LOCALITY PLANNING ENERGY
HOLDINGS LIMITED
ANNUAL REPORT 2017
LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
Contents
CORPORATE DIRECTORY
CHAIRMAN’S LETTER
CEO REPORT
DIRECTORS REPORT
REMUNERATION REPORT – AUDITED
AUDITOR’S INDEPENDENCE DECLARATION
SHAREHOLDER INFORMATION
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS DECLARATION
INDEPENDENT AUDITORS REPORT
1
2
3
5
11
15
16
18
22
41
42
Corporate Directory
NON-EXECUTIVE CHAIRMAN
Mr Andrew Pierce
EXECUTIVE DIRECTORS
Mr Damien Glanville
Mr Ben Chester
CHIEF FINANCIAL OFFICER
Ms Melissa Farrell (Appointed 31st May 2017)
Mr Charles Furness (Resigned 31st May 2017)
COMPANY SECRETARY
Mr Bill Lyne (Appointed 31st May 2017)
Mr Charles Furness (Resigned 31st May 2017)
PRINCIPAL & REGISTERED OFFICE
Suite 306, Tower 1
55 Plaza Parade
Maroochydore QLD 4558
Phone:
+61 7 5479 2875
AUDITORS
Bentleys
Level 9, 123 Albert Street
Brisbane QLD 4000
Phone:
+61 7 3222 9777
LAWYERS
Gadens
Level 11, 111 Eagle Street
Brisbane, QLD, Australia 4000
Phone +61 7 3231 1692
SHARE REGISTRAR
Advanced Share Registry Services
150 Stirling Highway
NEDLANDS WA 6009
Phone:
+61 8 9389 8033
STOCK EXCHANGE LISTING
Australian Securities Exchange
Code: LPE
Page 1
Chairman’s Letter
I am pleased to be able to report a successful year, our first full year, for LPE – a year of growth.
On the operational side, LPE provided energy in excess of 107 GWh to over 200 communities, predominately in SE
Queensland. This is a wonderful achievement given that we commenced operations from small beginnings in 2016.
This is also significant in that it was achieved 14 months ahead of managements forecast.
Management and its team have a strong commitment to driving sales. In addition to communities being billed there
are close to 115 communities contracted and in the pipeline to under management which will increase our revenue
generating contracts to in excess of 200 GWh when connected in the near future.
On the financial side, revenues have increased substantially to over $10.26mfor the year whilst closely maintaining
our gross margins. These margins were slightly affected due to extreme conditions experienced in the energy market
during the 2nd and 3rd quarters of FY 2017. These have now normalised.
The year also saw the number of staff increase scaling up across all facets of the business to cope with its current
and future growth. This included key appointments to leadership roles and senior management to strengthen the
execution of the company’s Vision, Mission and Values. This investment in people is an essential for our Company
and the adaption of our core values in order to present our business to the wider community with integrity, honesty
and professionalism.
During February 2017 LPE raised $5.8m in capital through an institutional share placement which is being used
finance the strategic growth in our supply of energy solutions to strata communities. The strong support of these
institutions is a welcome addition to our share register.
Our capital structure of your company has seen a significant increase in the number of ordinary shares issued. In
addition to the institutional placement it is due to all Performance Shares being converted to ordinary shares following
the 3 milestones being reached earlier than anticipated, and options being exercised. There are no further
Performance Shares to be converted and no options in the money outstanding.
During the FY 2018 the company expects to finalise its future funding requirements. Fundraising facilities to date
have been difficult due to the company’s infancy and the unique security being offered. We envisage this will be
resolved as the company becomes operationally cash flow positive and profitable. This will be achieved from
increased revenues, noted above, and contained costs.
Finally, on behalf of the Board, I would like to thank our shareholders and other stakeholders for their ongoing
support. I would also like to thank our staff and management for their hard work and efforts in consistently growing
the business for long term value for shareholders.
Andrew Pierce
Non-Executive Chairman
Page 2 CEO Report
It’s has been a busy year for LPE with significant contract growth of 211% achieved over the 2017 financial year. We
have been encouraged by the unprecedented number of communities contacting LPE for support and information.
If one has to be said for LPE, it has not only operated but grown through the most volatile energy market ever seen,
which is a testament to the security of the LPE brand and offering. This volatility and uncertainty prompted both
State and Federal Governments to intervene, making such an emotive essential service the most topical current
discussion point.
The measurable part of LPE has been a remarkable story but is only a small part of the bigger picture we have
planned for the Company. There has been a huge amount of work going on in the background to sustain growth.
The direction has consistently been to position the capabilities of the Company for the future to ensure we not only
deliver on the expectations set with all stakeholders, but exceed them.
Through the year we grew consistently at a rate that out-stripped our business model reaching key milestones 14
months ahead of schedule. This growth required us to return to the market for additional funding, which has in turn
supported the delivery to date as we move into profitability. Capital raised during the last financial year was
oversubscribed and enthusiastically supported by institutional investors.
The wholesale price of electricity has placed pressure on the market, however LPE has a very strong purchasing
mechanism that for the most part insulated us from the volatility of the energy market. There was also cyclone
Debbie which devastated the northern parts of Queensland, thankfully only one of LPE’s communities saw direct
damage. LPE was effected due to the requirement of Energex to deploy highly skilled personnel to affected regions,
resulting in slight delays on the conversion of some LPE sites.
In my role as CEO, it is only when I stop to reflect on the past year, and take stock of the huge accomplishment the
Company has achieved, that I realise from such small beginnings how proud of the LPE brand I am. We set the bar
high, executed on a robust plan and we did deliver. The record number of new customers that have become part
of the LPE community, the support of the shareholders, the internal growth of the staff and experience we have
gained has been a true indicator of this. We do believe we have instilled a passion and belief in our work within the
management and staff that without, the Company could not possibly achieve what it has. I am extremely grateful to
all our staff, who I thank for their dedication and contribution to the growth and capabilities of LPE.
I have included in this annual report some impact indicators of how LPE support its communities by offering the
support that our customers and strata communities have been missing. Because of this, LPE have been making a
genuine positive impact in the marketplace.
Damien Glanville
CEO
Page 3
Why we do what we do
As an all-Australian energy retailer, working for locals. We exist for one purpose only — to provide the best energy
deal for people living in and managing strata communities. And we do it in a way that is transparent, fair and has
them fully protected.
LPE started out as an idea, that quickly turned into an ideal, that quickly turned into something real — a real
alternative to the big energy retailers. With LPE, what you see is what you get. This extends to all the people at LPE,
we may be small, but that is exactly what keeps us focused, and allows us the capacity and capability to know our
market inside-out.
LPE are specialists in finding the right energy fit for strata communities, we reduce network charges for thousands
of customers every day. We Recognise that no two communities are alike, we are nimble and our services are
always in line with the needs of our customers. It’s this kind of attention to detail that communities can rely on, all
the things you should expect from an energy retailer.
Because of this, we set our standards high, as we believe in doing the right thing by our customers. For us, being
fair is something to be protected and nurtured. At LPE, we are creating a level playing field for everyone — one
community at a time.
Electricity has to be one of the most topical discussions in Australia at the moment. LPE has contributed over
$2,500,000 in savings to consumers which is money that is directly re-invested into local communities and
contributing to lowering the cost of living and providing support for our customers. These savings and securities are
not possible outside of the LPE model and are otherwise unable to be accessed directly by consumers. This is why
we do what we do.
The LPE model has also ensured that communities managed by LPE have lower Body Corporate fees and less
liability for owners, the value over the past year is close to $700,000 all the while increasing transparency and
protections to these communities.
No matter what powers any community they can trust us. Because the best deal, is always the fairest
Impact of LPE on our communities
When using performance indicators of the Retail Energy Market and comparing these key indicators the significance
becomes apparent of what LPE does for our communities and those individuals living in them;
Market Average
LPE
Energy Affordability - Average Annual Electricity Bill
$1401
$952
Debt Levels – Customers repaying debt
2.5% ($502 Avg in overdue amounts)
0.002% ($274 Avg in overdue amounts)
4.3% - (Based on low income median)
2.9% (Based on low income median)
Bills as percentage of income
Disconnections – for Non-payment
1.14%
0.005%
Hardship – Customers in Hardship Plans
0.97% (Avg amount owing $729)
Zero Customers
Savings over standard Market energy offers
Average $185
All reference values from AER performance of the energy market overview (Queensland)
Average $471
Page 4 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
Directors Report
Your Directors present their report on the consolidated entity consisting of Locality Planning Energy Holdings Limited and its
controlled entities at the end of, or during the year ended, 30 June 2017.
The Directors
The following persons were directors of the Company during the financial year and up to date of this report:
Mr Andrew Pierce
Non-Executive Chairman and Director
Qualifications
Experience
FCA
Mr Pierce is an accomplished and highly regarded accountant and director, having
served on the boards of Variety The Children’s Charity (NSW), Guide Dogs NSW/ACT,
Royal Guide Dogs Australia and Centre For Eye Health Limited. He is highly skilled in
the areas of financial reporting, company regulatory and governance areas. During the
past three years, Mr Pierce has not served as a director of any other ASX listed
companies.
Mr Pierce is a Fellow of Chartered Accountants Australia and New Zealand, having been
in private practice as a partner or principal since 1972.
Mr Pierce is a member of the Audit and Risk Management Committee.
In accordance with the ASX Corporate Governance Council’s definition of independence
and the materiality thresholds set, the Directors consider Mr Pierce to be independent.
Special responsibilities
Chairman
Interest
Options
in Shares and
18,960,641 fully paid ordinary shares
Directorships held in other
listed entities
Nil
Mr Damien Glanville
Executive Director and Chief Executive Officer
Appointed 11 December 2015
Qualifications
N/A
Experience
Co-founder and Chief Executive Officer
Mr Glanville has fourteen years’ experience in senior management, logistics and
Executive Director roles, the last seven specifically focused in the renewable energy on-
site generation and solar PV industry.
Damien is a co-founder and architect of designing the electricity retail model that
successfully enabled LPE to obtain their Australian Energy Regulator Authorisation, and
is also listed as the Chief Executive Officer for the Management components of the
Australian Energy Regulators authorisation to retail electricity
Special responsibilities
Chief Executive Officer
Interest in Shares and
Options
436,299,756 fully paid ordinary shares
Directorships held in other
listed entities
Nil
Page 5 The Directors (Cont’d)
Mr Ben Chester
Qualifications
Experience
Executive Director and Chief Operating Officer
Appointed 11 December 2015
B. Eng
Co-founder and Chief Operating Officer
Mr Chester has eight years’ experience in large scale development and deployment
of energy assets, along with energy to market strategy. He spent four years with an
ASX listed company specialising in renewable projects, as the principal design and
projects engineer for several commercial and utility scale deployments.
Ben has contributed to several Australian, State and Federal Government advisory
panels and with the Thailand Government on generation, deployment strategies
and network integration.
Ben is a co-founder and architect of designing the electricity retail model that
successfully enabled LPE to obtain their Australian Energy Regulator Authorisation,
and is listed as the Chief Operating Officer for the functional and compliance
components of the Australian Energy Regulators authorisation to retail electricity.
Special responsibilities
Chief Operating Officer
Interest in Shares and
Options
Directorships held
other listed entities
Mr Bill Lyne
Qualifications
Experience
436,299,756 fully paid ordinary shares
in
Nil
Company Secretary
Appointed 31 May 2017
BCom, CA, FCIS, FGIA, FAICD, FFIN
Mr Lyne is the principal of Australian Company Secretary Service, providing company
secretarial, compliance and governance services to public companies. He is currently
secretary of 4 other listed companies and has a wealth of experience in corporate
governance principles and practice.
Director of Jumbo Interactive Limited appointed 30 October 2009 ~ continuing
Chief Financial Officer
Appointed 31 May 2017
BBus, CPA, Master Finance
Melissa has over 15 years experience working in accounting and finance. She has
worked in various sectors, including banking and mining, both in Australia and
overseas, for public listed companies.
N/A
Directorships held in other
listed entities
Mrs Melissa Farrell
Qualifications
Experience
Directorships held in other
listed entities
Page 6 Principal Activities Of The Consolidated Entity
The principal activity of the consolidated entity is the sale of electricity and utility services to residential,
commercial and retail customers throughout the Australian National Electricity Market.
Operating Results
The net result of operations of the consolidated entity for the year ended 30 June 2017 was a loss of
$15,873,697 (2016 – loss of $8,613,937) which included:
Electricity sales totalling $10,261,154 (2016: $1,761,243),
the expensing of the issue of options and performance shares to key personnel and convertible
note holders totaling $13,369,577 (2016: $6,535,990).,
employee costs of $2,449,914 (2016: $1,481,186), and
other expenses of $1,902,766 (2016: $1,186,787).
During the year the Company received $5,683,200 (2016: $7,510,991) from the issue of shares.
The Company invested $2,568,733 during the year (2016: $1,243,071) in the development and/or conversion
of strata title sites for the purpose of supplying electricity.
Operating Report
LPE has had a stable operations platform for the best part of 2 years. The pre-established business plan has
scaled exactly against modelling. We take great pride in maintaining these levels and ensuring the budget
and delivery is met.
We have seen our sales team grow from strength to strength as we grow their understanding of this complex
but simple product, our billing and call centre teams have increased with scale to support strong growth of
billed communities, overall the staffing level are adequate to take us to through our next 100GWh of billed
customers.
The company has systems, software, processes and functional capacity to maintain scaled growth with the
mindset to preserve the existing head count and operational delivery standards.
LPE currently have 26 full time employees;
Sales - 6
Process and delivery - 3
Administration and support - 4
Billing and Finance - 4
Customer service - 4
Management - 2
Executive - 3
Over the past 12 months LPE has engaged consultants for specialist support functions that did not warrant a
full time internal role; these are for service such as;
Marketing
Energy Strategy
Human Resources
Board Support
Page 7
Dividends
The directors do not recommend the payment of a dividend and no amount has been paid or declared by
way of a dividend since 30 June 2017 and to the date of this report.
Review Of Activities and Business Strategies
At 30 June 2017, 107.138GWh were contracted billable strata communities with annualised volume that will
continue to generate revenue, through the extent of our average contract term length of 7.6 years. This
represents a contractual base growth of 211% over the year and a direct reflection of $10.26M in revenue
which is 483% improvement in revenue from last year.
The business plan has been well delivered, with the aforementioned figures. The core driver in obtaining this
growth has been to continue to do what LPE does well, that is deliver a great value proposition and high
service levels to our niche consumer base in embedded electricity networks. The primary strategy has been
to build sales channels and operational capacity that will deliver on the targets set by the board to meet
shareholder expectations and ensure our customers’ expectations are exceeded.
The main strategy for the FY17 did not venture far from the core offering, with learnings of the year that will
promote the expansion and growth which is the key outlook moving forward.
Outlook
Throughout FY18 the Company will maintain focus on delivery of the core embedded network supply
products, with a higher emphasis to the takeover market which are capital light and where LPEs high service
levels and risk reducing core offering delivers improved returns and security to these communities.
Following the FY17 expenditure in deploying electricity infrastructure assets and the softened energy market
in comparison to the first half of 2017, the existing secured communities will ensure LPE maintain gross
margins in the range of 17% to 19% and deliver on the revenue as per guidance for the FY18.
The company also continues to monitor progress in the parallel market of scheme managed billing and have
progressive strategy around acquisition if commercial opportunities arise. The legislative changes continue
to inhibit this small segment of the market where these entities operate which makes them key opportunities
for LPE to accelerate growth.
Further legislative changes have created a position for LPE to again fill a market gap this time in the operation
of embedded networks with the requirement for all embedded networks to have an Embedded Network
Manager overseeing the core operation of the network. LPE is poised for this prime opportunity to ensure the
existing retail operated networks, other networks and future networks are secure in these requirements. The
company has established a subsidiary entity for this purpose, named Locality Embedded Networks Pty Ltd
which will function in a ring-fenced capacity from the Authorised Retailer. Revenue from this entity will not
come into effect until 1 December 2017, it is anticipated to increase opportunity and the profit position of the
company into the future.
The Directors understand that to maintain the companies planned growth rate there will be a requirement for
funding which presently is being pursued via a debt product, the directors have confidence that this facility
will be secured in the near term.
Page 8
Significant Changes In The State Of Affairs
The debt facility announced on 22 June LPE had agreed terms for a debt facility with Moneytech, as
announced on 21 August 2017 the facility had fallen over due to Moneytech being unable to provide a product
that was previously agreed on.
This was disappointing for The Company, yet outside our control, the directors have confidence that this
facility will be replaced in the near term.
The establishment of Locality Embedded Networks Pty Ltd for the purposes of providing embedded network
management functions for embedded networks through Australia.
Events Subsequent To Balance Date
There are no matters or circumstances have arisen since the end of the year which significantly affected or
could significantly affect the operations of the consolidated entity, the results of those operations or the state
of affairs of the consolidated entity in future financial years.
Likely Developments
Directors expect the Company’s strong contracted pipeline and revenue growth to be maintained during the
coming year. A structured approach to expansion beyond the Queensland market into NSW, is likely to gain
traction as pilot programs that we have run across differing NSW distribution areas are concluded.
Company Health & Safety Policy
It is the responsibility of all employees to act in accordance with occupational health and safety legislation,
regulations and policies applicable to their respective organisations and to use security and safety equipment
provided.
Specifically all employees are responsible for safety in their work area by:
following the safety and security directives of management;
advising management of areas where there is potential problem in safety and reporting suspicious
occurrences; and
minimising risks in the workplace.
Page 9 Shares Under Option
Options outstanding
The following options are outstanding as at the date of this report.
Number
500,000
Exercise price
$0.25
Expiry
15/4/2018
Shares issued on the exercise of options
Date
27 June 2017
No. of shares
10,000,000
Exercise price
$0.025
Directors’ Meetings
Director
Andrew Pierce
Damien Glanville
Ben Chester
* at which eligible to attend
Meetings of Directors Held *
Meetings of Directors Attended
11
11
11
11
11
11
Page 10
Remuneration Report – Audited
Remuneration Practices
The Company did not have a Remuneration Committee during the past financial year as the Board did not
consider the Company would benefit from its establishment, and does not currently have one. In accordance
with the Company’s Board Charter, the Board carries out the duties that would ordinarily be carried out by the
Remuneration Committee under the Remuneration Committee Charter.
The primary purpose of the Board, in carrying out the responsibilities of the Committee, is in fulfilling its
responsibilities to shareholders by:
a)
reviewing and approving the executive remuneration policy to enable the Company to attract and
retain executives and Directors who will create value for shareholders;
b) ensuring that the executive remuneration policy demonstrates a clear relationship between senior
executive performance and remuneration;
reviewing the remuneration of executive Directors;
fairly and responsibly rewarding executives having regard to the performance of the Company,
the performance of the executive and the prevailing remuneration expectations in the market;
reviewing the Company’s recruitment, retention and termination policies and procedures for
senior management;
reviewing and approving the remuneration of the Chief Executive Officer/Managing Director and,
as appropriate other senior executives; and
c)
d)
e)
f)
g)
reviewing and approving any equity based plans and other incentive schemes.
The Board has the right to seek any information it considers necessary to fulfil its duties, which includes the
right to obtain appropriate external advice at the Company’s expense.
The Company has issued Performance Shares to Key Personnel to strengthen the relationship between senior
executive performance, shareholder value and remuneration, the grant date was 11 December 2015.
The Performance shares were converted to fully paid ordinary shares following the early achievement of
specified milestones:
One third of the Performance Shares were converted to Fully Paid Ordinary Shares on 7th November
2016 upon having under management (supply and sell under contract) 50 Giga Watts (GW) of
annualised energy contracts.
A further third of the Performance Shares were converted to Fully Paid Ordinary Shares on 7th February
2017 upon having under management (supply and sell under contract) 75 Giga Watts (GW) of
annualised energy contracts.
The final third of the Performance Shares were converted to Fully Paid Ordinary Shares on 16th May
2017 upon having under management (supply and sell under contract) 100 Giga Watts (GW) of
annualised energy contracts.
The milestones were determined after assessing the level of revenue required by the Company to meet its
financial goals and what could be achieved in the marketplace.
The Key Management personnel of Locality Planning Energy Holdings Limited and the consolidated entity
includes the directors of the Parent Entity.
Page 11 Remuneration Report – Audited
2017 Remuneration
Short-term
employee
benefits
Salary & fees
Share Based
Remuneration
Conversion of
Performance
Shares
Post-
Employment
Benefits
Super-
annuation
Total
Performance
Related %
% consisting of
options
Directors
Andrew Pierce
Damien Glanville
Ben Chester
Total
2016 Remuneration
$
$
$
$
%
%
98,333
254,086
254,086
-
-
98,333
3,901,243
3,901,243
23,890
23,890
4,179,219
4,179,219
0%
93.35%
93.35%
606,505
7,802,486
47,780
8,456,771
92.26%
0%
0%
0%
0%
Share based
Remuneration
Short-term
employee
benefits
Salary & fees
Post-
Employment
Benefits
Super-
annuation
Total
Performance
Related %
% consisting of
options
$
$
$
$
%
%
Directors
Andrew Pierce
55,609
89,000
-
144,609
0%
61.5%
Damien Glanville*
184,293
1,583.669
16,905
1,784,867
88.73%
Ben Chester*
185,447
1,583,669
16,905
1,786,021
88.67%
John Shepherd**
49,735
89,000
Daniel Moore**
13,387
89,000
-
-
138,735
102,387
0%
0%
Total
488,471
3,434,338
33,810
3,956,619
80.05%
0%
0%
64.2%
86.9%
6.75%
*Appointed 11th December 2015
** Resigned 11th December 2015
Page 12
Shareholdings of key management personnel
Balance
Performance
Share
Options
Net change
Balance
1 July
Converted
exercised
other
30 June
Directors
Andrew Pierce
8,960,641
-
10,000,000
-
Damien Glanville
186,985,610
249,314,146
Ben Chester
186,985,610
249,314,146
-
-
Option holdings of key management personnel
18,960,641
436,299,756
436,299,756
Balance
Received as
Options
Net change
Balance
1 July
Remuneration
exercised
other
30 June
Directors
Andrew Pierce
10,000,000
-
10,000,000
-
-
At the start of the year, the company had 106,100,000 options on issue, of which 105,600,000 expired during
the year. Of these, 10,000,000 were exercised, and 95,600,000 lapsed without being exercised. None of the
options that lapsed were held by Key Management Personnel.
END OF REMUNERATION REPORT
Non-Audit Services
The auditor was paid for taxation services during the year, amounting to $5000. The directors are satisfied that
this did not comprimise the independence of the auditors as it was a minor amount compared to the overall
renumeration paid to the auditors.
Environmental
Whilst it is not an environmental issue for the Company, under the Renewable Energy Target, the Company is
obliged to purchase and surrender an amount of large-scale generation certificates, and small-scale technology
certificates, based on the volume of electricity the company acquires each year. This administrative function is
managed through the purchase of electricity.
Indemnification and Insurance of Officers or Auditor
Each of the Directors and the Secretary of the Company have entered into a Deed with the Company whereby
the Company has provided certain contractual rights of access to books and records of the Company to those
Directors and Secretary. The Company has insured all of the Directors and Officers of Locality Planning Energy
Holdings Limited. The contract of insurance prohibits the disclosure of the nature of the liabilities covered and
amount of the premium paid. The Corporations Act 2001 does not require disclosure of the information in these
circumstances.
The Company has not indemnified or insured its auditor.
Page 13
Proceedings on Behalf of Company
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in
any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the
Company for all or any part of those proceedings. The Company was not a party to any other such
proceedings during the year.
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 30 June 2017 has been received and forms
part of this directors’ report and can be found on the following page.
Declaration
This report is made in accordance with a resolution of the Directors.
Andrew Pierce
Non- Executive Director
27 September 2017
Page 14
Bentleys~
THINKING AHEAD
LOCALITY PLANNING ENERGY HOLDINGS LIMITED
AUDITOR'S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF LOCALITY PLANNING ENERGY HOLDINGS LIMITED
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2017
there have been:
i. no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
ii. no contraventions of any applicable code of professional conduct in relation to the
audit.
Bentleys Brisbane (Audit) Pty Ltd
;5;··~
Stewart Douglas
Director
Brisbane
27 September 2017
A member of Bentleys, a network of independent accounting firms located throughout Australia, New
Zealand and China that trade as Bentleys . .AJl members of the Bentleys Network are affiliated only
and are separate legal entities and not ín Partnership. Uability limited by a scheme approved under
Professional Standards Legislation.
) Accountants
) Auditors
) Advisors
LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
Shareholder Information
Additional information required by the Australian Securities Exchange (ASX) and not shown elsewhere in the
Annual Report, current as at 18 September 2017, is advised hereunder.
Stock Exchange Quotation
The Company’s shares are quoted on the ASX (Home branch: Sydney) under the code “LPE”.
Classes of Securities
The Company has the following equity securities on issue:
ASX quoted: 1,005,335,029 ordinary shares, each fully paid, held by 1,222 shareholders
Unquoted: 1,505,201,358 ordinary shares, held by 5 shareholders (included in above total)
500,000 options, exercisable at 25 cents each, expiring 15 January 2018
Voting Rights
The voting rights attaching to ordinary shares are set out in Clause 13.13 of the Company’s Constitution
and are summarised as follows:
each shareholder entitled to vote may vote in person or by proxy, attorney or representative;
on a show of hands, every person present who is a shareholder or a proxy, attorney or representative
of a shareholder has one vote (even though he or she may represent more than one shareholder);
and
on a poll, every person present who is a shareholder or a proxy, attorney or representative of a
shareholder shall, in respect of each full paid share held by him, or in respect of which he is
appointed proxy, attorney or representative, have one vote for the share.
Holders of options have no voting rights until such options are exercised.
Restricted Securities
1,505,201,358 ordinary shares, subject to escrow until 4 January 2018
On-market Buy-backs
There is no current on-market buy-back of any securities.
Distribution of Security Holders
Distribution of shares and the number of holders by size of holding are:
Shareholding Range
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 and over
Totals
Ordinary Shares
Number of
Holders
21
10
95
408
688
1,222
Number
of Shares
2,381
32,828
914,729
21,408,831
2,488,177,618
2,510,536,387
There are 163 shareholders holding less than a marketable parcel of ordinary shares based on the closing
price of 2.5 cents per share on 18 September 2107.
Page 16 Twenty Largest Security Holders
The names of the 20 largest shareholders, the number of shares and the percentage of capital each holds,
are:
NAME
NUMBER OF SHARES
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
BEN JAMES CHESTER
DAMIEN IAN GLANVILLE 4557
PETTETT PTY LTD
JARWILL PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
FERNSHA PTY LIMITED
NATIONAL NOMINEES LIMITED
DEFENDER EQUITIES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
SORE TOOTH PTY LIMITED
BEDAR HOLDINGS PTY LIMITED
436,299,756
436,299,756
435,701,676
186,900,170
75,300,788
50,000,000
45,800,000
36,461,173
22,617,666
20,500,100
19,400,000
18,960,641
WOODVILLE SUPER PTY LIMITED
18,330,000
BOND STREET CUSTODIANS LIMITED
EMS ARCADIA PTY LTD
GINGA PTY LTD
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY LIMITED
MR JOHN CHARLES VASSALLO & MR SEAN JAMES VASSALLO
BARK (NSW) PTY LTD
MR JOHN HENRY TOLL
Totals: Top 20 holders of LPE ORDINARY FULLY PAID
TOTAL REMAINING HOLDERS BALANCE
16,892,318
14,000,010
13,500,000
13,429,470
13,018,065
13,000,000
11,500,000
1,897,911,589
612,624,798
% OF
CAPITAL
17.379
17.379
17.355
7.445
2.999
1.992
1.824
1.452
0.901
0.817
0.773
0.755
0.73
0.673
0.558
0.538
0.535
0.519
0.518
0.458
75.6
24.4
Substantial Shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of
the Corporations Act are:
NAME
THE CHESTER FAMILY A/C
THE GLANVILLE FAMILY A/C
THE PETTETT FAMILY A/C
JARWILL PTY LTD
NUMBER OF SHARES
436,299,756
436,299,756
435,701,676
186,900,170
Corporate Government Statement
The Corporate Governance Statement is available on the Company’s website at
https://localityenergy.com.au/for-investors/
Page 17 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
Revenue
Electricity Sales
Less cost of goods sold
Energy usage charges
Network charges
Other COGS
Total cost of goods sold
Gain/(loss) from trading
Other Income
Interest received
Other receipts
Proceeds on sale of subsidiaries
Gain/(loss) on disposal of assets
Subsidary loans write off
Other expenses
Employee costs
Professional costs
Share-based payments
Depreciation and amortisation
Borrowing costs
Bad and doubtful debts
Other expenses
Loss from continuted operation
Loss before income taxes
Income tax benefit/(expense)
Net loss for the period
Other comprehensive income
Other comprehensive invome net of tax
Total comprehensive loss for the year
Basic/diluted earnings/(loss) per share (dollars per share)
Note
5
2017
$
2016
$
10,261,154
1,761,243
-3,596,925
-4,021,783
-881,835
-8,500,543
1,760,611
-562,022
-689,791
-164,945
-1,416,758
344,485
44,333
49,079
0
-5,463
0
33,216
105,482
110,109
-734
-117,700
-2,449,914
-503,046
-13,369,577
-392,899
-117,774
-79,187
-809,859
-15,873,697
-15,873,697
-1,481,186
-617,581
-6,535,990
-127,732
-79,495
0
-361,979
-8,729,105
-8,729,105
0
-15,873,697
115,168
-8,613,937
0
0
-15,873,697
(0.0089)
0
0
-8,613,937
(0.0102)
14
6
16
The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjuntion with the Notes
to the Financial Statements
Page 18 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total current assets
Non-current assets
Plant and equipment
Leasehold improvements
Intangibles
Total non-current assets
TOTAL ASSETS
Current liabilities
Trade and other payables
Employee entitlements - annual leave
Borrowings
Total current liabilities
Non-current liabilities
Borrowings
Total non-current liabilities
TOTAL LIABILITIES
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
2017
$
2016
$
21
7
8
9
10
11
12
12
13
16
3,977,705
1,872,142
91,862
5,941,710
528,777
459,050
3,576,211
4,564,038
2,631,507
994,141
27,646
3,653,294
414,896
0
1,280,690
1,695,586
10,505,748
5,348,880
1,586,117
158,649
45,524
1,790,290
707,820
85,200
55,948
848,968
1,258,677
1,258,677
222,213
222,213
3,048,967
1,071,181
7,456,781
4,277,699
39,064,880
125,000
-31,733,100
7,456,780
14,584,862
6,535,990
-16,843,153
4,277,699
The Consolidated Statement of Financial Position should be read in conjuntion with the Notes to the Financial
Statements
Page 19 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
CONSOLIDATED STATEMENT OF CASH FLOWS
AS AT 30 JUNE 2017
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Net cash provided by/(used in) operating activities
Cash flows from investing activities
Payment for plant and equipment
Payment for leasehold improvements
Payment for intangibles
Cash acquired in business combination
Proceeds from sale of business
Proceeds from sale of assets
Net cash provided by/(used in) investing activities
Cash flows from financing activities
Proceeds from issues of shares
Proceeds from loans
Repayment of loans
Net cash provided by/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents opening balance
Cash and cash equivalents closing balance
Note
2017
$
2016
$
10,248,163
-12,235,782
34,675
-104,237
-2,057,181
-337,491
-459,175
-2,646,911
0
0
60,909
-3,382,668
5,683,200
1,150,000
-47,154
6,786,046
1,346,198
2,631,507
3,977,705
1,277,912
-3,521,937
33,216
-65,495
-2,276,304
-419,702
0
-1,239,542
-843,055
110,109
0
-2,392,190
7,510,991
128,590
-356,424
7,283,157
2,614,663
16,844
2,631,507
21
21
The Consolidated Statement of Cash Flows should be read in conjunction with the notes to the financial statements
Page 20 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2017
Balance at 1 July 2015
Reverse acqusition of SXT
Profit/(Loss) after income tax
Share based payments
Other comprehensive income
Shares issued during the year
Balance at 30 June 2016
Balance at 1 July 2016
Profit/(Loss) after income tax
Share based payments
Other comprehensive income
Shares issued during the year
Expired options
Options converted
Balance at 30 June 2017
Issued
capital
$
Options
reserve
$
Accumulated
losses
$
301,643
5,527,685
0
0
0
8,755,534
14,584,862
0
0
0
6,535,990
0
0
6,535,990
14,584,862
0
0
0
5,683,200
0
18,796,818
39,064,880
6,535,990
0
13,369,577
0
0
-983,749
-18,796,818
125,000
-747,151
-7,482,065
-8,613,937
0
0
0
-16,843,153
-16,843,153
-15,873,697
0
0
0
983,749
0
-31,733,100
Totals
$
-445,508
-1,954,380
-8,613,937
6,535,990
0
8,755,534
4,277,699
4,277,699
-15,873,697
13,369,577
0
5,683,200
0
0
7,456,780
The Consolidated Statement of Changes in Equity should be read in conjunction with the Notes to the Financial
Statements
Page 21 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
1 REPORTING ENTITY
The financial statements of Locality Planning Energy Holdings Limited (“the Company”) for the year ended 30
June 2017 covers the Consolidated Entity consisting of Locality Planning Energy Holdings Limited and the
entities it controlled from time to time throughout the year (“the Group” or “Consolidated Entity”) as required by
the Corporations Act 2001. Locality Planning Energy Holdings Limited is a for-profit entity for the purpose of
preparing these financial statements.
The financial statements are presented in Australian dollars, which is the functional currency.
The address of the Group’s registered office and principal place of business is Suite 306, Tower One, 55 Plaza
Parade, Maroochydore, QLD, 4558.
1 BASIS OF PREPARATION
A. Statement of compliance
The Financial Report has been prepared in accordance with requirements of Australian Accounting Standards,
other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act
2001.
This report is to be read in conjunction with any other public announcements made by the Group during the year
in accordance with the continuous disclosure requirements of the Corporations Act 2001.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply
with International Financial Reporting Standards.
The accounting policies adopted are consistent with those of the previous financial year, unless stated
otherwise.
B. Basis of measurement
The financial statements have been prepared on the historical cost basis.
C. Use of estimates and judgements
The preparation of financial statements in conformity with AASB’s requires management to make judgements,
estimates and assumptions that effect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimates are revised and in any future periods affected. Information
about critical estimates and judgements in applying accounting policies that have the most significant effect on
the amounts recognised in the financial statements are outlined below:
Impairment
The Group assesses impairment at the end of each reporting period by evaluating conditions specific to the
Group that may lead to impairment of other assets and financial assets. This assessment includes the
recoverable amount of the intangible assets, which comprise the cost of securing a contract to supply electricity
to a strata title property, plus the cost of establishing the metering infrastructure at that site. These costs are
amortised over the life of the contract, which is generally 5 or 10 years. Where an impairment trigger exists, the
recoverable amount of the asset is determined. Value-in-use calculations are performed or market based
information is obtained in assessing recoverable amounts that incorporate a number of key estimates.
Page 22 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
2 BASIS OF PREPARATION (Cont'd)
D. Going Concern
The financial statements have been prepared on a going concern basis which contemplates the continuity of
normal business activities and the realisation of assets and discharge of liabilities in the ordinary course of
business. The Group has incurred a net loss after tax for the year ended 30 June 2017 of $15,873,697 and a
net cash outflow from operations of $2,057,181. At 30 June 2017, the Group’s current assets exceeded its
current liabilities by $4,151,418.
The Company has prepared budgets based on its current growth plans and is examining funding opportunities
to fund this growth. This include long term funding.
The consolidated entity has sufficient networking capital to maintain continuity of normal business activity and
pay its debts as and when they fall due, without the need for funding.
3 SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these
consolidated financial statements, and have been applied by all entities in the Group.
A. Basis of consolidation
The consolidated financial statements comprise the financial statements of Locality Planning Energy Holdings
Limited and its subsidiary for the year ended 30 June 2017 ("the Group"). Subsidiaries are entities (including
structured entities) over which the Group has control. The Group has control over an entity when the Group is
exposed to, or has rights to, variable returns from its involvement with the entity, and has the ability to use its
power to affect those returns. Subsidiaries are consolidated from the date on which control is transferred to
the Group and are deconsolidated from the date that control ceases.
All intercompany balances and transactions, including unrealised profits arising from intragroup transactions
have been eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred.
B. Income Tax
The charge for current income tax expense is based on the profit/loss for the year adjusted for any non-
assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively
enacted by the balance date.
Deferred tax is accounted for 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.
No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a
business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or
liability is settled. Current and deferred tax is recognised in the profit or loss, except where it relates to items
recognised in the other comprehensive income or directly in equity. In this case the tax is recognised in the
other comprehensive income or directly in equity respectively.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be
available against which deductible temporary differences or tax losses can be utilised. To the extent that any
rebates are received from Government taxation authorities, they are recognised in profit or loss as an income
tax benefit.
Page 23 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
3 SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
C. Plant and Equipment
Plant and equipment are measured on the cost basis less depreciation and impairment losses.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
consolidated entity and the cost of the item can be measured reliably. All other repairs and maintenance are
charged to the profit or loss during the financial period in which they are incurred.
All assets are depreciated on either a straight line basis or diminishing value basis over their useful lives to the
consolidated entity commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Plant and equipment
Motor Vehicles
Depreciation Rate & Method
10-50% per annum straight line or diminishing value
25% per annum, diminishing value
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
and losses are included in the profit or loss.
D. Intangible assets
Intangible assets include the cost of securing a contract to supply electricity to a strata title property, plus the
cost of establishing the metering infrastructure at that site. These costs are then amortised over the life of the
contract, which is generally 5 or 10 years.
E. Leasehold Improvements
Leasehold improvements are amortised over the shorter of either the unexpired period of the lease or the
estimated useful lives of the improvements.
F. Trade and other payables
Trade and other payables represent liablities for goods and services provided to the Group prior to the year
end and which are unpaid. These amounts are unsecured and have 30-60 day payment terms. They are
recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method
Page 24 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
3 SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
G. Impairment of Financial Assets
A financial asset (or a group of financial assets) is deemed to be impaired if, and only if, there is objective
evidence of impairment as a result of one of more events (a "loss event") having occurred, which has an
impact on the estimated future cash flows of the financial asset(s).
For financial assets carried at amortised cost (including loans and receivables), a separate allowance account
is used to reduce the carrying amount of financial assets impaired by credit losses. After having taken all
possible measures of recovery, if management establishes that the carrying amount cannot be recovered by
any means, at that point the written-off amounts are charged to the allowance account or the carrying amount
of impaired finanical assets is is reduced directly if no impairment amount amount was previously recognised
in the allowance amount.
H. Impairment of Non-Financial Assets
At each reporting date, the Consolidated Entity reviews the carrying values of its tangible and intangible assets
to determine whether there is any indication that those assets have been impaired. If such an indication
exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and
value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its
recoverable amount is expensed in the profit or loss.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
I. Share-based payments
The Consolidated Entity may make share-based payments to directors and employees. The fair value of the
equity to which employees become entitled is measured at grant date and recognised as an expense over the
vesting period, with a corresponding increase to an equity account. The fair value of shares is ascertained as
the market bid price. The fair value of options is ascertained using a valuation which incorporates all market
vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at each
reporting date such that the amount recognised for services received as consideration for the equity
instruments granted shall be based on the number of equity instruments that eventually vest.
J. Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly
liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are
shown within short-term borrowings in current liabilities on the statement of financial position.
K. Revenue
Revenue is measured at the fair value of the consideration received or receivable, less any trade or volume
discounts. Interest revenue is recognised using the effective interest rates applicable to the financial assets.
Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of
significant risks and rewards of ownership of the goods and the cessation of all involvement in those goods.
Revenue from rendering of services is measured by reference to the stage of completion of the service
provided.
All revenue is stated net of the amount of goods and services tax (GST).
Page 25 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
3 SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
L. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as
part of the cost of acquisition of the asset or as part of an item of expense. Receivables and payables in the
Consolidated Statement of Financial Position are shown inclusive of GST. Cash flows are presented in the
statement of cash flows on a gross basis, except for the GST component of investing and financing activities,
which are disclosed as operating cash flows.
M. Issued Capital
Ordinary shares are classified as equity. Costs directly attributable to the issue of new shares or options are
shown as a deduction from equity.
N. Earnings per share
The Consolidated Entity presents basic and diluted earnings per share (EPS) data for its ordinary shares.
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by
the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by
adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary
shares outstanding, adjusted for the effects of all dilutive potential ordinary shares.
O. Leases
Leases of property, plant and equipment, where substantially all the risks and benefits incidental to the
ownership of the asset, but not legal ownership, are transferred to the Consolidated Entity are classified as
finance leases.
Finance leases are capitalised recording an asset and a liability equal to the present value of the minimum
lease payments, including any guaranteed residual value. Leased assets are amortised over the shorter of
the asset’s useful life and the lease term. Lease payments are allocated between the reduction of the lease
liability and the lease interest expense for the period.
Lease payments under operating leases, where substantially all the risks and benefits remain with the lessor,
are charged to the profit or loss on a straight line basis over the period of the lease.
Page 26 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
3 SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
P. Financial Instruments
Recognition
Financial instruments are initially measured at fair value on trade date, which includes transaction costs, when
the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are
measured as set out below.
Loans and receivables
These financial assets consist of trade and other receivables, which are measured at cost less any
accumulated impairment losses. There is no significant concentration of credit risk.
Financial Assets at fair value through profit or loss
Financial assets are valued at ‘fair value through profit or loss’ when they are either held for trading for the
purpose of short term profit taking, derivatives not held for hedging purposes, or when they are designated as
such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets
is managed by key management personnel on a fair value basis in accordance with a documented risk
management or investment strategy. Such assets are subsequently measured at fair value with changes in
carrying value being included in profit or loss.
Held-to-maturity investments
These investments have fixed maturities, and it is the Group’s intention to hold these investments to maturity.
Any held-to-maturity investments held by the Group are stated at amortised cost.
Available-for-sale financial assets
Available-for-sale financial assets include any financial assets not included in the above categories. Available-
for-sale financial assets are reflected at fair value. Unrealised gains and losses arising from changes in fair
value are taken directly to equity, except where losses are considered to be prolonged and extensive, in which
case such losses are recognised in profit or loss.
Financial liabilities
Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal
payments and amortisation.
Derivative instruments
Derivative instruments are measured at fair value. Gains and losses arising from changes in fair value are
taken to the statement of comprehensive income unless they are designated as hedges. At present, the
Group does not have any derivative instruments.
Fair Value
Fair value is determined based on current bid prices for all quoted investments.
Impairment
At each reporting date, the Group assesses whether there is objective evidence that a financial instrument has
been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the
instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in
Page 27 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
3 SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
Q. Employee Entitlements
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees
to balance date.
Employee benefits that are expected to be settled within one year have been measured at the amounts
expected to be paid when the liability is settled. Long-term employee benefits are only recognised to the extent
that it is considered probable that employees will reach the eligible service period.
R. New Accounting Standards issued but not yet applicable
There are a number of new accounting standards and interpretations that have been issued that do not take
effect in the current accounting period, but will impact future accounting periods. Management has decided
against early adoption of any of these standards.
AASB 16 Leases
This standard removes the distinction between operating and financing leases for lessees as previously
defined by AASB 117 Leases. Instead, an entity recognises a ‘right-to-use’ asset for all leases entered into,
along with corresponding lease liabilities for the discounted value of future payments due under the lease,
subject to various adjustments.
Management expects this standard to have some impact on the financial statements as it is currently party to
a number of operating leases that are not in the Statement of Financial Position.
Had all of the leases in place at 30 June 2017 been accounted for in accordance with AASB 117,
management believes there would have been an additional right-to-use asset and corresponding liability of
approximately $680,000 in addition to the existing finance lease liability.
This standard takes effect for reporting periods beginning on or after 1 January 2019.
AASB 15 Revenue from Contracts with Customers
This standard introduces a new 5-step process for recognition of revenue which involves identifying the
‘performance obligations’ (also known as the ‘promises’ made to customers) in the contracts with customers,
and then determining how and when those ‘promises’ have been fulfilled.
Management will review contracts with customers and formulate a policy for identifying promises and when
they are fulfilled. Management expects to do this in the next 12-18 months, however preliminary expectations
are that the fulfilment of promises will likely result in a similar result to the current approach of recognising
revenue in accordance with the ‘percentage completion’ method applied under AASB 118.
This standard takes effect for reporting periods beginning on or after 1 January 2018.
AASB 9 Financial Instruments
This standard makes changes to naming conventions of financial assets and to conditions required to apply
hedge accounting. In addition, the standard introduces an ‘expected credit losses’ model for assessing
impairment of financial assets.
Management has not yet conducted a detailed analysis of receivables using the expected credit losses model,
however management does not expect the model would result in any substantial changes to the existing
provision for impairment of receivables. This standard takes effect for reporting periods beginning on or after
1 January 2018.
Page 28 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
4 SEGMENT REPORTING
The Group has identified its operating segments as being the energy retail sector in Australia. Management
currently identifies the energy retail sector as being the Group’s sole operating segment.
There have been no changes in the operating segments during the year. Accordingly, all significant operating
decisions are based upon analysis of the Group as one segment. The financial results from the segment are
equivalent to the financial statements of the Group as a whole.
5 REVENUE AND OTHER INCOME
Electricity sales
Interest revenue
Other receipts
Proceeds on sale of subsidiaries
Total revenue and other income
Consolidated
Entity
2017
$
Consolidated
Entity
2016
$
10,261,154
44,333
49,079
0
10,354,566
1,761,243
33,216
105,482
110,109
2,010,050
Page 29 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
6 INCOME TAX
Components of tax expense/(benefit) comprise:
Current tax
Prior year tax
Deferred tax
Income Tax Expense/(Benefit)
Consolidated
Entity
2017
$
Consolidated
Entity
2016
$
0
0
0
0
0
-115,168
0
-115,168
Numerical reconciliation of income tax benefit to prima facie tax payable
Loss from operations before tax for the year
The prima facie income tax benefit on loss before income tax at a tax rate
of 27.5% (2016: 30%)
-15,873,697
-8,729,105
-4,365,267
-2,618,732
3,681,073
0
684,194
0
1,964,023
-115,168
654,709
115,168
76,904
50,440
1,575,104
1,652,008
453,270
503,710
Tax effect amounts which are not (deductable)/taxable in calculating
taxable income:
R & D tax offset
Deferred tax asset not brought to account
Total income tax benefit
Net unrecognised deferred tax assets
Net Deductable temporary differences
Unused tax losses
Net unrecognised deferred tax aset
The above potential tax benefit for tax losses has not been recognised in
the statement of financial position. These tax losses can only be utilised in
the future if the continuity of ownership test is passed, or failing that, the
same business test is passed.
The above potential tax benefit, which excludes tax losses, for deductible
temporary differences has not been recognised in the statement of
financial position as the recovery of this benefit is uncertain.
The consolidated entity has no franking credits
Page 30 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
7 TRADE & OTHER RECEIVABLES
Trade receivables
R & D rebate receivable
Other receivables
GST receivable
Consolidated
Entity
2017
$
Consolidated
Entity
2016
$
1,768,273
0
28,109
75,760
1,872,142
730,081
115,168
59,292
89,600
994,141
Current trade receivables are interest bearing and are generally receivable within 14 days. A provision for impairment is recognised
against sales wehre there is objective evidence that an individuall trade receivable is impaired.
2017
Trade Debtors
Less provisions for impairement
Other receivables
Total
2016
Trade Debtors
Less provisions for impairement
Other receivables
Total
Gross
Amount
Past due
and impaired
Past due but not impaired
Days (overdue)
<30
$
31-45
$
>45
$
1,797,927
-29,654
103,869
1,872,142
730,081
0
264,060
994,141
50,000
99,910
26,824
161,303
50,000
99,910
26,824
161,303
0
0
32,430
4,818
37,404
32,430
4,818
37,404
The entity does not hold any financial assets whose terms have been renegotiated, but which would otherwise be past due or
impaired.
The >45 day amount is subject to a contractual arrangements
Collateral held as security
No collateral is held as security for any of the trade and other receivable balances.
Collateral pledged
No collateral has been pledged for any of the trade and other receivable balances.
Page 31 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Consolidated
Entity
2017
$
Consolidated
Entity
2016
$
8 OTHER CURRENT ASSETS
Bond paid
Deposits paid
Prepayments
9 PLANT & EQUIPMENT
Plant & equipment at cost
Accumulated depreciation
Motor vehicles at cost
Accumulated depreciation
Reconciliation
2,943
10,000
78,920
91,862
448,606
-84,840
363,766
228,047
-63,036
165,011
528,777
Reconciliations of the carrying amount of each class of plant and equipment between the beginning and the
end of the financial year
Plant and equipment
Balance at the beginning of the year
Additions
Depreciation
Write off plant and equipment
Balance at the end of the year
Motor Vehicles
Balance at the beginning of the year
Additions
Disposals
Depreciation
Balance at the end of the year
112,825
301,605
-50,664
0
363,766
302,071
60,786
-5,464
-54,668
302,725
3,896
0
23,750
27,646
147,000
-34,175
112,825
330,091
-28,020
302,071
414,896
50,445
89,615
-26,951
-284
112,825
0
330,091
0
-28,020
302,071
Page 32 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Consolidated
Entity
2017
$
Consolidated
Entity
2016
$
10 LEASEHOLD IMPROVEMENTS
Leasehold improvements at cost
Accumulated depreciation
Reconciliation
473,405
-14,354
459,050
Reonciliations of the carrying amount of leasehold improvements between the beginning and
the end of the financial year
0
0
0
0
0
0
0
0
473,405
-14,354
459,050
3,926,791
-350,580
3,576,211
1,358,059
-77,369
1,280,690
Leashold improvements
Balance at the beginning of the year
Additions
Depreciation
Balance at the end of the year
11 INTANGIBLES
Intangibles at cost - site conversion costs
Accumulated amortisation
Reconciliation
Reconciliations of the carrying amount of site conversion costs between the beginning and
the end of the financial year
Site Conversion Costs
Balance at the beginning of the year
Additions
Amortisation
Write off intangibles
Balance at the end of the year
12 BORROWINGS
Current
Site conversion loans
Owing to related parties
Non-current
Site conversion loans
Owing to related parties
1,280,690
2,568,733
-273,211
0
3,576,212
45,524
0
45,524
108,677
1,150,000
1,258,677
110,834
1,243,071
-72,761
-454
1,280,690
37,753
18,195
55,948
154,506
67,707
222,213
Page 33 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
13 ISSUED CAPITAL
(a) Issued and paid up capital
Ordinary shares fully paid no par value
(b) Movement in ordinary shares on issue
Balance at 30 June 2016
Conversion of performance shares to ordinary shares
Institutional placement
Exercise of options
Balance at 30 June 2017
2017
Number
2,510,536,385
2016
Number
1,357,135,611
Number
1,357,135,611
854,400,774
289,000,000
10,000,000
2,510,536,385
$
14,584,862
18,796,818
5,433,200
250,000
39,064,880
Ordinary shares
Ordinary shares entitle the holder to paricipate in dividends and the proceeds on the winding up of the
company in proportion to the number of and amounts paid on the shares held.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon
a poll each share shall have one vote.
Ordinarly shares have no par value and the Company does not have a limited amount of authorised capital.
Share buy-back
There is no current on-market share buy-back.
(c) Share options
At the end end of the period, the following options over unissued shares were outstanding:
Exercise
$
Number
500,000
Expiry
0.25 15/04/2018
Capital risk management
The consolidated entity's objectives when managing capital are to safeguard its ability to continue as a going concern
so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital
structure to reduce the cost of capital.
In common with many other newly listed companies, the parent raises finance for the consolidated entity's working
capital and asset development activities. The consolidated entity's overall strategy remains unchanged from 2016.
The consolidated entity is not subject to externally imposed capital requirements.
14 SHARE-BASED PAYMENTS
During the year ended 30 June 2017, the Company converted previously issued performance shares. Previously issued options
were also exercised
Grant date
11/12/2015
02/11/2015
Number of
Instruments
854,400,774
10,000,000
Exercise
Price
$
n/a
0.025
Expiry date
n/a
30/06/2017
Fair value
expensed during
the period
$
13,208,577
161,000
13,369,577
Page 34 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
15 RESERVES
Options reserve
Opening balance
Options vested
Expired options
Options converted to ordinary shares
Closing balance
The option reserve account is to account for share based payments
16 EARNINGS PER SHARE
Weighted average number of shares used as the denominator in calculating
basic and diluted earnings per share
Net loss after tax used in calculating basic earnings per share
Net loss after tax used in calculating diluted earnings per share
17 CONTROLLED ENTITIES
Consolidated
Entity
2017
$
Consolidated
Entity
2016
$
6,535,990
13,369,577
-983,750
-18,796,817
125,000
0
6,535,990
0
0
6,535,990
2017
Number
2016
Number
1,786,258,101
845,775,323
$
-15,873,697
-15,873,697
$
-8,613,937
-8,613,937
Investment in controlled entities
Country of Class of % of ownership % of ownership
Locality Planning Energy Pty Ltd
incorporation shares
Australia
Ord
2017
100%
2016
100%
Page 35 18 LEASE COMMITMENTS
Total operating lease payments
Within 1 year
1 to 5 years
Total
Total finance lease payments
Within 1 year
1 to 5 years
Total
Less Future interest charges
Total
Reconciliation to lease liabilities
Current - Note 12
Non-current - Note 12
Total
Consolidated
Entity
2017
$
Consolidated
Entity
2016
$
178,708
508,250
686,958
58,933
127,252
186,185
-31,983
154,202
45,524
108,677
154,201
95,493
523,320
618,813
58,933
186,300
245,233
-52,974
192,259
37,942
154,317
192,259
19 CONTINGENT LIABILITIES AND ASSETS
The Directors are not aware of any contingent liabilities or contingent assets that are likely to have a material
effect on the results of the Group as disclosed in these financial statements. (2016:nil)
20 RELATED PARTIES
Key management personnel compensation
Short term employee benefits
Post-employment benefits
Share based payments
Consolidated
Entity
2017
$
Consolidated
Entity
2016
$
606,505
47,780
7,802,485
8,456,770
488,471
33,810
3,434,338
3,956,619
Other related party transactions
During the year, two Directors provided loans to the Group totalling $1,150,000 as disclosed at note 12.
Loans are repayable in full, 2 years of being granted, and a commercial rate of interest is charged.
Loans are secured by the borrowers' interest in a list of Installation of Works Agreements.
Page 36 21 CASH FLOW INFORMATION
Reconciliation of cash flow from operations with profit / (loss) after tax
Profit / (loss) after tax
Non-cash flows:
Depreciation and amortisation
Loss on disposal of assets
Loss on sale of subsidiaries
Share-based payments
Interest expense settled in shares
Changes in operating assets and liabilities
Increase in receivables
Decrease / (increase) in other assets
(Decrease) / increase in creditors and payables
Increase in employee entitilements
Net cash used in operating activities
Cash and cash equivalents in the Consolidated Statement of Cash Flows include:
Cash on hand
Cash at bank
Cash on deposit
Consolidated
Entity
2017
$
Consolidated
Entity
2016
$
-15,873,697
-8,613,937
392,899
5,463
0
13,369,577
0
-2,105,758
-878,001
-64,216
917,345
73,449
-2,057,181
151
2,477,554
1,500,000
3,977,705
127,732
734
7,591
6,535,990
19,543
-1,922,347
-959,372
-12,425
558,634
59,206
-2,276,304
1,517
174,990
2,455,000
2,631,507
Page 37 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
22 FINANCIAL INSTRUMENTS
Signifcant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expense are recognised, in respect of each class
of financial asset, financial liability, and equity instrument are disclosed in Note 3 to the financial statements.
Financial risk management objectives
The financial risks of the Consolidated Entity include price risk, interest rate risk, liquidity risk and credit risk.
The consolidated entity does not hedge these risk exposures. The Consolidated Entity does not enter into or
trade financial instruments, including derivative financial instruments, for speculative purposes.
Price risk
Price risk is the risk of changes to market prices in the supply of electricity. This risk applies to both the price
at which the Company sells electricity to its customers and the price it pays for that electricity. The Company
manages this risk by signing up customers and suppliers to long-term contracts where possible.
The Consolidated Entity’s activities are also exposed to the financial risks of changes in interest rates on its
borrowings and cash and cash equivalents. It is the policy of the Consolidated Entity to manage their risks by
continuously monitoring interest rates.
Interest rate risk
Interest rate risks are caused by fluctuations in interest rates which, in turn, are due to market forces.
The Consolidated Entity’s main interest rate risk arises from cash and cash equivalents. The following table
demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held
constant, of the Consolidated Entity’s profit or loss before taxes through the impact on cash and cash
equivalents and held to maturity investments with a decrease or an increase of 0.25% in interest rates.
Cash and cash equivalents and other financial assets
Borrowings
Sensitvity
Effect on profit or loss before taxes
Increase 0.25%
Decrease 0.25%
Consolidated
Entity
2017
$
Consolidated
Entity
2016
$
3,977,705
-1,304,201
2,673,504
2,631,507
-278,161
2,353,346
6,684
-6,684
5,883
-5,883
Page 38 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
22 FINANCIAL INSTRUMENTS (Cont'd)
Liquidity risk management
Liquidity risks are caused by the inability to raise the money needed to meet payment of liabilities as and when
they fall due. The Consolidated Entity manages liquidity risk by maintaining of reserves and by continually
monitoring forecast and actual cash flows and cash balances. The Company is actively pursuing financing
possibilities to fund its future growth plans.
At 30 June 2017 current assets exceeded current liabilities by $4,151,418 (2016: current assets exceeded
current liabilities by $2,804,326). Financial liabilities comprised trade payables, accruals and loans. All trade
payables and accruals have a contractual maturity of 6 months or less.
Credit risk management
In relation to financial assets, credit risk arises from the potential failure of counterparties to meet their
obligations under a contract or arrangements. Credit risk for the Consolidated Entity arises from cash and
cash equivalents and outstanding receivables. The Consolidated Entity partially reduces credit risk by the use
of direct debit facilities with its customers. In addition, the Company has the right to withhold the supply of
electricity to secure payment. All cash & cash equivalents are held with Australian regulated banks. The
maximum exposure to credit risk is the carrying amount of the financial assets recognised in the Consolidated
Statement of Financial Position.
Fair values
The carrying amounts of all financial assets and liabilities primarily comprising cash and cash equivalents,
trade and other receivables, trade and other payables, employee entitlements, and loans are stated at their
fair value.
23 AUDITORS REMUNERATION
Amounts paid/payable for audit or review of the financial statements
Assistance with financial reporting issues in respect of the reverse acquistion
Amounts paid/payable for tax and other services
Consolidated
Entity
2017
$
Consolidated
Entity
2016
$
80,000
5,000
85,000
80,000
40,000
0
120,000
24 SUBSEQUENT EVENTS
There have been no other matters or circumstances that have arisen since the end of the year which
significantly affected or could significantly affect the operations of the Consolidated Entity, the results of those
operations or the state of affairs of the Consolidated Entity in future financial years.
Page 39 LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
25 PARENT ENTITY DISCLOSURES
The following information has been extracted from the books and records of the legal parent entity Locality
Planning Energy Holdings Limited.
2017
$
2016
$
Results of parent entity
Profit/loss for the year
Other comprehensive income/(loss for the year
Total comprehensive income/(loss) before tax
Income tax benefit
Total comprehensive income before tax
Financial position of parent entity at year end
Current Assets
Total Assets
Current Liabilities
Total Liabitlies
Net Assets
Total equity of the parent entity comprising:
Issued capital
Reserves
Accumulated losses
Total equity
-14,051,627
0
-14,051,627
0
-14,051,627
-6,866,765
0
-6,866,765
115,168
-6,751,597
12,798,636
12,798,636
6,624,421
6,624,421
1,214,546
1,214,546
38,874
38,874
11,584,090
6,585,547
39,064,880
125,000
-27,605,789
11,584,091
14,584,862
6,535,990
-14,535,305
6,585,547
Page 40 DIRECTORS DECLARATION
The Directors of the Company declare that:
1
The attached financial statements and notes are in accordance with the Corporations Act 2001, including:
(a) complying with Australian Accounting Standards (including Australian Accounting Interpretations) and the
Corporations Regulations 2001; and
2
3
4
(b) giving a true and fair view of the financial position as at 30 June 2017 and performance for the year ended on that
date of the consolidated entity,
The financial statements also comply with International Financial Reporting Standards as disclosed in note 2.
The Remuneration Report as set out in the Directors’ Report complies with Section 300A of The Corporations Act 2001.
The Chief Executive Officer and Chief Financial Officer have declared that:
(a) the financial records of the company for the financial year have been properly maintained in accordance with Section
286 of the Corporations Act 2001;
(b) the financial statements and notes for the financial year comply with the Australian Accounting Standards (including
Australian Accounting Interpretations); and
(c) the financial statements and notes for the financial year give a true and fair view.
5
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
ANDREW PIERCE
Director
27 September 2017
Page 41 Bentleys~
THINKING AHEAD
INDEPENDENT AUDITOR'S REPORT
TO THE DIRECTORS OF LOCALITY PLANNING ENERGY HOLDINGS LIMITED
Opinion
We have audited the financial report of Locality Planning Energy Holdings Limited ("the
Company", and its controlled entities (the "Group")), which comprises the consolidated
statement of financial position as at 30 June 2017 and the consolidated statement of
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 director's declaration.
ln our opinion the consolidated financial report of the Group is in accordance with the
Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the Group's financial position as at 30 June 2017
and of its performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations
Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our
responsibilities under those standards are further described in the Auditor's Responsibilities
for the Audit of the Financial Report section of our report. We are independent of the Group
in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Australian Professional and Ethical Standards Board's APES
11 O Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of
the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of the Company, would be in the same terms if given to the
directors as at the time of this auditor's report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 2(0) in the financial report, which indicates that the Company
incurred a net loss of $15,873,697 and a net cash outflow from operations of $2,057,181
during the year ended 30 June 2017. As stated in note 2(0), these events or conditions,
along with other matters as set forth in Note 2(0), indicate that a material uncertainty exists
that may cast significant doubt on the Company's ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial report of the current period. These matters were
addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
A member of Bentleys, a network of independent accounting firms located throughout Australia. New
Zealand and China that trade as BenUeys. Al members of the BenUeys Network are affiliated onfy'
and are separate k,gal entities and not in Partnershlo. liabiity timtted by a scheme approved under
Professional Standards Legislation.
) Accountants
) Auditors
) Advisors
Bentleyss
THINKING AHEAD
INDEPENDENT AUDITOR'S REPORT
TO THE DIRECTORS OF LOCALITY PLANNING ENERGY HOLDINGS LIMITED
(Continued)
Key Audit Matter
How our audit addressed the key audit matter
Recognition and Recording of Revenue
We focused on this area as a key audit matter Our procedures included, amongst others:
due to:
• The strong growth in sales in recent years
resulting in the need for substantially increased
human and information technology capabilities
and resources to ensure accurate recording.
• The significance of sales revenue and projected
sales revenue in calculating share-based
payments and potentially the value-in-use of
certain key assets.
•
•
•
• The estimation and complexity required in
determining the amount and timing of accrued •
but unbilled revenue.
• The complexity of the billing system used by •
the organisation.
Testing key controls within the sales and
accounts receivable process to ensure
completeness and accuracy of sales invoices
recorded in the ledger.
Analytical procedures to identify unusual
transactions or trends in sales data that may
be indicative of material misstatement.
Cut-off procedures to ensure that only sales
related to the 2016-2017 financial year are
recorded in these financial statements.
Detailed recalculation of accrued and unbilled
revenue.
Challenging managements' assumptions and
estimates in relation to key inputs used in the
calculation of unbilled revenue accruals and
collectability of sales. These estimates are
summarised in Note 1
to the financial
statements.
A member of Ben tleys , a network of independent accounting firms loca ted throughout AustraLia, New
Zealand and China that trade as 8el'ltleys. All members of the Bentleys Network are affiliated only
and are separate legal entities and not .., Partne,ship. Uabifity üm~ed by a scheme approved under
Professional Standards Legislation.
) Accountants
) Auditors
) Advisors
Bentleys·
THINKING AHEAD
INDEPENDENT AUDITOR'S REPORT
TO THE DIRECTORS OF LOCALITY PLANNING ENERGY HOLDINGS LIMITED
(Continued)
Information Other than the Financial Report and Auditor's Report Thereon
The directors are responsible for the other information. The other information comprises the
information included in the Group's annual report for the year ended 30 June 2017, but does
not include the financial report and our auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we
do not express any form of assurance conclusion thereon.
ln connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of the Directors 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 in accordance with Australian Accounting Standards and
the Corporations Act 2001 and for such internal control as the directors determine is
necessary to enable the preparation of the financial report that gives a true and fair view and
is free from material misstatement, whether due to fraud or error.
ln preparing the financial report, the directors are responsible for assessing the ability of the
Group to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend
to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a
whole is free from material misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with the Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on
the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise
professional judgement and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial report, whether
due to fraud or error, design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
A rnember of Bentleys, a network of independent accounting firms located throughout Australia, New
Zealand and China that trade as Bentleys. All members of the Bentleys Network are affiliated only
and are separate legal entnies and not in Partnership. Uability ümned by a scheme approved under
Professional Standards Legis