerging on this fundamental project.APA is encouraged by the development of coal seam gas as an alternative fuel in the medium ter
44、m.This,in turn,will support the development by APA of a gas pipeline connecting Ballera in Queensland to our Moomba to Sydney Pipeline.006 has been an exciting,busy and challenging year,and we have stuck to our promise we deliver.We have delivered to our customers,our unitholders,and on our promise
45、to develop a new strategic direction.We are already delivering on executing the objectives set for us.The Board is confi dent that APA is well positioned to pursue strategies to continue its growth in profi tability and distributions for the long term.On behalf of the Board,I thank management and st
46、aff for their efforts,and all unitholders for their support.George H BennettChairman5 September 006006 has been an exciting,busy and challenging year,and we have stuck to our promise we deliver.We have delivered to our customers,our unitholders,and on our promise to develop a new strategic direction
47、.We are already delivering on executing the objectives The Board is confi dent that APA is well positioned to pursue strategies to continue its growth in profi tability and distributions for the and staff for their efforts,and all“2006 has been an exciting,busy and challenging year for APA,and we ha
48、ve stuck to our promise we deliver.“3Left:Scraper Station at Bulla Park on the MSPRight:Compressor at Kogan North in QldManaging Directors Reportan interview with Mick McCormack by Cecilia Hilder.Mick,youve been in the job for a year now,and youve made some significant changes,particularly in the de
49、velopment and execution of new strategic objectives.What have been the highlights?Yes,its been an exciting first year and Im pleased to say a very active one for APA.We have announced a number of large developments,the most high profile of which is the GasNet acquisition.Equally significant is our e
50、xpansion into complementary infrastructure such as Murraylink,the continuing progress of the Kogan North gas processing project in Qld and the storage facility at Mondarra in WA.These projects are fundamental to our new strategy,which is focused on growing distributions.Will you elaborate on these d
51、evelopments?I would be pleased to.Firstly,the GasNet offer.Following the offer by Colonial First State Global Asset Management on 15 August 006,the joint bidding arrangements with Babcock and Brown Infrastructure(BBI)lapsed,and we announced our intention to make a cash offer of$3.10 per GasNet secur
52、ity.This Offer valued the stapled securities in GasNet at approximately$45 million.Our offer was at a 7.6%premium to the$.88 offer from Colonial,which was recommended by the GasNet Board.The Offer was also between a 5.8%to 14.0%premium to the Independent Expert valuation range($.7 to$.93)included in
53、 GasNets Target Statement of 9 August 006.We were in a unique position to make this bid because APA,alone,is able to extract additional value from the proposed and existing asset portfolio.We were very pleased that on 31 August 006 the GasNet Board unanimously recommended acceptance of our offer,in
54、the absence of a superior offer.We consider GasNet a quality asset that fits APAs objectives.On current analysis,the acquisition is expected to enhance APAs capacity to increase annual distributions per unit by approximately 10%on the expanded capital base post the capital raising,assuming 100%owner
55、ship of GasNet.The acquisition of GasNet is strategically and financially compelling for APA.The GasNet business is highly complementary with APAs business,enables APA to develop a gas transmission grid on the eastern seaboard and will assist APA to realise its intention to offer a seamless tariff f
56、or gas delivered into Queensland,New South Wales,ACT and Victoria.The acquisition will also improve utilisation of the Victoria/New South Wales interconnect pipeline and APAs Moomba to Sydney Pipeline and increase APAs ablility to compete with the Eastern Gas Pipeline.GasNets Victorian pipeline,when
57、 integrated into APAs existing business,will add to the gas supply options for the eastern seaboard.This will create significant gas on gas competition.GasNet is a strong strategic fit for APA and we expect it will deliver significant future value.How will APA fund the acquisition?APA will fund the
58、acquisition through committed debt facilities.However,to reduce gearing,address financing flexibility and,partly to fund other current acquisition and development opportunities,we have raised approximately$00 million through an institutional placement and a Security Purchase Plan(SPP)to existing APA
59、 unitholders.We may use some of the proceeds of the placement to fund the GasNet offer.Unitholders will have had an opportunity to participate in the SPP by the time the Annual Report is received by them.I should add that the units issued under the placement and SPP will not be entitled to receive t
60、he already announced APA final distribution of 6 cents per unit for the year ended 30 June 006,but otherwise will rank equally with existing units and will be entitled to the first interim distribution for the quarter ending 30 September 006,payable in December 006.“We have announced a number of lar
61、ge developments,the most high-profile of which is the GasNet acquisition.These projects are fundamental to our new strategy,which is focused on growing distributions.”4And what about the Murraylink acquisition?Murraylink connects the electricity transmission networks in South Australia and Victoria.
62、Assets include two converter stations and two buried,high voltage direct current cables of about 180 kilometres in length which link the two networks,from Berri in South Australia to Red Cliffs,near Mildura in Victoria.Its a relatively new system,having been completed in 003 and features highly inno
63、vative but proven,electricity technology.It cost around$180 million to build,but APA acquired Murraylink for a little over$153 million.Why Murraylink?We targeted Murraylink because it requires a very similar skill set to our core assets.Murraylink has a low risk revenue outlook with fixed revenues t
64、o 013 and beyond.It fits with our existing stable of assets and boosts our drive to increase unitholders distributions by at least CPI.How does this investment compare with your gas transmission assets?The current business model that we successfully apply to our gas pipelines is centered on our know
65、ledge of the business and our ability to manage external service providers.Like most of our pipelines,Murraylink is capital intensive,regulated,has a low operating cost and a relatively low risk piece of linear energy infrastructure,in a remote location.If you look at our footprint on a map of Austr
66、alia,you can see we are also used to managing assets in remote locations.This equiped us to carry out a smooth transition of ownership and operatorship of Murraylink.Can you give the detail of the transaction and the funding arrangements?The acquisition of Murraylink was fully financed through a one
67、 year acquisition bridge facility.The inclusion of the bridge facility did not impact significantly on APAs gearing levels.Gearing rose to 68%,well within APAs borrowing covenants.What is the earnings impact?How will it affect your main corporate objective of growing distributions by at least CPI bo
68、th in the short and long term?Murraylink is a low risk investment with strong and reliable cash flows.APAs acquisition of Murraylink further enhances APAs cash flows and therefore,APAs primary growth metric:the ability to grow distributions at least in line with CPI.On a full year basis,the acquisit
69、ion is expected to generate EBITDA of approximately$9.million in the 007 financial year.Can you explain the strategic rationale of acquiring an electricity transmission asset,and how it fits your growth strategy?We believe its a logical extension of our business,as the skills involved are very simil
70、ar to those employed in running our gas transmission pipeline business.Murraylinks revenue certainty is somewhat higher than most regulated gas pipelines because its revenue is not dependent on the actual throughput of the system,so future revenues are independent of any throughput growth.At the sam
71、e time,modest upside is achievable through performance incentives and by reducing operating costs.We are looking to invest in a range of energy assets that have an appropriate risk and reward profile,and are cash positive.Murraylink fits those criteria perfectly and will be an important part of our
72、growth strategy.We bought it at a good price,and it will contribute to the cash flows necessary to support our increased unit distributions into the future.What about Kogan North in Qld?In August 005,we announced a plan to build,own and operate a$13 million coal seam gas processing facility at Kogan
73、 North,west of Brisbane on the Roma to Brisbane Pipeline(“RBP”).The facility was built to process four petajoules of gas a year approximately enough energy to supply about 35,000 homes.The Kogan North gas processing project is important for APA as it represents the first of many such potential devel
74、opments that are complementary to our existing business.How is the facility progressing and when will the first sale of gas be delivered?The facility is complete,with the first gas delivered into the RBP in January of this year.Volumes have been steadily increasing since that time as the Kogan field
75、 produces more gas,and full production rates are anticipated to be achieved later this year.The gas from the Kogan North facility,along with gas from other sources,is transported on the RBP for use at CS Energys Swanbank power station.How did you fund Kogan North?The construction of the plant at Kog
76、an North was financed through existing bank facilities.“We are looking to invest in a range of energy assets that have an appropriate risk and reward profile,and are cash positive.“5Left:Trenching on the RBPRight:Gatton Compressor Station on the RBPManaging Directors ReportTell me about the Mondarra
77、 gas storage facility in WA.In February 006,APA announced we would be expanding the Mondarra gas storage facility by drilling a“state of the art”purpose built gas storage well into the existing reservoir.The cost of this expansion is expected to be between$10$15 million.How is this expansion possibl
78、e?It is backed by a five year agreement,plus a five year option with Verve Energy(formerly known as Western Power)to utilise the facility,and our Parmelia Gas Pipeline(“PGP”).What does this mean for APA?The multi-million dollar storage and transportation contract and the expansion will allow APA to
79、provide additional peak gas supply services which are expected to be much sought after in the rapidly developing deregulated WA energy market.The expansion of the gas storage facility is an exciting addition to the suite of flexible and innovative services that APA has been developing to help manage
80、 peak supply constraints in the Perth region.In addition to the gas storage revenue,this development will directly lead to additional gas transportation revenue for the PGP.This investment forms another step in the development by APA of the“Mondarra Gas Hub”,which straddles the two gas pipelines ser
81、vicing the south west of WA.The Mondarra Gas Hub effectively offers interconnected pipeline gas transportation services,load management,storage,compression and processing all controlled from APAs dedicated 4 hour Perth Control Centre.Are you excited about the pipeline in the Northern Territory?Yes,t
82、he Bonaparte Gas Pipeline,as it will be called,is a very good project.At the end of the financial year,we announced that we had signed a$400 million,5 year,Gas Transportation Agreement(GTA)with Power and Water Corporation(“PWC”)commencing in January 009.This followed our previous announcement that w
83、e had entered into a Heads of Agreement with the Northern Territory Government and PWC,to develop the pipeline for the transportation of gas from Enis gas plant at Wadeye,to our Amadeus Basin to Darwin Pipeline.How much will the pipeline cost?The 77 kilometre pipeline is estimated to cost$130 millio
84、n over the next two years.This new project ensures that we will have a growing transmission business in the NT well into the future and is an important step in realising our long-term vision of bringing northern gas into Australia.How will the cost of building this pipeline be funded?The different f
85、unding options for this pipeline are being examined as part of the preliminary stages of this project.Tell me about the Tipton West project in Queensland.In April 006,a Heads of Agreement was signed with the Tipton West Joint Venture for APA to fund,own and operate the Tipton West central gas proces
86、sing facilities and associated lateral pipelines.The Tipton West project is located in the Surat Basin approximately 0 kilometres south of Dalby in Queensland.The field currently has a Gas Sales Agreement with Braemar Power for up to 13.3 petajoules per annum for 15 years and a gas sales Memoranda o
87、f Understanding with BP and Ergon Energy for a total of 63 petajoules.What is the cost of the facilities?The estimated cost of the facilities is$50 million.They are projected to have the capacity to process and deliver up to 17 petajoules per annum of gas from the Tipton West coal seam gas field to
88、a number of customers,including Wambo Power,Ergon Energy and BP.We expect the first gas sales in early 007.What are your plans for the future?APAs aim is to grow unitholder distributions annually,by at least CPI.In the short term,this means that the gas transportation business is core to future deve
89、lopments.It is also clear that the long term growth of APA includes realising a northern gas supply into the south east Australian market,with haulage into NSW and Victoria through the MSP and the GasNet pipeline.6 Stephen Ohl and Mick McCormack inspect the Murraylink assets at Red Cliffs in Vic7“AP
90、A is continuing to grow and develop new markets because our lean,low cost,competitive business model is based on experience,expertise and industry skills.”7There is still some way to go with the PNG Gas Project,but there is little doubt that there continue to be strong drivers for this project to pr
91、oceed.In the meantime,APA is enthusiastic about the greater role in energy supply that coal seam gas is providing over the medium term.The delivery of coal seam gas into southern markets has fi rmed APAs intention to develop a gas pipeline which will connect Ballera in Queensland to the MSP and the
92、NSW and Victorian markets.I am very positive about the future,and excited by the prospects for growth and expansion available to APA.APA is continuing to grow and develop new markets because our lean,low cost,competitive business model is based on experience,expertise and industry skills.I fi rmly b
93、elieve APA has a great long term future and will live up to its slogan “we deliver energy”.I thank the Board for their trust in me,and my colleagues for their dedication and performance.Once again,I thank unitholders for the opportunity to serve them.Mick McCormackManaging Director5 September 006Rod
94、 JohannessenRod Johannessen is the Commercial Manager,Queensland and also a dedicated sailor.Most summer weekends youll fi nd him crewing on a yacht,which races on Brisbanes Moreton Bay.This year will be the fi rst season on the skippers new yacht,a Mumm 36“Georgia Express”.The existing crew have be
95、en sailing together for four years,and Rods role is as bowman.In his position at the pointy end,he is responsible for changing headsails and spinnakers.He enjoys competing in ocean races such as the Brisbane to Gladstone Race at Easter,and has also sailed in a variety of places around the world,incl
96、uding the Solomon Islands and the islands of Indonesia.Staff in profi le“Pigging”on the MSP8 8Asset OverviewExisting Assets8“APA has 100%ownership of the MSP.Stretching 1,299 kilometres,the MSP links the natural gas fields at Cooper Basin to the south west of Sydney.”WA AssetsGoldfields Gas Transmis
97、sion(“GGT”)The 88.1%APA owned GGT is being expanded by the addition of compression at Paraburdoo to service Rio Tintos rapidly expanding Hamersley Iron mine operations.The$15 million expansion is currently on time and budget for completion in October 006 to meet the requirement in Hamersley Irons 16
98、 year GTA.Parmelia Gas Pipeline(“PGP”)In September 005,APA entered into a$10 million,seven year,contract with Arc Energy to transport Perth Basin gas to Midland Brick,the worlds largest brickworks,in Perth.At the same time,APA also sold to Arc Energy its Dongara processing facility located on the Do
99、ngara gas field for approximately$.5 million.This enabled the field to be more easily developed under single management control.Mid West PipelineThe Mid West Pipeline/Joint Venture entered into a GTA with Synergy for the transport of additional gas to an expansion of Harmonys Hill 60 gold mine opera
100、tion close to Mt Magnet.Westlime(Arrowsmith)LateralThe Westlime lateral in the Mid West region of WA was connected to the PGP and recommissioned to transport gas to the Roc Oil operated Arrowsmith oil stabilisation plant built to process oil from the Cliff Head offshore oil platforms.Wiluna LateralT
101、he Wiluna operation continues to use marginally increased quantities of gas and has recently announced drilling results indicative of significant additional gold reserves which should lead to an extension of the life of the current mine operation.NSW AssetsMoomba to Sydney Pipeline(“MSP”)and Central
102、 West Pipeline System(“CWP”)APA has 100%ownership of the MSP.Stretching 1,99 kilometres,the MSP links the natural gas fields at Cooper Basin to the south west of Sydney.A number of laterals branch off the main line to supply regional centres in NSW,and the ACT.They are:the Northern Lateral(a lateral
103、 from Young to Lithgow with branches supplying Orange,Oberon and Bathurst),the Young to Wagga Wagga Lateral,the Burnt Creek to Griffith Lateral,and the Dalton to Canberra Lateral.The MSP also includes the Interconnect(from Wagga Wagga to Culcairn).The Interconnect includes a bi-directional connectio
104、n at Culcairn,linking the MSP with the GasNet Pipeline System in Victoria.Gas delivered through the MSP services a diverse range of industrial,commercial and residential users in NSW and the ACT with an expected increasing supply going to power applications.The main revenue returned from the MSP com
105、es from the Gas Transportation Deed with AGL Wholesale Gas.This contract provides a predictable revenue stream from the MSP until 007 and a measure of revenue certainty to 016.APA also owns 100%of the 55 kilometre CWP,which links the MSP with regional centres in NSW including Forbes,Parkes,Narromine
106、 and Dubbo.As a greenfields pipeline,the CWP is designed to allow for penetration of gas into a new and growing market.As such,there is no fixed reservation charge for capacity and the CWP Reference Tariff is charged,based only on actual throughput.The recent commissioning of the Central Ranges Pipe
107、line(Dubbo to Tamworth)is expected to increase volumes through the CWP.During the year,a meter station was constructed at Dubbo to deliver gas into the new Central Ranges Pipeline developed by Central Ranges Pipeline Pty Ltd.First gas was delivered into this new pipeline in July 006.Morney Tank Comp
108、ressor in Qld9 9Rick FrancisAs well as being the Chief Financial Officer for the APA Group,Rick Francis has been the manager for his childrens local Under 7 soccer team since 005.In this role,he ensures both the children and parents feel a part of the team and helps out with the coaching and referee
109、ing during the season.“I have really enjoyed watching all the kids grow up over the last years,watching their different personalities come out and how they have become part of the team.All the kids are from the local primary school and it has really brought them together.It is very easy to get caugh
110、t up in work matters,so getting involved with the kids really helps keep a balanced perspective on things.Finding time to contribute to the local community is hard nowadays,however,there is nothing better than helping your children and others develop both on and off the sporting field and watching t
111、heir determination and joy as they play each match.”Staff in profileLeft:Wiluna Compressor Station on the GGTRight:Pipeline stringing in Mt.Isa on the CGPQld AssetsRoma to Brisbane Pipeline(“RBP”)The RBP was commissioned in 1969 to transport gas 438 kilometres from the Surat Basin to industrial user
112、s in Brisbane.Since that time,the RBP has been expanded through the installation of six compressor stations and six stages of looping that have increased capacity from the original free flow capacity of 40 terajoules per day to the current nominal capacity of 180 terajoules per day.APA is well advan
113、ced in the next phase of expansion of the RBP with Front End Engineering and Design(“FEED”)completed in December 005 and negotiations with a number of prospective new customers nearing completion.The next phase of expansion is anticipated to increase the capacity of the RBP to in excess of 00 terajo
114、ules per day.Further expansion through compression of the pipeline is possible to in excess of 300 terajoules per day.Associated with the RBP is the Peat Lateral Pipeline which transports gas 11 kilometres from the Peat and Scotia gas fields to interconnect with the RBP at Condamine.The RBP delivers
115、 gas to approximately 0 delivery points in south east Queensland for use by major industrial customers such as Incitec Pivot and BP,gas-fired power generators and gas retailers for supply to industrial,commercial and residential consumers.Carpentaria Gas Pipeline(“CGP”)The CGP was commissioned in 19
116、98 to transport gas 840 kilometres from the Ballera gas centre to customers in Mt Isa and the surrounding Carpentaria mineral province.Gas is predominantly used for power generation for mining operations,with some additional use as a feedstock and process heating.The CGP was expanded in late 00 thro
117、ugh the installation of a mid-line compressor station.There is the provision for further expansion of the CGP through the installation of up to four compressors at each of the scraper stations along the CGP.10Asset OverviewNew DevelopmentsMondarra Gas Storage ExpansionThe Mondarra gas storage facili
118、ty is located close to Dongara in the Mid West of WA adjacent to the two pipelines servicing Perth and the south west of WA being the APA owned Parmelia Gas Pipeline and the Alinta operated Dampier to Bunbury Gas Pipeline.It is currently operating as WAs only gas storage facility,based on a depleted
119、 gas reservoir that was discovered and developed by West Australian Petroleum in the early 1970s,and which has operated as a storage field since the bulk of the natural gas was produced during the mid 1980s.The gas reservoir is located around 30 kilometres to the south east of Dongara and sits at a
120、depth of some three kilometres directly beneath the Parmelia Gas and Dampier to Bunbury Pipelines with the surface facilities located between the two pipelines.APA announced in February 006,the execution of a five year agreement with Verve Energy which underpinned the expansion of the Mondarra gas s
121、torage facility including the drilling of a new well into the existing reservoir.The project is currently on track,with the drilling of the new well in late 006 and the completion of the required tie-ins and additional surface facilities scheduled for early 007.The top section of the well will be dr
122、illed conventionally to a depth of,700 metres and then completed using a“state of the art”underbalanced drilling technique utilising a coiled tubing unit for the 45 degree open hole section through the reservoir formation.Further expansion of the surface facilities to upgrade the compression and pro
123、cessing facilities is anticipated during 007,once the well has been tested and modelled.This investment by APA,provides the opportunity to expand the rapidly developing“Mondarra Gas Hub”which conveniently straddles the two gas pipelines servicing the south west of WA,offering interconnected pipeline
124、 gas transportation services,load management,storage,compression and processing all controlled remotely from APAs dedicated 4 hour Perth Control Centre.The expansion of the gas storage facilities is an exciting addition to the suite of flexible and innovative services that APA has been developing an
125、d is a premium alternative to the standard gas transportation services that have traditionally been available in WA.Kogan North Gas Processing FacilityThe Kogan North gas processing facility is located at Kogan,west of Brisbane and adjacent to the RBP.The facility will filter,dehydrate,compress and
126、meter coal seam gas from the Kogan North gas field for injection into the RBP.The gas is then transported on the RBP for use at CS Energys Swanbank E Power Station.The facility processed its first gas in January 006 and volumes have been steadily increasing since that time in line with the developme
127、nt plan for the Kogan North gas field.The facility has been initially designed to process four petajoules per annum and has the capability to be expanded as more gas is identified and produced in the surrounding areas.Daandine Gas Fired Power StationThe Daandine gas fired power station is located at
128、 Kogan,west of Brisbane and is adjacent to APAs Kogan North gas processing facility and the RBP.The power station consists of 11 x 3 mega watts Jenbacher gas fired engines and is designed to produce 7.4 mega watts of electricity in base load operation.The power station is anticipated to utilise appr
129、oximately two petajoules per annum of gas sourced from the adjacent Daandine coal seam gas field.Agreements for APA to build,own and operate the power station were executed in June 006 and construction of the power station is underway.Commissioning of the power station is anticipated to occur in lat
130、e 006 to early 007.The location of the Daandine power station,which is adjacent to the Kogan North gas processing facility and the RBP,provides the opportunity for the power station to obtain additional gas supplies for current and future operation of the power station.In addition,as further gas is
131、identified at the Daandine gas field in excess of the requirements of the power station,it can be processed via the Kogan North gas processing facility and transported to the broader market via the RBP.Gas Storage Facilities10“This investment by APA,provides the opportunity to expand the rapidly dev
132、eloping“Mondarra Gas Hub”which conveniently straddles WAs only two gas pipelines servicing the south west of WA.”11MurraylinkAPA acquired Murraylink in March 006.Murraylink is a 180 kilometre,high voltage direct current electricity transmission asset that links the electricity transmission networks
133、in Berri,South Australia and the transmission networks at Red Cliffs near Mildura,Victoria.The assets include two converter stations and two buried high voltage direct current cables.Murraylink was constructed in 003,based on innovative but proven electricity technology.Like many gas pipelines,Murra
134、ylink is capital intensive,has a low operating cost and is a relatively low risk piece of linear energy infrastructure in a remote location.Murraylink is a regulated asset with revenue certainty to 013 and beyond.In accordance with the electricity market rules,revenue from Murraylink is determined b
135、y the Australian Energy Regulator.APA,as owner,has a statutory right to recover revenue from all electricity users in Victoria and South Australia.Murraylink has certainty of cash flow,which is provided by the electricity market framework rather than through contracts.Bonaparte Gas Pipeline(“BGP”)In
136、 June 006,APA signed a$400 million GTA with Power and Water Corporation(“PWC”)in the NT.The 5 year agreement,which commences on 1 January 009,also commits APA to develop the BGP at an estimated cost of$130 million.The pipeline will transport gas from Enis on-shore gas plant,to be built at Wadeye,and
137、 will connect to the Amadeus Basin to Darwin Pipeline(“ABDP”).Approximately 77 kilometres in length,the new pipeline will have an initial delivery capacity of 30 petajoules per year.Preliminary works on route selection,land access and engineering activities commenced immediately in order to meet the
138、 1 January 009 commencement date.APA also holds a 96%interest in NT Gas,the operator of the ABDP.The new BGP project,the GTA with PWC and the ownership interest in NT Gas,places APA in a strong position to continue its long term commitment to support the growing energy requirements of the Northern T
139、erritory.ElectricityMurraylink assetsLeft:Redcliffs,VICRight:Berri,SANORTHERNTERRITORYBONAPARTE GASPIPELINEDARWINJoseph Bonaparte GulfAdelaide RiverAMADEUS BASIN TO DARWIN PIPELINE Daly RiverDARWINBlacktip FieldGas PipelinesBonaparte Gas Pipeline mapBoard of DirectorsAPAs gas processing facility rem
140、oves water and other impurities to achieve pipeline quality gas for delivery into APAs pipelines and ultimately to end users.1 APAs gas transmission pipelines connect producers of gas,(often located in remote areas),to the major consumers of gas.APA earns revenue by selling transportation and relate
141、d services to the producers,consumers and retailers of gas.APAs contracts with its customers are typically over long terms,(10 to 0 years),with a large portion of the revenue being fixed and independent of how much gas is actually transported.Consequently,APAs revenue is relatively secure and well u
142、nderstood over a long period of time.Gas Transmission Gas ProcessingGeorge H Bennett FCA INDEPENDENT CHAIRMANAppointed 11 February 000Mr George Bennett is a company director with almost 40 years experience at accounting services firm KPMG.Mr Bennett retired as National Executive Chairman of KPMG and
143、 chairman of the KPMG Asia Pacific board in 1993.His other directorships include Brazin Limited,Fantastic Holdings Limited,Macquarie Leisure Management Limited and Macquarie Office Management Limited.Mr Bennett is also the Chairman of the Nominations and Remuneration Committee.Ross M Gersbach BBus C
144、PA NON-EXECUTIVE DIRECTORAppointed 6 August 004Mr Ross Gersbach is Group Manager,Infrastructure Investments with AGL.Mr Gersbach was appointed to this position in 004,prior to which he held the position of Group Manager,Corporate Development.Mr Gersbach has been with AGL since 1986 and has had senio
145、r roles across a number of AGLs operating units,including AGLs pipeline division.Mr Gersbach is a director of Elgas Limited,ActewAGL and a number of AGL investment subsidiaries.Mr Gersbach is a member of the Nominations and Remuneration Committee and the Audit and Risk Management Committee.Russell A
146、 Higgins AO BEc FAICD INDEPENDENT NON-EXECUTIVE DIRECTORAppointed 7 December 004Mr Russell Higgins AO is a company director with extensive experience both locally and internationally in the energy sector and in economic and fiscal policy.Among his many roles,Mr Higgins was Secretary and Chief Execut
147、ive Officer of the Department of Industry,Science and Resources from 1997 to 00 and Chairman of the Australian Governments Energy Task Force from 003 to 004.Mr Higgins is the chairman of the Co-operative Research Centre for Coal in Sustainable Development and Chairman of the CSIRO Energy Transformed
148、 Flagship Advisory Committee.He is a director of Rice Growers Limited(trading as SunRice)and of the Australian Biodiesel Group Limited.He is a former Chairman of the Snowy Mountains Council,a former chairman of the Australian Governments Management Improvement Advisory Committee and a former directo
149、r of EFIC,CSIRO,Austrade,the Australian Industry and Development Corporation,the Australian Tourist Commission,and the Australian Sports Commission as well as former member of the Australian Governments Joint Economic Forecasting Group.Mr Higgins is a member of the Audit and Risk Management Committe
150、e.Jane F McAloon BEc(Hons)LLB FCIS NON-EXECUTIVE DIRECTORAppointed 3 March 005 Retired as of 8 August 006Ms Jane McAloon was Company Secretary of AGL and is a Chartered Secretary.She has previously held the positions of Deputy Director General of the NSW Cabinet Office,Director General of the NSW Mi
151、nistry of Energy and Utilities and Executive Director Strategy,NSW Co-ordinator of Rail.She has also worked as a lawyer and Ministerial Adviser.George H BennettRoss M GersbachRussell A Higgins AOJane F McAloonMuri MuhammadRobert J WrightMichael J McCormackWan Shamilah SaidiAPAs electricity transmiss
152、ion system connects electricity transmission systems from one state to another as part of the National Electricity market that ensures electricity is delivered from generators in one part of the country to another part of the country where it is needed by end users.13APAs gas storage facility stores
153、 gas in a reservoir to be injected into APAs pipelines during periods of high demand.Electricity Gas StorageMuri Muhammad MSc INDEPENDENT NON-EXECUTIVE DIRECTORAppointed 8 March 000Mr Muri Muhammad retired from Petronas in August 00 and was re-appointed as Adviser,Gas Business in the Presidents Offi
154、ce(Petronas)until 30 March 005.He brings to the Responsible Entity 30 years experience in the chemicals and petroleum industry as well as expertise in the domestic and international gas transmission and distribution,gas utilisation,co-generation and conversion businesses where he has held various se
155、nior executive positions.Mr Muri was appointed Vice President for Gas Business in 1998 until his retirement in August 00.In that role,he was involved in Petronas gas development projects in Iran,India,Algeria,Myanmar,Pakistan,Vietnam and China.Mr Muri has held several directorships including Chairma
156、n of the board of Petronas subsidiaries and associate companies in Malaysia and abroad.He has been involved in district cooling co-generation;pipeline gas transmission and distribution;liquefied natural gas production and marketing;and urea/ammonia production and marketing.Mr Muri currently sits on
157、the boards of Transportadora de Gas Del Norte of Argentina and Petronas Gas Berhad of Malaysia,both of which are gas pipeline transmission companies.Mr Muri is also a member of the Malaysian Energy Commission,a Malaysian Government regulatory body.Mr Muri is a member of the Nominations and Remunerat
158、ion Committee.Robert J Wright BComm FCPA INDEPENDENT NON-EXECUTIVE DIRECTORAppointed 11 February 000Mr Robert Wright has over 30 years financial management experience,having held a number of chief financial officer positions,including finance director of David Jones Limited.He is currently the chair
159、man of Dexion Limited and a director of SAI Global Limited,Super Cheap Auto Group Limited,Babcock&Brown Residential Land Partners Group and the reconstructed Harris Scarfe Australia Pty Limited.Mr Wright is the Chairman of the Audit and Risk Management Committee.Michael(Mick)J McCormack BSurv GradDi
160、pEng MBA FAICD MANAGING DIRECTORFor bio,see page 14.Wan Shamilah Saidi Bsc ACA ALTERNATE INDEPENDENT NON-EXECUTIVE DIRECTORAppointed 1 October 005Ms Wan Shamilah Saidi is the General Manager,Finance Division of Petronas Gas Berhad,a gas processing,transmission and utilities company listed on the Mal
161、aysian Stock Exchange.She holds a degree in Economics and Accounting from University of Bristol,England.Ms Shamilah is also a member of the Institute of Chartered Accountants in England&Wales and the Malaysian Institute of Accountants.Ms Shamilah has been with Petronas since 1993 and has held variou
162、s positions in Group Finance and Corporate Planning&Development Division of Petronas.Prior to the current position,she was a manager within the Business Development Unit responsible for the mergers and acquisitions activities for Petronas.Ms Shamilah currently sits on the board of several companies
163、in the Petronas Group.George H BennettRoss M GersbachRussell A Higgins AOJane F McAloonMuri MuhammadRobert J WrightMichael J McCormackWan Shamilah SaidiManagement team1421Peter D Fox BE(Hons)Grad Dip Petroleum EngGENERAL MANAGER,CORPORATE DEVELOPMENTMr Fox was appointed to his position on 1 July 006
164、.He is responsible for the corporate development of APA.This includes primary responsibility for the regular review and development of APAs overall strategic plan,evaluation of major acquisition prospects for the organisation and management of the processes to execute those acquisitions.Mr Fox has o
165、ver 17 years experience in the energy industry,of which over eight years has been spent on infrastructure acquisition projects.Mr Fox has tertiary qualifications in chemical and petroleum engineering and is a member of the Society of Petroleum Engineers.3Michael(Mick)J McCormack BSurv Grad Dip Petro
166、leum Eng MBA FAICDMANAGING DIRECTORMr McCormack has been Chief Executive Officer of APA since 1 July 005,and was appointed Managing Director on 1 July 006.He carries overall responsibility for the performance of APA and its management team.Mr McCormack has extensive senior management experience in t
167、he energy transmission sector in Australia,with particular focus on gas transmission pipelines,where he has worked on the development of new and existing pipelines across Australia.Mr McCormacks entire career has been based in the energy transmission business and prior to joining APA on its float in
168、 000,he spent 13 years with AGL where he held a range of senior management positions within its pipeline business.Mr McCormack is the Chairman of a range of APA subsidiary companies.Mr McCormack has tertiary qualifications in science,engineering and business.Mr McCormack is a director on the board o
169、f the Australian Pipeline Industry Association and is a Fellow of the Australian Institute of Company Directors.Stephen P Ohl BEng GradDipMan MIEAust FAICDGROUP GENERAL MANAGER,OPERATIONSMr Ohl is responsible for the business performance of all APA assets.This includes primary responsibility for the
170、 operation,contract management,commercial development and technical regulation of all pipeline and related assets.Mr Ohl has over 30 years experience in the petrochemical,oil and gas and pipeline industries,of which 15 years was spent managing and operating APA assets,which were previously owned by
171、AGL.Mr Ohl has tertiary qualifications in engineering and management and is a member of the Institution of Engineers Australia,Fellow of the Australian Institute of Company Directors and past President of Australian Pipeline Industry Association.Mr Ohl is also a director on a number of subsidiary co
172、mpanies within the APA group.2115Austin J V James LLBCOMPANY SECRETARY/GENERAL MANAGER,CORPORATEMr James is responsible for the management of corporate services functions including public and unitholder relations,and administration,and has been the Company Secretary for the APA group for the last si
173、x years.Mr James has substantial experience in corporate,legal and regulatory roles.Prior to joining APA,Mr James worked for AGL,where he held senior management positions including Manager Finance and Planning,Manager Taxation and Manager Development Projects.Mr James has been admitted to the Suprem
174、e Court of New South Wales as a barrister.Mr James is a company secretary on all subsidiary companies within the APA group.Richard F Francis BComm CA MBA MAICDCHIEF FINANCIAL OFFICERMr Francis is responsible for the financial management of APA.This includes accounting and financial reporting,financi
175、al compliance and governance,taxation,treasury and IT functions.Mr Francis has 4 years accounting experience,including 15 years in chartered accounting in Australia and the UK and nine years in commerce.Prior to joining APA,Mr Francis was the Group Financial Controller for Origin Energy for over fiv
176、e years from its initial listing in early 000.He also held a number of divisional senior management positions in Boral Energy and Boral.Mr Francis is a chartered accountant,has a MBA from Macquarie Graduate School of Management and is a member of the Australian Institute of Company Directors.Mr Fran
177、cis is a director on a number of subsidiary companies within the APA group.Sandra M Dureau BA(Asian Studies)LLBGENERAL COUNSEL/GENERAL MANAGER,REGULATORYMs Dureau is responsible for the management of legal and economic regulatory matters affecting APA and its assets.This includes responsibility for
178、the outcome of regulatory processes under the National Gas Code.Ms Dureau has extensive legal and regulatory experience in energy infrastructure,including gas pipelines,having worked in the industry since 1996 in legal,regulatory and commercial roles.Prior to moving in-house,Ms Dureau worked as a so
179、licitor for 10 years.Ms Dureau is a member of the Australian Institute of Company Directors.Ms Dureau is a director on a number of subsidiary companies within the APA group.3456456SponsorshipsAustralian Brandenburg OrchestraWith so much of the arts facilities and government programs going into the m
180、ajor metropolitan centres,is it not about time regional and rural Australia received the same quality music and entertainment?It will not happen without private sponsorship,and willing performers.Through the partnership of Australian Pipeline Trust(“APA”)and the ABO,this has happened.It has been a m
181、ission of APA Managing Director,Mick McCormack(an accomplished rhythm and blues musician,born and raised in country Queensland),to channel corporate support for the arts back to the bush.Paul Dyer,Artistic Director of the ABO,loves to see the Orchestra he has built from scratch over the past decade,
182、play to everyone,not just those fortunate enough to live within driving distance of a city concert hall.Since its inception in 1989,the Orchestra has enjoyed rapid growth,but its audience reach was primarily limited to the greater Sydney area,despite demand further afield.With the high costs of tran
183、sporting an orchestra out of its metropolitan base to smaller audiences in distant locations,private sector support was needed to take the Orchestra on the road.APA also recognised it needed an effective way to communicate directly with the people it does business with in those very same Years remov
184、ed from the day it was first penned in 1723 and far from his own 18th century Europe,Vivaldis The Four Seasons filled the Goldfields Arts Centre in Kalgoorlie in 2005,with each and every note in perfect unison by the members of the Australian Brandenburg Orchestra(“ABO”).distant locations in particu
185、lar the Northern Territory and Western Australia.Music became the link.In 001,the Orchestra launched its first national tour in Perth and Darwin.In 006,the Orchestra was encouraged by Mick McCormack to look at a more robust tour.The Orchestra went on to perform to over 10,000 concert-goers in Brisba
186、ne,Darwin,Perth,Bunbury and Adelaide.The Orchestra also toured regional parts of New South Wales,including Bathurst,Newcastle,Bowral and Goulburn.In total,the partnership allowed over 45,000 people at more than 60 performances across Australia,to experience the talents of the Orchestra,in the last 1
187、 months.The recently completed 006 national tour allowed APA to maximise the value of its sponsorship by inviting APA customers,important State Government contacts and other associates to performances in cities across Australia and so further develop our relationships and communication with all thes
188、e stakeholders.In planning and shaping the future of the partnership,both parties meet together extensively to understand each others needs and objectives.Underpinned by this mutual understanding,the partnership has seen APA grow to be Australias leading transporter not only of energy but also music
189、.16Above:Another string to his bow Mick McCormack and Paul DyerFinancial ReportAnnual Financial Report 2006 18 Corporate Governance Statement 25 Directors Report 44 Income Statement 45 Balance Sheet 46 Statement of Changes in Equity 48 Cash Flow Statement 49 Notes to the Financial Statements 93 Dire
190、ctors Declaration 94 Auditors Independence Declaration 95 Independent Audit Report 96 Additional Stock Exchange Information 97 Unitholder Information 99 Glossary of Terms and Abbreviations 100 Financial Calendar and Directory1718 Australian Pipeline Trust(ARSN 091 678 778)and controlled entitiesCorp
191、orate Governance Statement The Board of Directors(“Board”or“Directors”)of Australian Pipeline Limited(“APL”or“Responsible Entity”),as Responsible Entity for Australian Pipeline Trust(“APA”or“Trust”)and its controlled entities(together“consolidated entity”)is responsible for the consolidated entitys
192、corporate governance practices.The Board had conducted a review of the corporate governance practices following the publication of ASX Corporate Governance Council“Principles of Good Corporate Governance and Best Practice Recommendations”(“Principles”),which became applicable to APA in the financial
193、 year ended 30 June 2004.APA reviews its governance practices on an ongoing basis against the Principles.For maximum transparency,each of the ten Principles issued by the Australian Stock Exchange(“ASX”)has been responded to in turn:Principle 1:Lay Solid Foundations for Management and Oversight by t
194、he BoardThe Boards responsibilities are encompassed in a charter,which is published on APAs website(“website”).The major roles it has defined to fulfil its responsibilities to APA unitholders(“unitholders”)and the community are to:(a)set the strategic direction of the consolidated entity with manage
195、ment and monitor managements implementation of that strategy;(b)select and appoint(and,if appropriate,remove from office)the Managing Director/Chief Executive Officer,determine his conditions of service and monitor his performance against established objectives;(c)ratify the appointment(and,if appro
196、priate,the removal from office)of the Chief Financial Officer and the Company Secretary;(d)approve conditions of service and performance monitoring procedures to apply to senior management;(e)monitor financial outcomes and the integrity of reporting,in particular approve annual budgets and longer te
197、rm strategic and business plans;(f)set specific limits of authority for management to commit to new expenditure,enter contracts or acquire businesses without prior Board approval;(g)ensure that effective audit,risk management and compliance systems are in place to protect the consolidated entitys as
198、sets and to minimise the possibility of APA operating beyond the constitution or beyond acceptable risk parameters;(h)establish and maintain a code of conduct(“code”);(i)monitor compliance with regulatory requirements(including continuous disclosure)and code;(j)review senior management succession pl
199、anning and development on a regular basis;and(k)provide effective and timely reporting to unitholders.To assist it in carrying out its responsibilities,the Board has established standing committees of its members.They are:Audit and Risk Management Committee;and Nominations and Remuneration Committee
200、.Directors appointed at the time of the public float in 2000,have not received formal letters of appointment,though they have received less formal letters from the Chairman in response to their letter of consent to act as a Director.All Independent Directors appointed since,have received formal appo
201、intment letters.The Board delegates responsibility for implementing the strategic direction and for managing the day-to-day operations of the consolidated entity to the Managing Director/Chief Executive Officer.There are clear lines of communication established between the Chairman and Managing Dire
202、ctor/Chief Executive Officer to ensure that the responsibilities and accountabilities of each are clearly understood.The Managing Director/Chief Executive Officer,Chief Financial Officer and other senior management have service contracts setting out their duties,responsibilities,conditions of servic
203、e and termination entitlements.Principle 2:Structure the Board to Add ValueThe Board determines its size and composition,subject to limits imposed by APLs constitution.The constitution provides for a minimum of three Directors and a maximum of 12.During the financial year,the Board was composed of s
204、ix Directors,all of whom are non-executive.Mr M J McCormack,Chief Executive Officer,was appointed Managing Director from 1 July 2006.Since July 2005,the Board has consisted of three non-corporate Directors(all independents),a representative of Petronas(also an independent)and two representatives of
205、The Australian Gas Light Company(“AGL”).From June 2004,unitholders have had the ability to nominate candidates for the three non-corporate Independent Australian Pipeline Trust(ARSN 091 678 778)and controlled entities 19Corporate Governance Statement Director positions,upon retirement or vacancy of
206、the existing incumbents.The three non-corporate Directors nominated by unitholders,will retire on a rotating annual basis and may stand for re-election.In August each year,unitholders will be notified by announcement to ASX that they may nominate a person(s)for election to the Board as a non-corpora
207、te Director.Unitholders will have 15 days from the date of announcement to ASX to lodge a nomination form together with the relevant consent to act as a Director.Once nominations are received by the required date,APL will advise unitholders of all candidates who have been validly nominated and prese
208、nt its nominations to unitholders at the APA annual meeting,which is generally held in October each year.A majority resolution by unitholders on nominations presented to the APA meeting will confirm unitholders intentions.Unitholders will not be able to vote for the two Directors appointed by AGL,th
209、e one Director appointed by Petronas,or the Managing Director.A majority of the current members of the Board are“independent”within the ASX definition,to the extent that the components of that definition can be objectively assessed.Those members are Messrs G H Bennett(Chairman of the Board),R J Wrig
210、ht(Chairman of the Audit and Risk Management Committee),R A Higgins AO and M Muhammad(the Petronas representative).Mr R M Gersbach and Ms J F McAloon(who retired on 28 August 2006)are not considered to be independent by virtue of their positions as Directors appointed by AGL(which owns 30%of the uni
211、ts on issue in the Trust).Mr M J McCormack,as Managing Director,will not be considered to be independent.The Nominations and Remuneration Committee(“Committee”)of the Board comprises three Non-Executive Directors,Messrs G H Bennett(Chairman),R M Gersbach and M Muhammad.The terms of reference of the
212、Committee are set out on page 35 in the Directors Report.The Committee met four times during the financial year ended 30 June 2006.Details of attendance are set out on page 34 in the Directors Report.The Committee may make use of external consultants if that is deemed appropriate.Succession planning
213、 for the Board is reviewed regularly,first by the Committee and then by the Board.In considering potential new non-corporate Directors to commend to shareholders and unitholders,the Board seeks to identify candidates with appropriate skills and experience to contribute to the effective direction of
214、APL,who can exercise an independent and informed judgement on matters which come to the Board,and who are free of any business or other relationship that may interfere materially with the exercise of that independent judgement.The Chairman is selected by the full Board.The Managing Director is an Ex
215、ecutive Director of APL and Chief Executive Officer of APA.The Directors,at any time during the financial year,or since,are listed below.For a brief description of their qualifications,experience and special responsibilities,see pages 12 to 13:Mr G H Bennett FCA Independent ChairmanMr R M Gersbach B
216、Bus CPA Non-Executive DirectorMr R A Higgins AO BEc FAICD Independent Non-Executive DirectorMs J F McAloon BEc(Hons)LLB FCIS Non-Executive DirectorAppointed 23 March 2005.Retired as of 28 August 2006.Mr M Muhammad MSc Independent Non-Executive DirectorMr R J Wright BComm FCPA Independent Non-Executi
217、ve DirectorMs Wan Shamilah Saidi Bsc ACA Alternate Independent Non-Executive DirectorAppointed 21 October 2005.Mr Ed Osman Ridzwan BSc MBA Alternate Independent Non-Executive DirectorAppointed 25 September 2003.Retired as of 21 October 2005.Mr M J McCormack BSurv GradDipEng MBA FAICD Managing Direct
218、or/Chief Executive OfficerAppointed Managing Director 1 July 2006.Mr J K McDonald FAICD Managing DirectorAppointed Managing Director 3 June 2002.Retired as of 1 July 2005.Corporate Governance Statement 20 Australian Pipeline Trust(ARSN 091 678 778)and controlled entitiesPrinciple 3:Promote Ethical a
219、nd Responsible Decision MakingAPA has policies on ethical and responsible decision making,including policies on unit trading by directors and senior managers,and on conflicts of interest.APAs Code of Conduct(“code”),which applies to Directors as well as employees,is available on the website.The code
220、 is important,but equally important is the encouragement of ethical conduct not just by edict,but also by example,from all involved in APA.It is the Boards objective that all dealings with staff,with customers,with regulatory authorities and with the community should be conducted honestly,fairly,dil
221、igently and in accordance with all applicable laws.Any departure from such practice is treated very seriously.APA has a formal policy on dealing in units.The policy provides that Directors and staff may buy and sell APA units only during the four week periods following the release to ASX of the half
222、 year and full year results and the annual meeting of APA,unless exceptional circumstances apply.In any case,Directors and staff are precluded from buying or selling units at any time if they are aware of any price-sensitive information which has not been made public.APA has introduced a formal Boar
223、d protocol which addresses any potential conflict of interest,but in particular,outlines an appropriate methodology to address issues arising from the proposed Alinta Limited(“Alinta”)/AGL merger.Principle 4:Safeguard Integrity in Financial ReportingAPA complies with all the ASX recommendations unde
224、r this Principle.The Managing Director/Chief Executive Officer and the Chief Financial Officer have,for many years,provided detailed written undertakings to the Board providing assurances that the consolidated entitys financial reports present a“true and fair view”and are in accordance with relevant
225、 accounting standards.The Board has established an Audit and Risk Management Committee(“Committee”),comprising three Non-Executive Directors,all with appropriate experience.They are Messrs R J Wright(Chairman),R M Gersbach and R A Higgins.Committee members qualifications are disclosed under Principl
226、e 2.The Managing Director/Chief Executive Officer,Chief Financial Officer,Company Secretary/General Manager,Corporate,Group General Manager,Operations,and External Auditor attend Committee meetings at the discretion of the Committee.The Committee also meets privately with the External Auditor withou
227、t management present.The minutes of each Committee meeting are reviewed at the subsequent meeting of the Board and the Chairman of the Committee reports on the Committees conclusions and recommendations.The Committee held four meetings during the year ended 30 June 2006.The details of meetings atten
228、ded by each member are set out on page 34 in the Directors Report.The role and responsibilities of the Committee are to:(a)recommend to the Board the appointment of the External Auditor and its fees;(b)review and/or evaluate:the audit plan of the External Auditor;the performance of the External Audi
229、tor;the provision of non-audit services by the External Auditor,including the quantum of fees and the types of activities performed;the effectiveness of the internal review processes;the management letters from the External Auditor and managements responses;the adequacy and effectiveness of the repo
230、rting and accounting controls of the consolidated entity;the financial reports to be made to unitholders and/or the public prior to their release;the consolidated entitys exposure to business risks;reports from management,the compliance service provider and/or the External Auditor concerning any sig
231、nificant regulatory,accounting or reporting development to assess potential financial reporting issues;Corporate Governance Statement Australian Pipeline Trust(ARSN 091 678 778)and controlled entities 21the adequacy of risk management strategies in relation to the maintenance,operations or replaceme
232、nt of assets of the consolidated entity(and make recommendations to the Board);andthe adequacy of risk management strategies in relation to any statutory or policy requirements,including environment,and occupational health and safety(and make recommendations to the Board);(c)approve and recommend ac
233、ceptance to the Board of:all significant accounting policy changes;the consolidated entitys taxation position;andhalf yearly and annual financial statements;(d)determine that no restrictions are being placed upon either the internal review processes or the External Auditor;(e)monitor the standard of
234、 corporate conduct in areas such as arms length dealings and likely conflicts of interest;(f)direct any special projects on investigations deemed necessary by the Board;and(g)perform other duties as directed by the Board,from time to time.Principle 5:Make Timely and Balanced DisclosureA continuous d
235、isclosure regime operates throughout APA.The continuous disclosure policy is posted on the website.Policies and procedures are in place to ensure matters that a person could reasonably expect to have a material effect on the unit price are announced to ASX in a timely manner.The Company Secretary is
236、 the nominated Continuous Disclosure Officer and he reports to the Board quarterly on matters notified to ASX.In addition,direct reports to the Managing Director/Chief Executive Officer also confirm in writing to the Board,on a quarterly basis,that matters which might need to be disclosed have been
237、brought to the attention of the Continuous Disclosure Officer for review.In the event a decision is made not to notify ASX of a particular event or development,the reasons for non-notification are advised to the Board.Directors receive copies of all announcements immediately after notification to AS
238、X.All announcements are posted on the website.Principle 6:Respect the Rights of UnitholdersAPA endeavours to keep its unitholders fully informed of matters likely to be of interest to them.It does this through:reports to ASX and the press;half year and full year profit announcements;a periodic newsl
239、etter;annual reports;release to ASX of information provided to analysts;andweb casting of half year and full year accounts presentations.All the above are notified on the website.Unitholders are given the opportunity to provide their e-mail addresses to APA to enable them to receive reports and anno
240、uncements to ASX without delay.At the annual meeting,the Chairman encourages questions and comments from unitholders and seeks to ensure the meeting is managed to give the maximum number of unitholders an opportunity to participate.In the interests of clarity,questions on operational matters may be
241、answered by the Managing Director/Chief Executive Officer or another appropriate member of senior management.The External Auditor attends APAs annual meeting and is available to respond to questions about the conduct of the audit and the preparation and content of the Independent Audit Report.Princi
242、ple 7:Recognise and Manage RiskAny business faces a wide variety of risks depending on the nature of its operations and the regions within which it operates.APA has a formal enterprise-wide risk program based on Standards Australias AS/NZS 4360:1999(Risk Management).This program is supported by APAs
243、 Risk Management Statement,which has been endorsed by the Board on the recommendation of the Managing Director/Chief Executive Officer and the Audit and Risk Management Committee.All outstanding audit issues are monitored through to satisfactory completion.The External Auditor also reports findings
244、on relevant risk issues to the Audit and Risk Management Committee and to the Board on a half yearly basis.The system of risk management and internal control ensures compliance with the policies established by the Board.This system underpins the integrity of the financial statements and the operatio
245、n and management of APA assets.Financial risk managementThe ongoing review of control systems that is undertaken is supported by a system of regular internal reviews to ensure that the outsourced components of accounting functions operate effectively.This review,which is performed on a half year bas
246、is,ensures that the financial systems and controls and procedures,operate in accordance with the Pipeline Management Agreement.Operational and asset managementAPA ensures the integrity of pipeline assets through the implementation of asset specific Safety and Operating Plans(“SAOPs”)complying with t
247、he conditions of the relevant pipeline licence and Australian Standard AS 2885.3 Pipelines Gas and Liquid Petroleum Part 3:Operations and Maintenance.These SAOPs detail the policy for personnel,the public and environmental protection as identified in risk assessments satisfying Australian Standard A
248、S 2885.1 Pipelines Gas and Liquid Petroleum Part 1:Design and Construction.The plans include measures to protect pipeline assets,promote public awareness of the pipelines,operate and maintain the pipelines safely,respond to emergencies,prevent gas escapes,carry out inspections and ensure that plans
249、and procedures continue to comply with engineering design.Each SAOP is reviewed and updated every two years if significant incremental change has occurred.The risk assessments are reviewed and updated to coincide with any change in use of the relevant pipeline and at intervals not exceeding five yea
250、rs.The SAOPs for each of the New South Wales and Queensland pipelines are audited annually by qualified external auditors.In Western Australia,the requirements of SAOP are met in the Safety Case that is prepared for each pipeline.Each Safety Case is audited regularly by the Western Australia technic
251、al regulator.Managing Director and Chief Financial Officer certificationAs noted in the Directors Declaration on page 93,the Managing Director and Chief Financial Officer have provided the Board with written declarations that:the statement given to the Board on the integrity of APAs financial statem
252、ents and operating and asset management is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board;andAPAs risk management and internal compliance and control system is operating efficiently and effectively in all material r
253、espects.Principle 8:Encourage Enhanced PerformanceA formal review process to assess Board performance is undertaken annually in June.The review involves completion of a questionnaire by each Board member to assess the performance of the Board as a whole and Board Committees.Using the services of an
254、independent third party to collate the responses,the Board then meets to discuss and consider the results and make recommendations.The performance review covers the role of the Board and its Committees,their composition,how the Board operates,how Board members interact,the effectiveness of the Chair
255、man in leading the Board,and Board performance generally.The review continues to indicate sound operation in all key areas.APA has processes in place to review the performance of senior management.Arrangements are formal and quantitative.Each senior manager,including the Managing Director/Chief Exec
256、utive Officer,has personal objectives as well as objectives related to business units and APA as a whole.They are assessed against those objectives on an annual basis,or more frequently if that is indicated.A more detailed outline is set out in the Directors Report.The assessment and monitoring of t
257、he Managing Director/Chief Executive Officer is handled by the Chairman with the assistance of the Nominations and Remuneration Committee.A full report is provided to,and discussed in detail by the Board.Assessment and monitoring of other senior managers is handled by the Managing Director/Chief Exe
258、cutive Officer,who reports in detail to the Chairman and the Nominations and Remuneration Committee.Corporate Governance Statement22 Australian Pipeline Trust(ARSN 091 678 778)and controlled entitiesEach year,the Board devotes time to consider broad corporate governance matters,including the continu
259、ing relevance of existing Committees and to reviewing its own performance.The Chairman is responsible,in the first instance,for monitoring the contribution of individual Directors and counselling them on any areas for improvement.Subject to normal privacy requirements,Directors have unfettered acces
260、s to the consolidated entitys records and information,and to the Company Secretary and other relevant senior officers.They receive regular detailed reports on financial and operational aspects of APAs business and may request elaboration or explanation of those reports at any time.Each Director has
261、the added right to seek independent professional advice at APAs expense.Prior approval of the Chairman is required,but this may not be unreasonably withheld.Directors and senior management are encouraged to broaden their knowledge of APAs business and to keep abreast of developments in business more
262、 generally by attendance at relevant courses,seminars,conferences etc both in Australia and overseas.APA meets expenses involved in such activities.Principle 9:Remunerate Fairly and ResponsiblyA more detailed outline of the remuneration and reward principles for Directors and Key Management Personne
263、l is set out on pages 35 to 42 in the Directors Report.Principle 10:Recognise the Legitimate Interests of StakeholdersAPAs code sets out the behaviour required of Directors,employees and contractors.The code provides a mechanism to enable employees to report breaches of the code without any fear of
264、retribution.The full code is published on the website.APA has also introduced a Whistleblowers Policy.This policy covers the procedures for dealing with reports and suspected improper conduct within APA.It also addresses the protection of individuals making those reports.This policy is consistent wi
265、th the whistleblower provisions of the Corporations Act 2001,Part 9.4AAA and the Australian Standard AS 8004.2003.ASX Corporate Governance Council Best Practice RecommendationsThe following table provides a summary of APAs compliance with the Principles:ASX PrincipleComply(yes/no)Principle 1Lay Soli
266、d Foundations for Management and Oversight by the Board1.1Formalise and disclose the functions reserved to the Board and those delegated to the ManagementYesPrinciple 2Structure the Board to Add Value 2.1A majority of the Board should be Independent Directors Yes2.2The Chairman should be an Independ
267、ent Director Yes2.3The roles of the Chairman and Managing Director/Chief Executive Officer should not be exercised by the same individual Yes2.4 The Board should establish a Nomination Committee Yes2.5Provide the information indicated in the guide to reporting on Principle 2YesPrinciple 3Promote Eth
268、ical and Responsible Decision Making3.1Establish a Code of Conduct to guide the Directors,the Managing Director/Chief Executive Officer,the Chief Financial Officer,and any other key executives as to:3.1.1 the practices necessary to maintain confidence in APAs integrity 3.1.2 in conjunction with 3.1.
269、1 and 7.2.2 the responsibility and accountability of individuals for reporting and investigating reports of unethical practices Yes Yes3.2Disclose the policy concerning trading in APA securities by Directors,Officers and employeesYes3.3Provide the information indicated in the guide to reporting on P
270、rinciple 3YesCorporate Governance Statement Australian Pipeline Trust(ARSN 091 678 778)and controlled entities 2324 Australian Pipeline Trust(ARSN 091 678 778)and controlled entitiesASX PrincipleComply(yes/no)Principle 4Safeguard Integrity in Financial Reporting4.1Require the Managing Director/Chief
271、 Executive Officer and the Chief Financial Officer,to state in writing to the Board that the financial reports present a true and fair view,in all material respects,of APAs financial condition and operational results are in accordance with relevant accounting standardsYes4.2The Board should establis
272、h an Audit CommitteeYes4.3Structure the Audit Committee so that it consists of:only Non-Executive Directors a majority of Independent Directors an Independent Chairman,who is not Chairman of the Board at least three members Yes Yes Yes Yes4.4The Audit Committee should have a formal charterYes4.5Prov
273、ide the information indicated in the guide to reporting on Principle 4YesPrinciple 5Make Timely and Balanced Disclosure 5.1Establish written policies and procedures designed to ensure compliance with ASX Listing Rules disclosure requirements and to ensure accountability at a senior management level
274、for that complianceYes5.2Provide the information indicated in the guide to reporting on Principle 5 YesPrinciple 6Respect the Rights of Unitholders 6.1 Design and disclose a communications strategy to promote effective communication with unitholders and encourage effective participation at general m
275、eetings Yes6.2Request the External Auditor to attend the annual meeting and be available to answer unitholder questions about the conduct of the audit and the preparation and content of the auditors report YesPrinciple 7 Recognise and Manage Risk 7.1 The Board or appropriate Board Committee should e
276、stablish policies on risk oversight and management Yes7.2 The Chief Executive Officer(or equivalent)and the Chief Financial Officer(or equivalent)should state to the Board in writing that:7.2.1 the statement given in accordance with best practice recommendation 4.1 is founded on a sound system of ri
277、sk management and internal compliance and control which implements the policies adopted by the Board7.2.2 the companys risk management and internal compliance and control system is operating efficiently and effectively in all material respectsYes Yes7.3Provide the information indicated in the guide
278、to reporting on Principle 7YesPrinciple 8 Encourage Enhanced Performance 8.1Disclose the process for performance evaluation of the Board,its Committees and individual Directors and Key Executives YesPrinciple 9Remunerate Fairly and Responsibly 9.1Provide disclosure in relation to the entitys remuner
279、ation policies to enable investors to understand:the costs and benefits of these policies;and the link between remuneration paid to Directors and Key Executives and corporate performance.Yes Yes9.2 The Board should establish a Remuneration CommitteeYes9.3 Clearly distinguish the structure of Non-Exe
280、cutive Directors remuneration from that of Executives Yes9.4 Ensure that the payment of equity based executive remuneration is made in accordance with thresholds set in plans approved by unitholders N/A9.5Provide the information in the guide to reporting on Principle 9 YesPrinciple 10 Recognise the
281、Legitimate Interests of Stakeholders 10Establish and disclose a code of conduct to guide compliance with legal and other obligationsYesCorporate Governance Statement Australian Pipeline Trust(ARSN 091 678 778)and controlled entities 25The Directors of Australian Pipeline Limited(“APL”or“Responsible
282、Entity”)submit herewith the annual financial report of Australian Pipeline Trust(“APA”or“Trust”)and its controlled entities(together“consolidated entity”)for the financial year ended 30 June 2006(“financial year”or“current financial year”).In order to comply with the provisions of the Corporations A
283、ct 2001,the Directors report as follows:DirectorsThe names of the Directors of the Responsible Entity during and since the end of the financial year are as follows.The Directors held office for the entire period,unless stated otherwise:Mr G H Bennett(Chairman)Mr R M GersbachMr R A Higgins AOMs J F M
284、cAloon(retired as of 28 August 2006)Mr M MuhammadMr R J WrightMs Wan Shamilah Saidi(alternate for Mr M Muhammad appointed as of 21 October 2005)Mr Ed Osman Ridzwan(alternate for Mr M Muhammad retired as of 21 October 2005)Mr M J McCormack(Managing Director appointed as of 1 July 2006)Mr J K McDonald
285、(Managing Director retired as of 1 July 2005)The Directors qualifications,experience and special responsibilities are set out on pages 12 to 13.SecretaryMr A J V James LLBMr James is responsible for the management of corporate services functions including public and unitholder relations,and administ
286、ration,and has been the Company Secretary for the APA group for the last six years.Mr James has substantial experience in corporate,legal and regulatory roles.Prior to joining APA,Mr James worked for AGL,where he held senior management positions including Manager Finance and Planning,Manager Taxatio
287、n and Manager Development Projects.Mr James has been admitted to the Supreme Court of New South Wales as a barrister.Principal ActivitiesThe principal activity of the consolidated entity during the course of the financial year was the ownership of gas transmission pipelines located throughout Austra
288、lia.The consolidated entity undertook the sale of transportation and related services to the producers,consumers and aggregators of gas through these gas transmission pipelines.Additionally,APA owns a coal seam gas processing plant,gas storage facilities and a high voltage direct current interconnec
289、tion system,including a 180 kilometre underground transmission cable.Directors Report26 Australian Pipeline Trust(ARSN 091 678 778)and controlled entitiesDirectors ReportOperating and Financial ReviewChange of accounting standardsThe financial reporting framework used by Australian reporting entitie
290、s has changed to Australian equivalents to International Financial Reporting Standards(“A-IFRS”)from the previous Australian accounting standards.The accompanying financial report is the first full financial report based on the new standards.The comparatives for the financial year ended 30 June 2005
291、 have been restated accordingly.Note 47 to the financial statements provides details of the impact of transition to A-IFRS.All figures below are restated to reflect the impact of A-IFRS.Financial performanceOperating profit after tax and minorities but before significant items for the financial year
292、 was$60,661,000,an increase of 18.1%on the prior financial year of$51,351,000.The increased performance was mainly due to:a full 12 month contribution from the two acquisitions in the 2005 year,ie,the acquisition of the remaining 45%of SCP Investments(No.1)Pty Limited(“SCP”)and 100%of the Parmelia G
293、as Business on 17 August 2004 and the remaining 30%interest in the Carpentaria Gas Pipeline(“CGP”)joint venture on 17 February 2005;part year contribution from Murraylink,which was acquired on 30 March 2006;increased pipeline transportation revenue across pipelines;andreduced operating costs achieve
294、d primarily through the integration of APAs Western Australian Gas Business and negotiated savings under operating and management contracts.After significant items,profit attributable to unitholders of APA for the financial year was$62,546,000(2005:$109,508,000).Details of significant items are prov
295、ided in Note 4 to the financial statements.Distribution to unitholdersOn 29 August 2006,the Directors declared an unfranked final profit distribution of 6.0 cents per unit(“cpu”),taking the total distribution for the financial year to 24.0 cpu.This is an increase of 1.5 cpu,up 6.7%,over the prior ye
296、ar reflecting improved operating performance and increased cashflows.This distribution will be paid on 29 September 2006 and equates to a cash distribution of$16,811,000.No further franking credits are currently available as a consequence of the additional tax deductions arising from APAs entry into
297、 the tax consolidation regime in the 2004 financial year.HighlightsAcquisitions and InvestmentsDuring the financial year,APA:acquired the Murraylink electricity transmission assets,including two converter stations and two buried,high voltage direct current cables between Berri in South Australia and
298、 Red Cliffs near Mildura in Victoria linking the electricity transmission networks in Victoria and South Australia.The Murraylink business has been operating to budget since its acquisition in March 2006;in association with Babcock&Brown Infrastructure(“BBI”),announced a takeover offer for GasNet Au
299、stralia Group(“GasNet”),a publicly listed vehicle with gas transmission assets in Victoria and Western Australia.On 22 August 2006,APA and BBI terminated their joint bidding agreement and APA has made a full cash takeover offer for GasNet securities;invested in a coal seam gas processing facility at
300、 Kogan North,adjacent to the Roma to Brisbane Pipeline(“RBP”).APA has constructed and will operate the$13 million facility for a period of 15 years and process four petajoules of gas a year.The facility was commissioned on 1 March 2006;Australian Pipeline Trust(ARSN 091 678 778)and controlled entiti
301、es 27Directors Reportentered into arrangements to build,own and operate the$29 million Daandine gas fired power station at Kogan.The 27.4 MW power station will operate for 15 years and generate gas tolling revenue to APA of approximately$5.5 million,with electricity generated being supplied into the
302、 southern Queensland grid;andentered into a Heads of Agreement and Gas Transportation Agreement with the NT Power and Water Corporation(“PWC”)for the development of the estimated$130 million Bonaparte Gas Pipeline(“BGP”)which will run from the onshore gas plant at Wadeye to the Amadeus Basin to Darw
303、in Pipeline.Other HighlightsIn Western Australia,APA:began construction of a$15 million compressor expansion of Goldfields Gas Transmission Pipeline(“GGT”).The additional capacity will be used to transport gas to the Hamersley Iron Paraburdoo mine;entered into a 16 year contract with Hamersley Irons
304、 Paraburdoo mine on GGT;executed a five year agreement(plus a five year option)with Verve Energy(formerly known as Western Power)to utilise the Mondarra storage facility;andsigned a seven year contract with Arc Energy to transport gas from the Perth basin gas fields through the Parmelia Gas Pipeline
305、 to Midland Brick.In New South Wales,APA:negotiated a 10 year contract for the transportation of gas through the Central West Pipeline to the inlet of the new Central Ranges Pipeline linking Dubbo to Tamworth,which required the construction of a new meter station at the inlet of the pipeline;andincr
306、eased Moomba to Sydney Pipeline(“MSP”)third party revenue on the MSP to approximately$4 million.APA expects the trend of increasing revenues from third parties to continue as retail competition increases.In the Northern Territory,APA:signed a 25 year$400 million Gas Transportation Agreement(“GTA”)wi
307、th PWC,commencing 1 January 2009,for the transportation of gas from the onshore gas plant at Wadeye to the Amadeus Basin to Darwin Pipeline.In Queensland,APA:completed construction and commenced operation of the Kogan North gas processing facility;andentered into agreements for and commenced constru
308、ction of the Daandine gas fired power station.Stress corrosion cracking(“SCC”)Work continued on the investigation and repair of SCC on the MSP following the in-line inspection(“intelligent pigging”)of the first 162 kilometres of the MSP in the prior period.Further intelligent pigging was conducted i
309、n January 2006 in the section immediately downstream of the first 162 kilometres of the pipeline,and in February 2006,the section immediately downstream of the Bulla Park compressor station.Based on the results of the current financial years program,APA has provided for further repair costs to the M
310、SP and further intelligent pigging exercises in the two sections between Moomba and Bulla Park that have not yet been inspected.During the financial year,APA incurred$14,909,000 in repair and inspection costs(compared to the provision of$20,120,000 established at 30 June 2005).APA has raised a furth
311、er provision of$11,300,000 in relation to the 2006/07 SCC program.APA has ensured that all appropriate regulatory bodies are fully informed and has worked with the Department of Energy,Utility and Sustainability in reviewing the approach adopted by APA.APA continues to meet its contractual obligatio
312、ns and to deliver energy safely and reliably.28 Australian Pipeline Trust(ARSN 091 678 778)and controlled entitiesDirectors ReportFinancial summaryThe following table provides a summary of key financial data as applicable to the financial year:Year ended Year ended 30 June 2006 30 June 2005 Change c
313、ompared to 2005$000$000$000%Operating Results before Significant ItemsPipeline transportation revenue 278,956 267,235 11,721 4.4Electricity transmission revenue 3,188 3,188 Other tolling revenue 1,199 1,199 Other pipeline revenue passthrough 85,727 89,304(3,577)(4.0)Other revenue 9,958 10,773(815)(7
314、.6)Total revenue 379,028 367,312 11,716 3.2EBITDA 200,402 178,876 21,526 12.0EBIT 161,553 142,503 19,050 13.4Pre-tax profit 90,433 78,043 12,390 15.9Income tax expense (29,438)(26,382)(3,056)11.6Operating profit after tax and minorities,before significant items 60,661 51,351 9,310 18.1Significant It
315、emsSCC repair and investigative work (11,300)(23,530)12,230 Tariff dispute resolution 3,262 3,262 Due diligence cost on capital acquisition projects recovered 2,000(2,000)Significant items before income tax (8,038)(21,530)13,492 Tax effect of significant items 2,411 6,459(4,048)Tax-consolidation ben
316、efit APA 7,512 33,738(26,226)A-IFRS transitional tax adjustment 39,490(39,490)Significant items after income tax 1,885 58,157(56,272)(96.8)Profit after income tax and minorities 62,546 109,508(46,962)(42.9)Earnings per unit,before significant items 21.75c 18.67c 3.08c 16.5Earnings per unit 22.43c 39
317、.81c(17.38)c(43.7)CommentaryRevenuePipeline revenue increased by 4.4%from$267,235,000 to$278,956,000,principally due to a full 12 month contribution from the two acquisitions in the previous financial year.APA added$11,968,000 from the consolidation of the WA Gas Business,while the CGP acquisition a
318、dded an additional$5,969,000.Settlement of$3,262,000 in relation to an“acquired”dispute regarding tariffs is also included in pipeline revenue,as a significant item.The reduction in transportation revenue on the MSP under the Gas Transportation Deed(“GTD”),which was foreshadowed in previous financia
319、l reports,was$5,839,000 but was largely mitigated by additional revenue from other customers.This additional revenue has increased by 51%on the previous financial year and reflects the emergence of retail competition.The revenue from the RBP increased by$1,674,000 to$31,887,000,principally due to ne
320、w capacity contracts executed with CS Energy in February 2005.Australian Pipeline Trust(ARSN 091 678 778)and controlled entities 29Directors ReportExpensesAsset operating and management(“O&M”)expenses before significant items decreased from$74,879,000 in the previous financial year to$67,897,000,mai
321、nly as a result of efficiency savings achieved from the integration of the WA Gas Business into APA,lower service expenses associated with operations and management of capital expansions and negotiated savings under the O&M agreement with Agility.At 30 June 2006,APA had borrowings of$1,262 million p
322、rincipally from bi-lateral facilities and US Private Placement notes,compared to$1,066 million at 30 June 2005.Borrowings increased mainly due to funding of the acquisition of Murraylink,however net borrowing costs increased only$6,972,000(10.9%)to$71,121,000,due to the timing of the drawdowns and a
323、s a result of renegotiating syndicated borrowings on more favourable terms during the year.Income TaxThe effective tax rate before significant items has reduced marginally in 2006(32.6%)in comparison to the previous financial year(33.8%).Earnings per UnitEarnings per unit(“EPU”)before significant it
324、ems increased from 18.67 cpu to 21.75 cpu due to the improved performance mentioned above.The issue of 1,286,000 units under the Distribution Reinvestment Plan(“DRP”)occurred on 30 June 2006 and hence did not significantly impact EPU in 2006.Free Cash Flow/Operating Cash FlowCash flow from operating
325、 activities of$112,174,000 increased 5.6%or$5,954,000 on the previous financial year,due to improved operating performance adjusted for non-cash items and working capital movements.Operating cashflows also increased despite payments in relation to stress corrosion cracking(“SCC”)increasing to$14,909
326、,000 in the current year(2005:$3,410,000).The increase in interest paid due to the acquisitions in 2006 and 2005 was largely offset by the tax refunds received in 2006.Net cash used in investing activities includes the acquisition of the Murraylink electricity transmission assets($158,254,000)and a
327、6.2%shareholding in GasNet($22,511,000).Payments for property,plant and equipment include the construction of a gas processing facility at Kogan in Queensland and a compressor expansion on the GGT pipeline in Western Australia.As provided for in the 2005 accounts,a further$35,902,000 was incurred in
328、 settlement of an outstanding tariff dispute recognised as part of the WA Gas Business acquisition.In line with APAs strategic goal of increasing distributions annually by at least consumer price index(“CPI”),unitholder distributions increased 4.9%from$63,786,000 in the previous financial year to$66
329、,936,000 as a consequence of a higher number of units on issue and an increase in distributions per unit.Distribution Reinvestment Plan(“DRP”)The DRP was reinstated during the year following a reassessment of future capital requirements across the APA group.The DRP was reintroduced for the third int
330、erim distribution for the financial year ended 30 June 2006 and raised$5,244,000,net of costs,from the 1,286,000 units that were issued.As at 30 June 2006,280,181,000 units were on issue(2005:278,895,000).Significant ItemsThe results of the current financial year were impacted by the following signi
331、ficant items:based on the investigation,analysis and repairs carried out to date in relation to SCC on the MSP,APA has identified additional work that needs to be carried out.As there is a legal and constructive obligation to carry out further repair and investigative work,an additional amount of$11
332、,300,000 has been provided at 30 June 2006.Payments for SCC work conducted during the financial year of$14,909,000 were applied against the provision created in the prior year;30 Australian Pipeline Trust(ARSN 091 678 778)and controlled entitiesDirectors Reportfollowing the finalisation of APAs entr
333、y into tax consolidations in 2004,further adjustments have been made to the tax cost base of assets which have resulted in a release of deferred tax liabilities and the recognition of an income tax benefit of$7,512,000;andsettlement of an acquired dispute regarding tariffs,resulted in a provision of$3,262,000 being released to profit.The net after-tax impact of the significant items is$1,885,000.I
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