ZENITH PACIFIC PTY LTD AND CONTROLLED ENTITIES ABN FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

Transcription

1 FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE

2 CONTENTS Financial Statements Directors' Report 1 Auditors Independence Declaration 3 Statement of Profit or Loss and other Comprehensive Income 4 Statement of Financial Position 5 Statement of Changes in Equity 6 Statement of Cash Flows 7 Notes to the Financial Statements 8 15 Directors' Declaration 16 Independent Audit Report Page

3 Directors Report Your directors present their report on the company for the financial year ended 30 June. Directors The names of the directors in office at any time during, or since the end of, the year are: Gavin Great William (Doug) Walker Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. During the year weekly senior management meetings were held, which both directors attended. One formal board meeting was held, and both directors attended. Principal Activities The principal activity of Zenith Pacific Pty Ltd is to build, own, operate and maintain remote power plants for the resources industry. No significant change in the nature of the Group s activities occurred during the year. Operating and Financial Review The consolidated profit for the year ended 30 June amounts to 1,602,671 (: 3,185,997). Major contributors to the profit variance were approximately nine months suspended operations at Ok Tedi mine in PNG due to an El Nino weather event (approximately 600,000), and an MWM engine failure and subsequent write down (695,000). Dividends No dividends were paid or declared during the year. Matters Subsequent to the end of the financial year No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the company, the results of those operations or the state of affairs of the company in future financial years. Likely Developments The Nova power station came online on 1 September, and cashflows will commence from the end of October. The Group expects to commence construction phase of Jundee I by the end of October, with the site projected to commence in February The company has also signed a PPA for the East Kundana power station with construction expected to commence November. Other significant contracts are still in the negotiation phase. In addition to the above, the Directors believe that there is a good likelihood of negotiating successful contract extensions for Barrow Island, Silver Lake (Daisy Milano) and the Ok Tedi Operate & Maintain contract in Papua New Guinea. Environmental Regulations The entity is not subject to any significant environmental regulation under Australian Commonwealth or State law. The Group does not hold mining leases or title to the sites where assets are located, as these are under the control and responsibility of our clients. However, the Group complies with all regulations as stipulated by our contracts. 1

4 Indemnification of Officer or Auditor Directors Report (continued) No indemnities have been given or insurance premiums paid, during or since the end of the financial year, for any person who is or has been an auditor of the Group. The Group has funded a premium in respect of insurance against liability incurred as an officer or director for the costs or expenses to defend legal proceedings. The amount of the premium paid was 3,108. Auditors Independence Declaration A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out at page 3. 2

5 Tel: Fax: Level 1, 15 Lake St Cairns QLD 4870 PO Box 6771 Cairns QLD 4870 AUSTRALIA DECLARATION OF INDEPENDENCE BY GREG MITCHELL TO THE DIRECTORS OF ZENITH PACIFIC PTY LTD As lead auditor of Zenith Pacific Pty Ltd for the year ended 30 June, I declare that, to the best of my knowledge and belief, there have been: 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and 2. No contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Zenith Pacific Pty Ltd and the entities it controlled during the period. Greg Mitchell Director BDO Audit (NTH QLD) Pty Ltd Cairns, 16 September BDO Audit (NTH QLD) Pty Ltd ABN is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN , an Australian company limited by guarantee. BDO Audit (NTH QLD) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees. 3

6 Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 30 June Revenue 3 26,490,631 23,999,907 Other income 32,325 58,239 Total income 26,522,956 24,058,146 Note Direct supply and project costs 16,334,891 12,340,054 Employee expenses 3,508,915 2,864,419 Insurance expenses 431, ,720 Occupancy expenses 348, ,687 Foreign exchange losses 119, ,187 Other expenses 1,257,774 1,288,525 Total expenses 22,000,779 17,537,592 Earnings before Depreciation and Finance Costs 4,522,177 6,520,554 Finance expenses 757, ,756 Depreciation 1,043,822 1,091,050 Loss on disposal of assets 695,085 - Profit before income tax 2,025,671 4,694,748 Income tax expense 4 423,000 1,508,751 Profit for the year 1,602,671 3,185,997 Total comprehensive income 1,602,671 3,185,997 The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. 4

7 Statement of Financial Position As at 30 June ASSETS Current assets Cash and cash equivalents 2,518, ,047 Trade and other receivables 5 4,698,929 4,068,570 Current Tax Asset 426,505 - Inventories 6 1,208,794 1,023,946 Other current assets 7 613, ,088 Total current assets 9,467,010 6,185,651 Note Non-current assets Property, plant and equipment 8 24,765,987 11,960,646 Deferred Tax Assets 318,125 - Intangible assets 9,953 9,953 Total non-current assets 25,094,065 11,970,599 TOTAL ASSETS 34,561,075 18,156,250 LIABILITIES Current liabilities Trade and other payables 9 3,616,724 1,859,181 Borrowings 10 3,734,732 2,698,681 Current Tax Liabilities - 667,721 Employee Provisions 544, ,902 Deferred Revenue , ,614 Total current liabilities 8,438,320 6,155,099 Non-current liabilities Borrowings 10 16,812,519 6,449,840 Employee Provisions 273,406 - Deferred Revenue 11 1,882,848 - Total non-current liabilities 18,968,733 6,449,840 TOTAL LIABILITIES 27,407,093 12,604,939 NET ASSETS 7,153,982 5,551,311 EQUITY Share Capital 120, ,100 Retained profits 7,033,882 5,431,211 TOTAL EQUITY 7,153,982 5,551,311 The above statement of financial position should be read in conjunction with the accompanying notes. 5

8 Statement of Changes in Equity For the Year Ended 30 June Share Capital Retained Profits Total Balance at 1 July ,100 2,245,214 2,365,314 Total comprehensive income for the year Surplus/(Deficit) for the year - 3,185,997 3,185,997 Total comprehensive income for the year - 3,185,997 3,185,997 Balance at 30 June 120,100 5,431,211 5,551,311 Total comprehensive income for the year Surplus/(Deficit) for the year - 1,602,671 1,602,671 Total comprehensive income for the year - 1,602,671 1,602,671 Balance at 30 June 120,100 7,033,882 7,153,982 The above statement of changes in equity should be read in conjunction with the accompanying notes. 6

9 Statement of Cash Flows For the Year Ended 30 June Cash from operating activities: Receipts from customers 30,686,056 25,539,061 Payments to suppliers and employees (23,341,305) (20,458,094) Borrowing costs (757,599) (734,756) Interest received 11,647 8,772 Income tax paid (1,835,351) (1,438,316) Net cash provided by (used in) operating activities 4,763,448 2,916,667 Cash flows from investing activities: Loans to related parties - 6,944 Proceeds from sale of property, plant and equipment - 58,207 Payment for property, plant and equipment (14,544,249) (3,376,834) Net cash provided by (used in) investing activities (14,544,249) (3,311,683) Cash flows from financing activities: Proceeds from borrowings 15,053,685 7,124,170 Repayment of borrowings (3,654,955) (6,447,089) Net cash provided by (used in) financing activities 11,398, ,081 Net increase (decreases) in cash held 1,617, ,065 Cash and cash equivalents at beginning of year 901, ,982 Cash at end of financial year 2,518, ,047 The above statement of cash flows should be read in conjunction with the accompanying notes. 7

10 1 Corporate Information ZENITH PACIFIC PTY LTD AND CONTROLLED ENTITIES Notes to the Financial Statements For the Year Ended 30 June The financial statements cover Zenith Pacific Pty Ltd and its wholly owned subsidiaries ( the group ). The wholly owned subsidiaries are Zenith Pacific (BWI) Pty Ltd, Zenith Pacific (WVL) Pty Ltd, Zenith Pacific (SLR) Pty Ltd, Zenith Pacific (NSR) Pty Ltd, Zenith Pacific (SIR) Pty Ltd and Zenith Pacific (JUN) Pty Ltd. Zenith Pacific Pty Ltd and its wholly owned subsidiaries are for-profit proprietary companies incorporated and domiciled in Australia. The financial statements of Zenith Pacific Pty Ltd for the year ended 30 June were authorised for issue in accordance with a resolution of the directors on the date the directors declaration was signed. The financial statements are presented in Australian dollars, which is the Group s functional and presentation currency. 2 Summary of Significant Accounting Policies The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. a) Basis of Preparation These financial statements are special purpose financial statements prepared in order to satisfy the financial reporting requirements of the Corporations Act The directors have determined that the company is not a reporting entity. The report has been prepared in accordance with the requirements of the Corporations Act 2001 and the following Australian Accounting Standards (AIFRS): AASB 101 Presentation of Financial Statements AASB 107 Statement of Cash Flows AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors AASB 110 Events after the End of the Reporting Period AASB 1048 Interpretation and Application of Standards AASB 1054 Australian Additional Disclosures. No other Australian Accounting Standards and authoritative pronouncements of the Australian Accounting Standards Board have been applied. The concept of accruals accounting has been adopted in preparation of the financial statements. The financial statements have also been prepared on a historical cost basis. b) Basis of Consolidation Consolidated financial statements include subsidiaries from the date that control commences until the date that control ceases. The financial statements of subsidiaries are prepared for the same reporting period as the parent, using consistent accounting policies. All intercompany balances and transactions, including unrealised profits arising from intra-group transactions have been eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. 8

11 Notes to the Financial Statements For the Year Ended 30 June 2 Summary of Significant Accounting Policies (continued) c) New, Revised or Amending Accounting Standards and Interpretations Adopted Zenith Pacific Pty Ltd presents its financial statements according to the requirements of AASB 101 Presentation of Financial Statements. AASB 101 specifies the disclosure of certain minimum line items in financial statements, as well as notes in the following order: statement of compliance with Australian Accounting Standards; summary of significant accounting policies; notes to the primary financial statements in the order in which each statement and each line item is presented; and lastly, other disclosures. Zenith Pacific Pty Ltd has elected to early adopt the changes to AASB 101 for the annual period beginning 1 July whereby: Materiality applies to all primary financial statements and notes, and applies, even in the case of a specific list of minimum disclosures; Even when a standard contains a list of specific minimum disclosure requirements, the entity assesses whether each required disclosure is material, and only discloses if the disclosure is considered material; The entity considers whether additional disclosures in addition to the minimum specified requirements in the standard is required for particular significant items so that users needs are met; Line items can be disaggregated if doing so could impact users decision. Subtotals must be made up of items recognised in accordance with Australian Accounting Standards and additional subtotals in the statement of profit or loss and other comprehensive income must be reconciled back to subtotals required by AASB ; Accounting policies have been grouped with numerical notes. The amendments to AASB 101 are mandatory for annual reporting periods beginning on or after 1 July. Adoption of these amendments from 1 July has had no impact on the reported results and financial position of Zenith Pacific Pty Ltd, except that comparatives for the annual period ending 30 June have been restated in line with changes in presentation and the order of notes. d) Accounting Estimates and Judgments The directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the company. Details of critical accounting estimates and assumptions about the future made by management at the end of the reporting period are set out below: Documentation to establish a joint venture with Solea AG had not been finalised at year end. Costs relating to the joint venture have been deferred until the matters have been resolved. Refer Note 8 Revenue received in advance has been recorded at fair value using the effective interest method. Refer note 12. Depreciation is based on the estimated useful life of the asset. Refer note 9. Provisions made in respect of employee benefits which are not expected to be settled within 12 months are measured as the present value of estimated future cash outflows. 9

12 Notes to the Financial Statements For the Year Ended 30 June 3 Revenue and Other Income Revenue Supply charges 14,328,697 15,166,022 Project revenue 7,958,919 3,645,230 Sales Revenue 4,203,015 5,188,655 26,490,631 23,999,907 Revenue is recognised at the fair value of consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances and duties and taxes paid. The following specific revenue recognition criteria must also be met before revenue is recognised: Revenue from electricity supply is recognised when the invoice is raised based on fixed charges and electricity consumed. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have passed to the buyer and can be reliably measured. Risks and rewards are considered to be passed to the buyer when the goods have been delivered to the customer. 4 Income Tax a) Income tax expense Current tax 742,014 1,508,752 Deferred tax movements (130,282) - (Under)/Over provision in prior year (188,732) - 423,000 1,508,752 b) Reconciliation of prima facie tax payable to income tax expense Prima facie income tax payable on profit before income tax at 30% 607,700 1,408,340 Non-deductible expenditure 4, ,412 (Under)/Over provision in prior year (188,732) - 423,000 1,508,752 The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable or disallowed items. Deferred tax assets and liabilities are recognised using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and on unused tax losses. 10

13 Notes to the Financial Statements For the Year Ended 30 June 5 Trade and Other Receivables Trade receivables 4,690,671 4,060,313 Amounts owing from related parties 8,258 8,257 4,698,929 4,068,570 Trade receivables are recognised at the original invoice amount less an allowance for uncollectible amounts and have repayment terms between 30 and 90 days. Collectability of trade debtors is assessed on an ongoing basis. Debts which are known to be uncollectable are written off. An allowance is made for doubtful debts where there is objective evidence that the group will not be able to collect all amounts due. 6 Inventories Work in progress 1,058, ,978 Stock on hand 150, ,968 1,208,794 1,023,946 Inventories are stated at the lower of cost and net realisable value. Cost comprises all direct materials, direct labour and an appropriate portion of variable and fixed overheads. Fixed overheads are allocated on the basis of normal operating capacity. Costs are assigned to inventories using the first-in-first-out basis. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated selling cost of completion and selling expenses. 7 Other Current Assets Prepayments 242, ,318 Deferred establishment costs 350,998 - Other current assets 20,038 13, , ,088 Costs relating to the establishment of the Joint Venture with Solea AG have been deferred. The costs will be recognised after the documentation to establish the joint venture is finalised. 11

14 Notes to the Financial Statements For the Year Ended 30 June 8 Property Plant and Equipment Power Generation Assets, at cost 26,077,724 14,365,045 Capital work in progress 943,175 - Less accumulated depreciation (3,162,097) (3,106,300) 23,858,802 11,258,745 Plant & Equipment, at cost 2,143,390 1,809,739 Less accumulated depreciation (1,236,205) (1,107,838) 907, ,901 Total property, plant and equipment 24,765,987 11,960,646 12

15 Notes to the Financial Statements For the Year Ended 30 June 8 Property Plant and Equipment (continued) Power Generation Assets Plant & Equipment Total Carrying amount at the beginning of year ended 30 June 11,258, ,901 11,960,646 Additions 13,267, ,017 13,602,439 Disposals (695,085) (1,366) (696,451) Depreciation expense (915,455) (128,367) (1,043,822) Carrying amount at the end of year ended 30 June 22,915, ,185 23,822,812 All plant and equipment is stated at historical cost, including costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management, less depreciation and any impairment. Depreciation is calculated on a straight-line and diminishing value basis over the estimated useful life, or in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term. The depreciation rates used for each class of depreciable assets are: Class of fixed asset Depreciation rate Depreciation basis Power Generation Assets 5 100% Straight Line 5 40% Diminishing Value Plant & Equipment % Straight Line % Diminishing Value The assets' residual values and useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. Gains and losses on disposals are calculated as the difference between the net disposal proceeds and the asset's carrying amount and are included in profit or loss in the year that the item is derecognised. 9 Trade and Other Payables Trade Creditors 3,225,997 1,136,806 BAS Liability 193, ,615 Accrued salaries & wages 83, ,703 Accrued expense 113,698 69,057 3,616,724 1,859,181 Trade and other payables represent liabilities for goods and services provided to the entity prior to year end and which are unpaid. These amounts are unsecured and have day payment terms. 13

16 Notes to the Financial Statements For the Year Ended 30 June 10 Borrowings CURRENT Equipment Finance - secured 2,174,296 2,634,965 Premium funding 47,810 51,090 Related party loans 1,512,626 12,626 3,734,732 2,698,681 NON-CURRENT Equipment Finance - secured 16,812,519 6,449,840 20,547,251 9,148,521 All borrowings are initially recognised at fair value, net of transaction costs incurred. Any difference between the proceeds and the redemption amount is recognised in profit or loss over the period of the borrowing. 11 Other Liabilities CURRENT Deferred Revenue 542, ,614 NON-CURRENT Deferred Revenue 1,882,848-2,425, ,614 Deferred revenue is initially recognised at fair value. The difference between the proceeds and the fair value amount is recognised in profit or loss over the period of the deferral using the effective interest rate method. 14

17 Notes to the Financial Statements For the Year Ended 30 June 12 Related Party Transactions The transactions between related parties are on commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. Payments Pacific Synergy Pty Ltd Rent and Electricity 161, ,500 Amounts payable to related parties: 161, ,500 Zenith Energy Pty Ltd 209, ,409 HR & SC Moffat Super Fund 750,000 - The Walker Investment Trust 750,000-1,709, , Cash Flow Information Reconciliation of Cash Flow from Operations with Profit after Income Tax Net (deficit)/surplus for the period 1,602,671 3,185,997 Cash flows excluded from (deficit)/surplus attributable to operating activities Non-cash flows in (deficit)/surplus Depreciation and amortisation 1,043,822 1,091,050 (Profit)/Loss on disposal of assets 695,085 9,413 Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries (Increase)/decrease in trade and other receivables (636,625) (737,684) (Increase)/decrease in inventories (184,848) (331,042) (Increase)/decrease in other assets (415,450) (4,320) (Increase)/decrease in tax assets (744,630) - Increase/(decrease) in trade payables and accruals 1,757,543 (431,110) Increase/(decrease) in deferred revenue 2,159,076 (178,444) Increase/(decrease) in tax liabilities (667,721) 70,435 Increase/(decrease) in provisions 154, ,372 4,763,448 2,916,667 15

18 Directors Declaration The directors have determined that the company is not a reporting entity. The directors have determined that this special purpose financial report should be prepared in accordance with the accounting policies described in the financial statements. The directors of the company declare that: 1. The financial statements, comprising the statement of profit or loss and other comprehensive income, statement of financial position, statement of cash flows, statement of changes in equity, and accompanying notes, are in accordance with the Corporations Act 2001 and: (a) comply with Accounting Standards as described in Note 2 to the financial statements and the Corporations Regulations 2001; and (b) give a true and fair view of the financial position as at 30 June and of its performance for the financial year ended on that date in accordance with the accounting policies described in the financial statements. 2. In the directors' opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by: 16

19 Tel: Fax: Level 1, 15 Lake St Cairns QLD 4870 PO Box 6771 Cairns QLD 4870 AUSTRALIA INDEPENDENT AUDITOR S REPORT To the members of Zenith Pacific Pty Ltd We have audited the accompanying financial report, being a special purpose financial report of Zenith Pacific Pty Ltd, which comprises the consolidated statement of financial position as at 30 June, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity, and consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors declaration of the consolidated entity comprising the company and the entities in the group at the year s end or from time to time during the financial year. Directors Responsibility for the Financial Report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view and have determined that the basis of preparation described in Note 2 to the financial report is appropriate to meet the requirements of the Corporations Act 2001 and is appropriate to meet the needs of the members. The directors responsibility also includes such internal control as the directors determine is necessary to enable the preparation of a financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. BDO Audit (NTH QLD) Pty Ltd ABN is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN , an Australian company limited by guarantee. BDO Audit (NTH QLD) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees. 17

20 Tel: Fax: Level 1, 15 Lake St Cairns QLD 4870 PO Box 6771 Cairns QLD 4870 AUSTRALIA Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Zenith Pacific Pty Ltd, would be in the same terms if given to the directors as at the time of this auditor s report. Opinion In our opinion the financial report of Zenith Pacific Pty Ltd is in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the company s financial position as at 30 June and of its performance for the year ended on that date; and (b) complying with Australian Accounting Standards to the extent described in Note 2 and the Corporations Regulations Basis of Accounting Without modifying our opinion, we draw attention to Note 2 to the financial report, which describes the basis of accounting. The financial report has been prepared for the purpose of fulfilling the directors financial reporting responsibilities under the Corporations Act As a result, the financial report may not be suitable for another purpose. BDO Audit (NTH QLD) Pty Ltd Greg Mitchell Director Cairns, 16 September BDO Audit (NTH QLD) Pty Ltd ABN is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN , an Australian company limited by guarantee. BDO Audit (NTH QLD) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees. 18