31 August 2020
Appendix 4E and 2020 Annual Report
Attached are the following documents relating to Locality Planning Energy Holdings Limited results for the year
ended 30 June 2020:
Appendix 4E
Locality Planning Energy Holdings Limited 2020 Annual Report
Authorised by the Board.
Contact: Daniel Seeney
Company Secretary
investors@localityenergy.com.au
ENDS
About LPE
LPE is the local Aussie electricity provider that cares about the needs of Australians and currently supplies
electricity to tens of thousands of customers. Our mission is to keep things simple and be honest about the
costs of electricity – to save the most amount of money for the most amount of people. This means no confusing
contracts, just simple savings, and honest electricity. The LPE product range includes solutions across
electricity, solar, embedded networks, centralised hot water, and billing services for other utilities. In January
2016, LPE was listed on the ASX and quickly developed a reputation as an energy supply specialist in strata
communities throughout South-East Queensland. Two years later in 2018 the Company received financial
backing from investment giant BlackRock.
Locality Planning Energy Holdings Ltd (ASX: LPE)
T1.306 55 Plaza Parade, Maroochydore QLD 4558
Telephone 1800 040 168
www.localityenergy.com.au
ACN 147 867 301
LOCALITY PLANNING ENERGY HOLDINGS LIMITED
ABN 90 147 867 301
Appendix 4E Preliminary Final Report under ASX Listing Rule 4.3A
Year ended 30 June 2020
Current reporting period
Previous corresponding
period
1 July 2019 to 30 June 2020
1 July 2018 to 30 June 2019
Results for announcement to the market
30 June
2020
$
30 June
2019
$
%
change
Revenue from ordinary activities
43,719,587
28,476,525
58.53%
Profit/(loss) from ordinary activities after tax
attributable to members
(7,231,267)
(2,181,690)
(231.45%)
Net profit/(loss) from ordinary activities after
tax attributable to members
(7,231,267)
(2,181,690)
(231.45%)
Final & interim dividend
Nil
Nil
-
Brief explanation of revenue and results
Significant customer growth during the period has contributed to a 59% increase in
revenue.
Net loss after tax of $7.23 million includes a non-cash loss of $2.25 million from the
change in fair value of financial instruments used to hedge the Company’s cost of
wholesale energy. The loss in fair value on the Company’s hedge book has been taken
up on the balance sheet to be realised in future periods.
Excluding this item, the underlying loss was $4.98 million which is largely due to an
increase in employee costs, up $2.46 million on the prior period, representing an
investment in the sales team and additional operational personnel to support the
Company’s significant growth.
1
Financing costs of $1.96 million (2019: $0.62 million) is up from prior period due to
additional drawdowns of the BlackRock Facility to $15 million as at 30 June 2020 ($6.1
million as at 30 June 2019).
Electricity margins (excluding the unrealised losses on derivatives) have been maintained
at 17% (2019: 18%), with only a slight dilution from the prior period, due to a change in
product mix (an increase in residential retail electricity and business customers.)
Dividend payments
Dividend reinvestment plan
Nil
Nil
Net tangible asset per security
2020
$
0.1440
2019
$
0.0435
Entities over which the group gained or lost control over the period
LPE Infrastructure Pty Ltd was deregistered on the 13th May 2020.
Details of interests in associates and joint ventures
Nil
Any other significant information
An additional $3 million in capital was raised via a new share issue in August 2020, which
will allow the company to accelerate growth in 2021.
Commentary on results
The Company has experienced significant growth during the period, with customers
increasing by 9,700 to 31,200 at 30 June 2020. This growth has been achieved despite
unprecedented disruptions to interpersonal sales activity in the second half, relating to the
COVID-19 pandemic. The majority of growth in the current period has been achieved from
residential retail electricity and business customers.
The Company has a broadening product offering, with 90% of its growth in the current period
obtained from direct market residential and SME customers (just 10% from the Company’s
long-established embedded networks product), and its emerging and innovative shared
solar product is anticipated to deliver significant traction in 2021.
This report should be read in conjunction with Locality Planning Energy Holdings
Limited Directors’ Report incorporating the Operating and Financial Review and the
2020 Annual Report released to market on 31 August 2020.
2
Locality Planning Energy Holdings Limited
Annual Report
2020
The Honest Electricity Provider
Locality Planning Energy Holdings Limited | Annual Report 2020
1
Contents
Performance Highlights
What We Do
Corporate Directory
Chairman’s Letter
Message from the Managing Director and CEO
Operating and Financial Review
Impacts of COVID-19
Directors’ Report
Remuneration Report – Audited
Financial Statements
Notes to the Financial Statements
Directors’ Declaration
Auditor’s Independence Declaration
Independent Auditor’s Report
Shareholder Information
4
5
9
10
12
14
16
19
23
27
32
53
54
55
61
LPE is recognised as one of the leading
South East Queensland electricity providers.
We supply thousands of Aussies with
innovative electricity solutions.
2
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3
We’re Local We’re Honest We’re Innovative
LPE Performance Highlights
Key Operating Metrics
LPE Performance Highlights
Key Operating Metrics
6,213
6,213
34,082
34,082
4,963
4,963
26,253
26,253
Customer
Growth
Customer
Growth
Residential Customers
SME Customers
1,390
151
1,390
Business Customers
SME Customers
Residential Customers
0
3,269
FY16
0
3,269
FY16
117
9,050
117
FY17
9,050
151
15,120
15,120
FY18
20,165
20,165
FY19
FY20
FY21(F)
What We Do
FY17
FY18
FY19
FY20
FY21(F)
$43M
$43M
Revenue
Growth
Revenue
Growth
$28M
$21M
$28M
$21M
$10M
$10M
FY17
FY18
FY19
FY20
FY17
FY18
FY19
FY20
$2M
FY16
$2M
FY16
Locality Planning Energy (ASX: LPE) became an
authorised electricity retailer in 2014 and listed
on the ASX in January 2016.
LPE is an electricity retail company specialising
in residential apartment buildings (embedded
networks) throughout South-East Queensland.
The Company also installs and manages hot
water supply infrastructure and behind-the-
meter solar energy solutions. In addition, LPE has
a growing business in the traditional direct-to-
consumer electricity supply segment, targeting
both residential and business customers.
4
Locality Planning Energy Holdings Limited | Annual Report 2020
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5
LPE Performance Highlights
Key Operating Metrics
LPE Performance Highlights
Key Operating Metrics
4,963
4,963
26,253
26,253
Customer
Growth
Customer
SME Customers
Residential Customers
Growth
Business Customers
SME Customers
Residential Customers
151
1,390
1,390
20,165
20,165
117
9,050
117
FY17
9,050
151
15,120
15,120
FY18
0
3,269
FY16
0
3,269
FY16
FY19
FY20
FY21(F)
FY17
FY18
FY19
FY20
FY21(F)
6,213
6,213
34,082
34,082
$43M
$43M
Revenue
Growth
Revenue
Growth
$28M
$21M
$28M
$21M
$10M
$10M
$2M
FY16
$2M
FY16
FY17
FY18
FY19
FY20
FY17
FY18
FY19
FY20
What We Do
Locality Planning Energy (ASX: LPE) became an
authorised electricity retailer in 2014 and listed
on the ASX in January 2016.
LPE is an electricity retail company specialising
in residential apartment buildings (embedded
networks) throughout South-East Queensland.
The Company also installs and manages hot
water supply infrastructure and behind-the-
meter solar energy solutions. In addition, LPE has
a growing business in the traditional direct-to-
consumer electricity supply segment, targeting
both residential and business customers.
4
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5
Our Products
Embedded
Networks
LPE is recognised as one of the largest
residential embedded network
operators in South East Queensland.
Embedded networks enable
communities to reduce energy costs
via connecting multiple premises to
the National Electricity Market with a
single meter, saving residents money
on costly network charges.
At LPE we have everything you and
your community need to reduce your
electricity bills and become more
environmentally friendly. Our strata
electricity experts offer a range of
options for owner’s corporations,
body corporate managers and owners
to reduce costs and maximise savings.
“We’ve been using LPE for many
years to provide our local new
developments with tailored electricity
solutions. The team at LPE continue
to provide a high level of service
and work with us to ensure the
solutions meet the requirements
for each build. LPE has dedicated
departments covering Electricity,
Hot Water and Solar with experts in
each field. Being a local company,
ease of access to each department
has been invaluable. Overall LPE
has been able to provide turnkey
embedded electricity solutions of
temporary builders supply to practical
completion.”
Matt Skrinis Project Manager
Hutchinson Builders
Retail
Electricity
We supply thousands of residential
and business customers with
their day-to-day electricity needs.
The LPE difference is that we are
committed to honest pricing, with
simple and easy to understand
bills. LPE also takes great pride in
our exceptional customer service,
including a call center based right
here in Australia.
“LPE have been such a pleasure to
deal with. Right from the beginning,
I’ve found their local customer
service team to be friendly,
responsive and knowledgeable. Not
only do we receive great friendly
service, but they saved me a lot of
money with a great rate, and I get
rewarded when I refer my friends.
My only regret is not making the
switch sooner!”
Vicki Tierney
Woody Point
6
6
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7
7
Our Products
Embedded
Networks
LPE is recognised as one of the largest
residential embedded network
operators in South East Queensland.
Embedded networks enable
communities to reduce energy costs
via connecting multiple premises to
the National Electricity Market with a
single meter, saving residents money
on costly network charges.
At LPE we have everything you and
your community need to reduce your
electricity bills and become more
environmentally friendly. Our strata
electricity experts offer a range of
options for owner’s corporations,
body corporate managers and owners
to reduce costs and maximise savings.
“We’ve been using LPE for many
years to provide our local new
developments with tailored electricity
solutions. The team at LPE continue
to provide a high level of service
and work with us to ensure the
solutions meet the requirements
for each build. LPE has dedicated
departments covering Electricity,
Hot Water and Solar with experts in
each field. Being a local company,
ease of access to each department
has been invaluable. Overall LPE
has been able to provide turnkey
embedded electricity solutions of
temporary builders supply to practical
completion.”
Matt Skrinis Project Manager
Hutchinson Builders
Retail
Electricity
We supply thousands of residential
and business customers with
their day-to-day electricity needs.
The LPE difference is that we are
committed to honest pricing, with
simple and easy to understand
bills. LPE also takes great pride in
our exceptional customer service,
including a call center based right
here in Australia.
“LPE have been such a pleasure to
deal with. Right from the beginning,
I’ve found their local customer
service team to be friendly,
responsive and knowledgeable. Not
only do we receive great friendly
service, but they saved me a lot of
money with a great rate, and I get
rewarded when I refer my friends.
My only regret is not making the
switch sooner!”
Vicki Tierney
Woody Point
6
6
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7
7
Corporate
Directory
Non-Executive Chairman
Mr Justin Pettett
Non-Executive Director
Mr Barnaby Egerton-Warburton
Executive Directors
Mr Damien Glanville
Ms Melissa Farrell
Chief Operating Officer
Mr Paul Wilson
Company Secretary
Mr Daniel Seeney
Principal & Registered Office
Suite 306, Tower 1
Kon-Tiki Business Centre
55 Plaza Parade
Maroochydore QLD 4558
Phone: 1800 040 168
Auditors
Bentleys
Level 9, 123 Albert Street
Brisbane QLD 4000
Phone +61 7 3222 9777
Lawyers
Gadens
Level 11, 111 Eagle Street
Brisbane QLD 4000
Phone +61 7 3231 1692
Share Registrar
Link Market Services Limited
10 Eagle Street
Brisbane QLD 4000
Phone: + 61 1300 554 474
Stock Exchange Listing
Australian Securities Exchange
Code: LPE
8
8
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9
9
Brendan Hays, Chair of Urban Apartment’s body corporateSolar and Shared SolarLPE work with homes, businesses, and strata communities to provide the perfect solar solution for any situation.We are leading the way on sustainability in strata energy solutions, through delivering innovative shared solar electricity infrastructure to residential customers in apartment living. Our shared solar product enables residents to benefit from onsite solar generation and batteries. LPE installs and owns the infrastructure, and enters a long-term supply agreement with the community whereby body corporates and their underlying residents benefit from the installation and maintenance of the asset at zero upfront cost as well as gaining access to LPE’s dependable platform for customer service and billing. “We have been interested in installing solar for many years, but there was no solution available that worked for all residents within the apartment complex, as well as the body corporate. With LPE, we managed to not only have the solar system installed at no cost, but we can now enjoy the benefits of cheaper, greener electricity in our community. Our residents feel good knowing that they are helping the environment by using renewable energy and they are saving money whilst doing it.” Corporate
Directory
Non-Executive Chairman
Mr Justin Pettett
Non-Executive Director
Mr Barnaby Egerton-Warburton
Executive Directors
Mr Damien Glanville
Ms Melissa Farrell
Chief Operating Officer
Mr Paul Wilson
Company Secretary
Mr Daniel Seeney
Principal & Registered Office
Suite 306, Tower 1
Kon-Tiki Business Centre
55 Plaza Parade
Maroochydore QLD 4558
Phone: 1800 040 168
Auditors
Bentleys
Level 9, 123 Albert Street
Brisbane QLD 4000
Phone +61 7 3222 9777
Lawyers
Gadens
Level 11, 111 Eagle Street
Brisbane QLD 4000
Phone +61 7 3231 1692
Share Registrar
Link Market Services Limited
10 Eagle Street
Brisbane QLD 4000
Phone: + 61 1300 554 474
Stock Exchange Listing
Australian Securities Exchange
Code: LPE
8
8
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Locality Planning Energy Holdings Limited | Annual Report 2020
9
9
Brendan Hays, Chair of Urban Apartment’s body corporateSolar and Shared SolarLPE work with homes, businesses, and strata communities to provide the perfect solar solution for any situation.We are leading the way on sustainability in strata energy solutions, through delivering innovative shared solar electricity infrastructure to residential customers in apartment living. Our shared solar product enables residents to benefit from onsite solar generation and batteries. LPE installs and owns the infrastructure, and enters a long-term supply agreement with the community whereby body corporates and their underlying residents benefit from the installation and maintenance of the asset at zero upfront cost as well as gaining access to LPE’s dependable platform for customer service and billing. “We have been interested in installing solar for many years, but there was no solution available that worked for all residents within the apartment complex, as well as the body corporate. With LPE, we managed to not only have the solar system installed at no cost, but we can now enjoy the benefits of cheaper, greener electricity in our community. Our residents feel good knowing that they are helping the environment by using renewable energy and they are saving money whilst doing it.” Chairman’s
Letter
Dear Shareholders
I am pleased to present our 2020 annual report, my first as the Company’s Chairman. I am also
happy to report that we are recognised as one of the largest residential embedded network
operators in South East Queensland. The strides the Company has made over the past six
months have been extremely promising. The tenacity and enthusiasm shown by the staff at LPE
during the ongoing challenges of the COVID-19 pandemic is a testament to the changes made at
both the Board and Management levels in early 2020. Shareholders not only would have noticed a
step-change in the performance of the Company, but also the way that the Companys’ performance
is communicated. Clear and concise communication lines within the business, together with the
reinstatement of a hierarchy of responsibility and accountability has drastically improved the culture
and atmosphere at LPE. We can now focus on delivering the strategy laid out for the year ahead,
which anticipates healthy growth of 10,000 new customers, or +32% over the year.
During the 2020 financial year, the Company’s revenues once again grew significantly by over 58%
compared to the June 2019 year. However, this growth required significant investment in capacity
which saw costs increase considerably. Optimising the cost base of the business has been an intense
focus of the new Board, resulting in the implementation of cost-cutting measures and the launch
of a company wide efficiency program. Concurrently the sales and marketing strategy has been
revamped in conjunction with adapting sales tactics to the new COVID-19 norm. The result of all of
these actions is the Company is targeting healthy growth in the FY21 financial year, and in addition
we anticipate having a clear pathway to sustainable profitability over the near-term.
We pride ourselves on the development of new and innovative products with a clear customer
focused objective: to keep things simple and be honest and transparent about the costs of
electricity in order to save our customers the most amount of money. At the time of writing
this report, the Company has over 32,000 customers predominantly located in embedded networks
within strata communities. Over 20,000 of our customers live in these highly effective cost-saving
schemes, where LPE has installed, maintained, and funded hundreds of the capital conversion costs
of apartment buildings in return for a long-term energy supply contract. We expect continued growth
in embedded networks, however LPE customers now have a larger product suite to choose from to
save them money on their electricity costs.
As the wholesale energy market fundamentals change, so have we through the launch of LPEs
new shared solar products. Similar to our core embedded network infrastructure installations, we
supply and maintain the solar system at no capital cost to body corporates or residents, and enter
a long-term contract with the community to manage the supply of low cost solar together with
traditional grid electricity to residents. We combine the solar and grid electricity consumed into one
single, easy to understand bill. LPE shared solar is the first of its kind to be offered by an energy
retailer. We are currently working with a large amount of strata communities through the design and
approval stages of deploying a solar solution that will work towards creating a sustainable community.
Through the growth of our shared solar product we will transition to not only a supplier of electricity
but an owner and operator of electricity generation infrastructure. This will set us apart from our
competitors and position LPE as a vertically integrated business similar to the behemoths in our
industry.
I would like to take this opportunity to expand upon one important aspect of what differentiates
LPE, and how this provides for a highly durable core business, and a steady platform to grow our
market share over the long-term. Capital costs associated with our embedded networks and shared
solar are an investment in critical energy infrastructure in the communities that we supply. These
costs are incurred upfront and are funded 100% by LPE. The infrastructure represents the physical
requirements within buildings such as wiring, metering and switchboard changes for embedded
networks and the installation of solar panels, inverters, batteries and other associated elements
required for our shared solar systems. Our investment in this energy infrastructure is recovered
over several years, including an adequate return, as customers use and pay for electricity supplied
by us. As a result, our customers enjoy savings on their electricity usage and the Company enjoys
predictable long-term contracted recurring revenues.
The durability of LPE’s core business has been a key strength during this time of COVID-19 and
provided a steady platform upon which our team can continue to focus on growing the business.
The support shown by new and existing shareholders has been most encouraging, and the recent
capital raise has served to broaden the Company’s share register for the next stage of growth.
I would like to thank our staff, customers, and shareholders for their continued support, and we look
forward to working with, supplying and updating you respectively throughout the year.
Justin Pettett
Chairman
10
Locality Planning Energy Holdings Limited | Annual Report 2020
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11
Chairman’s
Letter
Dear Shareholders
I am pleased to present our 2020 annual report, my first as the Company’s Chairman. I am also
happy to report that we are recognised as one of the largest residential embedded network
operators in South East Queensland. The strides the Company has made over the past six
months have been extremely promising. The tenacity and enthusiasm shown by the staff at LPE
during the ongoing challenges of the COVID-19 pandemic is a testament to the changes made at
both the Board and Management levels in early 2020. Shareholders not only would have noticed a
step-change in the performance of the Company, but also the way that the Companys’ performance
is communicated. Clear and concise communication lines within the business, together with the
reinstatement of a hierarchy of responsibility and accountability has drastically improved the culture
and atmosphere at LPE. We can now focus on delivering the strategy laid out for the year ahead,
which anticipates healthy growth of 10,000 new customers, or +32% over the year.
During the 2020 financial year, the Company’s revenues once again grew significantly by over 58%
compared to the June 2019 year. However, this growth required significant investment in capacity
which saw costs increase considerably. Optimising the cost base of the business has been an intense
focus of the new Board, resulting in the implementation of cost-cutting measures and the launch
of a company wide efficiency program. Concurrently the sales and marketing strategy has been
revamped in conjunction with adapting sales tactics to the new COVID-19 norm. The result of all of
these actions is the Company is targeting healthy growth in the FY21 financial year, and in addition
we anticipate having a clear pathway to sustainable profitability over the near-term.
We pride ourselves on the development of new and innovative products with a clear customer
focused objective: to keep things simple and be honest and transparent about the costs of
electricity in order to save our customers the most amount of money. At the time of writing
this report, the Company has over 32,000 customers predominantly located in embedded networks
within strata communities. Over 20,000 of our customers live in these highly effective cost-saving
schemes, where LPE has installed, maintained, and funded hundreds of the capital conversion costs
of apartment buildings in return for a long-term energy supply contract. We expect continued growth
in embedded networks, however LPE customers now have a larger product suite to choose from to
save them money on their electricity costs.
As the wholesale energy market fundamentals change, so have we through the launch of LPEs
new shared solar products. Similar to our core embedded network infrastructure installations, we
supply and maintain the solar system at no capital cost to body corporates or residents, and enter
a long-term contract with the community to manage the supply of low cost solar together with
traditional grid electricity to residents. We combine the solar and grid electricity consumed into one
single, easy to understand bill. LPE shared solar is the first of its kind to be offered by an energy
retailer. We are currently working with a large amount of strata communities through the design and
approval stages of deploying a solar solution that will work towards creating a sustainable community.
Through the growth of our shared solar product we will transition to not only a supplier of electricity
but an owner and operator of electricity generation infrastructure. This will set us apart from our
competitors and position LPE as a vertically integrated business similar to the behemoths in our
industry.
I would like to take this opportunity to expand upon one important aspect of what differentiates
LPE, and how this provides for a highly durable core business, and a steady platform to grow our
market share over the long-term. Capital costs associated with our embedded networks and shared
solar are an investment in critical energy infrastructure in the communities that we supply. These
costs are incurred upfront and are funded 100% by LPE. The infrastructure represents the physical
requirements within buildings such as wiring, metering and switchboard changes for embedded
networks and the installation of solar panels, inverters, batteries and other associated elements
required for our shared solar systems. Our investment in this energy infrastructure is recovered
over several years, including an adequate return, as customers use and pay for electricity supplied
by us. As a result, our customers enjoy savings on their electricity usage and the Company enjoys
predictable long-term contracted recurring revenues.
The durability of LPE’s core business has been a key strength during this time of COVID-19 and
provided a steady platform upon which our team can continue to focus on growing the business.
The support shown by new and existing shareholders has been most encouraging, and the recent
capital raise has served to broaden the Company’s share register for the next stage of growth.
I would like to thank our staff, customers, and shareholders for their continued support, and we look
forward to working with, supplying and updating you respectively throughout the year.
Justin Pettett
Chairman
10
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
11
Message from the
Managing Director
& CEO
Financial year 2019/20 has seen another year of solid growth across all customer segments, which
has been achieved in conjunction with significant changes to our sales process as we rapidly adapt to
the new COVID-19 business environment.
The era of COVID-19 is one we will all remember for our lifetime. It was a time when we needed to
promptly acclimatise to a new and uncertain working environment comprised of a largely remote
work force. It is a testament to LPE’s capable team and self-directed corporate culture that staff were
able to quickly and effectively relocate to their home offices and continue working hard to serve our
customers at a potentially very difficult time for many.
As the pandemic took hold, the Company acted to reduce the scope of our sales team whose
ability to execute on the prior sales and growth strategy was severely constrained. However, despite
a smaller team and the limitations of doing business during the pandemic, LPE’s team were able
to continue to engage with new customers and surpassed our previous best sales month for the
financial year. The entire team across sales, operations and marketing persevered, and continued to
work towards our objectives through an innovative mindset and sheer grit. The outcomes delivered
over the second half of the year are a testament to the hard work of all our team members during this
challenging period.
In a time of crisis, it is more important than ever to reflect, and identify learnings as well as areas for
improvement both personally and professionally. I believe LPE has been successful in incorporating
this culture of continuous learning and development, as we strive to be more efficient in the way we
operate day-to-day, and extend our customer-oriented value proposition which lies at the heart of our
competitive advantage and continual growth.
This has underpinned the recent decision to embark on a broad efficiency improvement program,
overhaul our customer service functions, improve onboarding processes, and optimise billing. These
actions have enabled an improvement in capacity and capability with a smaller team, reinforcing our
competitiveness in preparation for the year ahead.
I would like to take this opportunity to personally thank our employees who were part of LPE’s
journey through the COVID-19 lockdown. The attitude that was demonstrated in such trying times of
uncertainty was simply amazing.
Creating sustainable communities of the future
LPE is passionate about facilitating innovative energy solutions for the long-term benefit of strata
communities and their residents. Our business has been successfully built upon the installation,
ownership and management of electricity supply infrastructure in high density residential premises in
the South-East Queensland market.
LPE’s value proposition is built around being a dependable and capable long-term partner for behind-
the-meter electricity supply. Our focus has always been on ensuring that we deliver the benefits
available to residential customers in strata.
We are now leading the way on sustainability in strata energy solutions, through delivering innovative
shared solar electricity infrastructure to residential customers in apartment living. Our shared solar
product enables residents to benefit from onsite solar generation, by applying the same process
we have become well known for in embedded networks. LPE installs and owns the infrastructure,
and enters a long-term supply agreement with the community whereby body corporates and their
underlying residents benefit from the installation and maintenance of the asset at zero upfront cost
as well as gaining access to LPE’s dependable platform for customer service and billing.
We are also extending our shared solar product suite with deployment of a solution that incorporates
rapidly evolving battery technology, in order to store excess solar energy during the day which is
then redeployed to residents during peak consumption times in the evening. This facilitates a
significant reduction in the cost of a customer’s annual electricity bill. However, the community also
obtains access to a valuable renewable energy generation asset capable of delivering long-term
benefits without having to fund capital works, and with peace of mind that they are supported by an
ASX listed specialist.
The year ahead will see the deployment of this strategy which is an exciting development in the
evolution of LPE, and a platform for growth in partnership with our core customers.
The next stage of growth
The financial year ahead is anticipated to be a turning point for the Company as the reinvigorated
Board and leadership team sets about executing our growth strategy and working diligently towards
our long-term vision. While the operating and economic landscape is likely to be characterised by
continued uncertainty, LPE is fortunately positioned in that our core business of electricity retailing in
strata communities is a highly defensive business with a very high portion of contracted and stable
revenue streams. This provides a steady platform from which the Company is able to continue to
maintain focus on long-term growth through the economic cycle.
Strata communities will continue to be our core focus as we further grow our portfolio of embedded
networks, centralised hot water plants and shared solar infrastructure. We are conscious of the
financial stress being experienced by small business in the current climate and have therefore elected
to take a cautious approach in the interim to increasing exposure to SME customers. Our honest and
transparent retail electricity rates continue to resonate with residential customers, and we anticipate
that LPE will continue to gain market share and expand our scale throughout the year in this segment.
Wholesale energy prices have declined to all-time lows as a result of COVID–19 shutdowns, which
has created some of the most competitive retail energy prices we have seen in decades. As a
smaller growth-oriented company with a nimble culture, we believe the current market conditions are
supportive and provide a significant runway for ongoing growth. We look forward to the year ahead,
and to welcoming new customers to LPE to experience for themselves what underpins everything
we do, our motto: “Honest Electricity”.
Damien Glanville
Managing Director & CEO
12
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
13
Message from the
Managing Director
& CEO
Financial year 2019/20 has seen another year of solid growth across all customer segments, which
has been achieved in conjunction with significant changes to our sales process as we rapidly adapt to
the new COVID-19 business environment.
The era of COVID-19 is one we will all remember for our lifetime. It was a time when we needed to
promptly acclimatise to a new and uncertain working environment comprised of a largely remote
work force. It is a testament to LPE’s capable team and self-directed corporate culture that staff were
able to quickly and effectively relocate to their home offices and continue working hard to serve our
customers at a potentially very difficult time for many.
As the pandemic took hold, the Company acted to reduce the scope of our sales team whose
ability to execute on the prior sales and growth strategy was severely constrained. However, despite
a smaller team and the limitations of doing business during the pandemic, LPE’s team were able
to continue to engage with new customers and surpassed our previous best sales month for the
financial year. The entire team across sales, operations and marketing persevered, and continued to
work towards our objectives through an innovative mindset and sheer grit. The outcomes delivered
over the second half of the year are a testament to the hard work of all our team members during this
challenging period.
In a time of crisis, it is more important than ever to reflect, and identify learnings as well as areas for
improvement both personally and professionally. I believe LPE has been successful in incorporating
this culture of continuous learning and development, as we strive to be more efficient in the way we
operate day-to-day, and extend our customer-oriented value proposition which lies at the heart of our
competitive advantage and continual growth.
This has underpinned the recent decision to embark on a broad efficiency improvement program,
overhaul our customer service functions, improve onboarding processes, and optimise billing. These
actions have enabled an improvement in capacity and capability with a smaller team, reinforcing our
competitiveness in preparation for the year ahead.
I would like to take this opportunity to personally thank our employees who were part of LPE’s
journey through the COVID-19 lockdown. The attitude that was demonstrated in such trying times of
uncertainty was simply amazing.
Creating sustainable communities of the future
LPE is passionate about facilitating innovative energy solutions for the long-term benefit of strata
communities and their residents. Our business has been successfully built upon the installation,
ownership and management of electricity supply infrastructure in high density residential premises in
the South-East Queensland market.
LPE’s value proposition is built around being a dependable and capable long-term partner for behind-
the-meter electricity supply. Our focus has always been on ensuring that we deliver the benefits
available to residential customers in strata.
We are now leading the way on sustainability in strata energy solutions, through delivering innovative
shared solar electricity infrastructure to residential customers in apartment living. Our shared solar
product enables residents to benefit from onsite solar generation, by applying the same process
we have become well known for in embedded networks. LPE installs and owns the infrastructure,
and enters a long-term supply agreement with the community whereby body corporates and their
underlying residents benefit from the installation and maintenance of the asset at zero upfront cost
as well as gaining access to LPE’s dependable platform for customer service and billing.
We are also extending our shared solar product suite with deployment of a solution that incorporates
rapidly evolving battery technology, in order to store excess solar energy during the day which is
then redeployed to residents during peak consumption times in the evening. This facilitates a
significant reduction in the cost of a customer’s annual electricity bill. However, the community also
obtains access to a valuable renewable energy generation asset capable of delivering long-term
benefits without having to fund capital works, and with peace of mind that they are supported by an
ASX listed specialist.
The year ahead will see the deployment of this strategy which is an exciting development in the
evolution of LPE, and a platform for growth in partnership with our core customers.
The next stage of growth
The financial year ahead is anticipated to be a turning point for the Company as the reinvigorated
Board and leadership team sets about executing our growth strategy and working diligently towards
our long-term vision. While the operating and economic landscape is likely to be characterised by
continued uncertainty, LPE is fortunately positioned in that our core business of electricity retailing in
strata communities is a highly defensive business with a very high portion of contracted and stable
revenue streams. This provides a steady platform from which the Company is able to continue to
maintain focus on long-term growth through the economic cycle.
Strata communities will continue to be our core focus as we further grow our portfolio of embedded
networks, centralised hot water plants and shared solar infrastructure. We are conscious of the
financial stress being experienced by small business in the current climate and have therefore elected
to take a cautious approach in the interim to increasing exposure to SME customers. Our honest and
transparent retail electricity rates continue to resonate with residential customers, and we anticipate
that LPE will continue to gain market share and expand our scale throughout the year in this segment.
Wholesale energy prices have declined to all-time lows as a result of COVID–19 shutdowns, which
has created some of the most competitive retail energy prices we have seen in decades. As a
smaller growth-oriented company with a nimble culture, we believe the current market conditions are
supportive and provide a significant runway for ongoing growth. We look forward to the year ahead,
and to welcoming new customers to LPE to experience for themselves what underpins everything
we do, our motto: “Honest Electricity”.
Damien Glanville
Managing Director & CEO
12
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
13
Operating and
Financial Review
Operating Results
The net result of operations of the consolidated entity for the year ended 30 June 2020 was a loss of $7.2 million
(2019 – loss of $2.2 million) which included:
• Revenue $43.7 million (2019: $28.5 million);
• Costs of goods sold $35.8 million (2019: $22.6 million);
• Unrealised loss on derivatives $2.3 million (2019: Nil);
• Financing expenses $2.0 million (2019: $0.6 million);
• employee costs of $6.5 million (2019: $4.0 million);
• other expenses of $4.4 million (2019: $3.5 million).
LPE continued to deliver significant growth during the year with the business expanding to over 31,000 customers
by 30 June 2020 reflecting growth of 45%. The uplift was achieved as the core embedded networks business
was complemented by the fast growing direct-market vertical, which gained strong traction with residential and
business customers. The growth was supported with considerable investment in sales and marketing initiatives
over the year, including an expansion of the capacity of the sales team up until the onset of COVID-19.
The rapid growth achieved over the year generated a gross profit of $7.1m (an increase of $2.0m or 41%).
Electricity margins (excluding the unrealised losses on derivatives) were maintained at 17% (2019: 18%), with only
a slight variance from the prior period, due to a change in product mix (an increase in direct market residential and
business customers).
Underlying EBIT for the year was a loss of $3.8m, an increase of $1.4m over the prior year. While, gross profit
increased considerably during the year, this was offset by higher expenditure incurred to increase sales capacity
and deliver the growth that was anticipated. Employee costs for the year increased by $2.5 million compared to
the prior year, representing not just an investment in the sales team but also additional operational personnel to
support the Company’s rapid growth and expanded customer base.
Earnings Before Interest and Tax (EBIT)
Statutory EBIT
Government Grants
Loss/(gain) on fair value of financial instruments
Underlying EBIT
2020
$...
2019
$...
-5,948,846
-2,317,665
-113,444
2,254,517
0
-42,945
-3,807,773
-2,360,610
Underlying EBIT is the primary alternative performance measures used by the Directors for the purpose of
assessing the performance of the Group. Underlying EBIT is a non-statutory (non-IFRS) measure. The objective of
measuring and reporting underlying EBIT is to provide a more meaningful and consistent representation of financial
performance by removing items that distort performance or are non-recurring in nature. Changes in the fair value
of financial instruments are excluded from underlying EBIT to remove the significant volatility caused by timing
mismatches in valuing financial instruments and the related underlying transactions. The valuation changes are
subsequently recognised in underlying earnings when the underlying transactions are settled.
In February following the renewal process that took place at the Board and senior executive level, a companywide
efficiency program was implemented which has led to a significant reduction in operating costs and improved
productivity. Importantly, off the back of this efficiency project, LPE has implemented a high-performance culture
in which all employees have buy-in and proactively look for ways to find and achieve further efficiency gains. Major
improvements have been achieved through staff productivity initiatives to better optimize working hours through
reallocating team members across different working groups dependent of workflows in real time.
Through the last 4 months of the financial year there has been a dramatic increase in employee engagement
which is measured weekly, and employee satisfaction has reached its highest score since company scorecards
commenced in 2016. This overwhelming increase has been driven by improved internal communication and
company culture.
The highly capable operations team performed exceptionally well through the second half of FY20, and
demonstrated their ability to adapt quickly to a rapidly changing business landscape. The team was able to change
direction and maximise opportunity as it was presented, and this has supported the steady growth realised in both
the strata and direct-market segments.
A consistently positive customer experience is imperative for the sustainability of LPE’s business over the long-
term. In that regard, the demonstrated ability of LPE’s team to uphold high levels of customer service and
support through the pandemic, has strengthened this fundamental point of difference in the minds of our valuable
customers. Throughout COVID, LPE’s call center has maintained call wait times below the regulated and required
30 second time limit, and the previously mentioned internal changes have been critical to maintain this service
level.
where needed.
As a result, the Company has successfully maintained excellent customer engagement throughout the year,
and the entire team’s focus on providing our customers with the compassion they needed and the support they
expect has been evident in our customer feedback and organic growth rates. Some examples of initiatives LPE
implemented to support customers through recent months are the removal of late fees and offering payment plans
Community engagement continues to be at the forefront for the Company and during the year LPE has continued
to provide support to our local communities. Through the community give back program, LPE has provided money
to several local sporting and social clubs during the year. LPE also provided a local Sunshine Coast family with 12
months free power after running a local campaign.
LPE’s core capability of expertise in strata has been instrumental in the successful retention of embedded networks
coming out of contract during the period. This expertise is continually recognised by a vast number of body
corporate committees we serve, and this was clearly demonstrated over the year as the Company maintained a
100% retention rate of embedded network sites during FY20.
As the Company looks forward to delivering further growth in FY21, the operational strategy is focused on
continuing to realise efficiency improvements, whilst supporting new and existing customers with the exceptional
local service LPE is known for.
Shared Solar
LPE’s emerging and innovative shared solar energy product is anticipated to deliver significant traction in FY21.
The solution facilitates the installation of rooftop solar infrastructure for strata communities, and the concurrent
delivery of material savings on electricity bills with no upfront capital outlay with the backing of an established and
trusted ASX listed strata specialist. It is therefore a compelling option for strata communities to deliver renewable
energy to their residents by overcoming the usual hurdles and perceived risks faced by body corporates when
considering an investment in renewable energy infrastructure.
Similar to LPE’s core embedded network infrastructure installations, LPE will supply and maintain the solar system
at no capital cost to body corporates or residents, and enter a long-term contract with the community to manage
the supply of low cost solar and traditional grid electricity to residents. LPE then combines the solar and general
grid electricity consumed into a single, easy to understand bill.
LPE’s existing reputation and network of relationships in residential strata communities in South-East Queensland
is pivotal to the deliverability of this strategy. The Company has an existing reputation as a reliable long-term
partner in the deployment of strata electricity infrastructure as well as a customer focused and service oriented
electricity supplier.
Outlook
growth of ~30%.
LPE anticipates a further 10,000 customers to be added to the business over the year, representing healthy
14
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
15
Operating and
Financial Review
Operating Results
(2019 – loss of $2.2 million) which included:
• Revenue $43.7 million (2019: $28.5 million);
• Costs of goods sold $35.8 million (2019: $22.6 million);
• Unrealised loss on derivatives $2.3 million (2019: Nil);
• Financing expenses $2.0 million (2019: $0.6 million);
• employee costs of $6.5 million (2019: $4.0 million);
• other expenses of $4.4 million (2019: $3.5 million).
The net result of operations of the consolidated entity for the year ended 30 June 2020 was a loss of $7.2 million
LPE continued to deliver significant growth during the year with the business expanding to over 31,000 customers
by 30 June 2020 reflecting growth of 45%. The uplift was achieved as the core embedded networks business
was complemented by the fast growing direct-market vertical, which gained strong traction with residential and
business customers. The growth was supported with considerable investment in sales and marketing initiatives
over the year, including an expansion of the capacity of the sales team up until the onset of COVID-19.
The rapid growth achieved over the year generated a gross profit of $7.1m (an increase of $2.0m or 41%).
Electricity margins (excluding the unrealised losses on derivatives) were maintained at 17% (2019: 18%), with only
a slight variance from the prior period, due to a change in product mix (an increase in direct market residential and
business customers).
Underlying EBIT for the year was a loss of $3.8m, an increase of $1.4m over the prior year. While, gross profit
increased considerably during the year, this was offset by higher expenditure incurred to increase sales capacity
and deliver the growth that was anticipated. Employee costs for the year increased by $2.5 million compared to
the prior year, representing not just an investment in the sales team but also additional operational personnel to
support the Company’s rapid growth and expanded customer base.
Statutory EBIT
Government Grants
Loss/(gain) on fair value of financial instruments
-5,948,846
-2,317,665
2020
$...
-113,444
2,254,517
2019
$...
0
-42,945
Underlying EBIT
-3,807,773
-2,360,610
Underlying EBIT is the primary alternative performance measures used by the Directors for the purpose of
assessing the performance of the Group. Underlying EBIT is a non-statutory (non-IFRS) measure. The objective of
measuring and reporting underlying EBIT is to provide a more meaningful and consistent representation of financial
performance by removing items that distort performance or are non-recurring in nature. Changes in the fair value
of financial instruments are excluded from underlying EBIT to remove the significant volatility caused by timing
mismatches in valuing financial instruments and the related underlying transactions. The valuation changes are
subsequently recognised in underlying earnings when the underlying transactions are settled.
In February following the renewal process that took place at the Board and senior executive level, a companywide
efficiency program was implemented which has led to a significant reduction in operating costs and improved
productivity. Importantly, off the back of this efficiency project, LPE has implemented a high-performance culture
in which all employees have buy-in and proactively look for ways to find and achieve further efficiency gains. Major
improvements have been achieved through staff productivity initiatives to better optimize working hours through
reallocating team members across different working groups dependent of workflows in real time.
Through the last 4 months of the financial year there has been a dramatic increase in employee engagement
which is measured weekly, and employee satisfaction has reached its highest score since company scorecards
commenced in 2016. This overwhelming increase has been driven by improved internal communication and
company culture.
The highly capable operations team performed exceptionally well through the second half of FY20, and
demonstrated their ability to adapt quickly to a rapidly changing business landscape. The team was able to change
direction and maximise opportunity as it was presented, and this has supported the steady growth realised in both
the strata and direct-market segments.
A consistently positive customer experience is imperative for the sustainability of LPE’s business over the long-
term. In that regard, the demonstrated ability of LPE’s team to uphold high levels of customer service and
support through the pandemic, has strengthened this fundamental point of difference in the minds of our valuable
customers. Throughout COVID, LPE’s call center has maintained call wait times below the regulated and required
30 second time limit, and the previously mentioned internal changes have been critical to maintain this service
level.
As a result, the Company has successfully maintained excellent customer engagement throughout the year,
and the entire team’s focus on providing our customers with the compassion they needed and the support they
expect has been evident in our customer feedback and organic growth rates. Some examples of initiatives LPE
implemented to support customers through recent months are the removal of late fees and offering payment plans
where needed.
Community engagement continues to be at the forefront for the Company and during the year LPE has continued
to provide support to our local communities. Through the community give back program, LPE has provided money
to several local sporting and social clubs during the year. LPE also provided a local Sunshine Coast family with 12
months free power after running a local campaign.
LPE’s core capability of expertise in strata has been instrumental in the successful retention of embedded networks
coming out of contract during the period. This expertise is continually recognised by a vast number of body
corporate committees we serve, and this was clearly demonstrated over the year as the Company maintained a
100% retention rate of embedded network sites during FY20.
As the Company looks forward to delivering further growth in FY21, the operational strategy is focused on
continuing to realise efficiency improvements, whilst supporting new and existing customers with the exceptional
local service LPE is known for.
Earnings Before Interest and Tax (EBIT)
Shared Solar
LPE’s emerging and innovative shared solar energy product is anticipated to deliver significant traction in FY21.
The solution facilitates the installation of rooftop solar infrastructure for strata communities, and the concurrent
delivery of material savings on electricity bills with no upfront capital outlay with the backing of an established and
trusted ASX listed strata specialist. It is therefore a compelling option for strata communities to deliver renewable
energy to their residents by overcoming the usual hurdles and perceived risks faced by body corporates when
considering an investment in renewable energy infrastructure.
Similar to LPE’s core embedded network infrastructure installations, LPE will supply and maintain the solar system
at no capital cost to body corporates or residents, and enter a long-term contract with the community to manage
the supply of low cost solar and traditional grid electricity to residents. LPE then combines the solar and general
grid electricity consumed into a single, easy to understand bill.
LPE’s existing reputation and network of relationships in residential strata communities in South-East Queensland
is pivotal to the deliverability of this strategy. The Company has an existing reputation as a reliable long-term
partner in the deployment of strata electricity infrastructure as well as a customer focused and service oriented
electricity supplier.
Outlook
LPE anticipates a further 10,000 customers to be added to the business over the year, representing healthy
growth of ~30%.
14
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
15
Health & Safety
The safety of LPE’s team and their families is of utmost importance to the Company. LPE
implemented a range of measures to protect our workplace and staff from the possible risks
of COVID-19. These included the provision of hand sanitising products at the entrance to and
throughout our corporate head office, as well as reminders and advice to employees about proper
and frequent hand washing and personal distancing.
A sign-in register for visitors was established at our front-desk as well as signage instructing all
visitors to wash their hands immediately prior to entering LPE’s premises. More broadly, business
travel was significantly limited and a range of response measures were formulated in the event that an
infection in the workforce did arise. Many of these measures remain in place and LPE believes that
continued vigilance is necessary for the foreseeable future given the continued potential risk of staff
members contracting the virus.
Operations
LPE’s core business was relatively insulated from many potential operational impacts of the
pandemic, and so far the Company has been able to quickly and effectively adapt to the challenges
which have arisen. LPE’s operational team were required to manage a range of revised business
practices, which primarily related to ensuring that staff could transition to a work from home
environment rapidly and with minimal impact on employee morale and mental health, as well as
productivity.
our service levels.
A review of the workforce was conducted and where staff were identified as able to work from home
they were advised to do so. Operational support was provided to employees to make a smooth
transition to their home offices and this process was completed without any significant disruption to
In the field sales staff were required to adapt sales tactics in order to comply with all Government
directives and LPE health and safety policies and procedures. Unfortunately, a significant reduction
in the sales force was also necessary given the limitations of sales tactics in the new environment.
A reluctance by body corporate committees to hold meetings in person, as well as a general
aversion to interpersonal contact by prospective residential and business customers, meant that the
willingness and ability of decision makers to engage with our sales team was severely dampened.
However remaining team members adapted to make use of the range of technological tools available
nowadays including video conferencing, to as best they could maintain sales traction through the
period of uncertainty.
Liquidity
As part of the Queensland State Government’s COVID-19 economic relief package, The Company
received $6.65 million in cash stimulus receipts which were directly credited to residential and
business customers as a one-off payment of $200 and $500 respectively. Approximately $3.1
million of this cash injection was applied to bills issued prior to 30 June 2020, with the balance to be
allocated in the 2021 financial year, as customers’ electricity bills become due and payable.
The Company has run various scenarios to test the strength of our liquidity and we are comfortable
the business is well positioned to manage comfortably through further COVID related risks.
Government Subsidies
Cash boosts of $62,500 were received from the Australian Government, and $46,000 was refunded
by the Queensland Government with respect to Payroll Tax Relief.
Impacts
of COVID-19
The Board continues to closely monitor developments and directives from the Australian Federal
Government with regards to COVID-19. The personal safety of our staff as well as upholding service
levels to our customers at this challenging time are both of critical importance.
The onset of the COVID-19 pandemic and the associated Government imposed restrictions on
travel and interpersonal contact introduced a significant period of upheaval and uncertainty for LPE
and the community more broadly. LPE’s core business of electricity retail was recognised as an
essential service by the Government, given the reliance our customers have on us to facilitate energy
supply to homes and businesses that is fundamental to the day-to-day function of people’s lives and
livelihoods.
LPE’s customer focused and flexible culture allowed the business to quickly adapt and ensure that
the safety of our employees was protected, at the same time as our customers’ service was upheld.
Given the essential status of LPE’s core business, and the consumer staple nature of energy supply,
business operations were relatively steady. While significant change was necessary in the workforce
to adapt to remote working conditions, as well as major strategic change as marketing and growth
plans slowed, the impact on the business was relatively muted compared to many others.
As such while the pandemic and its various implications on business conditions is likely to continue
for a sustained and uncertain period of time, the impact on LPE is likely to remain relatively
manageable, and the Company believes that adequate measures and preparations are in place to
respond effectively to any future challenges which may arise as a result of the pandemic.
16
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
17
Health & Safety
The safety of LPE’s team and their families is of utmost importance to the Company. LPE
implemented a range of measures to protect our workplace and staff from the possible risks
of COVID-19. These included the provision of hand sanitising products at the entrance to and
throughout our corporate head office, as well as reminders and advice to employees about proper
and frequent hand washing and personal distancing.
A sign-in register for visitors was established at our front-desk as well as signage instructing all
visitors to wash their hands immediately prior to entering LPE’s premises. More broadly, business
travel was significantly limited and a range of response measures were formulated in the event that an
infection in the workforce did arise. Many of these measures remain in place and LPE believes that
continued vigilance is necessary for the foreseeable future given the continued potential risk of staff
members contracting the virus.
Operations
LPE’s core business was relatively insulated from many potential operational impacts of the
pandemic, and so far the Company has been able to quickly and effectively adapt to the challenges
which have arisen. LPE’s operational team were required to manage a range of revised business
practices, which primarily related to ensuring that staff could transition to a work from home
environment rapidly and with minimal impact on employee morale and mental health, as well as
productivity.
A review of the workforce was conducted and where staff were identified as able to work from home
they were advised to do so. Operational support was provided to employees to make a smooth
transition to their home offices and this process was completed without any significant disruption to
our service levels.
In the field sales staff were required to adapt sales tactics in order to comply with all Government
directives and LPE health and safety policies and procedures. Unfortunately, a significant reduction
in the sales force was also necessary given the limitations of sales tactics in the new environment.
A reluctance by body corporate committees to hold meetings in person, as well as a general
aversion to interpersonal contact by prospective residential and business customers, meant that the
willingness and ability of decision makers to engage with our sales team was severely dampened.
However remaining team members adapted to make use of the range of technological tools available
nowadays including video conferencing, to as best they could maintain sales traction through the
period of uncertainty.
Liquidity
As part of the Queensland State Government’s COVID-19 economic relief package, The Company
received $6.65 million in cash stimulus receipts which were directly credited to residential and
business customers as a one-off payment of $200 and $500 respectively. Approximately $3.1
million of this cash injection was applied to bills issued prior to 30 June 2020, with the balance to be
allocated in the 2021 financial year, as customers’ electricity bills become due and payable.
The Company has run various scenarios to test the strength of our liquidity and we are comfortable
the business is well positioned to manage comfortably through further COVID related risks.
Government Subsidies
Cash boosts of $62,500 were received from the Australian Government, and $46,000 was refunded
by the Queensland Government with respect to Payroll Tax Relief.
Impacts
of COVID-19
The Board continues to closely monitor developments and directives from the Australian Federal
Government with regards to COVID-19. The personal safety of our staff as well as upholding service
levels to our customers at this challenging time are both of critical importance.
The onset of the COVID-19 pandemic and the associated Government imposed restrictions on
travel and interpersonal contact introduced a significant period of upheaval and uncertainty for LPE
and the community more broadly. LPE’s core business of electricity retail was recognised as an
essential service by the Government, given the reliance our customers have on us to facilitate energy
supply to homes and businesses that is fundamental to the day-to-day function of people’s lives and
livelihoods.
LPE’s customer focused and flexible culture allowed the business to quickly adapt and ensure that
the safety of our employees was protected, at the same time as our customers’ service was upheld.
Given the essential status of LPE’s core business, and the consumer staple nature of energy supply,
business operations were relatively steady. While significant change was necessary in the workforce
to adapt to remote working conditions, as well as major strategic change as marketing and growth
plans slowed, the impact on the business was relatively muted compared to many others.
As such while the pandemic and its various implications on business conditions is likely to continue
for a sustained and uncertain period of time, the impact on LPE is likely to remain relatively
manageable, and the Company believes that adequate measures and preparations are in place to
respond effectively to any future challenges which may arise as a result of the pandemic.
16
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
17
Electricity Demand
When normalised for weather, electricity demand has remained relatively flat. It is clear the impact of
COVID-19 restrictions are flowing through to some sectors more than others, with significant declines
in retail, food and beverage businesses in particular as these industries have been most significantly
impacted by government restrictions. LPE’s customer base is predominately residential though, so
any decrease in demand from our business portfolio has been offset by an increased demand in
residential consumers, as a result of more people staying home during the day.
Support provided to Customers
The COVID-19 pandemic continues to have a significant impact for some of our customers. We
recognise that the circumstances arising from the COVID-19 pandemic and the impacts on the
economy, mean customers may find it difficult to pay their bills as they fall due. LPE are supporting
these customers by:
• Offering payment plans or hardship arrangements to all residential and small business customers
who indicate they may be in financial stress.
• Suspending disconnections to 31 October 2020 (and potentially beyond) for residential and
business customers who may be in financial distress, provided the customer makes contact with
and responds to communications from us.
• Waiving all late fees, disconnection fees, and reconnection fees.
• Deferring referrals of customers to debt collection agencies for recovery actions, or credit default
until at least 31 October.
The number of residential customers on payment plans peaked late April at 1% of customers
and has subsequently decreased to 0.6% of customers as at 30 June 2020 (up from 0.3% as at
30 June 2019).
Increase in Doubtful Debt Position
The Company has recognised an additional non-cash provision of $93,000 for bad and doubtful
debts associated with the potential impacts of COVID-19 on customers’ ability to pay their energy
bills. The increased provision factors in observed customer payment behaviour, the mix of customers
in COVID-19 high risk segments, the economic restrictions in place and assumes no additional
government or business economic support over and above what has already been announced.
Overall
Throughout the period of the pandemic, no business continuity issues
have been experienced and additional costs associated with operational
adaption have been minimal. LPE expects our business to remain
operational through any potential further escalation in COVID-19 related
uncertainty given the essential nature of the industry in which we operate,
and the plans we have put in place to respond to risks identified.
Directors’ Report
The following persons were directors of the company during
the financial year and up to the date of this report.
Mr Justin Pettett
Non-Executive Director, Co-founder
Mr Barnaby Egerton-Warburton
Non-Executive Director
and Chairman
Appointment Date
21 January 2020
Experience
Qualifications
BEcon, GAICD
Appointment Date
13 March 2020
Mr Pettett has over 20 years of ASX company
experience having founded and helped built businesses
Experience
and taken companies from start-up to the take-over/
acquisition/public-listing stages, working closely with
key stakeholders, investors and industry partners. He
has been involved in the energy business, namely the
oil and gas industry for over 20 years and is currently
an Executive Director and the Chief Operating Officer
of Conrad Petroleum Ltd, a Singapore based, South-
East Asian oil and natural gas company overseeing
Mr Egerton-Warburton has over 20 years investment
banking experience with JPMorgan (New York, Sydney,
Hong Kong), Prudential Bache (Perth, New York) and
Banque National de Paris (New York). In accordance
with the ASX Corporate Governance Council’s definition
of independence and the materiality thresholds set,
the directors consider Mr Egerton-Warburton to be
independent.
contractual arrangements, partner negotiations and
Special Responsibilities
operational oversight.
He has a solid, proven track record in identifying and
maximising business opportunities, particularly in the
energy sector with strengths including capital raising,
negotiation, investment analysis and leading teams to
deliver successful results. Mr Pettett is a co-founder of
Nil
Mr Barnaby Egerton-Warburton is Chairman of the
Remuneration Committee. He is also a member of the
Audit and Risk Committee.
Interest in Shares and Options
LPE and as such has operational and strategic insight
Directorships Held in Other Listed Entities
Chairman of Hawkstone Mining Limited, Non-Executive
Director of Invictus Energy Limited (ASX:IVZ), Non-
Executive Director Eneabba Gas Limited (ASX:ENB) and
Non-Executive Director of iSignthis Limited (ASX:ISX).
into the electricity retailing industry.
Special Responsibilities
Mr Pettett is Chairman of the Nomination Committee.
He is also a member of the Remuneration Committee
and the Audit and Risk Management Committee.
Interest in Shares and Options
7,349,102 fully paid ordinary shares
Directorships Held in Other Listed Entities
Nil
18
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
19
Electricity Demand
When normalised for weather, electricity demand has remained relatively flat. It is clear the impact of
COVID-19 restrictions are flowing through to some sectors more than others, with significant declines
in retail, food and beverage businesses in particular as these industries have been most significantly
impacted by government restrictions. LPE’s customer base is predominately residential though, so
any decrease in demand from our business portfolio has been offset by an increased demand in
residential consumers, as a result of more people staying home during the day.
Support provided to Customers
The COVID-19 pandemic continues to have a significant impact for some of our customers. We
recognise that the circumstances arising from the COVID-19 pandemic and the impacts on the
economy, mean customers may find it difficult to pay their bills as they fall due. LPE are supporting
these customers by:
• Offering payment plans or hardship arrangements to all residential and small business customers
who indicate they may be in financial stress.
• Suspending disconnections to 31 October 2020 (and potentially beyond) for residential and
business customers who may be in financial distress, provided the customer makes contact with
and responds to communications from us.
• Waiving all late fees, disconnection fees, and reconnection fees.
• Deferring referrals of customers to debt collection agencies for recovery actions, or credit default
until at least 31 October.
The number of residential customers on payment plans peaked late April at 1% of customers
and has subsequently decreased to 0.6% of customers as at 30 June 2020 (up from 0.3% as at
30 June 2019).
Increase in Doubtful Debt Position
The Company has recognised an additional non-cash provision of $93,000 for bad and doubtful
debts associated with the potential impacts of COVID-19 on customers’ ability to pay their energy
bills. The increased provision factors in observed customer payment behaviour, the mix of customers
in COVID-19 high risk segments, the economic restrictions in place and assumes no additional
government or business economic support over and above what has already been announced.
Overall
Throughout the period of the pandemic, no business continuity issues
have been experienced and additional costs associated with operational
adaption have been minimal. LPE expects our business to remain
operational through any potential further escalation in COVID-19 related
uncertainty given the essential nature of the industry in which we operate,
and the plans we have put in place to respond to risks identified.
Directors’ Report
The following persons were directors of the company during
the financial year and up to the date of this report.
Mr Barnaby Egerton-Warburton
Non-Executive Director
Qualifications
BEcon, GAICD
Appointment Date
13 March 2020
Experience
Mr Egerton-Warburton has over 20 years investment
banking experience with JPMorgan (New York, Sydney,
Hong Kong), Prudential Bache (Perth, New York) and
Banque National de Paris (New York). In accordance
with the ASX Corporate Governance Council’s definition
of independence and the materiality thresholds set,
the directors consider Mr Egerton-Warburton to be
independent.
Special Responsibilities
Mr Barnaby Egerton-Warburton is Chairman of the
Remuneration Committee. He is also a member of the
Audit and Risk Committee.
Interest in Shares and Options
Nil
Directorships Held in Other Listed Entities
Chairman of Hawkstone Mining Limited, Non-Executive
Director of Invictus Energy Limited (ASX:IVZ), Non-
Executive Director Eneabba Gas Limited (ASX:ENB) and
Non-Executive Director of iSignthis Limited (ASX:ISX).
Mr Justin Pettett
Non-Executive Director, Co-founder
and Chairman
Appointment Date
21 January 2020
Experience
Mr Pettett has over 20 years of ASX company
experience having founded and helped built businesses
and taken companies from start-up to the take-over/
acquisition/public-listing stages, working closely with
key stakeholders, investors and industry partners. He
has been involved in the energy business, namely the
oil and gas industry for over 20 years and is currently
an Executive Director and the Chief Operating Officer
of Conrad Petroleum Ltd, a Singapore based, South-
East Asian oil and natural gas company overseeing
contractual arrangements, partner negotiations and
operational oversight.
He has a solid, proven track record in identifying and
maximising business opportunities, particularly in the
energy sector with strengths including capital raising,
negotiation, investment analysis and leading teams to
deliver successful results. Mr Pettett is a co-founder of
LPE and as such has operational and strategic insight
into the electricity retailing industry.
Special Responsibilities
Mr Pettett is Chairman of the Nomination Committee.
He is also a member of the Remuneration Committee
and the Audit and Risk Management Committee.
Interest in Shares and Options
7,349,102 fully paid ordinary shares
Directorships Held in Other Listed Entities
Nil
18
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
19
Mr Damien Glanville
Executive Director, Co-founder and
Chief Executive Officer
Appointment Date
11 December 2015
Experience
Mr Glanville has 18 years experience in senior
management, logistics and Executive Director roles,
the last eight specifically focused in renewable energy
on-site generation and solar PV industry. Mr Glanville
is a co-founder and architect of the electricity retail
model that successfully enabled LPE to obtain their
Australian Energy Regulator authorisation and is also
listed as its Chief Executive Officer for the management
components of the Australian Energy Regulators
authorisation to retail electricity.
Special Responsibilities
Mr Glanville is a member of the Audit and Risk
Management Committee, the Remuneration
Committee, and the Nomination Committee.
Interest in Shares and Options
8,400,955 fully paid ordinary shares
Directorships Held in Other Listed Entities
Nil
Ms Melissa Farrell
Executive Director and Chief Financial Officer
Mr Daniel Seeney
Company Secretary
Qualifications
BBus, CPA, MAppFin, MAICD
CFO Appointment Date
31 May 2017
Executive Director Appointment Date
21 January 2020
Experience
Ms Farrell has 20 years experience working in
accounting and finance, 8 of which have been in senior
roles. She has worked in various sectors including
banking, and mining, both in Australia and overseas for
publicly listed companies including the Commonwealth
Bank and Wesfarmers Resources.
Special Responsibilities
Ms Farrell is Chairperson of the Audit and Risk
Management Committee. She is also a member of
the Remuneration Committee, and the Nomination
Committee.
Interest in Shares and Options
Nil
Directorships Held in Other Listed Entities
Nil
Mr Paul Wilson
Chief Operating Officer
Appointment Date
28 January 2020
Experience
Qualifications
BComm, BEC, CA
Appointment Date
19th March 2020
Experience
Daniel has more than 15 years experience in financial
services and capital markets, having previously
worked at industry leaders including Investors Mutual,
Paul spent 5 years (2011-2016) working in the utilities
industry for Utility Services Group Limited (UASG
subsidiary of Spotless Group Holdings) as Operations
Manager, where he was promoted into a National
Management role.
Citigroup, JP Morgan and PricewaterhouseCoopers.
In 2017 Paul began his tenure with the Company as
He has worked across a range of sectors in roles
General Manager of Operations and after 2 years
including corporate finance, investment research, funds
was promoted to Chief Operating Officer, overseeing
management and investment banking.
operations, compliance, sales and marketing within
Company Secretary and Investor Relations
Interest in Shares and Options
Special Responsibilities
Interest in Shares and Options
Nil
Nil
Directorships Held in Other Listed Entities
the business.
Nil
Nil
Directorships Held in Other Listed Entities
20
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
21
Mr Damien Glanville
Executive Director, Co-founder and
Chief Executive Officer
Appointment Date
11 December 2015
Experience
Mr Glanville has 18 years experience in senior
management, logistics and Executive Director roles,
the last eight specifically focused in renewable energy
on-site generation and solar PV industry. Mr Glanville
is a co-founder and architect of the electricity retail
model that successfully enabled LPE to obtain their
Australian Energy Regulator authorisation and is also
listed as its Chief Executive Officer for the management
components of the Australian Energy Regulators
authorisation to retail electricity.
Special Responsibilities
Mr Glanville is a member of the Audit and Risk
Management Committee, the Remuneration
Committee, and the Nomination Committee.
Interest in Shares and Options
8,400,955 fully paid ordinary shares
Directorships Held in Other Listed Entities
Ms Melissa Farrell
Executive Director and Chief Financial Officer
Qualifications
BBus, CPA, MAppFin, MAICD
CFO Appointment Date
31 May 2017
Executive Director Appointment Date
21 January 2020
Experience
Ms Farrell has 20 years experience working in
accounting and finance, 8 of which have been in senior
roles. She has worked in various sectors including
banking, and mining, both in Australia and overseas for
publicly listed companies including the Commonwealth
Bank and Wesfarmers Resources.
Special Responsibilities
Ms Farrell is Chairperson of the Audit and Risk
Management Committee. She is also a member of
the Remuneration Committee, and the Nomination
Committee.
Interest in Shares and Options
Directorships Held in Other Listed Entities
Nil
Nil
Nil
20
Mr Daniel Seeney
Company Secretary
Qualifications
BComm, BEC, CA
Appointment Date
19th March 2020
Experience
Daniel has more than 15 years experience in financial
services and capital markets, having previously
worked at industry leaders including Investors Mutual,
Citigroup, JP Morgan and PricewaterhouseCoopers.
He has worked across a range of sectors in roles
including corporate finance, investment research, funds
management and investment banking.
Special Responsibilities
Company Secretary and Investor Relations
Interest in Shares and Options
Nil
Directorships Held in Other Listed Entities
Nil
Mr Paul Wilson
Chief Operating Officer
Appointment Date
28 January 2020
Experience
Paul spent 5 years (2011-2016) working in the utilities
industry for Utility Services Group Limited (UASG
subsidiary of Spotless Group Holdings) as Operations
Manager, where he was promoted into a National
Management role.
In 2017 Paul began his tenure with the Company as
General Manager of Operations and after 2 years
was promoted to Chief Operating Officer, overseeing
operations, compliance, sales and marketing within
the business.
Interest in Shares and Options
Nil
Directorships Held in Other Listed Entities
Nil
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
21
Directors’ Meetings
Director
Justin Pettett
Barnaby Egerton-Warburton
Damien Glanville
Melissa Farrell
Neale O’Connell
Andrew Pierce
Ben Chester
Director
Justin Pettett
Barnaby Egerton-Warburton
Damien Glanville
Melissa Farrell
Neale O’Connell
Andrew Pierce
Ben Chester
Director
Justin Pettett
Barnaby Egerton-Warburton
Damien Glanville
Melissa Farrell
Neale O’Connell
Andrew Pierce
Ben Chester
Director
Justin Pettett
Damien Glanville
Melissa Farrell
Meetings of
Directors Held*
5
4
12
5
6
6
7
Audit & Risk
Committee
Meetings Held*
2
1
3
2
1
1
1
Remuneration
Committee
Meetings Held*
2
2
3
2
1
1
1
Nomination
Comittee
Meetings Held*
1
1
1
Meetings of
Directors Attended
5
4
12
5
6
6
7
Audit & Risk
Committee
Meetings Attended
2
1
3
2
1
1
1
Remuneration
Comittee
Meetings Attended
2
2
3
2
1
1
1
Nomination
Committee
Meetings Attended
1
1
1
* of which eligible to attend
Remuneration
Report – Audited
Remuneration Practices
The Company has established a Remuneration Committee as a Committee of the Board.
The primary purpose of the Committee is to support and advise the Board 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;
c)
recommending to the Board the remuneration of executive Directors;
d)
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;
e)
reviewing the Company’s recruitment, retention and termination policies and procedures for
f)
reviewing and approving the remuneration of the Chief Executive Officer and, as appropriate
senior management;
other senior executives; and
g) reviewing and approving any equity based plans and other incentive schemes.
The Committee shall have 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 key management personnel (KMP) of Locality Planning Energy Holdings Limited and the
consolidated entity includes the directors of the Parent Entity.
Remuneration Policy
The Board’s policy for determining the nature and amount of remuneration for KMP of the
Consolidated Group is based on the following:
• The remuneration policy is to be developed by the remuneration committee and approved by the
Board after professional advice is sought from independent external consultants.
• All KMP receive a base salary (which is based on factors such as length of service and
experience), and superannuation.
• The Remuneration committee reviews KMP packages annually by reference to the Consolidated
Group’s performance, executive performance and comparable information from industry sectors.
The Board’s policy is to remunerate non-executive directors at market rates for time, commitment and
responsibilities. The remuneration committee determines payments to the non-executive directors
and reviews their remuneration annually, based on market practice, duties and accountability.
Independent external advice is sought when required.
22
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
23
Directors’ Meetings
Meetings of
Directors Held*
Meetings of
Directors Attended
Barnaby Egerton-Warburton
Audit & Risk
Committee
Audit & Risk
Committee
Meetings Held*
Meetings Attended
Barnaby Egerton-Warburton
5
4
12
5
6
6
7
2
1
3
2
1
1
1
2
2
3
2
1
1
1
1
1
1
Remuneration
Committee
Meetings Held*
Remuneration
Comittee
Meetings Attended
Nomination
Comittee
Nomination
Committee
Meetings Held*
Meetings Attended
* of which eligible to attend
5
4
12
5
6
6
7
2
1
3
2
1
1
1
2
2
3
2
1
1
1
1
1
1
Director
Justin Pettett
Damien Glanville
Melissa Farrell
Neale O’Connell
Andrew Pierce
Ben Chester
Director
Justin Pettett
Damien Glanville
Melissa Farrell
Neale O’Connell
Andrew Pierce
Ben Chester
Director
Justin Pettett
Damien Glanville
Melissa Farrell
Neale O’Connell
Andrew Pierce
Ben Chester
Director
Justin Pettett
Damien Glanville
Melissa Farrell
Remuneration
Report – Audited
Remuneration Practices
The Company has established a Remuneration Committee as a Committee of the Board.
The primary purpose of the Committee is to support and advise the Board 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;
c)
recommending to the Board the remuneration of executive Directors;
d)
e)
f)
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 and, as appropriate
other senior executives; and
g) reviewing and approving any equity based plans and other incentive schemes.
The Committee shall have 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 key management personnel (KMP) of Locality Planning Energy Holdings Limited and the
consolidated entity includes the directors of the Parent Entity.
Barnaby Egerton-Warburton
Remuneration Policy
The Board’s policy for determining the nature and amount of remuneration for KMP of the
Consolidated Group is based on the following:
• The remuneration policy is to be developed by the remuneration committee and approved by the
Board after professional advice is sought from independent external consultants.
• All KMP receive a base salary (which is based on factors such as length of service and
experience), and superannuation.
• The Remuneration committee reviews KMP packages annually by reference to the Consolidated
Group’s performance, executive performance and comparable information from industry sectors.
The Board’s policy is to remunerate non-executive directors at market rates for time, commitment and
responsibilities. The remuneration committee determines payments to the non-executive directors
and reviews their remuneration annually, based on market practice, duties and accountability.
Independent external advice is sought when required.
22
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
23
2020 Remuneration
Short Term
Employee
Benefits
Short Term
Employee
Benefits
Salary & Fees
$
58,500
Annual Leave
Payout $
Post
Employment
Benefits
Super-
annuation $
0
26,538
350,000
213,946
20,000
78,750
228,846
33,261
184,161
1,167,464
26,538
21,003
18,858
1,900
15,544
3,160
17,495
77,960
Long Term
Employment
Benefits
$
0
5,676
8,808
0
0
0
0
1,477
15,960
Termination
$
326,229
Total...
$......
58,500
403,217
241,612
21,900
78,750
570,618
36,421
203,133
326,229
1,614,151
Directors
Justin Pettett
Damien Glanville
Melissa Farrell*
Barnaby Egerton-
Warburton**
Andrew Pierce ***
Ben Chester ****
Neale O’Connell ***
Executives
Paul Wilson*
Total
2019 Remuneration
Directors
Andrew Pierce
Damien Glanville
Ben Chester
Neale O’Connell
Executives
Melissa Farrell
Total
Short Term
Employee
Benefits
Salary & Fees $
125,000
325,070
325,070
15,000
171,755
961,894
Post
Employment
Benefits
Superannuation $
0
22,594
22,594
1,425
16,304
62,917
Long Term
Employment
Benefits $
0
5,145
5,121
0
894
11,160
Total...
$......
125,000
352,809
352,785
16,425
188,953
1,035,971
Shareholdings of Key Management Personnel
Directors
Justin Pettett*
Damien Glanville
Melissa Farrell
Barnaby Egerton-Warburton **
Executives
Paul Wilson *
Balance
1 July 2019
Shares
Acquired
Shares
Balance
Disposed
30 June 2020
8,500,995
0
0
0
0
0
0
0
100,000
7,349,102
8,400,995
0
0
0
0
0
0
*Appointed 21 January 2020
*** Resigned 21 January 2020
** Appointed 13 March 2020
**** Resigned 13 February 2020
Other required disclosures for the year ended 30 June 2020
Principal Activities of the Consolidated Entity
Officers of Locality Planning Energy Holdings Limited.
The principal activity of the consolidated entity is the
sale of electricity and utility services to residential and
commercial customers throughout the Australian
National Electricity Market.
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 2020 and to the date
of this report.
Review of Activities and Business Strategies
An operating and financial review of the company
during the financial year is contained on pages 13
to 14 of this report and forms part of the Directors’
Report. It includes a review of operations during the
year, as well as the financial results and business
strategies of the Company.
Changes in State of Affairs
In the opinion of the Directors there were no significant
changes in the state of affairs of the consolidated
entity that occurred during the financial year.
Proceedings on Behalf of the Company
No person has applied under Section 237 of the
Corporations Act for leave of the 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.
Non-Audit Services
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.
Events Subsequent to Balance Date
The Company raised an additional $3 million in
capital via the issue of 12,000,000 fully paid ordinary
shares in August 2020. There are 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
result of those operations, or the state of affairs of the
Consolidated Entity in future financial years.
Non-IFRS Financial Information
The Operating & Financial Review attached to and
forming part of this Directors’ Report includes non-
International Financial Standards (IFRS) financial
measures. The Company’s management uses
these non-IFRS financial measures to assess the
performance of the business.
• Principal among these non-IFRS financial measures
is Underlying EBIT. This measure is adjusted
for significant items (which are material items of
revenue or expenses that are unrelated to the
underlying performance of the business); and
• Changes in the fair value of financial instruments
recognised in the statement of profit or loss (to
remove the volatility caused by mismatches in
valuing financial instruments and the underlying
asset differently).
Non-audit services have been provided during the year
The Company believes that Underlying EBIT provides
by the external auditor, Bentleys. Disclosure of the
a better understanding of its financial performance
details of these services can be found in Note 22 of
than Statutory EBIT and allows for a more relevant
the Financial Statements.
comparison of financial performance between financial
Auditor’s Independence Declaration
A copy of the external auditor’s declaration under
Section 370C of the Corporates Act in relation to
the audit for the financial year is attached to the
Company’s Financial Statements.
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 the Secretary.
The Company has insured all of the Directors and
periods.
Underlying EBIT is presented with reference to
ASIC Regulatory Guide 230 ‘Disclosing non-IFRS
financial information’, issued in December 2011. The
Company’s policy for reporting Underlying EBIT is
consistent with this guidance. The Directors have
had the consistency of the application of the policy
reviewed by the external auditor of the Company.
Corporate Governance
A copy of Locality Planning Energy Holdings Limited’s
Corporate Governance Statement can be found on
the Company’s website at https://localityenergy.com.
au/invester-resources-pdf/corporate-governance
24
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
25
2020 Remuneration
Directors
Justin Pettett
Damien Glanville
Melissa Farrell*
Barnaby Egerton-
Warburton**
Andrew Pierce ***
Ben Chester ****
Neale O’Connell ***
Executives
Paul Wilson*
Total
Directors
Andrew Pierce
Damien Glanville
Ben Chester
Neale O’Connell
Executives
Melissa Farrell
Total
Short Term
Employee
Benefits
Short Term
Post
Long Term
Employee
Employment
Employment
Benefits
Benefits
Salary & Fees
Annual Leave
$
Payout $
annuation $
Termination
$
26,538
58,500
350,000
213,946
20,000
78,750
228,846
33,261
Benefits
Super-
0
21,003
18,858
1,900
15,544
3,160
17,495
77,960
5,676
8,808
$
0
0
0
0
0
1,477
15,960
184,161
1,167,464
26,538
326,229
1,614,151
Total...
$......
58,500
403,217
241,612
21,900
78,750
570,618
36,421
203,133
Total...
$......
125,000
352,809
352,785
16,425
188,953
1,035,971
326,229
5,145
5,121
0
0
894
11,160
2019 Remuneration
Short Term
Employee
Benefits
Employment
Long Term
Benefits
Employment
Salary & Fees $
Superannuation $
Benefits $
Shareholdings of Key Management Personnel
Directors
Justin Pettett*
Damien Glanville
Melissa Farrell
Executives
Paul Wilson *
Barnaby Egerton-Warburton **
Balance
1 July 2019
Shares
Acquired
Shares
Balance
Disposed
30 June 2020
8,500,995
100,000
7,349,102
8,400,995
0
0
0
0
0
0
*Appointed 21 January 2020
*** Resigned 21 January 2020
** Appointed 13 March 2020
**** Resigned 13 February 2020
Post
0
22,594
22,594
1,425
16,304
62,917
0
0
0
0
125,000
325,070
325,070
15,000
171,755
961,894
0
0
0
Other required disclosures for the year ended 30 June 2020
Principal Activities of the Consolidated Entity
The principal activity of the consolidated entity is the
sale of electricity and utility services to residential and
commercial customers throughout the Australian
National Electricity Market.
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 2020 and to the date
of this report.
Review of Activities and Business Strategies
An operating and financial review of the company
during the financial year is contained on pages 13
to 14 of this report and forms part of the Directors’
Report. It includes a review of operations during the
year, as well as the financial results and business
strategies of the Company.
Changes in State of Affairs
In the opinion of the Directors there were no significant
changes in the state of affairs of the consolidated
entity that occurred during the financial year.
Proceedings on Behalf of the Company
No person has applied under Section 237 of the
Corporations Act for leave of the 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.
Non-Audit Services
Non-audit services have been provided during the year
by the external auditor, Bentleys. Disclosure of the
details of these services can be found in Note 22 of
the Financial Statements.
Auditor’s Independence Declaration
A copy of the external auditor’s declaration under
Section 370C of the Corporates Act in relation to
the audit for the financial year is attached to the
Company’s Financial Statements.
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 the 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.
Events Subsequent to Balance Date
The Company raised an additional $3 million in
capital via the issue of 12,000,000 fully paid ordinary
shares in August 2020. There are 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
result of those operations, or the state of affairs of the
Consolidated Entity in future financial years.
Non-IFRS Financial Information
The Operating & Financial Review attached to and
forming part of this Directors’ Report includes non-
International Financial Standards (IFRS) financial
measures. The Company’s management uses
these non-IFRS financial measures to assess the
performance of the business.
• Principal among these non-IFRS financial measures
is Underlying EBIT. This measure is adjusted
for significant items (which are material items of
revenue or expenses that are unrelated to the
underlying performance of the business); and
• Changes in the fair value of financial instruments
recognised in the statement of profit or loss (to
remove the volatility caused by mismatches in
valuing financial instruments and the underlying
asset differently).
The Company believes that Underlying EBIT provides
a better understanding of its financial performance
than Statutory EBIT and allows for a more relevant
comparison of financial performance between financial
periods.
Underlying EBIT is presented with reference to
ASIC Regulatory Guide 230 ‘Disclosing non-IFRS
financial information’, issued in December 2011. The
Company’s policy for reporting Underlying EBIT is
consistent with this guidance. The Directors have
had the consistency of the application of the policy
reviewed by the external auditor of the Company.
Corporate Governance
A copy of Locality Planning Energy Holdings Limited’s
Corporate Governance Statement can be found on
the Company’s website at https://localityenergy.com.
au/invester-resources-pdf/corporate-governance
24
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
25
Financial
Statements
Business Risks
The Company has identified the following risks as
having the potential to materially affect LPE’s ability to
meet its business objectives:
Regulatory policy
LPE is exposed to regulatory policy change and
government interventions. Changes in energy market
design and climate change policies for example,
have the potential to impact the financial outcomes
of the Company. LPE contributes to policy process
by actively participating in public policy debate,
proactively engaging with policy makers and
participating in public forums, industry associations
and research.
Competition
LPE operates in a highly competitive industry which
can put pressure on margins. Our strategy to mitigate
this risk is to effectively build customer loyalty and
trust by delivering an exceptional customer service
experience based on openness and transparency, and
by offering innovative energy solutions that come with
longer length supply terms.
Changes in demand for energy
A decrease in demand for energy could possibly
reduce LPE’s revenues and adversely affect the
Company’s future financial performance. LPE cannot
control the habits or consumption patterns of our
customers, nor is it possible to quantify the long-term
impact of COVID-19 on demand, however LPE works
to mitigate the impact of this risk by utilising data
analytics to better predict customer demand.
Technological developments/disruption
Technology is allowing consumers to understand
and manage their electricity usage through smart
appliances, having the potential to disrupt the
Company’s existing relationship with consumers.
Advances in technology have the potential to create
new business models and introduce new competitors.
LPE actively monitors and participates in technological
developments and is exploring investments in new
innovative products to enhance customer experience
and reduce cost to serve.
Cyber security
A cyber security incident could lead to disruption of
critical business operations. It could also lead to a
breach of privacy, and loss of and/or corruption of
commercially sensitive data which could adversely
affect customers. LPE regularly assesses its cyber
security profile. All Employees undertake cyber
awareness training, including how to identify scam
emails and how to keep data safe.
Climate change
The ongoing decarbonisation of energy markets and
the decreasing demand for fossil fuels provides both
risks and opportunities for LPE. The Company is
focused and committed to growth and innovation of its
Solar products.
Company Health and 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 a
potential problem in safety and reporting suspicious
occurrences; and
• minimising risks in the workplace.
Environmental
Whilst it was 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.
Approval of Directors’ Report
This Director’s Report is made in accordance with a
resolution of the Board of Directors and is signed for
and on behalf of the Board this 31st day of August
2020
Justin Pettett
Chairman
26
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
27
27
Financial
Statements
Business Risks
The Company has identified the following risks as
having the potential to materially affect LPE’s ability to
meet its business objectives:
Regulatory policy
LPE is exposed to regulatory policy change and
government interventions. Changes in energy market
design and climate change policies for example,
have the potential to impact the financial outcomes
of the Company. LPE contributes to policy process
by actively participating in public policy debate,
proactively engaging with policy makers and
participating in public forums, industry associations
and research.
Competition
security profile. All Employees undertake cyber
awareness training, including how to identify scam
emails and how to keep data safe.
Climate change
The ongoing decarbonisation of energy markets and
the decreasing demand for fossil fuels provides both
risks and opportunities for LPE. The Company is
focused and committed to growth and innovation of its
Solar products.
Company Health and 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
LPE operates in a highly competitive industry which
can put pressure on margins. Our strategy to mitigate
their work area by:
this risk is to effectively build customer loyalty and
• following the safety and security directives of
trust by delivering an exceptional customer service
management;
experience based on openness and transparency, and
by offering innovative energy solutions that come with
• advising management of areas where there is a
potential problem in safety and reporting suspicious
longer length supply terms.
Changes in demand for energy
A decrease in demand for energy could possibly
reduce LPE’s revenues and adversely affect the
Company’s future financial performance. LPE cannot
control the habits or consumption patterns of our
customers, nor is it possible to quantify the long-term
impact of COVID-19 on demand, however LPE works
to mitigate the impact of this risk by utilising data
analytics to better predict customer demand.
Technological developments/disruption
Technology is allowing consumers to understand
and manage their electricity usage through smart
appliances, having the potential to disrupt the
Company’s existing relationship with consumers.
Advances in technology have the potential to create
new business models and introduce new competitors.
LPE actively monitors and participates in technological
developments and is exploring investments in new
innovative products to enhance customer experience
and reduce cost to serve.
Cyber security
A cyber security incident could lead to disruption of
critical business operations. It could also lead to a
breach of privacy, and loss of and/or corruption of
commercially sensitive data which could adversely
affect customers. LPE regularly assesses its cyber
occurrences; and
• minimising risks in the workplace.
Environmental
Whilst it was 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.
Approval of Directors’ Report
This Director’s Report is made in accordance with a
resolution of the Board of Directors and is signed for
and on behalf of the Board this 31st day of August
2020
Justin Pettett
Chairman
26
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
27
27
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 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Consolidated statement of financial position
for the year ended 30 June 2020
Electricity revenue
Electricity cost of goods sold
Unrealised gain/losses on derivatives
Gain from trading
Other income
Total operating income
Impairment losses
Financing expenses
Other expenses
Loss before income taxes
Income tax benefit/(expense)
Net loss for the period
Other comprehensive income
Other comprehensive income net of tax
Total comprehensive loss for the year
Basic/diluted earnings/(loss) per share (dollars per share)
Note
5A
5B
2020....
$.......
2019....
$.......
42,926,175
(35,782,849)
(2,254,517)
4,888,809
27,722,990
(22,647,860)
42,945
5,118,075
5C
5D
5E
5F
6
14
793,412
5,682,221
753,535
5,871,610
(505,289)
(1,962,389)
(10,445,810)
(7,231,267)
(122,489)
(617,560)
(7,313,251)
(2,181,690)
-
(7,231,267)
-
(2,181,690)
-
-
(7,231,267)
(0.1440)
-
-
(2,181,690)
(0.0435)
Current assets
Cash and cash equivalents
Trade and other receivables
Site conversion receivables current
Financial assets
Other current assets
Total current assets
Non-current assets
Site conversion receivables
Plant and equipment
Leasehold improvements
Intangibles
Right of use assets
Total non-current assets
TOTAL ASSETS
Current liabilities
Trade and other payables
GST payable
Lease Liabilities Current
Provisions
Borrowings
Financial liabilities - derivatives
Total current liabilities
Non-current liabilities
Employee entitlements - leave provisions
Lease Liabilities
Borrowings
Total non-current liabilities
Employee entitlements - leave provisions Current
Note
2020....
$.......
2019....
$.......
20
7
7
8
9
7
10
11
12
13
13
8,251,616
4,862,976
1,360,871
2,376,027
461,274
3,306,072
3,065,010
1,554,644
42,945
337,181
17,312,764
8,305,852
3,968,347
3,965,663
395,446
177,090
478,002
117,360
448,655
372,371
162,154
-
5,136,245
4,948,843
22,449,009
13,254,695
8,911,718
3,292,863
30,580
216,169
107,923
46,049
2,205,301
143,365
19,359
248,307
-
-
-
35,784
11,661,105
3,596,313
62,567
3,427
13,521,697
13,587,691
44,177
-
5,182,725
5,226,902
TOTAL LIABILITIES
25,248,796
8,823,215
Net assets / (deficiency)
(2,799,787)
4,431,480
Equity
Issued capital
Accumulated losses
Total equity
14
39,064,880
39,064,880
(41,864,667)
(34,633,400)
(2,799,787)
4,431,480
The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the Notes to the Financial Statements.
The Consolidated Statement of Financial Position should be read in conjunction
with the Notes to the Financial Statements.
28
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
29
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 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Consolidated statement of financial position
for the year ended 30 June 2020
Electricity revenue
Electricity cost of goods sold
Unrealised gain/losses on derivatives
Gain from trading
Other income
Total operating income
Impairment losses
Financing expenses
Other expenses
Loss before income taxes
Income tax benefit/(expense)
Net loss for the period
Note
5A
5B
5C
5D
5E
5F
6
2020....
$.......
2019....
$.......
42,926,175
27,722,990
(35,782,849)
(22,647,860)
(2,254,517)
4,888,809
42,945
5,118,075
793,412
5,682,221
753,535
5,871,610
(505,289)
(1,962,389)
(10,445,810)
(7,231,267)
(122,489)
(617,560)
(7,313,251)
(2,181,690)
(7,231,267)
(2,181,690)
-
-
-
-
-
-
Other comprehensive income
Other comprehensive income net of tax
Total comprehensive loss for the year
Basic/diluted earnings/(loss) per share (dollars per share)
14
(0.1440)
(0.0435)
(7,231,267)
(2,181,690)
Current assets
Cash and cash equivalents
Trade and other receivables
Site conversion receivables current
Financial assets
Other current assets
Total current assets
Non-current assets
Site conversion receivables
Plant and equipment
Leasehold improvements
Intangibles
Right of use assets
Total non-current assets
TOTAL ASSETS
Current liabilities
Trade and other payables
GST payable
Employee entitlements - leave provisions Current
Lease Liabilities Current
Provisions
Financial liabilities - derivatives
Borrowings
Total current liabilities
Non-current liabilities
Employee entitlements - leave provisions
Lease Liabilities
Borrowings
Total non-current liabilities
TOTAL LIABILITIES
Net assets / (deficiency)
Equity
Issued capital
Accumulated losses
Total equity
Note
2020....
$.......
2019....
$.......
20
7
7
8
9
7
10
11
12
13
13
14
8,251,616
4,862,976
1,360,871
2,376,027
461,274
17,312,764
3,968,347
395,446
177,090
478,002
117,360
5,136,245
3,306,072
3,065,010
1,554,644
42,945
337,181
8,305,852
3,965,663
448,655
372,371
162,154
-
4,948,843
22,449,009
13,254,695
8,911,718
30,580
216,169
107,923
46,049
2,205,301
143,365
11,661,105
62,567
3,427
13,521,697
13,587,691
3,292,863
19,359
248,307
-
-
-
35,784
3,596,313
44,177
-
5,182,725
5,226,902
25,248,796
8,823,215
(2,799,787)
4,431,480
39,064,880
(41,864,667)
(2,799,787)
39,064,880
(34,633,400)
4,431,480
The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the Notes to the Financial Statements.
The Consolidated Statement of Financial Position should be read in conjunction
with the Notes to the Financial Statements.
28
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
29
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Consolidated statement of cash flows
for the year ended 30 June 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Consolidated statement of changes in equity
for the year ended 30 June 2020
Balance at 1 July 2018
Profit/(Loss) after income tax
Balance at 30 June 2019
Balance at 1 July 2019
Profit/(Loss) after income tax
Balance at 30 June 2020
Issued..
Accumulated
capital..
$.......
losses..
$.......
Totals...
$.......
39,064,880
(32,451,710)
-
(2,181,690)
39,064,880
(34,633,400)
6,613,170
(2,181,690)
4,431,480
39,064,880
(34,633,400)
-
(7,231,267)
39,064,880
(41,864,667)
4,431,480
(7,231,267)
(2,799,787)
Cash flows from operating activities
Receipts from customers
Receipts from government utility relief scheme
Receipts from government grants
Payments to suppliers and employees
Interest received
Interest paid
Net cash provided by/(used in) operating activities
Cash flows from investing activities
Payment for financial assets
Payment for plant and equipment
Payment for leasehold improvements
Payment for intangibles
Net cash provided by/(used in) investing activities
Cash flows from financing activities
Financing costs paid
Proceeds from loans
Repayment of leases
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
2020....
$.......
2019....
$.......
36,474,440
6,653,700
58,899
(43,274,840)
679,900
(1,143,332)
(551,233)
26,713,354
-
-
(28,630,798)
749,638
(399,995)
(1,567,801)
(2,376,027)
(114,645)
(10,917)
(456,535)
(2,958,124)
-
(240,490)
(25,732)
(49,261)
(315,483)
(395,259)
11,383,110
(135,683)
(2,397,267)
8,454,901
(1,033,000)
6,877,710
-
(2,019,717)
3,824,993
4,945,544
3,306,072
8,251,616
1,941,709
1,364,363
3,306,072
20
20
20
The Consolidated Statement of Cash Flows should be read in conjunction
with the Notes to the Financial Statements.
The Consolidated Statement of Changes in Equity should be read in conjunction
with the Notes to the Financial Statements.
30
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
31
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Consolidated statement of cash flows
for the year ended 30 June 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Consolidated statement of changes in equity
for the year ended 30 June 2020
Balance at 1 July 2018
Profit/(Loss) after income tax
Balance at 30 June 2019
Balance at 1 July 2019
Profit/(Loss) after income tax
Balance at 30 June 2020
Issued..
capital..
$.......
Accumulated
losses..
$.......
Totals...
$.......
39,064,880
-
39,064,880
(32,451,710)
(2,181,690)
(34,633,400)
6,613,170
(2,181,690)
4,431,480
39,064,880
-
39,064,880
(34,633,400)
(7,231,267)
(41,864,667)
4,431,480
(7,231,267)
(2,799,787)
Note
2020....
$.......
2019....
$.......
Cash flows from operating activities
Receipts from customers
Receipts from government utility relief scheme
Receipts from government grants
Payments to suppliers and employees
Interest received
Interest paid
Net cash provided by/(used in) operating activities
20
Cash flows from investing activities
Payment for financial assets
Payment for plant and equipment
Payment for leasehold improvements
Payment for intangibles
Net cash provided by/(used in) investing activities
Cash flows from financing activities
Financing costs paid
Proceeds from loans
Repayment of leases
Repayment of loans
Net cash provided by/(used in) financing activities
20
36,474,440
26,713,354
6,653,700
58,899
-
-
(43,274,840)
(28,630,798)
679,900
(1,143,332)
(551,233)
749,638
(399,995)
(1,567,801)
(2,376,027)
(114,645)
(10,917)
(456,535)
(2,958,124)
-
(240,490)
(25,732)
(49,261)
(315,483)
(395,259)
11,383,110
(135,683)
(2,397,267)
8,454,901
(1,033,000)
6,877,710
-
(2,019,717)
3,824,993
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents opening balance
Cash and cash equivalents closing balance
4,945,544
3,306,072
8,251,616
1,941,709
1,364,363
3,306,072
20
The Consolidated Statement of Cash Flows should be read in conjunction
with the Notes to the Financial Statements.
The Consolidated Statement of Changes in Equity should be read in conjunction
with the Notes to the Financial Statements.
30
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
31
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
1. Reporting Entity
The financial statements of Locality Planning Energy Holdings Limited (“the Company”) for the year ended
30 June 2020 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. The Company 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.
2. 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 (AASB) 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 be indicative of impairment triggers. Impairment of financial assets (trade receivables and financial assets)
are assessed for impairment as described in Note 3G. Note 3H describes the processing for assessing impairment
for non-financial assets (property, plant and equipment, intangible assets and other assets).
2. Basis of Preparation (continued)
(c) Use of Estimates and Judgements (continued)
Site Conversion Revenue
Site conversion revenue is recognised upon installation, however customers are able to make payment over a 5 to
10 year period. The Group has assessed that where this payment is deferred, the transaction contains a significant
financing component and therefore the revenue must be adjusted for the effects of the time value of money.
Judgement is therefore required to determine the amount of the consideration that relates to the site conversion
revenue, and the amount relating to the financing of the purchase. See note 3K for further details.
Derivatives
LPE’s approach to managing energy price risks reflects the need to provide pricing certainty to customers and limit
exposure to adverse wholesale market outcomes. LPE uses certain financial instruments (derivatives) to manage
these energy price risks arising in the normal course of business to align with LPE’s risk appetite.
These derivatives are recorded at fair value through profit or loss. Fair value is determined using valuation
techniques that incorporate a range of estimates and judgements, as described in Note 26.
(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 incurred a net loss after income tax for the year ended 30 June 2020 of $7,231,267 (2019:
$2,181,690) and a net cash outflow from operations of $551,233 (2019: $1,567,801). The Group also has a net
asset deficiency at 30 June 2020 of $2,799,787 (2019: net assets of $4,431,480). These factors, prima facie,
indicate that there is material uncertainty on whether the Group will continue as a going concern.
The Group has a healthy cash position of $8.2 million at 30 June 2020, and in August 2020 successfully raised
$3 million of capital through an issue of shares.
Notwithstanding this, the Group has prepared budgets based on its current growth plans, which indicate that the
Group will become profitable in the near future. For these reasons the directors have determined the Group has
access to sufficient net working capital to maintain continuity of normal business activity and pay its debts as and
when they fall due, and therefore that it is appropriate to prepare the financial report on a going concern basis.
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 subsidiaries for the year ended 30 June 2020 (“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.
32
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Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
1. Reporting Entity
The financial statements of Locality Planning Energy Holdings Limited (“the Company”) for the year ended
30 June 2020 covers the Consolidated Entity consisting of Locality Planning Energy Holdings Limited and the
the Corporations Act 2001. The Company 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.
2. Basis of Preparation
(a) Statement of Compliance
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 be indicative of impairment triggers. Impairment of financial assets (trade receivables and financial assets)
are assessed for impairment as described in Note 3G. Note 3H describes the processing for assessing impairment
for non-financial assets (property, plant and equipment, intangible assets and other assets).
entities it controlled from time to time throughout the year (“the Group” or “Consolidated Entity”) as required by
Site Conversion Revenue
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
2. Basis of Preparation (continued)
(c) Use of Estimates and Judgements (continued)
The Financial Report has been prepared in accordance with requirements of Australian Accounting Standards,
other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations
These derivatives are recorded at fair value through profit or loss. Fair value is determined using valuation
techniques that incorporate a range of estimates and judgements, as described in Note 26.
Site conversion revenue is recognised upon installation, however customers are able to make payment over a 5 to
10 year period. The Group has assessed that where this payment is deferred, the transaction contains a significant
financing component and therefore the revenue must be adjusted for the effects of the time value of money.
Judgement is therefore required to determine the amount of the consideration that relates to the site conversion
revenue, and the amount relating to the financing of the purchase. See note 3K for further details.
Derivatives
LPE’s approach to managing energy price risks reflects the need to provide pricing certainty to customers and limit
exposure to adverse wholesale market outcomes. LPE uses certain financial instruments (derivatives) to manage
these energy price risks arising in the normal course of business to align with LPE’s risk appetite.
(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 incurred a net loss after income tax for the year ended 30 June 2020 of $7,231,267 (2019:
$2,181,690) and a net cash outflow from operations of $551,233 (2019: $1,567,801). The Group also has a net
asset deficiency at 30 June 2020 of $2,799,787 (2019: net assets of $4,431,480). These factors, prima facie,
indicate that there is material uncertainty on whether the Group will continue as a going concern.
The Group has a healthy cash position of $8.2 million at 30 June 2020, and in August 2020 successfully raised
$3 million of capital through an issue of shares.
Notwithstanding this, the Group has prepared budgets based on its current growth plans, which indicate that the
Group will become profitable in the near future. For these reasons the directors have determined the Group has
access to sufficient net working capital to maintain continuity of normal business activity and pay its debts as and
when they fall due, and therefore that it is appropriate to prepare the financial report on a going concern basis.
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 subsidiaries for the year ended 30 June 2020 (“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.
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33
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
3. Significant Accounting Policies (continued)
3. Significant Accounting Policies (continued)
(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.
(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
Depreciation Rate & Method
Plant and equipment
10-50% per annum straight line or diminishing value
Motor Vehicles
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 software and legal costs. Software has an estimated useful life of between
three and ten years. It is assessed annually for impairment.
Leasehold improvements are amortised over the shorter of either the unexpired period of the lease or the
(e) Leashold Improvements
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.
(g) Impairment of Financial Assets
The Group applies the simplified approach to providing for expected credit losses prescribed by AASB 9, which
prescribes the use of the lifetime expected loss provision for all trade receivables. To measure the expected credit
losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due,
and a provision matrix is used.
become unrecoverable.
The “amounts written off” are all due to customers declaring bankruptcy, or term receivables that have now
At each reporting date, the Group recognises the movement in the loss allowance as an impairment gain or loss in
the Statement of Profit or Loss and Other Comprehensive Income.
(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.
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35
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
3. Significant Accounting Policies (continued)
3. Significant Accounting Policies (continued)
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
Leasehold improvements are amortised over the shorter of either the unexpired period of the lease or the
estimated useful lives of the improvements.
(e) Leashold Improvements
(b) Income Tax
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.
(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
Depreciation Rate & Method
Plant and equipment
10-50% per annum straight line or diminishing value
Motor Vehicles
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 software and legal costs. Software has an estimated useful life of between
three and ten years. It is assessed annually for impairment.
(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.
(g) Impairment of Financial Assets
The Group applies the simplified approach to providing for expected credit losses prescribed by AASB 9, which
prescribes the use of the lifetime expected loss provision for all trade receivables. To measure the expected credit
losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due,
and a provision matrix is used.
The “amounts written off” are all due to customers declaring bankruptcy, or term receivables that have now
become unrecoverable.
At each reporting date, the Group recognises the movement in the loss allowance as an impairment gain or loss in
the Statement of Profit or Loss and Other Comprehensive Income.
(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.
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35
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
3. Significant Accounting Policies (continued)
3. Significant Accounting Policies (continued)
(k) Revenue
Revenue for the Group can be categorised as follows:
– Supply of electricity
– Supply of embedded network or solar infrastructure (including installation)
Supply of electricity
Revenue from the supply of electricity is recognised as the customer obtains a benefit from the supply, which
occurs over time as the customer consumes the electricity. Consumption is determined by meter readings.
Between meter readings, consumption is estimated using industry and historical customer consumption patterns,
along with consumption reports from the Group’s suppliers.
Costs associated with the supply of the electricity are expensed over time in line with customers’ consumption.
Supply of embedded network or solar infrastructure
The Group arranges to supply and install embedded network infrastructure on customers’ premises. The
performance obligation is the installation of the infrastructure, and therefore revenue is recognised at a point in time
upon installation. Likewise, the Group arranges to supply and install solar infrastructure on customers’ premises.
The performance obligation is the installation of the infrastructure, and therefore revenue is recognised at a point
in time upon installation.
Customers have the option to pay for the site conversion infrastructure over the life of a related electricity supply
contract, ranging from 5 to 10 years. Therefore a significant financing component has been identified within these
contracts. The revenue is therefore discounted to remove the financing component. Consideration receivable in
respect of this revenue is recognised as ‘site conversion receivables’ in the Statement of Financial Position. The
financing component has been assessed by the Group at a rate of 12% per annum, and this is recognised as
interest revenue over time until the customer has paid all consideration.
Costs incurred to supply and install the site conversion infrastructure are expensed when the revenue is
recognised, upon installation. For costs incurred on site conversions where the infrastructure has not yet been
installed, and therefore no revenue yet recognised, the costs are capitalised within the inventory balance contained
within ‘Other Assets’ in the Statement of Financial Position.
(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
of the lease.
At inception of a contract, the Group assesses if the contract contains or is a lease. If there is a lease present,
a right-of-use asset and a corresponding lease liability is recognised by the Group where the Group is a lessee.
However all contracts that are classified as short-term leases (lease with remaining lease term of 12 months or
less) and leases of low value assets are recognised as an operating expense on a straight-line basis over the term
Initially the lease liability is measured at the present value of the lease payments still to be paid at commencement
date. The lease payments are discounted at the interest rate implicit in the lease. If this rate cannot be readily
determined, the Group uses the incremental borrowing rate.
Lease payments included in the measurement of the lease liability are as follows:
–
fixed lease payments less any lease incentives;
– variable lease payments that depend on an index or rate, initially measured using the index or rate at
the commencement date;
–
–
–
the amount expected to be payable by the lessee under residual value guarantees;
the exercise price of purchase options, if the lessee is reasonably certain to exercise the options;
lease payments under extension options if lessee is reasonably certain to exercise the options; and
– payments of penalties for terminating the lease, if the lease term reflects the exercise of an option
to terminate the lease.
The right-of-use assets comprise the initial measurement of the corresponding lease liability as mentioned above,
any lease payments made at or before the commencement date as well as any initial direct costs. The subsequent
measurement of the right-of-use assets is at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the underlying asset whichever is the
Where a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the
Group anticipates to exercise a purchase option, the specific asset is depreciated over the useful life of the
shortest.
underlying asset.
(p) Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions to the instrument. For financial assets, this is the date that the Group commits itself to either the
purchase or sale of the asset (ie trade date accounting is adopted).
Financial instruments (except for trade receivables) are initially measured at fair value plus transaction costs,
except where the instrument is classified “at fair value through profit or loss”, in which case transaction costs are
expensed to profit or loss immediately. Where available, quoted prices in an active market are used to determine
fair value. In other circumstances, valuation techniques are adopted.
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37
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
3. Significant Accounting Policies (continued)
3. Significant Accounting Policies (continued)
(k) Revenue
Revenue for the Group can be categorised as follows:
– Supply of electricity
– Supply of embedded network or solar infrastructure (including installation)
Supply of electricity
Revenue from the supply of electricity is recognised as the customer obtains a benefit from the supply, which
occurs over time as the customer consumes the electricity. Consumption is determined by meter readings.
Between meter readings, consumption is estimated using industry and historical customer consumption patterns,
along with consumption reports from the Group’s suppliers.
Costs associated with the supply of the electricity are expensed over time in line with customers’ consumption.
Supply of embedded network or solar infrastructure
The Group arranges to supply and install embedded network infrastructure on customers’ premises. The
performance obligation is the installation of the infrastructure, and therefore revenue is recognised at a point in time
upon installation. Likewise, the Group arranges to supply and install solar infrastructure on customers’ premises.
The performance obligation is the installation of the infrastructure, and therefore revenue is recognised at a point
in time upon installation.
Customers have the option to pay for the site conversion infrastructure over the life of a related electricity supply
contract, ranging from 5 to 10 years. Therefore a significant financing component has been identified within these
contracts. The revenue is therefore discounted to remove the financing component. Consideration receivable in
respect of this revenue is recognised as ‘site conversion receivables’ in the Statement of Financial Position. The
financing component has been assessed by the Group at a rate of 12% per annum, and this is recognised as
interest revenue over time until the customer has paid all consideration.
Costs incurred to supply and install the site conversion infrastructure are expensed when the revenue is
recognised, upon installation. For costs incurred on site conversions where the infrastructure has not yet been
installed, and therefore no revenue yet recognised, the costs are capitalised within the inventory balance contained
within ‘Other Assets’ in the Statement of Financial Position.
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
Ordinary shares are classified as equity. Costs directly attributable to the issue of new shares or options are shown
operating cash flows.
(m) Issued Capital
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
At inception of a contract, the Group assesses if the contract contains or is a lease. If there is a lease present,
a right-of-use asset and a corresponding lease liability is recognised by the Group where the Group is a lessee.
However all contracts that are classified as short-term leases (lease with remaining lease term of 12 months or
less) and leases of low value assets are recognised as an operating expense on a straight-line basis over the term
of the lease.
Initially the lease liability is measured at the present value of the lease payments still to be paid at commencement
date. The lease payments are discounted at the interest rate implicit in the lease. If this rate cannot be readily
determined, the Group uses the incremental borrowing rate.
Lease payments included in the measurement of the lease liability are as follows:
fixed lease payments less any lease incentives;
–
– variable lease payments that depend on an index or rate, initially measured using the index or rate at
the commencement date;
the amount expected to be payable by the lessee under residual value guarantees;
the exercise price of purchase options, if the lessee is reasonably certain to exercise the options;
lease payments under extension options if lessee is reasonably certain to exercise the options; and
–
–
–
– payments of penalties for terminating the lease, if the lease term reflects the exercise of an option
to terminate the lease.
The right-of-use assets comprise the initial measurement of the corresponding lease liability as mentioned above,
any lease payments made at or before the commencement date as well as any initial direct costs. The subsequent
measurement of the right-of-use assets is at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the underlying asset whichever is the
shortest.
Where a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the
Group anticipates to exercise a purchase option, the specific asset is depreciated over the useful life of the
underlying asset.
(l) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
(p) Financial Instruments
incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions to the instrument. For financial assets, this is the date that the Group commits itself to either the
purchase or sale of the asset (ie trade date accounting is adopted).
Financial instruments (except for trade receivables) are initially measured at fair value plus transaction costs,
except where the instrument is classified “at fair value through profit or loss”, in which case transaction costs are
expensed to profit or loss immediately. Where available, quoted prices in an active market are used to determine
fair value. In other circumstances, valuation techniques are adopted.
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37
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
3. Significant Accounting Policies (continued)
3. Significant Accounting Policies (continued)
(p) Financial Instruments (continued)
Classification and subsequent measurement
Financial Liabilities
Financial liabilities are subsequently measured at:
– Amortised cost; or
– Fair value through profit or loss.
A financial liability is measured at fair value through profit and loss if the financial liability is:
– A contingent consideration of an acquirer in a business combination to which AASB 3: Business
Combinations applies;
– Held for trading; or
–
Initially designated at fair value through profit or loss.
All other financial liabilities are subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating
interest expense in profit or loss over the relevant period. The effective interest rate is the internal rate of return of
the financial asset or liability. That is, it is the rate that exactly discounts the estimated future cash flows through the
expected life of the instrument to the net carrying amount at initial recognition.
A financial liability is held for trading if:
–
It is incurred for the purpose of repurchasing or repaying in the near term;
– Part of a portfolio where there is an actual patter of short-term profit taking; or
– A derivative financial instrument (except for a derivative that is in a financial guarantee contract or
a derivative that is in an effective hedging relationship).
The Group recognises the financial derivative instruments at fair value through profit or loss.
Financial Assets
Financial assets are subsequently measured at:
– Amortised cost;
– Fair value through other comprehensive income; or
– Fair value through profit or loss.
Measurement is on the basis of two primary criteria:
– The contractual cash flow characteristics of the financial asset; and
– The business model for managing financial assets.
A financial asset that meets the following conditions is subsequently measured at amortised cost:
– The financial asset is managed solely to collect contractual cashflows; and
– The contractual terms within the financial asset give rise to cashflows that are solely payments of principal
and interest on the principal amount outstanding on specified dates.
A financial asset that meets the following conditions is subsequently measured at fair value through other
comprehensive income:
– The contractual terms within the financial asset give rise to cashflows that are solely payments of principal
and interest on the principal amount outstanding on specified dates;
– The business model for managing the financial assets comprises both contractual cashflows and the
The Group has identified its operating segments as being the energy retail sector in Australia. Management
selling of the financial asset.
By default, all other financial assets that do not meet the measurement conditions of amortised cost and fair value
through other comprehensive income are subsequently measured at fair value through profit or loss.
The Group currently has futures contracts that are recognised within financial assets in the Statement of Financial
Position that are recognised at fair value through profit or loss. All other financial assets are recognised at
amortised cost.
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39
(p) Financial Instruments (continued)
Derecognition
of financial position.
Derecognition of financial liabilities
Derecognition refers to the removal of a previously recognised financial asset or financial liability from the statement
A liability is derecognised when it is extinguished (ie when the obligation in the contract is discharged, cancelled
or expires). An exchange of an existing financial liability for a new one with substantially modified terms, or a
substantial modification to the terms of a financial liability is treated as an extinguishment of the existing liability and
recognition of a new financial liability.
The difference between the carrying amount of the financial liability derecognised and the consideration paid and
payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
Derecognition of financial assets
A financial asset is derecognised when the holder’s contractual rights to its cash flows expire, or the asset is
transferred in such a way that all the risks and rewards of ownership are substantially transferred.
All of the following criteria need to be satisfied for Derecognition of financial asset:
– The right to receive cash flows from the asset has been expired or been transferred;
– All risk and rewards of ownership of the asset have been substantially transferred; and
– The Group no longer controls the asset.
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying
amount and the sum of the consideration received and receivable is recognised in profit or loss.
(q) Employee Entitlements
balance date.
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to
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
A number of new standards and interpretations are effective for annual reporting periods beginning after 1 July
2020 and earlier application is permitted; however the Company has not early adopted the new or amended
standards in preparing these financial statements. The new standards relate to very specific circumstances that
are not applicable to the Company.
4. Segment Reporting
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.
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
3. Significant Accounting Policies (continued)
3. Significant Accounting Policies (continued)
(p) Financial Instruments (continued)
Classification and subsequent measurement
Financial Liabilities
Financial liabilities are subsequently measured at:
– Amortised cost; or
– Fair value through profit or loss.
A financial liability is measured at fair value through profit and loss if the financial liability is:
– A contingent consideration of an acquirer in a business combination to which AASB 3: Business
Combinations applies;
– Held for trading; or
–
Initially designated at fair value through profit or loss.
All other financial liabilities are subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating
interest expense in profit or loss over the relevant period. The effective interest rate is the internal rate of return of
the financial asset or liability. That is, it is the rate that exactly discounts the estimated future cash flows through the
expected life of the instrument to the net carrying amount at initial recognition.
A financial liability is held for trading if:
–
It is incurred for the purpose of repurchasing or repaying in the near term;
– Part of a portfolio where there is an actual patter of short-term profit taking; or
– A derivative financial instrument (except for a derivative that is in a financial guarantee contract or
a derivative that is in an effective hedging relationship).
The Group recognises the financial derivative instruments at fair value through profit or loss.
Financial Assets
Financial assets are subsequently measured at:
– Amortised cost;
– Fair value through other comprehensive income; or
– Fair value through profit or loss.
Measurement is on the basis of two primary criteria:
– The contractual cash flow characteristics of the financial asset; and
– The business model for managing financial assets.
A financial asset that meets the following conditions is subsequently measured at amortised cost:
– The financial asset is managed solely to collect contractual cashflows; and
– The contractual terms within the financial asset give rise to cashflows that are solely payments of principal
and interest on the principal amount outstanding on specified dates.
A financial asset that meets the following conditions is subsequently measured at fair value through other
comprehensive income:
– The contractual terms within the financial asset give rise to cashflows that are solely payments of principal
and interest on the principal amount outstanding on specified dates;
– The business model for managing the financial assets comprises both contractual cashflows and the
selling of the financial asset.
By default, all other financial assets that do not meet the measurement conditions of amortised cost and fair value
through other comprehensive income are subsequently measured at fair value through profit or loss.
The Group currently has futures contracts that are recognised within financial assets in the Statement of Financial
Position that are recognised at fair value through profit or loss. All other financial assets are recognised at
amortised cost.
(p) Financial Instruments (continued)
Derecognition
Derecognition refers to the removal of a previously recognised financial asset or financial liability from the statement
of financial position.
Derecognition of financial liabilities
A liability is derecognised when it is extinguished (ie when the obligation in the contract is discharged, cancelled
or expires). An exchange of an existing financial liability for a new one with substantially modified terms, or a
substantial modification to the terms of a financial liability is treated as an extinguishment of the existing liability and
recognition of a new financial liability.
The difference between the carrying amount of the financial liability derecognised and the consideration paid and
payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
Derecognition of financial assets
A financial asset is derecognised when the holder’s contractual rights to its cash flows expire, or the asset is
transferred in such a way that all the risks and rewards of ownership are substantially transferred.
All of the following criteria need to be satisfied for Derecognition of financial asset:
– The right to receive cash flows from the asset has been expired or been transferred;
– All risk and rewards of ownership of the asset have been substantially transferred; and
– The Group no longer controls the asset.
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying
amount and the sum of the consideration received and receivable is recognised in profit or loss.
(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
A number of new standards and interpretations are effective for annual reporting periods beginning after 1 July
2020 and earlier application is permitted; however the Company has not early adopted the new or amended
standards in preparing these financial statements. The new standards relate to very specific circumstances that
are not applicable to the Company.
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.
38
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39
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
5. Statement of Profit or Loss and other Comprehensive Income
30 June 2020
6. Income Tax
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
A. Electricity Revenue
Electricity sales
Site conversion sales
Total Revenue and Other Income
B. Electricity Cost of Goods Sold
Energy usage charges
Network charges
Other COGS
Site conversion COGS
Total Revenue and Other Income
C. Other Revenue
Interest revenue
Government grants
Total Revenue and Other Income
D. Impairment Losses
Bad debts written off
Addition to provision for doubtful debt
Total Impairment Losses
E. Financing Expenses
Bank Fees
Borrowing expenses
Interest on leases
Interest expense
Total Financing Expenses
F. Other Expenses
Depreciation and amortisation
Employee costs
Gain/(loss) on disposal of assets
Information technology
Insurance
Marketing & advertising
Occupancy expenses
Other expenses
Professional costs
Consolidated
Entity 2020
$........
Consolidated
Entity 2019
$........
41,175,283
1,750,892
42,926,175
26,624,054
1,098,936
27,722,990
15,889,239
13,648,301
4,609,657
1,635,652
35,782,849
10,493,261
7,854,489
3,119,984
1,180,126
22,647,860
679,968
113,444
793,412
131,801
373,488
505,289
120,410
665,438
30,530
1,146,011
1,962,389
630,409
6,502,705
25,159
1,309,888
100,166
312,905
92,345
918,914
553,319
10,445,810
753,535
-
753,535
107,812
14,677
122,489
73,945
140,277
-
403,338
617,560
248,589
4,041,043
29,771
795,901
88,071
338,634
195,707
862,950
712,585
7,313,251
Components of tax expense/(benefit) comprise:
Current tax
Prior year tax
Deferred tax
Income tax expense/(benefit)
Consolidated
Consolidated
Entity 2020
Entity 2019
$........
$........
-
-
-
-
-
-
-
-
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% (2019: 27.5%)
(7,231,267)
(1,988,598)
(2,181,690)
(599,965)
Tax effect amounts which are not (deductible)/taxable
3,964
1,765
1,984,634
598,200
-
-
in calculating taxable income:
Deferred tax asset not brought to account
Total income tax benefit
Net unrecognised deferred tax assets
Net Deductible/(Assessable) temporary differences
(331,910)
(314,709)
Unused tax losses
Net unrecognised deferred tax asset
4,892,469
4,560,559
2,890,633
2,575,924
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.
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41
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
5. Statement of Profit or Loss and other Comprehensive Income
6. Income Tax
A. Electricity Revenue
Electricity sales
Site conversion sales
Total Revenue and Other Income
B. Electricity Cost of Goods Sold
Energy usage charges
Network charges
Other COGS
Site conversion COGS
C. Other Revenue
Interest revenue
Government grants
Total Revenue and Other Income
Total Revenue and Other Income
D. Impairment Losses
Bad debts written off
Addition to provision for doubtful debt
Total Impairment Losses
E. Financing Expenses
Bank Fees
Borrowing expenses
Interest on leases
Interest expense
Total Financing Expenses
F. Other Expenses
Depreciation and amortisation
Employee costs
Gain/(loss) on disposal of assets
Information technology
Insurance
Marketing & advertising
Occupancy expenses
Other expenses
Professional costs
Consolidated
Consolidated
Entity 2020
Entity 2019
$........
$........
41,175,283
26,624,054
1,750,892
1,098,936
42,926,175
27,722,990
15,889,239
13,648,301
4,609,657
1,635,652
10,493,261
7,854,489
3,119,984
1,180,126
35,782,849
22,647,860
679,968
113,444
793,412
131,801
373,488
505,289
120,410
665,438
30,530
1,146,011
1,962,389
630,409
6,502,705
25,159
1,309,888
100,166
312,905
92,345
918,914
553,319
753,535
-
753,535
107,812
14,677
122,489
73,945
140,277
-
403,338
617,560
248,589
4,041,043
29,771
795,901
88,071
338,634
195,707
862,950
712,585
10,445,810
7,313,251
Components of tax expense/(benefit) comprise:
Current tax
Prior year tax
Deferred tax
Income tax expense/(benefit)
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% (2019: 27.5%)
Tax effect amounts which are not (deductible)/taxable
in calculating taxable income:
Deferred tax asset not brought to account
Total income tax benefit
Net unrecognised deferred tax assets
Net Deductible/(Assessable) temporary differences
Unused tax losses
Net unrecognised deferred tax asset
Consolidated
Entity 2020
$........
Consolidated
Entity 2019
$........
-
-
-
-
-
-
-
-
(7,231,267)
(1,988,598)
(2,181,690)
(599,965)
3,964
1,765
1,984,634
-
598,200
-
(331,910)
(314,709)
4,892,469
4,560,559
2,890,633
2,575,924
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.
40
Locality Planning Energy Holdings Limited | Annual Report 2020
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41
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
7. Trade & Other Receivables
Trade receivables
Trade receivables provision
Interest receivables
Site conversion receivables (current)
Site conversion receivables (non-current)
Site conversion receivables provision
Consolidated
Entity 2020
$........
4,984,841
(125,830)
3,965
4,862,976
1,628,633
3,968,347
(267,762)
10,192,194
Consolidated
Entity 2019
$........
3,081,217
(20,104)
3,897
3,065,010
1,554,644
3,965,663
-
8,585,317
Current trade receivables are interest bearing and are generally receivable within 14 days.
Opening
Balance
1 July 2018
Net Measure-
ment of loss
allowance
Amounts
written off
Closing
Balance
30 June 2019
Lifetime Expected Credit Loss: Credit Impaired
Current trade receivables
Current interest receivables
Current site conversion receivables
Non-Current site conversion
receivables
5,426
-
-
-
14,677
-
-
-
107,812
-
-
-
20,103
-
-
-
5,426
14,677
107,812
20,103
Opening
Balance
1 July 2019
Net Measure-
ment of loss
allowance
Amounts
written off
Closing
Balance
30 June 2020
Lifetime Expected Credit Loss: Credit Impaired
Current trade receivables
Current interest receivables
Current site conversion receivables
Non-Current site conversion
receivables
20,103
-
-
-
105,726
-
44,973
222,789
131,801
-
-
-
125,829
-
44,973
222,789
20,103
373,488
131,801
393,591
The entity does not hold any financial assets whose terms have been renegotiated, but which would otherwise
be past due or impaired.
Collateral held as security
No collateral is held as security for any of the trade and other receivable balances.
Balance at the end of the year
Collateral pledged
No collateral has been pledged for any of the trade and other receivable balances.
42
Locality Planning Energy Holdings Limited | Annual Report 2020
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43
8. Financial Assets
At fair value through the profit or loss
Financial assets – derivatives
Short term deposits
At Amortised Cost
ASX initial margin on derivatives
9. Other Current Assets
Bond paid
Prepayments
Inventory
10. Plant & Equipment
Plant & equipment at cost
Accumulated depreciation
Motor vehicles at cost
Accumulated depreciation
Plant and Equipment
Balance at the beginning of the year
Additions
Depreciation
Disposals
Additions
Depreciation
Disposals
Balance at the end of the year
Motor Vehicles
Balance at the beginning of the year
Reconciliation
Reconciliations of the carrying amount of each class of plant and
equipment between the beginning and the end of the financial year.
Consolidated
Consolidated
Entity 2020
Entity 2019
$........
$........
-
42,945
2,250,000
126,027
2,376,027
66,209
183,469
211,596
461,274
527,978
(292,403)
235,575
310,412
(150,541)
159,871
395,446
268,135
82,153
(108,868)
(5,845)
235,575
180,520
39,401
(50,216)
(9,834)
159,871
-
-
42,945
3,796
87,089
246,296
337,181
463,001
(194,866)
268,135
297,907
(117,387)
180,520
448,655
228,635
117,840
(73,607)
(4,733)
268,135
93,776
123,871
(37,127)
-
180,520
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
7. Trade & Other Receivables
Trade receivables
Trade receivables provision
Interest receivables
Site conversion receivables (current)
Site conversion receivables (non-current)
Site conversion receivables provision
Consolidated
Consolidated
Entity 2020
Entity 2019
$........
4,984,841
(125,830)
3,965
4,862,976
1,628,633
3,968,347
(267,762)
$........
3,081,217
(20,104)
3,897
3,065,010
1,554,644
3,965,663
-
10,192,194
8,585,317
Current trade receivables are interest bearing and are generally receivable within 14 days.
Opening
Net Measure-
Balance
ment of loss
Amounts
Closing
Balance
1 July 2018
allowance
written off
30 June 2019
5,426
14,677
107,812
20,103
Lifetime Expected Credit Loss: Credit Impaired
Current trade receivables
Current interest receivables
Current site conversion receivables
Non-Current site conversion
receivables
-
-
-
-
-
-
-
-
-
-
-
-
Lifetime Expected Credit Loss: Credit Impaired
Current trade receivables
Current interest receivables
Current site conversion receivables
Non-Current site conversion
receivables
20,103
105,726
131,801
125,829
-
44,973
222,789
-
44,973
222,789
20,103
373,488
131,801
393,591
The entity does not hold any financial assets whose terms have been renegotiated, but which would otherwise
be past due or impaired.
Collateral held as security
Collateral pledged
No collateral is held as security for any of the trade and other receivable balances.
No collateral has been pledged for any of the trade and other receivable balances.
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
8. Financial Assets
At fair value through the profit or loss
Financial assets – derivatives
Short term deposits
At Amortised Cost
ASX initial margin on derivatives
9. Other Current Assets
Bond paid
Prepayments
Inventory
10. Plant & Equipment
Plant & equipment at cost
Accumulated depreciation
-
-
-
-
-
-
Motor vehicles at cost
Accumulated depreciation
5,426
14,677
107,812
20,103
Opening
Net Measure-
Balance
ment of loss
Amounts
Closing
Balance
1 July 2019
allowance
written off
30 June 2020
Reconciliation
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
Disposals
Balance at the end of the year
Motor Vehicles
Balance at the beginning of the year
Additions
Depreciation
Disposals
Balance at the end of the year
Consolidated
Entity 2020
$........
Consolidated
Entity 2019
$........
-
2,250,000
126,027
2,376,027
66,209
183,469
211,596
461,274
527,978
(292,403)
235,575
310,412
(150,541)
159,871
395,446
268,135
82,153
(108,868)
(5,845)
235,575
180,520
39,401
(50,216)
(9,834)
159,871
42,945
-
-
42,945
3,796
87,089
246,296
337,181
463,001
(194,866)
268,135
297,907
(117,387)
180,520
448,655
228,635
117,840
(73,607)
(4,733)
268,135
93,776
123,871
(37,127)
-
180,520
42
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43
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
11. Leasehold Improvements
Leasehold improvements at cost
Accumulated depreciation
Reconciliation
Reconciliations of the carrying amount of leasehold improvements
between the beginning and the end of the financial year.
Leasehold improvements
Balance at the beginning of the year
Additions
Depreciation
Balance at the end of the year
12. Intangibles
Intangibles at cost
Intangibles work in progress
Accumulated amortisation
Reconciliation
Reconciliations of the carrying amount of site conversion costs
between the beginning and the end of the financial year.
Intangibles
Balance at the beginning of the year
Additions
Amortisation
Write off intangibles
Balance at the end of the year
13. Borrowings
Current
Insurance financing
Motor vehicle financing
Non-current
Motor vehicle financing NC
Blackrock funding facility
Consolidated
Entity 2020
$........
518,357
(341,267)
177,090
Consolidated
Entity 2019
$........
507,440
(135,069)
372,371
372,371
10,917
(206,198)
177,090
345,134
338,700
(205,832)
478,002
407,925
25,732
(61,286)
372,371
312,357
-
(150,203)
162,154
162,154
455,620
(95,427)
(44,345)
478,002
218,851
49,261
(76,569)
(29,389)
162,154
92,862
50,503
143,365
-
35,784
35,784
33,711
13,487,986
13,521,697
55,448
5,127,277
5,182,725
The Group has a funding facility of $15 million with Blackrock as at 30 June 2020.
This facility is fully drawn down by $15 million as at 30 June 2020 ($6.1 million as at 30 June 2019).
This is presented above net of borrowing costs.
14. 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 2019
Balance at 30 June 2020
Ordinary shares
2020
Number
2019
Number
50,210,736
50,210,736
Number
50,210,736
50,210,736
$........
39,064,880
39,064,880
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.
Ordinary 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, there were NIL options over unissued shares.
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 is not subject to externally imposed capital requirements.
15. 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
Basic/diluted earnings/(loss) per share (dollars per share)
2020
Number
50,210,736
2019
Number
50,210,736
$........
(7,231,267)
(7,231,267)
(0.1440)
$........
(2,181,690)
(2,181,690)
(0.0435)
44
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
45
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
11. Leasehold Improvements
Leasehold improvements at cost
Accumulated depreciation
Reconciliation
Reconciliations of the carrying amount of leasehold improvements
between the beginning and the end of the financial year.
Reconciliation
Reconciliations of the carrying amount of site conversion costs
between the beginning and the end of the financial year.
Leasehold improvements
Balance at the beginning of the year
Additions
Depreciation
Balance at the end of the year
12. Intangibles
Intangibles at cost
Intangibles work in progress
Accumulated amortisation
Balance at the beginning of the year
Intangibles
Additions
Amortisation
Write off intangibles
Balance at the end of the year
13. Borrowings
Current
Insurance financing
Motor vehicle financing
Non-current
Motor vehicle financing NC
Blackrock funding facility
Consolidated
Consolidated
Entity 2020
Entity 2019
$........
518,357
(341,267)
177,090
$........
507,440
(135,069)
372,371
372,371
10,917
(206,198)
177,090
345,134
338,700
(205,832)
478,002
407,925
25,732
(61,286)
372,371
312,357
-
(150,203)
162,154
162,154
455,620
(95,427)
(44,345)
478,002
218,851
49,261
(76,569)
(29,389)
162,154
92,862
50,503
143,365
-
35,784
35,784
33,711
13,487,986
13,521,697
55,448
5,127,277
5,182,725
The Group has a funding facility of $15 million with Blackrock as at 30 June 2020.
This facility is fully drawn down by $15 million as at 30 June 2020 ($6.1 million as at 30 June 2019).
This is presented above net of borrowing costs.
14. 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 2019
Balance at 30 June 2020
2020
Number
2019
Number
50,210,736
50,210,736
Number
50,210,736
50,210,736
$........
39,064,880
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.
Ordinary 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, there were NIL options over unissued shares.
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 is not subject to externally imposed capital requirements.
15. 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
Basic/diluted earnings/(loss) per share (dollars per share)
2020
Number
50,210,736
2019
Number
50,210,736
$........
(7,231,267)
(7,231,267)
(0.1440)
$........
(2,181,690)
(2,181,690)
(0.0435)
44
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
45
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
16. Controlled Entities
Investment in controlled entities
Locality Planning Energy Pty Ltd
Locality Embedded Networks Pty Ltd
LPE Infrastructure Pty Ltd
Country
of Inc.
Australia
Australia
Australia
Class of
Shares
Ord
Ord
Ord
% of
Ownership
2020
% of
Ownership
2019
100%
100%
0%
100%
100%
100%
LPE Infrastructure Pty Ltd was deregistered on the 13th May 2020.
17. Commitments
Total operating lease payments
Within 1 year
1 to 5 years
Total
Consolidated Entity 2019
$......
176,445
123,457
299,902
The total operating lease payments is no longer applicable as The Group has applied AASB16: Leases
(refer to note 25).
The Group has various lease contracts that have not yet commenced as at 30 June 2020. The future lease
payments for these non-cancellable lease contracts are $95,816 within one year, $913,784 within five years
and $109,959 thereafter.
The Group has committed to software development to the value of $593,700 of which $149,700 has already
been paid.
18. 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 (2019: nil).
19. Related Parties
Key management personnel compensation
Short term employee benefits
Post-employment benefits
Long-term benefits
Termination benefits
Other related party transactions
There were no other related party transactions.
Consolidated
Entity 2020
$........
1,194,003
77,960
15,960
326,229
1,614,151
Consolidated
Entity 2019
$........
961,894
62,917
11,160
-
1,035,971
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
20. 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
Unrealised (gain) / loss on derivatives
Expenditure classified as financing activities
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
Reconciliation of liabilities arising from financing activities
Borrowings
Cashflows
Non-cash changes
Cash at bank
Cash on deposit
Cash and cash equivalents in the Consolidated Statement of Cash Flows include:
Consolidated
Consolidated
Entity 2020
Entity 2019
$........
$........
(7,231,267)
(2,181,690)
630,409
25,159
2,254,517
628,460
248,589
29,771
(42,945)
45,568
(3,692,722)
(1,900,707)
(1,606,878)
(1,036,094)
(124,093)
4,886,208
(13,748)
(551,233)
288,933
990,214
89,853
(1,567,801)
5,218,509
8,454,901
(8,348)
1,351,077
3,824,993
42,439
13,665,062
5,218,509
8,251,616
-
8,251,616
2,856,072
450,000
3,306,072
46
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47
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
Ownership
Ownership
% of
2020
100%
100%
0%
% of
2019
100%
100%
100%
Consolidated Entity 2019
$......
176,445
123,457
299,902
16. Controlled Entities
Investment in controlled entities
Locality Planning Energy Pty Ltd
Locality Embedded Networks Pty Ltd
LPE Infrastructure Pty Ltd
Country
of Inc.
Australia
Australia
Australia
Class of
Shares
Ord
Ord
Ord
LPE Infrastructure Pty Ltd was deregistered on the 13th May 2020.
17. Commitments
Total operating lease payments
Within 1 year
1 to 5 years
Total
(refer to note 25).
and $109,959 thereafter.
been paid.
The total operating lease payments is no longer applicable as The Group has applied AASB16: Leases
The Group has various lease contracts that have not yet commenced as at 30 June 2020. The future lease
payments for these non-cancellable lease contracts are $95,816 within one year, $913,784 within five years
The Group has committed to software development to the value of $593,700 of which $149,700 has already
20. 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
Unrealised (gain) / loss on derivatives
Expenditure classified as financing activities
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
Reconciliation of liabilities arising from financing activities
Borrowings
Cashflows
Non-cash changes
Consolidated
Entity 2020
$........
Consolidated
Entity 2019
$........
(7,231,267)
(2,181,690)
630,409
25,159
2,254,517
628,460
(3,692,722)
(1,606,878)
(124,093)
4,886,208
(13,748)
(551,233)
248,589
29,771
(42,945)
45,568
(1,900,707)
(1,036,094)
288,933
990,214
89,853
(1,567,801)
5,218,509
8,454,901
(8,348)
13,665,062
1,351,077
3,824,993
42,439
5,218,509
18. Contingent Liabilities and Assets
Cash and cash equivalents in the Consolidated Statement of Cash Flows include:
Cash at bank
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 (2019: nil).
Cash on deposit
8,251,616
-
8,251,616
2,856,072
450,000
3,306,072
19. Related Parties
Key management personnel compensation
Short term employee benefits
Post-employment benefits
Long-term benefits
Termination benefits
Other related party transactions
There were no other related party transactions.
Consolidated
Consolidated
Entity 2020
Entity 2019
$........
1,194,003
77,960
15,960
326,229
1,614,151
$........
961,894
62,917
11,160
-
1,035,971
46
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
47
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
21. Financial Instruments
Significant 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 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. Where
long-term bilateral contracts are not possible, the Company minimises its exposure to the spot market by using
derivative products. The minimum hedge limit (MHL) provides a floor for the coverage of derivatives and purchase
contracts over the Company's annualised customer load.
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 held to maturity
investments, and Borrowings. 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 borrowings with a decrease or an increase of 0.25%
in interest rates.
It is the policy of the Consolidated Entity to manage their risks by continuously monitoring interest rates.
Cash and cash equivalents and other financial assets
Borrowings
Sensitivity
Effect on profit or loss before taxes
Increase 0.25%
Decrease 0.25%
Consolidated
Entity 2020
$........
Consolidated
Entity 2019
$........
8,251,616
(13,665,062)
(5,413,447)
3,306,072
(5,218,509)
(1,912,437)
(13,534)
13,534
(4,781)
4,781
21. Financial Instruments (Continued)
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.
At 30 June 2020 current assets exceed current liabilities by $5,651,659 (2019: current assets exceeded
current liabilities by $4,709,539). Financial liabilities comprised trade payables, accruals and other payables.
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
their fair value.
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, derivatives and loans approximate
22. Auditors Remuneration
Amounts paid/payable for audit or review of the financial statements
Amounts paid/payable for tax and other services
Consolidated
Consolidated
Entity 2020
Entity 2019
$......
104,975
4,315
109,290
$......
90,000
4,556
94,556
23. Subsequent Events
The company raised an additional $3 million capital via the issue of 12,000,000 fully paid ordinary shares in
August 2020. There are 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 result of those
operations or the state of affairs of the Consolidated Entity in future financial years.
48
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49
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
21. Financial Instruments
Significant 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 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. Where
long-term bilateral contracts are not possible, the Company minimises its exposure to the spot market by using
derivative products. The minimum hedge limit (MHL) provides a floor for the coverage of derivatives and purchase
contracts over the Company's annualised customer load.
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 held to maturity
investments, and Borrowings. 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 borrowings with a decrease or an increase of 0.25%
in interest rates.
It is the policy of the Consolidated Entity to manage their risks by continuously monitoring interest rates.
Cash and cash equivalents and other financial assets
Borrowings
Sensitivity
Increase 0.25%
Decrease 0.25%
Effect on profit or loss before taxes
Consolidated
Consolidated
Entity 2020
Entity 2019
$........
$........
8,251,616
3,306,072
(13,665,062)
(5,413,447)
(5,218,509)
(1,912,437)
(13,534)
13,534
(4,781)
4,781
21. Financial Instruments (Continued)
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.
At 30 June 2020 current assets exceed current liabilities by $5,651,659 (2019: current assets exceeded
current liabilities by $4,709,539). Financial liabilities comprised trade payables, accruals and other payables.
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, derivatives and loans approximate
their fair value.
22. Auditors Remuneration
Amounts paid/payable for audit or review of the financial statements
Amounts paid/payable for tax and other services
Consolidated
Entity 2020
$......
Consolidated
Entity 2019
$......
104,975
4,315
109,290
90,000
4,556
94,556
23. Subsequent Events
The company raised an additional $3 million capital via the issue of 12,000,000 fully paid ordinary shares in
August 2020. There are 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 result of those
operations or the state of affairs of the Consolidated Entity in future financial years.
48
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49
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
24. Parent Entity Disclosures
The following information has been extracted from the books and records of the legal parent entity
Locality Planning Energy Holdings Limited.
2020
$...
2019
$...
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
Non Current Liabilities
Total Liabilities
Net Assets
Total equity of the parent entity comprising:
Issued capital
Accumulated losses
Total Equity
(2,456,468)
-
(2,456,468)
-
(2,456,468)
(1,270,399)
-
(1,270,399)
-
(1,270,399)
21,578,433
21,578,433
14,884,735
14,884,735
930,811
13,487,986
14,418,797
141,354
5,127,277
5,268,631
7,159,636
9,616,104
39,064,880
(31,905,244)
7,159,636
39,064,880
(29,448,776)
9,616,104
25. New and amended Accounting Policies adopted by the group
(a) Initial application of AASB 16
The Group applied AASB 16 Leases for the first time during the year.
The Group has adopted AASB 16 Leases retrospectively with the cumulative effect of initially applying AASB 16
recognised at 1 July 2019. In accordance with AASB 16, the comparatives for the 2019 reporting period have
not been restated.
The Group has recognised a lease liability and right-of-use asset for all leases (with the exception for short term
and low value leases) recognised as operating leases under AASB 117 Leases where the Group is the lessee.
There has been no significant change from prior year treatment for leases where the Group is a lessor.
The lease liabilities are measured at the present value of the remaining lease payments. The Group’s incremental
borrowing rate as at 1 July 2019 was used to discount the lease payments."
The right of use assets for the leases were measured and recognised in the statement of financial position as
at 1 July 2019 by taking into consideration the lease liability, prepaid and accrued lease payments previously
recognised as at 1 July 2019 (that are related to the lease).
The following practical expedients have been used by the Group in applying AASB 16 for the first time
– for a portfolio of leases that have reasonably similar characteristics, a single discount rate has been applied.
– leases that have remaining lease term of less than 12 months as at 1 July 2019 have been accounted for
in the same was as short-term leases
– The use of hindsight to determine lease terms on contracts that have options to extend or terminate
– applying AASB 16 to leases previously identified as leases under AASB 117: Leases and Interpretation 4:
Determining whether an arrangement contains a lease without reassessing whether they are, or contain,
a lease at the date of initial application
– not applying AASB 16 to leases previously not identified as containing a lease under AASB 117 and
Interpretation 4.
The following summary indicates the reclassification of Property Plant and Equipment to Right
Contingent liabilities
As at 30 June 2020, Locality Planning Energy Holdings Limited is not aware of any contingent liabilities.
Contractual commitments
At 30 June 2020, contractual commitments entered into by Locality Planning Energy Holdings Limited
is $Nil (2019: $Nil).
Guarantees
Locality Planning Energy Holdings Limited has not entered into any guarantees, in the current or previous
financial years, in relation to debts of its subsidiaries.
of Use asset on 1 July 2019 due to implementation of AASB 16:
Operating lease commitment at 30 June 2019
Discounted using the incremental borrowing rate at 1 July 2019
Add:
Less:
Extension options reasonably certain to be exercised
Short term leases included in the commitment note
Leases or low value assets included in the commitment note
Lease liabilities recognised at 1 July 2019
$......
299,902
271,872
-
-
(24,840)
247,032
The difference of $24,840 between the lease liability $247,032 as at 1 July 2019 and the discounted operating
lease commitments as at 30 June 2019 ($271,872) comprises of short term leases of $24,840 which is
expensed on a straight line basis.
The Group’s weighted average incremental borrowing rate on 1 July 2019 applied to the lease liabilities was 15%.
The difference between the undiscounted amount of operating lease commitments at 30 June 2019 of $299,902
and the discounted operating lease commitments as at 1 July 2019 of $271,872 were $28,030 which is due to
discounting the operating lease commitments at the Group’s incremental borrowing rate.
50
Locality Planning Energy Holdings Limited | Annual Report 2020
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51
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
24. Parent Entity Disclosures
The following information has been extracted from the books and records of the legal parent entity
Locality Planning Energy Holdings Limited.
2020
$...
2019
$...
Total comprehensive income before tax
(2,456,468)
(1,270,399)
(2,456,468)
(1,270,399)
(2,456,468)
(1,270,399)
-
-
-
-
21,578,433
21,578,433
14,884,735
14,884,735
930,811
13,487,986
14,418,797
141,354
5,127,277
5,268,631
7,159,636
9,616,104
39,064,880
39,064,880
(31,905,244)
(29,448,776)
7,159,636
9,616,104
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
Financial position of parent entity at year end
Total equity of the parent entity comprising:
Current Assets
Total Assets
Current Liabilities
Non Current Liabilities
Total Liabilities
Net Assets
Issued capital
Accumulated losses
Total Equity
Contingent liabilities
Contractual commitments
is $Nil (2019: $Nil).
Guarantees
As at 30 June 2020, Locality Planning Energy Holdings Limited is not aware of any contingent liabilities.
At 30 June 2020, contractual commitments entered into by Locality Planning Energy Holdings Limited
Locality Planning Energy Holdings Limited has not entered into any guarantees, in the current or previous
financial years, in relation to debts of its subsidiaries.
25. New and amended Accounting Policies adopted by the group
(a) Initial application of AASB 16
The Group applied AASB 16 Leases for the first time during the year.
The Group has adopted AASB 16 Leases retrospectively with the cumulative effect of initially applying AASB 16
recognised at 1 July 2019. In accordance with AASB 16, the comparatives for the 2019 reporting period have
not been restated.
The Group has recognised a lease liability and right-of-use asset for all leases (with the exception for short term
and low value leases) recognised as operating leases under AASB 117 Leases where the Group is the lessee.
There has been no significant change from prior year treatment for leases where the Group is a lessor.
The lease liabilities are measured at the present value of the remaining lease payments. The Group’s incremental
borrowing rate as at 1 July 2019 was used to discount the lease payments."
The right of use assets for the leases were measured and recognised in the statement of financial position as
at 1 July 2019 by taking into consideration the lease liability, prepaid and accrued lease payments previously
recognised as at 1 July 2019 (that are related to the lease).
The following practical expedients have been used by the Group in applying AASB 16 for the first time
– for a portfolio of leases that have reasonably similar characteristics, a single discount rate has been applied.
– leases that have remaining lease term of less than 12 months as at 1 July 2019 have been accounted for
in the same was as short-term leases
– The use of hindsight to determine lease terms on contracts that have options to extend or terminate
– applying AASB 16 to leases previously identified as leases under AASB 117: Leases and Interpretation 4:
Determining whether an arrangement contains a lease without reassessing whether they are, or contain,
a lease at the date of initial application
– not applying AASB 16 to leases previously not identified as containing a lease under AASB 117 and
Interpretation 4.
The following summary indicates the reclassification of Property Plant and Equipment to Right
of Use asset on 1 July 2019 due to implementation of AASB 16:
Operating lease commitment at 30 June 2019
Discounted using the incremental borrowing rate at 1 July 2019
Add:
Extension options reasonably certain to be exercised
Less:
Short term leases included in the commitment note
Leases or low value assets included in the commitment note
Lease liabilities recognised at 1 July 2019
$......
299,902
271,872
-
(24,840)
-
247,032
The difference of $24,840 between the lease liability $247,032 as at 1 July 2019 and the discounted operating
lease commitments as at 30 June 2019 ($271,872) comprises of short term leases of $24,840 which is
expensed on a straight line basis.
The Group’s weighted average incremental borrowing rate on 1 July 2019 applied to the lease liabilities was 15%.
The difference between the undiscounted amount of operating lease commitments at 30 June 2019 of $299,902
and the discounted operating lease commitments as at 1 July 2019 of $271,872 were $28,030 which is due to
discounting the operating lease commitments at the Group’s incremental borrowing rate.
50
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51
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
26. Fair Value Measurements
The Group measures and recognises the following assets and liabilities at fair value on a recurring basis after
initial recognition:
– derivative financial instruments;
– financial assets held for trading;
– financial assets at fair value through other comprehensive income;
The Group does not subsequently measure any liabilities at fair value on a non-recurring basis.
The attached financial statements and notes are in accordance with the Corporations Act 2001,
(a) Fair Value Hierarchy
AASB 13: Fair Value Measurement requires the disclosure of fair value information by level of the fair value
hierarchy, which categorises fair value measurements into one of three possible levels based on the lowest level
that an input that is significant to the measurement can be categorised into as follows:
Level 1: Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities
that the entity can access at the measurement date.
Level 2: Measurements based on inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly or indirectly.
Level 3: Measurements based on unobservable inputs for the asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more
valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market
data. If all significant inputs required to measure fair value are observable, the asset or liability is included in Level
2. If one or more significant inputs are not based on observable market data, the asset or liability is included in
Level 3.
The Group selects a valuation technique that is appropriate in the circumstances and for which sufficient data is
available to measure fair value. The availability of sufficient and relevant data primarily depends on the specific
characteristics of the asset or liability being measured. The valuation techniques selected by the Group are
consistent with one or more of the following valuation approaches:
– Market approach uses prices and other relevant information generated by market transactions for
identical or similar assets or liabilities.
– Income approach converts estimated future cash flows or income and expenses into a single discounted
present value.
– Cost approach reflects the current replacement cost of an asset at its current service capacity.
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when
pricing the asset or liability, including assumptions about risks. When selecting a valuation technique, the
Group gives priority to those techniques that maximise the use of observable inputs and minimise the use of
unobservable inputs. Inputs that are developed using market data (such as publicly available information on
actual transactions) and reflect the assumptions that buyers and sellers would generally use when pricing the
asset or liability are considered observable, whereas inputs for which market data is not available and therefore
are developed using the best information available about such assumptions are considered unobservable.
The Group uses an internally derived forward curve to calculate the fair value of its financial derivatives, using
an income approach. This model uses observable futures prices from ASX Energy and distributes these prices
across half hour intervals using internally derived ratios. The fair value of the Groups's derivative financial
instruments is $2,376,027 as at 30 June 2020 (2019: $42,945). Given the significance of the internally-derived
ratios to the valuation, the Group has assessed this as Level 3.
Directors’
Declaration
The Directors of the Company declare that:
including:
(a) complying with Australian Accounting Standards (including Australian Accounting Interpretations)
and the Corporations Regulations 2001; and
(b) giving a true and fair view of the financial position as at 30 June 2020 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.
Corporations Act 2001.
The Remuneration Report as set out in the Directors’ Report complies with Section 300A of The
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.
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.
Justin Pettett
Chairman
Dated: 31 August 2020
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Locality Planning Energy Holdings Limited | Annual Report 2020
53
Locality Planning Energy Holdings Limited – ABN 90 147 867 301
Notes to the financial statements for the year ended
30 June 2020
26. Fair Value Measurements
The Group measures and recognises the following assets and liabilities at fair value on a recurring basis after
initial recognition:
– derivative financial instruments;
– financial assets held for trading;
(a) Fair Value Hierarchy
– financial assets at fair value through other comprehensive income;
The Group does not subsequently measure any liabilities at fair value on a non-recurring basis.
AASB 13: Fair Value Measurement requires the disclosure of fair value information by level of the fair value
hierarchy, which categorises fair value measurements into one of three possible levels based on the lowest level
that an input that is significant to the measurement can be categorised into as follows:
Level 1: Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities
that the entity can access at the measurement date.
Level 2: Measurements based on inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly or indirectly.
Level 3: Measurements based on unobservable inputs for the asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more
valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market
data. If all significant inputs required to measure fair value are observable, the asset or liability is included in Level
2. If one or more significant inputs are not based on observable market data, the asset or liability is included in
Level 3.
The Group selects a valuation technique that is appropriate in the circumstances and for which sufficient data is
available to measure fair value. The availability of sufficient and relevant data primarily depends on the specific
characteristics of the asset or liability being measured. The valuation techniques selected by the Group are
consistent with one or more of the following valuation approaches:
– Market approach uses prices and other relevant information generated by market transactions for
identical or similar assets or liabilities.
present value.
– Income approach converts estimated future cash flows or income and expenses into a single discounted
– Cost approach reflects the current replacement cost of an asset at its current service capacity.
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when
pricing the asset or liability, including assumptions about risks. When selecting a valuation technique, the
Group gives priority to those techniques that maximise the use of observable inputs and minimise the use of
unobservable inputs. Inputs that are developed using market data (such as publicly available information on
actual transactions) and reflect the assumptions that buyers and sellers would generally use when pricing the
asset or liability are considered observable, whereas inputs for which market data is not available and therefore
are developed using the best information available about such assumptions are considered unobservable.
The Group uses an internally derived forward curve to calculate the fair value of its financial derivatives, using
an income approach. This model uses observable futures prices from ASX Energy and distributes these prices
across half hour intervals using internally derived ratios. The fair value of the Groups's derivative financial
instruments is $2,376,027 as at 30 June 2020 (2019: $42,945). Given the significance of the internally-derived
ratios to the valuation, the Group has assessed this as Level 3.
Directors’
Declaration
The Directors of the Company declare that:
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
(b) giving a true and fair view of the financial position as at 30 June 2020 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)
(b)
the financial records of the company for the financial year have been properly maintained
in accordance with Section 286 of the Corporations Act 2001;
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.
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.
Justin Pettett
Chairman
Dated: 31 August 2020
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Locality Planning Energy Holdings Limited | Annual Report 2020
53
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 2020 there have been:
i.
no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in
Corporations Act 2001, including:
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
Chartered Accountants
Ashley Carle
Director
Brisbane
31 August 2020
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LOCALITY PLANNING ENERGY HOLDINGS LIMITED
Report on the Audit of the Financial Report
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 2020 and 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 to the financial statements comprising a summary of significant accounting
policies and other explanatory information, and the director’s declaration.
In our opinion the accompanying consolidated financial report of the Group is in accordance with the
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
performance for the year then ended; and
(ii)
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 110 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 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
Without modifying our opinion, we draw attention to Note 2(D) in the financial report, which indicates
that the Group incurred a net loss of $7,231,267 and a net cash outflow from operating activities of
$551,233 during the year ended 30 June 2020, and had a net asset deficiency as at 30 June 2020 of
$2,799,787. These conditions indicate the existence of a material uncertainty that may cast significant
doubt on the Group’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.
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Locality Planning Energy Holdings Limited | Annual Report 2020
55
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 2020 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
Chartered Accountants
Ashley Carle
Director
Brisbane
31 August 2020
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LOCALITY PLANNING ENERGY HOLDINGS LIMITED
Report on the Audit of the Financial Report
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 2020 and 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 to the financial statements comprising a summary of significant accounting
policies and other explanatory information, and the director’s declaration.
In our opinion the accompanying 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 2020 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 110 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 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
Without modifying our opinion, we draw attention to Note 2(D) in the financial report, which indicates
that the Group incurred a net loss of $7,231,267 and a net cash outflow from operating activities of
$551,233 during the year ended 30 June 2020, and had a net asset deficiency as at 30 June 2020 of
$2,799,787. These conditions indicate the existence of a material uncertainty that may cast significant
doubt on the Group’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.
54
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Locality Planning Energy Holdings Limited | Annual Report 2020
55
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LOCALITY PLANNING ENERGY HOLDINGS LIMITED
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LOCALITY PLANNING ENERGY HOLDINGS LIMITED
Key Audit Matter
How our audit addressed the key audit matter
Key Audit Matter
How our audit addressed the key audit matter
1. Going Concern
We focused on this area as a key audit matter due
to:
Our procedures included, amongst others:
History of losses after income tax.
History of cashflow deficits
activities.
from operating
Net asset deficiency at 30 June 2020.
Obtaining cashflow forecasts for the Group.
Reviewing the assumptions in the forecasts for
our
reasonableness
knowledge of the business.
consistency with
and
Confirming the receipt of additional capital received
after year-end to bank statements.
Given the long-term nature of these receivables,
subject to a higher risk of impairment.
2. Recognition and Recording Revenue
We focused on this area as a key audit matter due
to:
Our procedures included, amongst others:
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 estimation and complexity
in
determining the amount and timing of accrued but
unbilled revenue.
required
The estimation
the
financing component of the embedded network
revenue.
in determining
involved
The complexity of the new billing system used by
the organization.
Testing key controls within the sales and accounts
receivable process to ensure completeness and
accuracy of sales invoices recorded in the ledger.
procedures
Analytical
unusual
transactions or trends in sales data that may be
indicative of material misstatement.
identify
to
Cut-off procedures to ensure that only sales related
to the 2019-2020 financial year are recorded in
these financial statements.
Detailed recalculation of accrued and unbilled
revenue.
Reviewing the reasonableness of the financing
component allocated by management
the
embedded network revenue.
to
4. Valuation of Financial Derivatives
We focused on this area as a key audit matter due
Our procedures included, amongst others:
The estimation and complexity
required
to
Confirming
the contracts
in place with
the
determine the fair value of the derivatives.
counterparty to ensure that all derivatives were
included in the model used to calculate the fair
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
financial
statements.
in Note 2(C)
the
to
to:
to:
3. Existence and Valuation of Site Conversion Receivables
We focused on this area as a key audit matter due
Our procedures included, amongst others:
The
site
conversion
receivables
balance
customers during the 2019-2020 financial year to
contributing towards a significant portion of total
ensure
the site conversion receivable balance
assets as at 30 June 2020.
recognised is appropriately valued and free from
Testing contracts of new embedded network
material misstatement.
Testing costs incurred to complete site conversion
works on new embedded network customer
premises, to ensure contracted receivables are not
overstated or deemed uncollectable from date of
recognition.
Confirming new embedded network customer
accounts during 2019-2020 are live and receiving
energy during the period, to ensure existence of the
new customers, existence of the site conversion
works completed, and consequently existence of the
site conversion receivables recognised in 2019-
2020.
Reviewing
pre-existing
embedded
network
customer accounts
to ensure
the customers
continue to remain live, and that the corresponding
site conversion
receivable continues
to be
collectable.
value.
accuracy.
Testing the formulae included in the model for
Where inputs
into
the fair value model were
observable, agreed to supporting documentation.
Where inputs into the fair value model were not
readily observable, reviewing the reasonableness of
the assumptions.
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Locality Planning Energy Holdings Limited | Annual Report 2020
57
to:
to:
1. Going Concern
We focused on this area as a key audit matter due
Our procedures included, amongst others:
History of losses after income tax.
History of cashflow deficits
from operating
reasonableness
and
consistency with
our
activities.
knowledge of the business.
Reviewing the assumptions in the forecasts for
Obtaining cashflow forecasts for the Group.
Net asset deficiency at 30 June 2020.
Confirming the receipt of additional capital received
after year-end to bank statements.
2. Recognition and Recording Revenue
We focused on this area as a key audit matter due
Our procedures included, amongst others:
The strong growth in sales in recent years
receivable process to ensure completeness and
resulting in the need for substantially increased
accuracy of sales invoices recorded in the ledger.
Testing key controls within the sales and accounts
human and information technology capabilities
and resources to ensure accurate recording.
The estimation and complexity
required
in
determining the amount and timing of accrued but
unbilled revenue.
The estimation
involved
in determining
the
financing component of the embedded network
revenue.
The complexity of the new billing system used by
the organization.
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 2019-2020 financial year are recorded in
these financial statements.
Detailed recalculation of accrued and unbilled
revenue.
Reviewing the reasonableness of the financing
component allocated by management
to
the
embedded network 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 2(C)
to
the
financial
statements.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LOCALITY PLANNING ENERGY HOLDINGS LIMITED
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LOCALITY PLANNING ENERGY HOLDINGS LIMITED
Key Audit Matter
How our audit addressed the key audit matter
Key Audit Matter
How our audit addressed the key audit matter
3. Existence and Valuation of Site Conversion Receivables
We focused on this area as a key audit matter due
to:
Our procedures included, amongst others:
site
conversion
The
balance
contributing towards a significant portion of total
assets as at 30 June 2020.
receivables
Given the long-term nature of these receivables,
subject to a higher risk of impairment.
Testing contracts of new embedded network
customers during the 2019-2020 financial year to
ensure
the site conversion receivable balance
recognised is appropriately valued and free from
material misstatement.
Testing costs incurred to complete site conversion
works on new embedded network customer
premises, to ensure contracted receivables are not
overstated or deemed uncollectable from date of
recognition.
Confirming new embedded network customer
accounts during 2019-2020 are live and receiving
energy during the period, to ensure existence of the
new customers, existence of the site conversion
works completed, and consequently existence of the
site conversion receivables recognised in 2019-
2020.
embedded
pre-existing
network
Reviewing
customer accounts
the customers
continue to remain live, and that the corresponding
to be
site conversion
collectable.
receivable continues
to ensure
4. Valuation of Financial Derivatives
We focused on this area as a key audit matter due
to:
Our procedures included, amongst others:
The estimation and complexity
determine the fair value of the derivatives.
required
to
the contracts
Confirming
the
counterparty to ensure that all derivatives were
included in the model used to calculate the fair
value.
in place with
Testing the formulae included in the model for
accuracy.
Where inputs
into
the fair value model were
observable, agreed to supporting documentation.
Where inputs into the fair value model were not
readily observable, reviewing the reasonableness of
the assumptions.
56
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Locality Planning Energy Holdings Limited | Annual Report 2020
57
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LOCALITY PLANNING ENERGY HOLDINGS LIMITED
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LOCALITY PLANNING ENERGY HOLDINGS LIMITED
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 2020, 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.
In 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.
In 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.
Obtain an understanding of internal control relevant to the audit 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 Group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors' use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group's ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor's report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor's report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor's report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
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59
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LOCALITY PLANNING ENERGY HOLDINGS LIMITED
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LOCALITY PLANNING ENERGY HOLDINGS LIMITED
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 2020, 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.
In 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.
In 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.
Obtain an understanding of internal control relevant to the audit 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 Group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors' use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group's ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor's report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor's report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor's report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
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Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
59
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LOCALITY PLANNING ENERGY HOLDINGS LIMITED
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors' report for the year ended 30 June
2020.
In our opinion, the Remuneration Report of Locality Planning Energy Holdings Limited, for the year
ended 30 June 2020, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards
Bentleys Brisbane (Audit) Pty Ltd
Chartered Accountants
Ashley Carle
Director
Brisbane
31 August 2020
Shareholder
Information
Shareholder Information
Additional information required by the Australian Securities Exchange (ASX) and not shown elsewhere
in the Annual Report, current as at 17 August 2020, is advised hereunder.
Stock Exchange Quotation
The Company’s shares are quoted on the ASX under the code “LPE”.
Classes of Securities
The Company has the following equity securities on issue:
ASX quoted: 62,210,736 ordinary shares, each fully paid, held by 967 shareholders.
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 fully 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
There are no current restricted securities
On-market Buy-backs
There is no current on-market buy-back of any securities.
Corporate Governance Statement
The Corporate Governance Statement is available on the Company’s website at
https://localityenergy.com.au/invester-resources-pdf/corporate-governance
Distribution of Security Holders
Distribution of shares and the number of holders by size of holding are:
%
No. of holders
Range
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Securities
51,991,613
8,533,587
801,844
751,797
131,895
83.57
13.72
1.29
1.21
0.21
62,210,736
100.00
64
242
105
264
292
967
%
6.62
25.03
10.86
27.30
30.20
100.00
60
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
61
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LOCALITY PLANNING ENERGY HOLDINGS LIMITED
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors' report for the year ended 30 June
In our opinion, the Remuneration Report of Locality Planning Energy Holdings Limited, for the year
ended 30 June 2020, complies with section 300A of the Corporations Act 2001.
2020.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards
Bentleys Brisbane (Audit) Pty Ltd
Chartered Accountants
Ashley Carle
Director
Brisbane
31 August 2020
Shareholder
Information
Shareholder Information
Additional information required by the Australian Securities Exchange (ASX) and not shown elsewhere
in the Annual Report, current as at 17 August 2020, is advised hereunder.
Stock Exchange Quotation
The Company’s shares are quoted on the ASX under the code “LPE”.
Classes of Securities
The Company has the following equity securities on issue:
ASX quoted: 62,210,736 ordinary shares, each fully paid, held by 967 shareholders.
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 fully 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
There are no current restricted securities
On-market Buy-backs
There is no current on-market buy-back of any securities.
Corporate Governance Statement
The Corporate Governance Statement is available on the Company’s website at
https://localityenergy.com.au/invester-resources-pdf/corporate-governance
Distribution of Security Holders
Distribution of shares and the number of holders by size of holding are:
%
No. of holders
Range
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Securities
51,991,613
8,533,587
801,844
751,797
131,895
83.57
13.72
1.29
1.21
0.21
62,210,736
100.00
64
242
105
264
292
967
%
6.62
25.03
10.86
27.30
30.20
100.00
60
Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
61
Shareholder Information (continued)
Twenty Largest Security Holders
Rank Name
A/C designation
17 Aug 2020 % IC
1
Lumber Co Pty Ltd
Chester Family
8,000,000
12.86
1 Mr Damien Ian Glanville
The Glanville Family A/C
8,000,000
12.86
2
Pettett Pty Ltd
Pettett Family A/C
6,775,000
10.89
3
National Nominees Limited
4
Jarwill Pty Ltd
Jarwill Investment A/C
5
Bearay Pty Limited
Brian Clayton S/F A/C
6
Fernsha Pty Limited
Simon’s Brooklyn A/C
4,750,000
3,738,003
2,000,000
1,696,160
7
Defender Equities Pty Ltd
Defender Aus Opportun FD A/C
1,400,000
8 Ginga Pty Ltd
T G Klinger Super Fund A/C
1,084,822
9
CS Third Nominees Pty Limited
HSBC Cust Nom AU Ltd 13 A/C
880,000
10 BNP Paribas Nominees Pty Ltd
DRP A/C
877,043
Hub 24 Custodial Serv Ltd
11 Woodville Super Pty Limited
Woodville Ave Super Fund A/C
700,000
12 Mr Anthony Bracks
13 Pettett Pty Ltd
Pettett Family A/C
14
Lumber Co Pty Ltd
Chester Family A/C
15
J P Morgan Nominees Australia Pty Limited
16 Sandhurst Trustees Ltd
Equit Inv Dragonfly A/C
17 Netwealth Investments Limited
Wrap Services A/C
18 Sore Tooth Pty Limited
Simon Tilley Super Fund A/C
576,240
520,000
510,995
500,002
500,000
456,231
410,000
19 M&S Kriticos SMSF Pty Ltd
M&S Kriticos Super Fund A/C
408,106
20 Mr Daryl Lindsay Allen
400,446
7.64
6.01
3.21
2.73
2.25
1.74
1.41
1.41
1.13
0.93
0.84
0.82
0.80
0.80
0.73
0.66
0.66
0.64
Total
44,183,048
71.02
Balance of Register
18,027,688
28.98
Grand Total
62,210,736 100.00
Substantial Shareholders
The names of substantial shareholders who have notified the Company in accordance
with section 671B of the Corporations Act are:
Name
Ben Chester / Lumber Co Pty Ltd
Damien Glanville
Justin Pettett / Pettett Pty Ltd
No. of Shares
8,510,995
8,288,995
7,349,102
EGP Capital Pty Ltd / EGP Concentrated Value Fund
4,750,000
Jarwill Pty Ltd
3,738,003
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Locality Planning Energy Holdings Limited | Annual Report 2020
Locality Planning Energy Holdings Limited | Annual Report 2020
63
Locality Planning Energy Holdings Limited
Suite 306, Level 3
Tower 1, Kon-Tiki Business Centre
55 Plaza Parade, Maroochydore
QLD 4558 Australia
1800 040 168
www.localityenergy.com.au
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Locality Planning Energy Holdings Limited | Annual Report 2020