New Energy Solar Limited
ACN 609 396 983
ANNUAL REPORT
31 December 2021
Renewable energy.
Sustainable investments.
N E W E N E R G Y S O L A R
Annual Report
CONTENTS
Chair's Letter ................................................................................................ i
Business Highlights .................................................................................... v
Investment Manager’s Report .................................................................... x
Corporate Governance Statement .............................................................. 1
Directors’ Report ......................................................................................... 9
Auditor’s Independence Declaration ....................................................... 23
Financial Statements................................................................................. 25
Statement of Profit or Loss and Other Comprehensive Income ............ 26
Statement of Financial Position ............................................................... 27
Statement of Changes in Equity ............................................................... 28
Statement of Cash Flows ........................................................................... 29
Notes to the Financial Statements ............................................................ 30
Directors’ Declaration ............................................................................... 62
Independent Auditor’s Report .................................................................. 63
Stock Exchange Information .................................................................... 67
Unaudited Aggregated Historical Financial Information ..................... 70
Additional Disclosures .............................................................................. 78
Directory .................................................................................................... 80
Chair's Letter
NC-31 south side aerial
view – March 2017
NC-47 aerial view – June 2017
i
Chair's Letter
FOR THE YE AR ENDED 31 DECEMBER 2021
Dear Investors,
On behalf of New Energy Solar Limited (NEW), I present the full-year report for the 12 months ended
31 December 2021.
In 2021 there were a number of changes consistent with the Board’s intention to address the share price
discount to net asset value (NAV). Specifically, NEW implemented the following recommendations of the
Strategic Review conducted in late 2020 (Strategic Review).
STRATEGIC INITIATIVE
Sale of NEW’s shares in US Solar Fund Plc
Sale of up to a 50% interest in the Mount Signal 2 (MS2) solar power plant
Sale of the two Australian power plants and exit from the Australian electricity market
Un-stapling to simplify corporate structure and streamline corporate governance
Use of asset sale proceeds to pay down debt
Return of capital through equal access off-market buyback
STATUS
Further to the above, NEW commenced an on-market buyback at the end of 2021. However, it has been
paused while the Board contemplates further action to address the share price discount which has persisted
despite completion of the initiatives set out above.
The Board’s actions to date have resulted in a simplified structure and more streamlined reporting, the sale
of some assets, a reduction in debt and a return of some capital to shareholders. However, despite these
initiatives, not enough progress has been made on closing the share price discount.
The Strategic Review contemplated additional phases if the share price discount did not improve and
accordingly, the Board is now in the process of revisiting the recommendations. As indicated in the business
update announcement on 11 February 2022, these recommendations include the sale of individual assets or
the sale of the whole portfolio.
We will ensure shareholders are updated on our progress in keeping with NEW’s obligations of
continuous disclosure.
ii
NEW ENERGY SOLARAnnual Report FINANCIAL RESULTS
UNDERLYING E ARNINGS1
While the generation performance of the portfolio was below weather-adjusted expectations over the year
to 31 December 2021, business interruption insurance proceeds on the Rosamond plants and the economic
curtailment compensation at MS2 have resulted in total underlying revenues of US$66.4 million. Earnings
before interest, tax, depreciation, and amortization (EBITDA) was US$47.7 million, of which US$25.2 million
was attributable to NEW.
STATUTORY E ARNINGS
During the year, NEW generated a total net loss of $4.4 million, which, after operating expenses for the year
of $11.4 million, and an income tax expense of $4.4 million, resulted in an after-tax net loss of $20.2 million.
As NEW is treated as an Investment Entity for accounting purposes, all asset revaluation gains and losses are
passed through the profit and loss statement. As at 31 December 2021, NEW had net assets of $368.7 million
(30 June 2021: $401.0 million), representing a NAV of $1.15 per security (30 June 2021: $1.12), an increase of
$0.03 cents per security from 30 June 2021.
GE ARING
NEW targets a long-term gearing level of 50% of gross assets. As at 31 December 2021, NEW’s external
“look through” gearing2 was 53.6%, reduced from the level of 60.3% on 30 June 2021 by the proceeds of the
asset sales.
CAPITAL MANAGEMENT
The sale of NEW’s Australian assets, Beryl (110.9MWDC) and Manildra (55.9MWDC), allowed NEW to conduct
an off-market buyback of NEW shares; and to reduce corporate debt close to NEW’s long-term target of 50%.
The off-market buyback resulted in the buying back and cancellation of 35.5 million shares at a price of $0.91
per share, constituting almost 10% of NEW’s issued capital.
ENVIRONMENT AND SOCIAL IMPACT
During the twelve-month period ended 31 December 2021, NEW’s portfolio generated over 1,121GWh of
electricity. Production from the current NEW portfolio of 14 solar power plants is equivalent to an annual
CO2 displacement rate of approximately 682,000 tonnes of CO2, equivalent to removing 148,000 cars from US
roads annually3.
1. Portfolio underlying financial performance including underlying earnings, underlying revenues and EBITDA are non-IFRS measures
employed by NEW to provide investors with additional information on the performance of NEW. Since NEW is treated as an
Investment Entity for accounting purposes, the portfolio's underlying financial performance is not presented in the statutory results.
Non-IFRS financial measures should be viewed in addition to, and not as a substitute for, the NEW’s statutory results.
2. Gearing = gross debt/gross asset value
3. Estimates use the first year of each plant's electricity production once operational or acquired by the Investment Manager. Assumes
all plants are owned by NEW on a 100% basis and that all plants are fully operational for the period. US CO2 emissions displacement
is calculated using data from the US Environmental Protection Agency’s “AVoid Emissions and geneRation Tool” (AVERT). Australian
CO2 emissions displacement is calculated using data from the Australian Government Department of the Environment and Energy.
iii
NEW ENERGY SOLARAnnual Report BUSINESS OUTLOOK
The momentum to transition from fossil fuel-based electricity generation to renewable generation
is significant in the United States. Additionally, the range of new technology solutions in generation,
transmission and storage of electricity is accelerating the change and fostering new businesses throughout
the US.
NEW, with its portfolio now entirely located in the United States, is part of an industry that is experiencing
extraordinary disruption and change. Unfortunately, NEW has been unable, thus far, to translate its
participation in the US market into value in its listed securities for the benefit of its shareholders. The
Board has determined that the value of NEW’s assets may be best realised through their sale. In the next
six months of 2022, management will explore the sale of NEW’s portfolio of assets. As all investors will be
aware, there is no guarantee of a specific outcome, but the Board remains focussed on delivering value for
NEW’s shareholders.
Finally, I would like to thank John Martin for his leadership of the NEW team until his departure in the first
part of 2021, and Liam Thomas for his leadership of NEW in the latter part of 2021. John remains on the
Board of NEW where he continues to work with Liam and the NEW executives to run NEW through these
difficult times.
Yours faithfully,
JEFFREY WHALAN
Chair of the Company
25 February 2022
iv
NEW ENERGY SOLARAnnual Report Business Highlights
TID array – close up –
September 2017
TID array – September 2017
v
Business Highlights
FOR THE YE AR ENDED 31 DECEMBER 2021
BUSINESS HIGHLIGHTS
To deliver on its objectives, and produce its key investment benefits, New Energy Solar Limited (NEW or the
Business) has a well-defined investment strategy and clear criteria by which to measure success.
Figure 1: New Energy Solar’s business achievements to date
Fully operating portfolio of 14
solar power plants across the US
Total portfolio capacity of
over 606MWDC
More than 1.5 million solar
panels generating emissions
free electricity
Capacity-weighted average
PPA term of 14.9 years 4
Distributions totalling
A$0.2865 per security paid
to investors since IPO
Generating more than 1,100GWh
of electricity annually5
CO2 displacement of 682,000
tonnes of CO2
5,6 in 2020
Equivalent to removing
148,000 US cars from the road6,7
...or powering 137,000 US homes6,8
4. Weighted by capacity on a 100% ownership basis as at 31 December 2021.
5. Generation accounts for solar plants on a 100% ownership basis. NEW’s proportionate share of generation was 883GWh.
6. Calculated using the United States Environmental Protection Agency’s “AVoided Emissions and geneRation Tool” (AVERT).
7. Calculated using data from the US Energy Information Administration (principal agency of the US Federal Statistical System).
8. Calculated using data from the US Environmental Protection Agency.
vi
NEW ENERGY SOLAR STRUCTURE
New Energy Solar’s corporate structure changed during 2021 from a stapled trust and company structure to a
company structure, pursuant to shareholder approval on 25 June 2021 to wind up the trust. The below diagram
indicates the structure as at 31 December 2021. The second diagram indicates the stapled structure which is
no longer in place but will assist with understanding the financial statements published prior to this 2021 annual
financial report. For the purposes of comparison with prior periods, unaudited aggregated financial statements for
the year to 31 December 2021 have been provided in this annual report. New Energy Solar Fund (the Trust) was
wound up as at 14 February 2022. Shares in NEW trade under the ticker ASX:NEW.
Figure 2: New Energy Solar structure at 31 December 2021
Shareholders
New Energy Solar Limited
(ASX:NEW)
New Energy Solar
Manager Pty Limited
(Investment Manager)
Equity Investment
Equity/loan
Dividends/MSA fee
Dividends
New Energy Solar Australia
HoldCo #1 Pty Ltd
Equity Investment
Australia
United States of America
New Energy Solar US Corp
Distributions
Underlying Subsidiaries1
1. Underlying plants are held by subsidiaries via various structures including trusts and partnerships.
vii
NEW ENERGY SOLARAnnual Report Figure 3: New Energy Solar structure at 31 December 2020
Stapled Securityholders
1 Share
1 Unit
New Energy Solar
Manager Pty Limited
(Investment Manager)
New Energy Solar
Limited (Company)
New Energy
Solar
(ASX:NEW
Fund)
New Energy Solar
Fund (Trust)
E&P
Investments Limited
(Responsible Entity)
Equity Investment
New Energy Solar Australia
HoldCo #1 Pty Ltd
Distributions
Underlying Subsidiaries1
Dividends
Equity
Investment
Interest
Loan
Australia
United States of America
New Energy Solar US Corp
Distributions
Underlying Subsidiaries1
1. Underlying plants are held by subsidiaries via various structures including trusts and partnerships.
NEW invests in solar plants via its wholly owned subsidiaries New Energy Solar US Corp (NES US Corp) and, prior
to the sale of the Australian assets in July 2021, New Energy Solar Australia HoldCo #1 Pty Limited (NESAH1).
As at 31 December 2021, NES US Corp is funded by equity from New Energy Solar Limited (for the purposes of
understanding the corporate structure, the Company), which is denominated in US dollars. The loan previously
in place from the Trust to NES US Corp was reallocated to equity in the Company as the result of the Trust’s
restructure implemented prior to 30 June 2021. NESAH1 is funded by equity and/or a loan from the Company.
Following completion of the Beryl and Manildra solar power asset sales in July 2021, NESAH1 no longer owns
underlying subsidiaries.
Following the restructure, the presentation of the financial statements has been streamlined to reflect the
performance of investments made by NEW in its underlying subsidiaries. Whereas in prior years, the Fund relied
on ASIC relief to disclose combined financial statements of the Company and the Trust to allow securityholders’
combined interest to be disclosed, shareholders’ interests are now reflected simply by their ownership interests
in the Company. NEW is considered to meet the definition of an ‘Investment Entity’ (refer ‘Summary of significant
accounting policies’ in note 2(A) to the financial statements), NES US Corp and NESAH1 are not consolidated and
are required to be held at fair value in NEW’s financial statements. Furthermore, as the accounts reflect the net
investment of the Company in its underlying subsidiaries via equity investment and loans receivable, the loans
receivable are also shown at fair value. The total investment (equity investment) in NES US Corp and investment
(equity investment and loan receivable together) in NESAH1 is presented on the statement of financial position as
“financial assets held at fair value through profit or loss”.
viii
NEW ENERGY SOLARAnnual Report The impact of this 'Investment Entity' classification on the presentation of the financial statements is that the main
operating revenues of NEW consist of either dividends or returns of capital to the Company from NES US Corp
and NESAH1, fair value movements in the value of the Company’s equity holding in NES US Corp, and formerly
NESAH1 and the loan receivable to NESAH1, and management service agreement (MSA) fee income for services
provided to NESAH1. Underlying subsidiaries net operating income and other expenses are reflected through the
fair value movement in the profit or loss statement.
The underlying earnings of solar plants, consisting of revenues from the sale of energy under the PPA less operating
expenses, are distributed on a periodic basis from the underlying plants through to NES US Corp, and formerly
through NESAH1, and underpin the ability to pay fees, dividends or returns of capital to the Company as noted
above. These funds ultimately underpin NEW’s dividends to shareholders.
Additionally, as the Company’s equity investment in NES US Corp is denominated in US dollars, NEW is also
exposed to valuation movements associated with foreign exchange rate movements.
ix
NEW ENERGY SOLARAnnual Report Investment Manager’s Report
FOR THE YE AR ENDED 31 DECEMBER 2021
Investment Manager’s
Report
NC-47 aerial view –
June 2017
x
NC-31 site inspection – October 2017
NEW ENERGY SOLARAnnual Report
Investment Manager’s Report
FOR THE YE AR ENDED 31 DECEMBER 2021
OVERVIEW OF THE NEW PORTFOLIO
AS AT 31 DECEMBER 2021 INTERESTS IN 14 OPERATING PLANTS IN THE UNITED
STATES (606MWDC CAPACITY)
Figure 4: NEW portfolio of 606MWDC operating solar plant capacity in the US9
Figure 5: NEW portfolio composition by size (MWDC) excluding Australian assets sold during 2021
3%
Rigel
(OR)
3%
12%
Boulder
Solar I
12%
Rigel
(NC)
8%
Mount Signal 2
30%
27%
NC-31
9%
NC-47
10%
Stanford
14%
TID
14%
58%
Oregon
North Carolina
California
Nevada
9. Includes plants that are wholly or partially owned by NEW and accounts for capacity on an ownership weighted basis.
xi
NEW ENERGY SOLARAnnual Report NEW'S OPERATING PORTFOLIO PERFORMANCE
AS AT 31 DECEMBER 2021 INTERESTS IN 14 OPER ATING PL ANTS IN THE
UNITED STATES (606MWDC CAPACIT Y)
Table 1 below shows the underlying generation and PPA terms of the operating projects in NEW’s portfolio for the
twelve months ended 31 December 2021. Note that plant capacity refers to the maximum amount of electricity
that can be produced at any one time, while generation is the volume of electricity generated over a period of time.
To assess the performance of the solar power plants the Investment Manager develops a set of expectations as to
the output of each solar power plant. Initially, a budget expectation for each year of a plant’s 30 to 40-year life is
developed based on long-term average weather patterns and irradiation records. Actual weather conditions are
then used to adjust those budget expectations to produce weather-adjusted expectations of output for the solar
power plants. Comparing actual metered generation to weather-adjusted expectations allows the identification of
equipment and other performance issues over and above the impact of weather conditions
Table 1: NEW portfolio
PLANT
Operating
NC-31
NC-47
Stanford
TID
Boulder Solar 1
Rigel Portfolio
Mount Signal 2
Total Portfolio
PLANT
CAPACITY
(MWDC)
2021 GENERATION (GWH)
Actual
generation
(gross)
Actual
generation (NEW
proportionate
share)
Weather-
adjusted
forecast (NEW
proportionate
share)
PPA TERM
REMAINING
(YEARS)
PPA
EXPIRY
DATE
43.2
47.6
67.4
67.4
124.9
55.6
199.6
605.6
64.3
70.2
107.4
126.6
262.3
76.8
413.4
1,121.0
64.3
70.2
107.3
126.4
128.5
76.8
310.1
883.6
68.9
73.3
153.8
154.7
131.4
82.5
346.0
1,010.6
5.7
5.9
20.5
15.7
15.5
11.7
18.9
14.9
2027
2027
2041
2037
2036
2033
2040
xii
NEW ENERGY SOLARAnnual Report Figure 6: US Operating portfolio –monthly generation
US Portfolio Generation Performance
US Portfolio Revenue Performance
140
120
100
80
60
40
20
-
h
W
G
86% 84% 83% 84% 85% 84% 85% 86% 86% 87% 87% 87%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1
2
0
2
n
a
J
1
2
0
2
b
e
F
1
2
0
2
r
a
M
1
2
0
2
r
p
A
1
2
0
2
y
a
M
1
2
0
2
n
u
J
1
2
0
2
l
u
J
1
2
0
2
g
u
A
1
2
0
2
p
e
S
1
2
0
2
t
c
O
1
2
0
2
v
o
N
1
2
0
2
c
e
D
Actual Generation
Weather Adjusted Budgeted Generation
Cumulative Generation/Cumulative Weather Adjusted Budget (RHS)
s
n
o
i
l
l
i
m
$
S
U
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
-
97% 96% 94% 96% 96% 95% 95% 94% 94% 94% 94% 94%
100%
80%
60%
40%
20%
0%
1
2
0
2
n
a
J
1
2
0
2
b
e
F
1
2
0
2
r
a
M
1
2
0
2
r
p
A
1
2
0
2
y
a
M
1
2
0
2
n
u
J
1
2
0
2
l
u
J
1
2
0
2
g
u
A
1
2
0
2
p
e
S
1
2
0
2
t
c
O
1
2
0
2
v
o
N
1
2
0
2
c
e
D
Revenue (Includes BI & Reimbursed Curtailment)
Weather Adjusted Budgeted Revenue
Cumulative Revenue/Cumulative Weather Adjusted Budgeted Revenue (RHS)
The US operating portfolio generated 13% below weather-adjusted expectations for the twelve months of
2021 primarily due to the continued impact of the fire damage incurred at the Rosamond plants in June 2020
and economic curtailment by the PPA counterparty at MS2. Curtailment occurs when the market operator or
PPA offtaker directs a plant to reduce generation either due to grid congestion or lower than expected demand
(called “economic curtailment”). Under MS2’s PPA, the offtaker has the right to curtail MS2 for economic reasons
throughout the year. However, there is a 12-month cap for unreimbursed economic curtailment, which resets on
June 1 each year – any economic curtailment incurred above this cap is reimbursed to MS2 via the monthly PPA
payments. Taking into account the compensation for economic curtailment at MS2 and the payment of business
interruption (BI) proceeds for the Rosamond plants, revenue from the US portfolio was 6% below expectations for
the year.
Remediation at the Rosamond plants following fire damage sustained at the plants in June 2020 continued
during 2021. By the end of the period, the sites were operating at or above 98% capacity. In total, over 52,000
new modules have been installed on the site. The Investment Manager undertook considerable work toward the
end of 2021 to accelerate the remediation and it is expected that commissioning of the remediated sections will
be concluded at the end of February 2022. The plants have been performing well and NEW continues to work
with insurers on additional testing to ensure the plants are restored to their condition prior to the fire. Insurance
proceeds have largely covered the costs of site restoration but discussions with NEW’s insurers with respect to the
costs of the work to accelerate remediation at the end of 2021 and the cost of final work and testing are ongoing. BI
insurance proceeds have been paid for 12 months as per the terms of the policy.
xiii
NEW ENERGY SOLARAnnual Report
Figure 7: Australian portfolio –monthly generation
Australian Portfolio Generation Performance
Australian Portfolio Revenue Performance
69%
67%
69%
h
W
M
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
-
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
3,000
2,500
2,000
62%
65%
71%
'
0
0
0
$
U
A
1,500
1,000
500
-
100%
80%
60%
40%
20%
0%
Jan 2021
Feb 2021
Mar 2021
Jan 2021
Feb 2021
Mar 2021
Actual Generation
Weather Adjusted Budgeted Generation
Cumulative Generation/Cumulative Weather Adjusted Budget (RHS)
Revenue (Includes BI & Reimbursed Curtailment)
Weather Adjusted Budgeted Revenue
Cumulative Revenue/Cumulative Weather Adjusted Budgeted Revenue (RHS)
The Australian plants performed below weather-adjusted expectations during the first quarter of 2021 as
generation, particularly at Manildra, was curtailed frequently in the early part of the year by the Australian Energy
Market Operator (AEMO). Generation is curtailed to maintain stability in the transmission network which is
experiencing considerable congestion in the Central-West of New South Wales. There is typically no compensation
to generation asset owners for this type of curtailment and these issues will not be resolved quickly. The sale of
the Australian assets meant that from 31 March 2021, NEW was no longer subject to generation risks or earning
revenue from those assets.
Table 2: Portfolio underlying financial performance10 for the twelve months ended 31 December 2021 and
comparison to prior periods
FINANCIAL PERFORMANCE
US$M
Revenue
Less: Operating expenses
EBITDA
Less: Distributions to tax equity investors and EBITDA
attributable to minority investors
EBITDA attributable to NEW
2021
66.4
(18.8)
47.7
(22.4)
25.2
2020
75.1
(20.5)
54.6
(18.7)
36.0
2019
54.3
(14.1)
40.3
(10.7)
29.6
10. Portfolio underlying financial performance including underlying earnings, underlying revenues and EBITDA are non-IFRS
measures employed by NEW to provide investors with additional information on the performance of NEW. Since NEW is treated
as an Investment Entity for accounting purposes, the portfolio underlying financial performance is not presented in the statutory
results. Non-IFRS financial measures should be viewed in addition to, and not as a substitute for, NEW’s statutory results.
xiv
NEW ENERGY SOLARAnnual Report FINANCIAL PERFORMANCE EXCLUDING BERYL, MANILDRA AND 25% INTEREST IN MS2
US$M
Revenue
2021
2020
2019
62.5
60.0
41.9
Less: Operating expenses
(17.7)
(15.9)
(11.3)
EBITDA
44.8
44.1
30.7
Less: Distributions to tax equity investors and EBITDA
attributable to minority investors
(22.4)
(20.9)
(10.7)
EBITDA attributable to NEW
22.4
23.2
20.0
The Business’s underlying revenues, which include the proceeds of BI insurance held for the Rosamond plants,
Stanford and TID, and compensation for economic curtailment at MS2, were lower at US$66.4 million compared to
the twelve months ended 31 December 2020, as a result of the asset sales. When excluding the production of the
assets that were sold from both 2020 and 2021, revenue increased by US$2.5 million.
EBITDA attributable to NEW fell US$10.8 million (-30%), also reflecting the sale of the 25% interest in MS2, Beryl
and Manildra and the higher distributions to tax equity and minority interests on MS2, when compared to the
2020 year. When removing the financial performance of Beryl, Manildra and the 25% interest in MS2, EBITDA
attributable to NEW decreases US$0.8 million (-3%) predominantly due to production shortfalls at Rosamond
in the second half of 2021 which occurred after the 12-month BI cover period expired in July 2021, as well as
increased insurance costs across the portfolio.
The output from NEW’s solar power plants this year had a positive environmental impact with gross electricity
generation from the portfolio during the twelve months to 31 December 2021 equivalent to:
• Displacing an estimated 682,000 tonnes of carbon emissions11.
• Removing over 148,000 US equivalent cars from the road12.
• Powering over 137,000 US equivalent houses13.
SALE OF AUSTR ALIAN A SSE TS
The asset sale process for NEW’s Australian assets, Beryl (110.9MWDC) and Manildra (55.9MWDC), resulted in the
announcement of a binding agreement on 7 June 2021 to sell the assets to Banpu Energy Holding Pty Limited for
$105.4 million before transaction costs (including a $4.0 million disposal fee payable to the Investment Manager,
a related party of E&P Financial Group, the parent of the Responsible Entity). The proceeds of the asset sale were
used to pay down debt to a level close to NEW’s long-term gearing target of 50% and to undertake both an off-
market and an on-market buyback. The off-market buyback was completed on 25 October 2021 with 35.5 million
shares acquired and cancelled, equivalent to almost 10% of NEW’s issued capital.
11. US CO2 emissions displacement is calculated using data from the US Environmental Protection Agency’s “AVoided Emissions and
geneRation Tool” (AVERT).
12. Calculated using data from the US Energy Information Administration (principal agency of the US Federal Statistical System).
13. Calculated using data from the US Environmental Protection Agency.
xv
NEW ENERGY SOLARAnnual Report INVESTMENTS & GEARING
NE T A SSE T VALUE
Over the twelve-month period to 31 December 2021, NEW’s NAV declined A$32 million, equivalent to 10 cents
per share. A summary of the items contributing to the decline are set out in Figure 8.
Figure 8: Change in NAV per security since 31 December 2020
1.25*
0.38
0.04
0.02
0.05
(0.38)
(0.01)
(0.04)
(0.06)
(0.01)
(0.04)
(0.02)
(0.03)
1.15
y
t
i
r
u
c
e
S
/
m
$
A
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
-
NAV as at
31-Dec-20
Sale of
assets
Asset sale
proceeds
Change in
fair value of
remaining
US assets
Net
distributions
from plants
Buyback Asset sale
disposal
fee
Asset sale
costs and
stamp duty
Cash
distributions
to investors
Securities
issued
(DRP)
Operating
costs
Pre-funded
remediation
works
Cash/
working
capital
Closing
NAV
(31-Dec-21)
* Represents the combined NAV for the Company ($1.12/share) and the Trust ($0.13/unit).
• The first block labelled “sale of assets” represents the reduction in portfolio value arising from the sale of
tranche one of MS2 and the sale of Manildra and Beryl.
• The net improvement in fair value of the underlying solar power plants of A$0.05 per share is broken down into
its individual movements in fair value in Figure 9 below but is most significantly impacted by the roll forward,
the FX gain and updated assumptions in the modelling of the remaining plants in the portfolio, offset by updated
merchant curves.
• Asset sale proceeds comprise proceeds from the sale of tranche one of MS2 and the sale of Manildra and Beryl.
The major transaction costs are detailed in the blocks labelled “asset sale disposal fee” and “asset sale costs and
stamp duty”. Transaction costs include stamp duty payable to the NSW Government, advisers’ costs and fees
incurred in connection with the sale, and a disposal fee of $4.0 million paid to the Investment Manager, a related
party of E&P Financial Group.
• Net distributions from plants describes the movement of earnings from the subsidiaries to the Company,
offsetting the corresponding amount recognised on a per share basis in the change in fair value below.
• The combined off-market and on-market buybacks resulted in the buy back and cancellation of 36.8 million
shares at less than NAV per share which has had an accretive impact of A$0.02 per share on the remaining
NEW shares.
• Cash distributions to investors and securities issued reflects the dividends paid and the issuance of additional
securities as part of the distribution reinvestment plan (DRP) operating for 2H 2020. The DRP has not operated
for 2021.
xvi
NEW ENERGY SOLARAnnual Report • The operating costs of the Business include Investment Management fees, advisor fees and the costs of running
the listed entity.
• The pre-funded remediation works represent the costs necessary to bring forward the Rosamond plants return
to close to full capacity ahead of the receipt of insurance proceeds.
• The decline in working capital reflects a decrease in cash balances and an unfavourable change in the
recognition of deferred tax assets.
600
Change in fair value of remaining US assets - A$18.2 million (5 cents per share)
350.5
22.2
25.1
16.8
368.7
(135.7)
(13.2)
(32.0)
(0.7)
486.2
m
$
A
550
500
450
400
350
300
250
200
31-Dec-20
Valuation
Asset sales
(25% MS2,
Beryl &
Manildra
31-Dec-20
adjusted
valuation
FX gain
Net
distributions
from plants
Roll
forward
Change in
operating
assumptions
Updated
merchant
curve
Rounding/
other
31-Dec-21
valuation
Figure 9: Change in Fair Value of NEW’s solar power plants since 31 December 2020
Following the A$135.7 million reduction in portfolio value consequent on the sale of tranche one of MS2 and of
Beryl and Manildra, the resulting portfolio value improved from A$350.5 million at December 2020 to A$368.7
million as at 31 December 2021.
The key elements in the improvement in fair value of NEW’s solar power plants this period include from left to right:
•
An improvement in the value of the USD over the year providing a foreign exchange (FX) gain of A$22.2 million.
• The distributions from the plants decrement is offset by an equivalent improvement in NEW’s net asset value,
as shown in Figure 8 at A$0.04 per share.
• The roll forward increment recognises the impact of the change in valuation date and is a function of discounted
cash flow modelling.
• The change in operating assumptions increment is largely the result of a reduction in the discount rate applicable
to MS2 given its operating life and the recognition by valuers of asset life extensions across the portfolio.
• The impact of updated long-term electricity price forecasts produced at the end of 2021 was negative overall.
Whilst NEW is largely protected from price declines in the short to medium term with its weighted average
PPA term of 14.9 years, a portion of its NAV is exposed to changes in price forecasts that impact its post-PPA
revenue expectations.
xvii
NEW ENERGY SOLARAnnual Report Table 3: NEW NAV as at 31 December 2021
ASSET
US PLANTS
Stanford
TID
NC-31
NC-47
Boulder Solar I
Rigel Portfolio
Mount Signal 2
Subtotal (US$)
Subtotal (A$ equivalent)14
Corporate Debt
Working Capital
Total
GE ARING
EQUITY
DEBT (FAIR
VALUE)
DEBT
(OUTSTANDING
BALANCE)
ENTERPRISE
VALUE
US$69.3m
US$64.3m
US$58.2m
US$133.6m
US$62.3m
US$19.5m
US$19.1m
US$81.8m
US$35.3m
US$23.6m
US$77.2m
US$25.8m
US$23.4m
US$22.7m
US$21.6m
US$61.0m
US$47.1m
US$177.6m
US$150.9m
US$254.8m
US$267.8m
US$310.6m
US$272.6m
US$578.4m
A$368.7m
(A$50.1m)
A$50.1m
A$368.7m
A$427.7m
A$50.1m
-
A$375.3m
A$50.1m
A$796.3m
-
-
A$50.1m
A$477.7m
A$425.4m
A$846.4m
NEW has a target long-term gearing15 ratio of 50% of gross assets. NEW had external gross look-through debt
outstanding of $425.4 million as at 31 December 2021, equivalent to a gearing ratio of 53.6%. This has decreased
6.7% from the 30 June 2021 gearing ratio of 60.3%. The decrease in gearing over the six-month period is primarily
due to the reduction of debt outstanding by A$184.0 million. This $184.0 million comprised the sale of NEW's
Australian assets which had A$176.4 million of debt outstanding as at 30 June 2021 and, corporate debt reduction,
and scheduled amortisation of existing project-level debt facilities.
NEW’s weighted average debt maturity of over 8.5 years as at 31 December 2021 reflects the long-term
contracted nature of its PPAs. The increase in weighted average debt maturity over the six-month period from 6.4
years is primarily attributable to the sale of NEW's Australian assets which supported debt facilities with nearer-
term maturities (2022 and 2023).
14. US$ figures converted to AU$ at US$:AU$ exchange rate of 0.7263 as at 31 December 2021. Figures may not add due to rounding.
15. Gearing = Total Debt/Gross Asset Value.
xviii
NEW ENERGY SOLARAnnual Report NEW’s group debt facilities outstanding as at 31 December 2021 are set out in Table 4 below:
Table 4: NEW debt facilities outstanding as at 31 December 2021
FACILITY
North Carolina Facility
US Private Placement 1
TYPE
Loan
Bond
AVAILABLE
FACILITY
DRAWN
SECURITY
US$19.1m
US$19.1m NC-31 and NC-47
US$58.2m
US$58.2m Stanford and TID
Mount Signal 2 Facility16
Loan
US$150.9m US$150.9m
Mount Signal 2
US Revolving Credit Facility
Loan
US$45.0m
US$36.4m
Corporate
US Private Placement 2
Rigel Facility
Total US Facilities
Total Debt
(A$ equivalent)
Gross assets
Gross Look
Through Gearing (%)
Bond
Loan
US$22.7m
US$22.7m
Boulder Solar I
US$21.6m
US$21.6m
Rigel
US$317.6m US$308.9m
A$437.2m
A$425.4m
A$794.1m
53.6%
ESTIMATED AVERAGE
DRAWN BALANCE OVER
FY 2021 (NON-
CAPITALISING FACILITIES)
US$21.5m
US$58.8m
US$151.3m
US$30.5m
US$22.7m
US$21.8m
US$306.6m
A$422.2m
16. Excluding US$6.4 million Mount Signal 2 revolving loan facility which was undrawn as at 31 December 2021.
xix
NEW ENERGY SOLARAnnual Report NEW ENERGY SOLAR’S INVESTMENTS
OPER ATING SOL AR POWER PL ANTS – UNITED STATES
Stanford Solar Power Plant (Stanford)
Rosamond, Kern County, California, USA
Location
Generating Capacity 67.4 MWDC/54 MWAC
Commercial
Operation
Date(COD)
December 2016
PPA Term
PPA Offtaker
O&M Service
Provider
Asset Description
25 years from COD
Stanford University
SunPower Corporation, Systems
Stanford is located on a 242-acre leased site in
Rosamond, Kern County, California, approximately
120 kilometres north of Los Angeles. Stanford
is located next to the TID solar power plant and
commenced operations in December 2016. NEW
acquired its substantial majority interest in Stanford
in December 2016.
Location
Generating Capacity 67.4 MWDC/54 MWAC
COD
December 2016
Rosamond, Kern County, California, USA
PPA Term
PPA Offtaker
O&M Service
Provider
Asset Description
20 years from COD
Turlock Irrigation District
SunPower Corporation, Systems
TID is located on a 265-acre leased site in
Rosamond, Kern County, California, approximately
120 kilometres north of Los Angeles. TID is
located next to Stanford solar power plan. and
commenced operations in December 2016. NEW
acquired its substantial majority interest in TID in
December 2016.
Stanford Aerial View – October 2017
Stanford Aerial View – October 2017
Turlock Irrigation District Power Plant (TID)
TID Aerial View – October 2017
TID Aerial View – October 2017
xx
NEW ENERGY SOLARAnnual Report North Carolina 43 MWDC Solar Power Plant (NC-31)
Location
Generating Capacity 43.2 MWDC/34.2 MWAC
COD
March 2017
Bladenboro, Bladen County, North Carolina, USA
NC-31 Aerial View – May 2017
PPA Term
PPA Offtaker
O&M Service
Provider
Asset Description
10 years from COD
Duke Energy Progress, Inc.
Miller Bros. Solar LLC
NC-31 is located on a 196-acre leased site in
Bladenboro, Bladen County, North Carolina, which
is approximately 232 kilometres east of Charlotte,
North Carolina. The plant commenced commercial
operations in March 2017. NEW committed to
acquiring a majority interest in NC-31 in August 2016
and acquired its interest in the plant in March 2017.
NEW acquired the minority interests in NC-31 in
July 2018.
NC-31 Aerial View – October 2017`
North Carolina 48 MWDC Solar Power Plant (NC-47)
Location
Generating Capacity 47.6 MWDC/33.8 MWAC
COD
May 2017
Maxton, Robeson County, North Carolina, USA
PPA Term
10 years from COD
PPA Offtaker
O&M Service
Provider
Duke Energy Progress, Inc.
DEPCOM Power, Inc.
NC-47 Aerial View – May 2017
Asset Description
NC-47 is located on a 260-acre leased site in
Maxton, Robeson County, North Carolina,
approximately 166 kilometres east of Charlotte. NC-
47 commenced commercial operations in May 2017.
NEW committed to acquiring a majority interest in
the plant in October 2016 and acquired its interest
in May 2017. NEW acquired the minority interests in
NC-47 in July 2018.
NC-47 Aerial View – May 2017
xxi
NEW ENERGY SOLARAnnual Report N E W E N E R G Y S O L A R
Annual Report
Boulder Solar 1 Power Plant (Boulder Solar 1)
Location
Generating Capacity 124.8MWDC / 100MWAC
Boulder City, Nevada, USA
COD
PPA Term
PPA Offtaker
O&M Service
Provider
Asset Description
December 2016
20 years from 1 January 2017
NV Energy (subsidiary of Berkshire Hathaway)
SunPower Corporation, Systems
Boulder Solar 1 is located on a 542-acre leased site in
Boulder City, Clark County, Nevada, approximately
50 kilometres south of Las Vegas. The plant
commenced commercial operations in December
2016. NEW acquired a 49% minority interest in
Boulder Solar 1 in February 2018.
Location
Generating Capacity 7.5MWDC / 5.0MWAC
Tabor City, North Carolina, USA
COD
PPA Term
PPA Offtaker
O&M Service
Provider
Asset Description
July 2018
15 years from COD
Duke Energy Progress, Inc.
Cypress Creek Renewables O&M (CCR O&M)
Arthur is located on a 35-acre leased site in Tabor
City, North Carolina. The plant commenced
commercial operations in July 2018.
Boulder Solar 1 Ground View – January 2018
Boulder Solar 1 Aerial View – January 2018
Arthur Solar Power Plant (Arthur)
Arthur Ground View – August 2018
Arthur Ground View – August 2018
xxii
N E W E N E R G Y S O L A R
Annual Report
Bonanza Solar Power Plant (Bonanza)
Bonanza Aerial View – April 2019
Location
Bonanza, Oregon, USA
Generating Capacity 6.8MWDC / 4.8 MWAC
COD
PPA Term
PPA Offtaker
O&M Service
Provider
Asset Description
December 2018
12.9 years from COD
PacifiCorp (subsidiary of Berkshire Hathaway)
CCR O&M
Bonanza is located on a 57-acre leased site
located 30 kilometres east of Klamath Falls,
Oregon. The plant commenced commercial
operations in December 2018.
Location
Generating Capacity 5.2MWDC / 5.0MWAC
Angier, North Carolina, USA
COD
PPA Term
PPA Offtaker
O&M Service
Provider
Asset Description
August 2018
15 years from COD
Duke Energy Progress, Inc.
CCR O&M
Church Road is located on a 21-acre leased site
in Angier, North Carolina. The plant commenced
commercial operations in August 2018.
Bonanza Aerial View – April 2019
Church Road Solar Power Plant (Church Road)
Church Road Ground View – May 2018
NC-47 Aerial View – May 2017
Church Road Ground View – May 2018
xxiii
N E W E N E R G Y S O L A R
Annual Report
County Home Solar Power Plant (County Home)
Location
Generating Capacity 7.5MWDC / 5.0 MWAC
Rockingham, North Carolina, USA
COD
PPA Term
PPA Offtaker
O&M Service
Provider
Asset Description
September 2018
15 years from COD
Duke Energy Progress, Inc.
CCR O&M
County Home is located on a 30-acre leased site
located 5 kilometres southeast of Rockingham,
North Carolina. The plant commenced commercial
operations in September 2018.
Location
Generating Capacity 7.5MWDC / 5.0MWAC
Maysville, North Carolina, USA
COD
PPA Term
PPA Offtaker
O&M Service
Provider
Asset Description
April 2018
15 years from COD
Duke Energy Progress, Inc.
CCR O&M
Hanover is located on a 45-acre leased site in
Maysville, North Carolina. The plant commenced
commercial operations in April 2018.
County Home Ground View – August 2018
County Home Ground View – August 2018
TID Aerial View – October 2017
Hanover Solar Power Plant (Hanover)
Hanover Ground View – April 2018
Hanover Ground View – April 2018
xxiv
N E W E N E R G Y S O L A R
Annual Report
Heedeh Solar Power Plant (Heedeh)
Heedeh Ground View – August 2018
Location
Generating Capacity 5.4MWDC / 4.5MWAC
Delco, North Carolina, USA
COD
PPA Term
PPA Offtaker
O&M Service
Provider
Asset Description
July 2018
15 years from COD
Duke Energy Progress, Inc.
CCR O&M
Heedeh is located on a 21-acre leased site in Delco,
North Carolina. The plant commenced commercial
operations in July 2018.
Location
Generating Capacity 7.5MWDC / 5.0 MWAC
Organ Church, North Carolina, USA
COD
PPA Term
PPA Offtaker
O&M Service
Provider
Asset Description
February 2019
15.0 years from COD
Duke Energy Carolinas
CCR O&M
Organ Church is located on a 45-acre leased site
located 15 kilometres northwest of Kannapolis,
North Carolina. The plant commenced commercial
operations in February 2019.
Heedeh Ground View – August 2018
Organ Church Solar Power Plant (Organ Church)
Organ Church Ground View – August 2018
Organ Church Ground View – August 2018
xxv
N E W E N E R G Y S O L A R
Annual Report
Pendleton Solar Power Plant (Pendleton)
Pendleton Ground View – October 2018
Location
Generating Capacity 8.4MWDC / 6.0 MWAC
Pendleton, Oregon, USA
COD
PPA Term
PPA Offtaker
O&M Service
Provider
Asset Description
September 2018
13.2 years from COD
PacifiCorp
CCR O&M
Pendleton is located on a 44-acre leased site
5 kilometres west of Pendleton, Oregon. The
plant commenced commercial operations in
September 2018.
Pendleton Ground View – October 2018
Mount Signal 2 Solar Power Plant (MS2)
MS2 Aerial View – December 2019
MS2 Aerial View – December 2019
xxvi
Location
Generating Capacity 199.6MWDC / 153.5MWAC
Imperial Valley, California, USA
COD
PPA Term
PPA Offtaker
O&M Service
Provider
Asset Description
December 2019
20 years from June 2020
Southern California Edison
First Solar
MS2 is located on a 1,314 acre leased site in the
Imperial Valley, California. The plant commenced
commercial operations in December 2019. MS2
sold electricity to the wholesale market until the
commencement of its 20-year PPA in June 2020.
NEW entered into a sale agreement with US
Solar Fund plc (USF) in December 2020 for 25%
of MS2, together with an option to purchase a
further 25% within 12 months of the close of
the first tranche. The first tranche closed on 29
March 2021 and USF exercised its option to
purchase the additional 25% of MS2 constituting
tranche two on 10 February 2022.
AUSTR ALIAN SOL AR POWER PL ANTS SOLD DURING 2021
On 7 June 2021 the Company announced its wholly owned subsidiary NESAH1 had entered a sale agreement with
Banpu Energy Holdings Pty Limited for the Manildra and Beryl solar power plants. The sale completed on 30 July 2021.
Manildra Solar Power Plant (Manildra)
Manildra Aerial View – July 2018
Manildra Ground View – July 2018
Beryl Solar Power Plant (Beryl)
Beryl Ground View – February 2019
Location
Generating Capacity 55.9MWDC / 46.7MWAC
Manildra, New South Wales, Australia
COD
PPA Term
PPA Offtaker
O&M Service
Provider
Asset Description
December 2018
10 years from COD, with an option to extend
to 2030
EnergyAustralia
First Solar
Manildra is located on a 120-hectare leased site 1.5
kilometres north-east of the Manildra town centre.
The plant achieved full commercial operations in
December 2018.
Location
Generating Capacity 110.9MWDC / 87MWAC
Beryl, New South Wales, Australia
COD
PPA Term
PPA Offtaker
O&M Service
Provider
Asset Description
June 2019
15 (Sydney Metro)17
c. 7.5 years with an option to extend to
December 2029 (Kellogg’s)18
Sydney Metro (69% of generation)
Kellogg’s (29% of generation)
First Solar
Beryl is located in Central West NSW,
approximately five kilometres west of Gulgong.
The plant achieved full commercial operations in
June 2019.
Beryl Aerial View – March 2019
17. The Sydney Metro PPA represents approximately 69% of Beryl’s generation during the 15-year term.
18. The Kellogg’s PPA represents approximately 29% of Beryl’s generation during the ~7.5-year initial term. Kellogg’s has an
option to extend the term for three years until 31 December 2029.
xxvii
NEW ENERGY SOLARAnnual Report N E W E N E R G Y S O L A R
Annual Report
INFORMATION ON THE INVESTMENT MANAGER
SENIOR MANAGEMENT TE AM
The senior members of the Investment Manager who are responsible for the management of New Energy Solar are
set out below.
Each of the members of the senior management team are employed by a member of the E&P Financial Group and
provide services for the benefit of the Business. Further information on the Investment Manager team is provided
at www.newenergysolar.com.au
LIAM THOMAS BAgribus (Curtin), MSc (Curtin), MBA (MELB)
CHIEF EXECUTIVE OFFICER
Liam was appointed Chief Executive Officer in August 2021 and assumed that role from 1
October 2021, following the resignation of John Martin.
Liam joined New Energy Solar in March 2016 to lead transaction origination and
execution activities. Liam has over 17 years’ experience in M&A, corporate and business
development, projects, and commercial management in the energy, infrastructure, mining
and agribusiness sectors.
Prior to joining NEW, Liam was a senior member of the International Development team at Origin Energy
focused on the investment and development strategy for utility scale solar, hydro, and geothermal projects
in Latin America and South-East Asia. Liam’s previous roles have included General Manager of Commercial
Development at Aurizon, Commercial Manager for the Northwest Infrastructure iron ore port joint venture,
and Project Manager at Orica, focusing on large-scale mining-related infrastructure and manufacturing projects.
Earlier in Liam’s career, he worked in the agricultural commodities sector with AWB Limited.
Liam has a Bachelor of Agribusiness and Master of Science from Curtin University, and a Master of Business
Administration from the University of Melbourne.
ADAM HAUGHTON BSc Materials Engineering (UMD) MBA (UT)
CHIEF INVESTMENT OFFICER
Adam joined the Investment Manager in July 2018, focusing on due diligence and
transaction execution for new fund investments.
Before joining the Investment Manager, Adam was a Vice President at Greentech Capital
Advisors, an investment bank focused on mergers and acquisitions and capital raising
transactions for companies within the sustainable infrastructure industry. Prior to
Greentech, Adam worked in Bank of America Merrill Lynch’s Global Industrials Investment
Banking group where he advised on a range of public and private mergers and acquisitions
and capital market transactions. Earlier in his career, Adam was a Development Engineer at SunEdison where he
was responsible for the development and design of utility-scale and commercial and industrial solar installations
in the U.S.
Adam has a Bachelor of Science in Materials Engineering from University of Maryland and Master of Business
Administration from University of Texas.
xxviii
N E W E N E R G Y S O L A R
Annual Report
WARWICK KENEALLY BEc (ANU), BCom (ANU), CA
CHIEF FINANCIAL OFFICER
Prior to joining New Energy Solar, Warwick was the interim CFO of the Investment
Manager’s parent, E&P Financial Group. Warwick has worked in chartered accounting
firms specialising in turnaround and restructuring. Warwick started his career with KPMG
working in their Canberra, Sydney and London offices – and has undertaken a range of
restructuring engagements across Europe, UK and Australia, for a range of Australian, UK,
European and US banks.
Warwick has worked with companies and lenders to develop and implement strategic
business options, provide advice in relation to continuous disclosure requirements, develop cash forecasting
training for national firms, and lectured on cash management.
Warwick has a Bachelor of Economics and Bachelor of Commerce from Australian National University and is a
Chartered Accountant.
SCOTT FRANCIS BS (Mechanical Engineering) (UR), MBA (UR)
HEAD OF ASSET MANAGEMENT
Scott joined the Investment Manager in July of 2021, focusing on Asset Management and
Operations across the portfolio of projects. Scott brings over 15 years of energy industry
experience and has managed over 1,000 MWs of solar and 2,500 MWs of wind projects.
Most recently, Scott was Director of Asset Management at Apex Clean Energy, a leading
developer and operator of US utility-scale solar and wind power, where Scott led the Asset
Management team.
Scott and his team provide comprehensive asset management in all aspects of projects including performance,
reporting, optimisation, revenue assurance (PPA and Merchant), insurance, and contractual performance
obligations. Prior roles have included various positions managing operations and business development for
Dominion Energy’s (Fortune 500 Utility) renewable assets.
xxix
NEW ENERGY SOLARAnnual Report Corporate Governance
Statement
TID aerial view –
September 2017
Stanford & TID site at sunset – September 2017
1
NEW ENERGY SOLARAnnual Report
Corporate Governance Statement
FOR THE YE AR ENDED 31 DECEMBER 2021
New Energy Solar Limited (the Company or NEW) is an Australian Securities Exchange (ASX) listed entity. Prior to
25 June 2021, NEW together with E&P Investments Limited as Responsible Entity of New Energy Solar Fund (the
Trust) (Responsible Entity) formed a stapled entity group whose securities were traded on the ASX. On 25 June
2021, securityholders approved the unstapling of NEW and the Trust and the winding up of the Trust. The winding
up of the Trust and its formal de-registration by ASIC was concluded on 14 February 2022. The Business has no
employees and its day-to-day functions and investment activities are managed by New Energy Solar Manager Pty
Limited (Investment Manager), in accordance with the investment management agreement.
The directors of NEW recognise the importance of good corporate governance.
NEW’s corporate governance charter (Corporate Governance Charter), which incorporates NEW’s policies
referred to below, is designed to ensure the effective management and operation of the Business and will remain
under regular review. The Corporate Governance Charter is available on NEW’s website newenergysolar.com.au.
A description of NEW’s adopted practices in respect of the eight Principles and Recommendations from the Fourth
Edition of the ASX Corporate Governance Principles and Recommendations (ASX Recommendations) is set out below.
All these practices, unless otherwise stated, were in place throughout the year and to the date of this report.
1. LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
BOARD ROLES AND RESPONSIBILITIES
The board of NEW (Board) is responsible for the overall operation, strategic direction, leadership and integrity
of the Business and, in particular, is responsible for NEW’s growth and success. In meeting its responsibilities, the
Board undertakes the following functions:
• Providing and implementing NEW’s strategic direction;
• Reviewing and overseeing the operation of systems of risk management to ensure that the significant risks
facing the Business are identified, that appropriate control, monitoring and reporting mechanisms are in place
and that risk is appropriately dealt with;
• Overseeing the integrity of the Business’ accounting and corporate reporting systems, including the external audit;
• Ensuring the Board is comprised of individuals who are best able to discharge the responsibilities of directors
having regard to the law and the best standards of governance;
• Reviewing and overseeing internal compliance and legal regulatory compliance;
• Ensuring compliance with NEW’s constitution and with the continuous disclosure requirements of the ASX
Listing Rules and the Corporations Act 2001 (Cth) (Corporations Act);
•
Overseeing NEW’s process for making timely and balanced disclosures of all material information concerning
the Business; and
• Communicating with and protecting the rights and interests of NEW’s shareholders.
2
NEW ENERGY SOLARAnnual Report The Board has established a formal policy which acts as a charter and sets out its functions and responsibilities
(Board Policy). The Board Policy is set out in section 3 of NEW’s Corporate Governance Charter. A review of the
Board Policy is conducted annually.
The responsibility for the operation and administration of NEW is delegated, by the Board, to the Investment
Manager as set out in the relevant investment management agreement. The Board ensures the Investment
Manager is appropriately qualified and experienced to discharge its responsibilities. The Investment Manager will be
responsible for implementing NEW’s strategic objectives and operating within the risk appetite as set out within the
Risk Appetite Statement which was approved by the Boards on 17 November 2021.
APPOINTMENT OF DIRECTORS
NEW has adopted a formal process to ensure that appropriate checks are undertaken before appointing a person
or putting forward to shareholders a candidate for election as a director. The Business has outsourced part of
this function to an external service provider, which specialises in completing background checks, to verify the
candidate’s experience, education, criminal record and bankruptcy history.
Upon proposing a candidate for election or re-election as a director, NEW provides shareholders with all the
relevant material information in its possession to allow shareholders to make an informed decision on whether or
not to elect or re-elect the candidate. The information will generally include:
• biographical details of the candidate, including their qualifications, experience and skills which may be relevant
to the Board of NEW; and
• details of any current or past directorships held by the candidate.
Each director of NEW receives a formal appointment letter outlining their terms of employment, responsibilities,
conditions and expectations of their engagement.
ROLE OF THE COMPANY SECRE TARY
The company secretary of NEW (Company Secretary) is directly accountable to the Board, through the
Chairperson of the Board on all matters to do with the proper functioning of the Board. This includes:
• advising the Board on governance matters;
• circulating to the Board all board papers in advance of any proposed meeting;
• ensuring that the business at board meetings is accurately captured in the minutes; and
•
facilitating the induction and professional development of directors.
DIVERSIT Y
NEW currently does not have any employees and therefore has adopted a diversity policy which is applicable only
to the Board. A copy of the policy setting out its objectives and reporting practices can be found on NEW’s website.
As required by the policy, at the commencement of each financial year, the Board is required to set measurable
objectives to allow it to achieve and maintain diversity on the Board. The measurable objective for gender diversity,
as agreed by the Board for FY2021, is set out below:
• At least one female director representation on the Board.
The outcome for the year, as reported by the Board, is set out below:
• As at 31 December 2021, there was one female and four male directors; and
• The Board was satisfied it had achieved its measurable objectives for FY2021.
3
NEW ENERGY SOLARAnnual Report 2. STRUCTURE THE BOARD TO ADD VALUE
BOARD COMPOSITION
NEW seeks to maintain a Board with a broad range of skills. NEW maintains a skills matrix (below) which lists the
skills that have been identified as the ideal attributes the Business seeks to achieve across its board membership:
• Financial
•
Industry Knowledge
• Leadership
• Understanding of Solar Infrastructure
• Funds Management
• Risk Based Auditing & Risk Management
• Capital Raising
• Legal
• Government and Regulation
• Marketing and Communications
•
Investor Relations
The composition of the Board is structured to maintain a mix of directors from different backgrounds with
complementary skills and experience. Details of each director at the date of this report are given in the Directors’
Report, including the period in office, skills, experience, and expertise relevant to the position of director.
The directors of NEW during the 2021 financial year and as at the date of this report are:
Jeffrey Whalan
Maxine McKew
James Davies
John Holland
John Martin
Independent, Non-Executive Chair
Independent, Non-Executive Director
Independent, Non-Executive Director
Independent, Non-Executive Director
Non-Independent, Non-Executive Director (from 1 October 2021)*
*Prior to 1 October 2021, John was an executive director. John remains as a non-independent director because he was an officer
of New Energy Solar Manager Pty Limited within three years of the date of this report. John resigned as an officer of New Energy
Solar Manager Pty Limited on 26 August 2021.
The company secretaries of NEW during the 2021 financial year and as at the date of this report are:
Hannah Chan
Caroline Purtell
The Board comprises four independent non-executive directors, Jeffrey Whalan, Maxine McKew, James Davies
and John Holland. An independent non-executive director is a non-executive director who is independent of the
Investment Manager and free of any business or other relationship that could materially interfere with, or could
reasonably be perceived to materially interfere with, the exercise of their judgement.
NEW is committed to diversity in the composition of its Board. The directors will continue to monitor the
composition of the Board.
NEW recognises the ASX Recommendations with respect to establishing remuneration and nomination committees
as good corporate governance. However, considering the size and structure of the Business, the functions that
would be performed by these committees are best undertaken by the Board.
4
NEW ENERGY SOLARAnnual Report
The Board will review its view on committees in line with the ASX Recommendations and in light of any changes
to the size or structure of the Business and, if required, may establish committees to assist them in carrying out
their functions. At that time the Board will adopt a charter for such committees in accordance with the ASX
Recommendations and industry best practice.
It is the Board’s policy to determine the terms and conditions relating to the appointment and retirement of non-
executive directors on a case-by-case basis and in conformity with the requirements of the ASX listing rules (Listing
Rules) and the Corporations Act. In accordance with the Corporate Governance Charter, directors are entitled to
seek independent advice at the expense of the Business. Written approval must be obtained from the Chair prior to
incurring any expense on behalf of NEW.
PERFORMANCE E VALUATION
The Board conducts a review of their collective performance and the performance of their directors annually. This
process includes consideration of feedback provided by directors via a questionnaire. The Board and individual
directors, including the chairperson, were evaluated during the year ending 31 December 2021 in accordance with
these processes.
INDUCTION AND ONGOING PROFESSIONAL DE VELOPMENT
On appointment, the directors are individually briefed by the Investment Manager. Directors are entitled to receive
appropriate professional development opportunities to develop and maintain the skills and knowledge needed to
perform their role as directors effectively. NEW’s induction program is structured to enable a new director to gain
an understanding of the Business’ investments, financial, strategic, operational and risk management position, and
their rights, duties and responsibilities.
The Company Secretary is responsible for facilitating the induction and ongoing development of all directors and,
where necessary, from time to time, will recommend relevant courses and industry seminars which may assist
directors in discharging their duties.
3. ACT ETHICALLY AND RESPONSIBLY
STATEMENT OF VALUES
The Board values sustainable management of the world’s natural resources for present and future generations. To
this end, NEW aims to both capitalise on and contribute to increasing awareness of the impact of climate change on
the world’s resources and specifically, invests to achieve attractive risk-adjusted returns for its investors in utility-
scale solar power plants, a key element in the global energy sector’s transition to a low carbon emissions system.
The Statement of Values is set out in section 2 of NEW’s Corporate Governance Charter.
CODE OF CONDUCT
The Board is committed to maintaining ethical standards in the conduct of its business activities. The Board’s
reputation as an ethical business organisation is important to its ongoing success and it expects all its officers to
be familiar with and have a personal commitment to meeting these standards. In this regard the directors have
adopted a code of conduct (Code of Conduct) to define basic principles of business conduct. The Code of Conduct
requires officers and employees to abide by the policies of the Business and the law. The Code of Conduct is a set
of principles giving direction and reflecting NEW’s approach to business conduct and is not a prescriptive list of
rules for business behaviour. The Code of Conduct covers ethical operations, compliance with laws, dealings with
customers and public officials, conflicts of interest, confidential and proprietary information and insider trading.
The Code of Conduct is set out in section 6 of NEW’s Corporate Governance Charter.
5
NEW ENERGY SOLARAnnual Report WHISTLEBLOWER POLICY
The Board has a Whistleblowing Policy which is available on NEW’s website.
ANTI-BRIBERY AND CORRUPTION POLICY
The Board has an Anti-Bribery and Fraud Policy which is available on NEW’s website.
SECURIT Y TR ADING POLICY
The Board has established a security trading policy (Security Trading Policy) to apply to trading in NEW’s shares on
the ASX. This policy outlines the permissible dealing of NEW’s shares while in possession of price sensitive information
and applies to all directors of NEW and the Investment Manager.
The Security Trading Policy imposes restrictions and notification requirements, including the imposition of blackout
periods, trading windows and the need to obtain pre-trade approval.
The Security Trading Policy is set out in section 7 of NEW’s Corporate Governance Charter.
INSIDER TR ADING POLICY
The Board has established an insider trading policy (Insider Trading Policy) to apply to trading in NEW’s shares.
This policy applies to all directors, executives and employees of NEW and the Investment Manager. All directors,
executives and employees of NEW and the Investment Manager must not deal in NEW shares while in possession
of price sensitive information. In addition, the Security Trading Policy sets out additional restrictions which apply to
directors and executives of NEW and the Investment Manager.
The Insider Trading Policy is set out in section 8 of NEW’s Corporate Governance Charter.
4. SAFEGUARD INTEGRIT Y IN CORPORATE REPORTING
NEW has established a joint Audit & Risk Committee. The members of the Audit & Risk Committee during the year were:
• James Davies (Independent Member) (Chairperson)
• Barry Sechos (Independent Member)
• Jeffrey Whalan (Independent Member)
• John Holland (Independent Member)
• Warwick Keneally (Internal Member retired 30 August 2021)
The chairperson of the Audit & Risk Committee is an independent non-executive director and is not the
chairperson of the Board. The Committee consists of three independent non-executive directors of NEW and one
independent advisor.
The primary function of the Audit & Risk Committee is to assist the Board in discharging its responsibility to
exercise due care, diligence and skill in relation to the following areas:
• Application of accounting policies to NEW’s financial reports and statements;
• Monitoring the integrity of the financial information provided to shareholders, regulators and the general public;
• Corporate conduct and business ethics, including auditor independence and ongoing compliance with laws
and regulations;
• Maintenance of an effective and efficient audit;
• Appointment, compensation and oversight of the external auditor, and ensuring that the external auditor meets
the required standards for auditor independence;
6
NEW ENERGY SOLARAnnual Report • Assess the adequacy of the Business’ process for managing risk;
• Regularly monitoring and reviewing corporate governance policies and codes of conduct.
The Audit & Risk Committee meets four times a year. The Audit & Risk Committee will report to the Board at a
minimum of two times a year.
A copy of the Audit & Risk Committee Charter is available on NEW’s website.
5. MAKING TIMELY AND BALANCED DISCLOSURE
The Board is committed to complying with its continuous disclosure obligations under the Corporations Act, as well
as releasing relevant information to the market and shareholders in a timely and direct manner to promote investor
confidence in NEW and its shares.
NEW has adopted a continuous disclosure policy (Continuous Disclosure Policy) to ensure it complies with its
continuous disclosure obligations under the Corporations Act and the Listing Rules.
The Continuous Disclosure Policy is set out in section 5 of NEW’s Corporate Governance Charter.
This policy is administered by the Board and the Investment Manager as follows:
•
•
the Board is involved in reviewing significant ASX announcements and ensuring and monitoring compliance with
this policy;
the Company Secretary is responsible for the overall administration of this policy and all communications with
the ASX; and
• senior management of the Investment Manager are responsible for reporting any material price sensitive
information to the Company Secretary and observing NEW’s no comments policy.
6. RESPECT THE RIGHTS OF SHAREHOLDERS
RIGHTS OF SHAREHOLDERS
NEW promotes effective communication with shareholders. The Board has developed a strategy within its
Continuous Disclosure Policy to ensure that shareholders are informed of all major developments affecting NEW’s
performance, governance, activities and state of affairs. This includes using a website to facilitate communication
with shareholders. Each shareholder is also provided online access to Link Market Services Limited (the Registry)
to allow them to receive communications from, and send communication to, NEW and the Registry. Information
is communicated through announcements published on NEW’s website, releases to the media and the dispatch of
financial reports. Shareholders are provided with an opportunity to access such reports and releases electronically.
Copies of all announcements are available on NEW’s website at newenergysolar.com.au.
These include:
• weekly Net Asset Value estimates;
• quarterly investment updates;
•
•
•
the half-year report;
the annual report;
the notice of annual general meeting, explanatory memorandum and the Chairperson’s address;
• announcements made to comply with NEW’s continuous disclosure requirements; and
• correspondence sent to shareholders on matters of significance to the Business.
7
NEW ENERGY SOLARAnnual Report N E W E N E R G Y S O L A R
Annual Report
The Board encourages full participation of shareholders at the general meetings to ensure a high level of
accountability and identification with NEW’s strategy. Shareholders who are unable to attend the general meeting
are given the opportunity to provide questions or comments in relation to the audit of the Business ahead of the
meeting and where appropriate, these questions are answered at the meeting. The external auditor is also invited
to attend the annual general meeting of NEW and is available to answer any questions concerning the conduct,
preparation and content of the auditor’s report.
7. RECOGNISE AND MANAGE RISK
The Board is responsible for identifying, assessing, monitoring and managing the significant areas of risk applicable
to NEW and its operations. The Board has established an Audit & Risk Committee to deal with these matters.
The Board monitors and appraises financial performance, including the approval of annual and half-year financial
reports and liaising with NEW’s auditors.
In order to evaluate and continually improve the effectiveness of its risk management and internal control
processes, the Board has adopted a Risk Management Framework (RMF). The Board conducts an annual review of
the RMF to satisfy itself that the framework continues to be sound.
The Board is responsible for maintaining proper financial records. In addition, the Board receives a letter half
yearly from NEW’s external auditor regarding their procedures and reporting that the financial records have
been properly maintained and the financial statements comply with the Australian accounting standards
(Accounting Standards).
NEW does not have a material exposure to environmental or social risks. The Board manages environmental and
social risks via a comprehensive risk management framework which consists of a Significant Risks document, a
Risk Appetite Statement and Risk Assessment Matrix which are regularly reviewed and updated. For further
information, please see the 2021 Sustainability Report which is available on NEW’s website.
The Board provides declarations required by Section 295A of the Corporations Act for all financial periods and
confirms that in its opinion the financial records of the Business have been properly maintained and that the
financial statements and accompanying notes comply with the Accounting Standards and give a true and fair
view of the financial position and performance of the Business. This opinion is based on the Board’s review of the
internal control systems, management of risk, the financial statements and the letter from NEW’s external auditor.
The Board does not release to the market any periodic corporate reports which are not audited or reviewed by an
external auditor.
8. REMUNERATE FAIRLY AND RESPONSIBLY
REMUNER ATION POLICIES
Due to the relatively small size of the Business and its operations, the Board does not consider it appropriate, at this
time, to form a separate committee to deal with the remuneration of the directors.
In accordance with NEW’s constitution, each director may be paid remuneration for ordinary services performed as
a director. Under the Listing Rules, the maximum fees payable to directors may not be increased without the prior
approval of shareholders at a general meeting of NEW. Directors will seek approval from time to time as deemed
appropriate. NEW does not intend to remunerate its directors through an equity-based remuneration scheme.
The maximum total remuneration of the directors of NEW has been set at $400,000 per annum to be divided among
them in such proportions as they agree. Total directors’ fees for the year ended 31 December 2021 were $220,817.
Details of NEW's related party transactions are set out in the notes to the financial statements in the Annual Report.
8
Directors’ Report
TID ground view – October 2017
TID overhead view
9
NEW ENERGY SOLARAnnual Report
Directors’ Report
FOR THE YE AR ENDED 31 DECEMBER 2021
The directors of New Energy Solar Limited (the Company or NEW) present their report together with the annual
financial report for the year ended 31 December 2021.
DIRECTORS
The directors of New Energy Solar Limited at any time during or since the end of the financial year are listed below:
Jeffrey Whalan
Non-Executive Chair
James Davies
John Holland
John Martin
Non-Executive Director
Non-Executive Director
Non-Independent, Non-Executive Director (from 1 October 2021)*
Maxine McKew
Non-Executive Director
*Prior to 1 October 2021, John was an executive director. John remains as a non-independent director because he was an officer
of New Energy Solar Manager Pty Limited within three years of the date of this report. John resigned as an officer of New Energy
Solar Manager Pty Limited on 26 August 2021.
Directors were in office from the start of the year to the date of this report, unless otherwise stated.
PRINCIPAL ACTIVITIES
The principal activities of NEW during the year were pursuing and investing in large-scale solar plants that generate
emissions-free power.
DIVIDENDS
Dividends paid during the financial year were as follows:
Interim dividend for the six-months ended 30 June 2021 of 3 cents
(30 June 2020: nil cents) per ordinary share
2021
$
10,722,552
10,722,552
2020
$
-
-
In the prior period, and prior to the de-stapling of the Company and the Trust, distributions of $10.6 million were
paid to securityholders by the Trust. Dividends paid or declared by the Company during, or since the end of the year
were as follows:
• Dividend of 3 cents per share for the six months ended 30 June 2021, paid on 26 August 2021 amounting to
$10,722,552.
• Dividend of 1 cent per share for the six months to 31 December 2021, announced on 11 February 2022, to be
paid on or around 6 April 2022.
10
NEW ENERGY SOLARAnnual Report
REVIEW OF OPERATIONS
Please refer to the Investment Manager's Report for the details relating to the operations during the financial year.
The full-year to 31 December 2021 loss is driven by the fair value loss of financial assets. This is mainly driven
by a decrease in net asset value of NESAH1, reflecting the announced sale price for the Manildra power plant
and transaction fees and costs arising from asset sales and associated with delivery of strategic initiatives for
investors during the year. On a like-for-like basis, the US portfolio benefitted from an uplift in value arising from
improvements in discount rates as assets reached stable operating performance, and extensions to asset life
assumptions where rights to occupy the land allowed extensions to be considered. This improvement was offset
by a $32 million decrease to the net asset value of NES US Corp, caused by the negative impact on investment fair
values from the latest merchant curve assumptions prepared by independent forecasters. This decrease is partially
offset by the positive impact on investment fair value movements from an unrealised foreign exchange translation
gain of $22.2 million.
At 31 December 2021, NEW's net assets are $368.7 million (31 December 2020: $376.8 million) representing
a net asset value per share of $1.15. At 31 December 2020, on a combined basis, the Company and the Trust
reported a net asset value per stapled security of $1.25.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in the nature of the principal activities during the year.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
NEW will continue to undertake their activities described in this report. The Report to Shareholders which forms
part of this financial report includes details of the outlook for solar markets in which NEW invests. Further details
are included in the Report to the Shareholders and the Investment Manager's Report which forms part of the
financial report.
NEW intends to further consider the recommendations of the 2020 Strategic Review, which includes the sale of its
remaining United States solar assets, to maximise shareholder value.
ENVIRONMENTAL REGULATION
NEW is not subject to any significant environmental regulation under Australian Commonwealth or State law.
11
NEW ENERGY SOLARAnnual Report INFORMATION ON DIRECTORS
JEFFREY WHALAN AO, BA (UNSW), FAICD, FAIM
NON-EXECUTIVE CHAIR
Jeffrey is an Independent Director of New Energy Solar Limited. He is Managing Director
of the Jeff Whalan Learning Group, a specialist human resources company. He was a
senior executive officer in the Australian Public Service from 1990 to 2008.
Jeffrey was appointed an Officer in the Order of Australia in 2008 for his work as chief
executive officer of Centrelink.
Among other things, the award recognised his achievements in ‘the development of
corporate accountability processes’.
Jeffrey is a Fellow of the Australian Institute of Company Directors. As CEO of Centrelink,
Jeffrey was responsible for the largest agency of the Australian Public Service, $70
billion of government outlays and 27,000 staff. Prior to joining Centrelink, he was chief
executive officer of Medicare Australia. Jeffrey has held Deputy Secretary positions in the
Departments of Prime Minister and Cabinet, Defence and the then Department of Family
and Community Services. He has also held senior executive positions in the Transport and
Health departments.
Other current directorships: None
Former directorships (last three years): Australian Governance Masters Index Fund
Limited (since 2010, delisted on 16 July 2018)
Special responsibilities: Member of the Audit and Risk Committee
Interests in shares: 541,552 ordinary shares
Interests in options: None
Interests in rights: None
Contractual rights to shares: None
12
NEW ENERGY SOLARAnnual Report
JAMES DAVIES BCS (UNE), MBA (LBS)
NON-EXECUTIVE DIRECTOR
James has over 30 years of experience in investment management across real estate,
private equity, infrastructure, natural resources and special situations. Most recently he
was Head of Funds Management at New Forests Asset Management, overseeing $2.5
billion worth of investments in broad acre real estate, forestry assets and environmental
markets. Prior to that he held Director roles at Hastings Funds Management Limited and
Royal Bank of Scotland’s Strategic Investments Group. He has sat on numerous Investment
Committees and Boards including as Chairman of Timberlink Australia and Forico. During
the past three years James has acted as a director of the Australian listed public entity of
Eildon Capital Limited (since 2016) and Kiland Limited (since 2021).
James holds a Bachelor of Computer Science from the University of New England, a
Masters of Business Administration from London Business School and is a Graduate of the
Australian Institute of Company Directors.
Other current directorships: Eildon Capital Limited (since 2016)
Former directorships (last three years): None
Special responsibilities: Chair of the Audit and Risk Committee
Interests in shares: 43,016 ordinary shares
Interests in options: None
Interests in rights: None
Contractual rights to shares: None
13
NEW ENERGY SOLARAnnual Report JOHN HOLLAND MA (Hons) (Oxford)
NON-EXECUTIVE DIRECTOR
John holds a portfolio of complementary non-executive board roles. In particular, he
chairs Virtu ITG UK, a brokerage business which is part of the Virtu Financial group, and
Open Door Capital Management (a Greater China Asset Management company), as well
as acting as Non-Executive Director of sQuidcard Limited (a UK and African Payments
business in the Education and Aid Sectors).
Prior to his current roles, John was Managing Director and Member of UBS Investment
Bank Board. Over the course of his 24-year career at UBS and its predecessor banks, John
helped to build and then led UBS’ leading Asian Equities and banking business based in
Hong Kong, before returning to London to assume various senior management roles in the
Global Equities business.
Throughout his career, John has had significant experience working with a wide range of
Financial Regulators, including a three-year stint as a member of the European Securities
Markets Experts Group advising the European Commission on new regulation.
John holds a Master of Arts (Hon) from Oriel College, Oxford University, majoring in
Philosophy, Politics and Economics.
Other current directorships: None
Former directorships (last three years): Asian Masters Fund Limited (since 2010,
delisted on 17 May 2018)
Special responsibilities: Member of the Audit and Risk Committee
Interests in shares: 256,754 ordinary shares
Interests in options: None
Interests in rights: None
Contractual rights to shares: None
14
NEW ENERGY SOLARAnnual Report JOHN MARTIN BEcon (Hons) (USYD)
NON-EXECUTIVE DIRECTOR
John is currently the Chief Executive Officer (CEO) of Windlab Pty Limited, a global
renewable energy development company, and brings a wealth of experience and capability
to the Board after more than two decades of experience in corporate advisory and
investment banking with a focus on the infrastructure, energy and utility sectors.
John resigned as the CEO of the Company on 30 September 2021, after being appointed
to that role in May 2016, but retained his role with the Board. John previously led the
Infrastructure and Utilities business at corporate advisory firm Aquasia where he advised
on more than $10 billion of infrastructure and utility M&A and financing transactions.
Prior to this John held various investment bank management positions including the Head
of National Australia Bank Advisory and the Joint Head of Credit Markets and Head of
Structured Finance at RBS/ABN AMRO.
During his time at ABN AMRO, John managed the Infrastructure Capital business which
was viewed as a market leader in the development and financing of infrastructure and
utility projects in Australia. John started his career as an economist with the Reserve
Bank of Australia and then worked in various treasury and risk management positions,
before moving to PwC as the partner responsible for financial risk management. At PwC
John advised some of Australia’s largest corporations on the management and valuation
of currency, interest rate and commodity exposures – with a focus on advising energy
companies trading in the Australian National Electricity Market.
John has a Bachelor of Economics (Honours) from the University of Sydney. John is a past
board member of Infrastructure Partnerships Australia.
Other current directorships: None
Former directorships (last three years): None
Special responsibilities: None
Interests in shares: 657,479 ordinary shares
Interests in options: None
Interests in rights: None
Contractual rights to shares: None
15
NEW ENERGY SOLARAnnual Report MAXINE MCKEW MAICD
NON-EXECUTIVE DIRECTOR
Maxine is an author and Honorary Enterprise Professor of the Melbourne Graduate
School of Education at the University of Melbourne. Her most recent book, published
by Melbourne University Press in 2014, is Class Act, a study of the key challenges in
Australian schooling. This publication followed the success of her memoir, Tales From the
Political Trenches, an account of her brief but tumultuous time in the Federal Parliament.
Maxine’s background traverses both journalism and politics. For many years she was a
familiar face to ABC TV viewers and was anchor of prestigious programs such as the 7.30
Report and Lateline. Her work has been recognised by her peers with both Walkley and
Logie awards.
When she left journalism to enter politics, Maxine wrote herself into the Australian
history books by defeating Prime Minister John Howard in the Sydney seat of Bennelong.
In government she was both parliamentary secretary for early childhood and later, for
regional development and local government.
Maxine serves as director of the State Library of Victoria and has served on the
boards of numerous not for profits, including Per Capita John Cain Foundation and
Playgroup Australia.
Other current directorships: None
Former directorships (last three years): None
Special responsibilities: None
Interests in shares: 66,666 ordinary shares
Interests in options: None
Interests in rights: None
Contractual rights to shares: None
Other current directorships' quoted above are current directorships for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
'Former directorships (last three years)' quoted above are directorships held in the last three years for listed entities
only and excludes directorships of all other types of entities, unless otherwise stated.
16
NEW ENERGY SOLARAnnual Report INFORMATION ON THE COMPANY SECRETARIES
HANNAH CHAN BCom, MCom, CA
Hannah has a Bachelor of Commerce degree in Finance from the University of NSW and a Master of Commerce
degree in Accounting from the University of Sydney. She is also a Chartered Accountant with the Institute of
Chartered Accountants in Australia and New Zealand and an affiliated member of the Governance Institute of
Australia. Prior to joining E&P Funds, Hannah gained extensive audit experience while working with Deloitte
Touche Tohmatsu and Ernst & Young.
Hannah is also the joint Company Secretary of E&P Investments Limited and a director of Australian Fund
Accounting Services Pty Limited.
Hannah was appointed as Company Secretary on 19 November 2015.
CAROLINE PURTELL BA, LLB, LLM
Caroline provides corporate governance and corporate secretariat services to the management, boards of directors
and committees for a portfolio of entities within the E&P Funds. Prior to joining E&P Funds, Caroline has worked in
top tier legal firms including King & Wood Mallesons, Sydney and Clifford Chance, London specialising in banking,
finance and corporate law.
Caroline has a Bachelor of Arts, Bachelor of Laws and Master of Laws (Honours) all from Sydney University. She is
also qualified to practice as a solicitor in both NSW and England. Caroline is a Fellow of the Governance Institute
of Australia.
Caroline was appointed as Company Secretary on 20 November 2018.
DIRECTORS’ MEETINGS
The number of meetings of NEW's Board held during the year ended 31 December 2021, and the number of
meetings attended by each director were:
Jeffrey Whalan
John Holland
Maxine McKew
James Davies
John Martin
FULL BOARD
ATTENDED
ELIGIBLE*
AUDIT & RISK
COMMITTEE
ATTENDED
ELIGIBLE
14
14
13
14
13
14
14
14
14
14
4
4
-
4
-
4
4
-
4
-
* Eligible: represents the number of meetings held during the time the director/member held office.
17
NEW ENERGY SOLARAnnual Report REMUNERATION REPORT (AUDITED)
The remuneration report details the key management personnel remuneration arrangements for the Company, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and
controlling the activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
• Principles used to determine the nature and amount of remuneration
•
Details of remuneration
• Service agreements
• Share-based compensation
• Additional disclosures relating to key management personnel.
PRINCIPLES USED TO DE TERMINE THE NATURE AND AMOUNT OF
REMUNER ATION
Under ASX Listing Rules, the maximum fees payable to directors may not be increased without the prior
approval from NEW in general meeting. Directors will seek approval from time to time as deemed appropriate.
Under NEW’s constitution, each director may be paid remuneration for ordinary services performed as a
director. However, John Martin, who acted as the CEO of NEW until 30 September 2021, had agreed not to
be paid any remuneration for the services he performed as a director. John Martin who acts as CEO of NEW is
remunerated by the Investment Manager (or related entities of the Investment Manager) up to 26 August 2021.
Investment Management fees are set out in note 16 to the financial statements.
The independent and non-independent directors, John Holland, James Davies, Maxine McKew and John Martin
(commenced 1 October 2021) each are entitled to receive $50,000 per annum respectively. As an independent
chairperson, Jeffrey Whalan is entitled to receive $75,000 per annum. These fees exclude any additional fee for
any service-based agreement which may be agreed upon from time to time and also excludes reimbursement of
out-of-pocket expenses. These fees are inclusive of statutory superannuation, where appropriate.
In addition to the above, as members of the Audit and Risk Committee, John Holland and Jeffrey Whalan each
are entitled to receive $10,000 per annum, and as chairperson, James Davies is entitled to receive $15,000
per annum.
DE TAILS OF REMUNER ATION
Amounts of remuneration
Details of the remuneration of key management personnel of NEW are set out in the following tables.
The key management personnel of NEW consisted of the following directors of NEW:
• Jeffrey Whalan
• James Davis
• John Holland
• John Martin
• Maxine McKew
18
NEW ENERGY SOLARAnnual Report DIRECTOR
FEES
SUPERANNUATION
CONTRIBUTIONS
CASH
BONUS
2021
$
$
Non-Executive Directors
Jeffrey Whalan
John Holland
Maxine McKew
James Davies
John Martin
68,337
50,000
45,558
45,558
11,364
6,663
-
4,442
4,442
1,136
220,817
16,683
$
–
–
–
–
–
–
DIRECTOR
FEES
SUPERANNUATION
CONTRIBUTIONS
CASH
BONUS
2020
$
$
Non-Executive Directors
Jeffrey Whalan
John Holland
Maxine McKew
James Davies
51,370
50,000
34,247
45,662
181,279
4,880
–
3,253
4,338
12,471
$
–
–
–
–
–
AUDIT
AND RISK
COMMITTEE(i)
$
10,000
10,000
-
OTHER(i)
TOTAL
$
-
-
-
$
85,000
60,000
50,000
15,000
18,000
83,000
-
-
12,500
35,000
17,820
290,500
AUDIT
AND RISK
COMMITTEE(i)
$
7,500
10,000
–
OTHER(i)
TOTAL
$
–
–
–
$
63,750
60,000
37,500
15,000
18,000
83,000
32,500
18,000
244,250
(i) Audit and risk committee fees and other service fees are subject to GST. Other fees paid to James Davies relate to his
consulting services provided to NEW.
SERVICE AGREEMENTS
NEW does not presently have formal service agreements or employment contracts with any key management
personnel. The Directors remuneration is not linked to the performance of NEW.
SHARE-BA SED COMPENSATION
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the
year ended 31 December 2021.
Options
There were no options over ordinary shares issued to directors and other key management personnel as part of
compensation that were outstanding as at 31 December 2021.
There were no options over ordinary shares granted to or vested by directors and other key management personnel
as part of compensation during the year ended 31 December 2021.
19
NEW ENERGY SOLARAnnual Report ADDITIONAL DISCLOSURES REL ATING TO KE Y MANAGEMENT PERSONNEL
Shareholding
The number of shares in NEW held during the financial year by each director and other members of key
management personnel of the Company, including their personally related parties, is set out below:
BALANCE AT
THE START OF
THE YEAR
RECEIVED
AS PART OF
REMUNERATION
ADDITIONS
DISPOSALS/
OTHER
BALANCE AT
THE END OF
THE YEAR
Ordinary shares
Jeffrey Whalan
James Davies
John Holland
John Martin
Maxine McKew
$
541,552
41,549
248,003
635,230
66,666
1,533,000
$
-
-
-
-
-
-
$
-
1,467
8,751
22,249
-
32,467
$
-
-
-
-
-
-
$
541,552
43,016
256,754
657,479
66,666
1,565,467
This concludes the remuneration report, which has been audited.
INDEMNIT Y AND INSURANCE OF OFFICERS
NEW has agreed to provide access to board papers and minutes to current and former directors of NEW while
they are directors and for a period of seven years after they cease to be directors.
NEW has agreed to indemnify, to the extent permitted by the Corporations Act 2001, each officer in respect
of certain liabilities, which the director may incur as a result of, or by reason of (whether solely or in part), being
or acting as a Director of NEW. NEW has also agreed to maintain in favour of each director a director's and
officers' policy of insurance for the period that he or she is a director and for a period of seven years after the
officer ceases to be a director.
INDEMNIT Y AND INSURANCE OF AUDITOR
NEW has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, NEW has not paid a premium in respect of a contract to insure the auditor of the
Company or any related entity.
SHARES UNDER OPTION
There were no unissued ordinary shares of NEW under option outstanding at the date of this report.
SHARES ISSUED ON THE EXERCISE OF OPTIONS
There were no ordinary shares of NEW issued on the exercise of options during the year ended 31 December
2021 and up to the date of this report.
20
NEW ENERGY SOLARAnnual Report PROCEEDINGS ON BEHALF OF NEW
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings
on behalf of NEW, or to intervene in any proceedings to which NEW is a party for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
On 11 February, the Board announced an unfranked dividend of 1 cent per share for the six-months ended
31 December 2021, payable on or around 6 April 2022.
On 10 February 2022, US Solar Fund plc announced its intention to exercise its option over a second 25%
tranche of Mt Signal 2. Pursuant to the agreement signed in December 2020, the acquisition price for the
second tranche was US$21 million, with financial close anticipated in April 2022. The investment value of MS2
at 31 December 2021 shown in the balance sheet reflects the fair market value of NEW’s 75% interest in the
solar power plant on a discounted cash flow basis at that time, unadjusted for option value.
On 11 February 2022, the Board advised that following its Strategic Review announced in October 2020
and the implementation of measures recommended by the review to reduce the share price discount to
net asset value of the Company, it had assessed the impact of the first phase of the Strategic Review. The
Board recognised that the first phase had succeeded in reducing gearing and returning some value to NEW
shareholders. However, as the NEW share price has continued to trade at a significant discount to net asset
value, the Board and its adviser RBC Capital Markets are revisiting the recommendations of the Strategic
Review with the objective of maximising shareholder value. These recommendations include the sale of NEW’s
remaining United States solar assets either in whole-of-portfolio or individual asset transactions.
Other than the matter noted above, no matter or circumstance has arisen since 31 December 2021 that has
significantly affected, or may significantly affect NEW's operations, the results of those operations, or NEW's
state of affairs in future financial years.
NON-AUDIT SERVICES
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year
by the auditor are outlined in note 18 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or
by another person or firm on the auditor's behalf), is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 18 to the financial statements do
not compromise the external auditor's independence requirements of the Corporations Act 2001 for the
following reasons:
• all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board,
including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for
NEW, acting as advocate for NEW or jointly sharing economic risks and rewards.
21
NEW ENERGY SOLARAnnual Report OFFICERS OF NEW WHO ARE FORMER PARTNERS OF DELOITTE
TOUCHE TOHMATSU
There are no officers of NEW who are former partners of Deloitte Touche Tohmatsu.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001
is set out immediately after this directors' report.
Deloitte Touche Tohmatsu continues in office in accordance with section 327 of the Corporations Act 2001 .
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
On behalf of the directors
JEFFREY WHALAN
Chair of NEW
25 February 2022
22
NEW ENERGY SOLARAnnual Report Auditor’s Independence
Declaration
Stanford at sunset
– September 2017
TID ground view – September 2017
23
N E W E N E R G Y S O L A R
Annual Report
Auditor’s Independence Declaration
FOR THE YE AR ENDED 31 DECEMBER 2021
24
Financial Statements
TID PV module closeup –
September 2017
TID ground view – September 2017
25
Statement of Profit or Loss
and Other Comprehensive Income
Statement of Financial Position
FOR THE YE AR ENDED 31 DECEMBER 2021
A S AT 31 DECEMBER 2021
Net income
Fair value loss of financial assets at fair value through profit or loss
Foreign exchange gain/(loss)
Finance income
Other income
Dividend income
MSA fee income
Total net loss
Expenses
Finance expenses
Investment management fees
Accounting and audit fees
Legal and advisory expenses
Director fees
Marketing expenses
Listing and registry expenses
Other operating expenses
Disposal fee and costs
Total expenses
Notes
2021
$
2020
$
8
4
8
8
(21,311,539)
(61,599,384)
152,717
(147,604)
7,741
4,587
10,722,552
6,000,000
9,834
-
-
-
(4,423,942)
(61,737,154)
(2,664)
(1,215,256)
17
(1,322,670)
(1,501,384)
(442,568)
(353,420)
(1,264,112)
(1,073,075)
(306,041)
(241,864)
(29,320)
(370,041)
(154,855)
(16,196)
(107,621)
(261,133)
17
(7,495,182)
-
(11,387,453)
(4,769,949)
Loss before income tax (expense)/benefit
(15,811,395)
(66,507,103)
Income tax (expense)/benefit
5
(4,363,088)
1,449,138
Loss after income tax (expense)/benefit for the year
(20,174,483)
(65,057,965)
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
Basic earnings per share
Diluted earnings per share
–
–
(20,174,483)
(65,057,965)
Cents
(5.76)
(5.76)
Cents
(18.43)
(18.43)
23
23
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
26
NEW ENERGY SOLARAnnual Report
Statement of Financial Position
A S AT 31 DECEMBER 2021
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Financial assets held at fair value through profit or loss
Deferred tax assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Current tax payable
Total current liabilities
Total liabilities
Net assets
EQUITY
Issued capital
Accumulated losses
Total equity
Notes
2021
$
2020
$
6
7
8
5
5,987,334
2,329,798
11,155,947
141,353
17,143,281
2,471,151
362,126,159
377,369,006
-
4,384,056
362,126,159
381,753,062
379,269,440
384,224,213
9
10,576,017
7,369,408
-
10,576,017
10,576,017
68,459
7,437,867
7,437,867
368,693,423
376,786,346
10
447,284,628
424,480,516
(78,591,205)
(47,694,170)
368,693,423
376,786,346
The above statement of financial position should be read in conjunction with the accompanying notes.
27
NEW ENERGY SOLARAnnual Report Statement of Changes in Equity
FOR THE YE AR ENDED 31 DECEMBER 2021
Statement Of Cash Flows
FOR THE YE AR ENDED 31 DECEMBER 2021
2020
RETAINED
EARNINGS/
(ACCUMULATED
LOSSES)
$
ISSUED
CAPITAL
$
TOTAL
EQUITY
$
Balance at 1 January 2020
339,372,774
17,363,795
356,736,569
Loss after income tax benefit for the year
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
Transactions with owners in their capacity as owners:
Issue of shares
Capital reallocation
–
–
–
(65,057,965)
(65,057,965)
–
–
(65,057,965)
(65,057,965)
3,380,500
81,727,242
–
–
3,380,500
81,727,242
Balance at 31 December 2020
424,480,516
(47,694,170)
376,786,346
2021
ISSUED
CAPITAL
ACCUMULATED
LOSSES
$
$
TOTAL
EQUITY
$
Balance at 1 January 2021
424,480,516
(47,694,170)
376,786,346
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
Transactions with owners in their capacity as owners:
Issue of shares
Capital reallocation (note 10)
Share buybacks (note 10)
Issue and share buyback costs (net of tax) (note 10)
Dividends paid (note 11)
Balance at 31 December 2021
–
–
–
(20,174,483)
(20,174,483)
–
–
(20,174,483)
(20,174,483)
1,588,331
54,741,257
(33,419,462)
(106,014)
-
-
-
-
1,588,331
54,741,257
(33,419,462)
(106,014)
-
(10,722,552)
(10,722,552)
447,284,628
(78,591,205)
368,693,423
The above statement of changes in equity should be read in conjunction with the accompanying notes.
28
NEW ENERGY SOLARAnnual Report Statement Of Cash Flows
FOR THE YE AR ENDED 31 DECEMBER 2021
Cash flows from operating activities
Interest income received
Payments to suppliers
Income tax (paid)/refund
Dividend income received
Notes
2021
$
2020
$
7,741
9,834
(4,317,981)
(3,429,755)
-
4,587
13,746
-
Net cash used in operating activities
21
(4,305,653)
(3,406,175)
Cash flows from investing activities
Payments for/(capital returned) for investments
Repayments from related parties
Disposal fee and costs
Net cash from/(used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payments for share buy-backs
Share issue transaction costs
(6,082,609)
(4,062,547)
64,594,536
1,248,164
(7,495,182)
-
51,016,745
(2,814,383)
10
1,588,331
3,380,500
(33,419,462)
(153,507)
-
-
Payments of transaction costs relating to loans
-
(147,260)
Dividends paid
11
(10,722,552)
-
(Repayment)/proceeds of loans from New Energy Solar Fund to New
Energy Solar Limited
Net cash from/(used in) financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the financial year
6
(499,084)
(43,206,274)
5,460,178
8,693,418
3,504,818
2,472,860
2,329,798
152,718
5,987,334
4,542
(147,604)
2,329,798
The above condensed statement of cash flows should be read in conjunction with the accompanying notes.
29
NEW ENERGY SOLARAnnual Report Notes to the Financial Statements
FOR THE YE AR ENDED 31 DECEMBER 2021
Notes to the Financial
Statements
NC-31 Blocks 9 and 12 –
February 2017
30
Stanford at sunset – September 2017
Notes to the Financial Statements
FOR THE YE AR ENDED 31 DECEMBER 2021
1. GENERAL INFORMATION
The financial statements cover New Energy Solar Limited (NEW or the Company). The financial statements are
presented in Australian dollars, which is NEW's functional and presentation currency.
NEW a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and
principal place of business are Level 15, 100 Pacific Highway, North Sydney NSW 2060.
A description of the nature of the consolidated entity's operations and its principal activities are included in the
directors' report, which is not part of the financial statements.
Following the de-stapling of the Company from New Energy Solar Fund (NESF or the Trust), which was approved
by shareholders on 26 June 2021, and the subsequent winding up of NESF and formal de-registration by
the Australian Securities and Investments Commission on 14 February 2022, these financial statements and
accompanying notes reflect the operating performance, financial position and cash flows, and the principal
accounting policies and accompanying notes as they relate to the corporate entity New Energy Solar Limited only.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 25 February
2022. The directors have the power to amend and reissue the financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
NE W OR AMENDED ACCOUNTING STANDARDS AND INTERPRE TATIONS
ADOPTED
NEW has adopted all of the new or revised Accounting Standards and Interpretations issued by the AASB
that are relevant to their operations and effective for an accounting period that begins on or after 1 January
2021. Their adoption has not had any material impact on the disclosures or on the amounts reported in these
financial statements.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted.
At the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue
but not yet effective. The potential impact of the new or revised Standards and Interpretations which will be applied
in the financial year ending 31 December 2021 are not expected to be material. The potential impact of the new or
revised Standards and Interpretations that will be effective for years ending on or after 31 December 2022 have
not yet been determined.
31
NEW ENERGY SOLARAnnual Report STANDARD / INTERPRETATION
AASB 2014-10 Amendments to Australian Accounting
Standards – Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture, AASB 2015-
10 Amendments to Australian Accounting Standards
– Effective Date of Amendments to AASB 10 and AASB
128 and AASB 2017-5 Amendments to Australian
Accounting Standards – Effective Date of Amendments
to AASB 10 and AASB 128 and Editorial Corrections
AASB 2020-1 Amendments to Australian Accounting
Standards – Classification of Liabilities as Current
or Non-Current and AASB 2020-6 Amendments to
Australian Accounting Standards – Classification of
Liabilities as Current or Non-current – Deferral of
Effective Date
AASB 2020-3 Amendments to Australian Accounting
Standards – Annual Improvements 2018-2020 and
Other Amendments
AASB 2020-8 Amendments to Australian Accounting
Standards – Interest Rate Benchmark Reform – Phase 2
BA SIS OF PREPAR ATION
EFFECTIVE FOR ANNUAL
REPORTING PERIODS
BEGINNING ON OR AFTER
EXPECTED TO BE INITIALLY
APPLIED IN THE FINANCIAL
YEAR ENDING
1 January 2022
31 December 2022
(Editorial corrections in
AASB 2017-5 applied from
1 January 2018)
1 January 2022
31 December 2022
1 January 2022
31 December 2022
1 June 2021
31 December 2022
These general-purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the AASB and the Corporations Act 2001, as appropriate for for-profit
oriented entities. These financial statements also comply with International Financial Reporting Standards as issued
by the International Accounting Standards Board (IASB).
The financial statements have been prepared on an accrual basis and are based on historical cost with the exception
of financial assets held at fair value through profit or loss, which are measured at fair value. All amounts are
presented in Australian dollars unless otherwise noted.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying NEW's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 3.
32
NEW ENERGY SOLARAnnual Report RE VENUE AND E XPENSES
NEW is indirectly investing in utility scale solar power plants that generate emissions free power via its wholly owned
US subsidiary, New Energy Solar US Corp.
Critical accounting estimates The preparation of the financial statements requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying NEW's
accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the financial statements, are disclosed in note 3. Revenue and Expenses NEW is indirectly
investing in utility scale solar power plants that generate emissions free power via its wholly owned US subsidiary,
New Energy Solar US Corp. New Energy Solar US Corp is funded by equity from NEW, both of which is denominated
in US dollars.
As NEW is considered to meet the definition of an ‘investment entity’ for accounting purposes (refer to the Basis for
non-consolidation note below), New Energy Solar US Corp is not consolidated in NEW’s financial statements, rather
it is required to be held at fair value in the financial statements.
The impact of this on the financial statements is that the main operating revenues of NEW consist of dividends or
returns of capital from New Energy Solar US Corp and the fair value movements in the value of NEW’s investment in
New Energy Solar US Corp. NEW is also entitled to a Management Service Agreement (MSA) fee for the provision of
management services to its wholly owned holding company New Energy Solar Holdco # 1 Pty Limited. Net operating
income from underlying solar assets held in the US and all underlying subsidiary expenses are reflected through the
movement in the fair value of investments in the profit or loss statement.
The underlying cash flows of solar power plants, being revenues from the sale of electricity and renewable energy
certificates less expenses, are distributed on a periodic basis from underlying projects through to New Energy Solar
US Corp and underpin the ability to pay dividends and returns of capital to NEW as noted above.
Additionally, as NEW’s equity investment in New Energy Solar US Corp is denominated in US dollars, and NEW
does not currently intend to hedge its exposure to foreign currencies, NEW is also exposed to valuation movements
associated with changes in the US dollar/Australian dollar exchange rate.
OPER ATING SEGMENTS
NEW currently operates in a single operating segment, being in the business of investing in solar asset plants.
Following the sale of NEW's Australian solar power assets during the year, presently NEW’s solar assets plants are
all located in the United States of America.
FOREIGN CURRENCY TR ANSL ATION
The functional and presentation currency of NEW is Australian dollars.
Transactions in foreign currencies are initially recorded in Australian dollars by applying the exchange rates at the
date of the transaction. Monetary assets and liabilities denominated in foreign currencies that are outstanding
at the reporting date are retranslated at the rate of exchange at the Statement of Financial Position date.
Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates
prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not translated.
33
NEW ENERGY SOLARAnnual Report BA SIS FOR NON- CONSOLIDATION
NEW is considered to meet the definition of an ‘Investment Entity’ as described in AASB 10 ‘Consolidated Financial
Statements’ (AASB 10) (refer below). Under AASB 10 an Investment Entity is required to hold its subsidiaries at fair
value through the profit and loss rather than consolidate them.
Subsidiaries are entities over which control is exercised. Control exists when the entity is exposed to, or has rights
to, variable returns from its involvement with the entity and has the ability to affect those returns through its power
over the entity.
As noted above because NEW is considered to be an investment entity, its financial statements reflect its financial
assets, including loan receivables and its investment in direct and indirect subsidiaries, at fair value.
Investment Entity Classification
NEW satisfies the three tests of an Investment Entity described in AASB 10 in consideration of the following factors:
• NEW has multiple investors, having obtained funds from a diverse group of shareholders that would not
otherwise have access individually to invest in renewable power generation assets;
• The business purpose of NEW is to invest funds for investment income and potential capital growth. The
intended underlying assets, including those held directly or indirectly, will have limited operational lives and
therefore minimal residual value and so will not be expected to be held indefinitely; and
• NEW measures and evaluates performance of their existing and intended future underlying investments on a
fair value basis which is most relevant for its shareholders.
The Board has also assessed that NEW meets the typical characteristics of an Investment Entity described in AASB
10 in that:
•
It is a separate legal entity;
• Ownership interests in the entity are held by a wide pool of investors who are not related parties; and
• Directly through its subsidiaries, it holds a portfolio of investments.
RE VENUE RECOGNITION
Dividend and distribution income
Dividend and distribution income are recognised on the date that NEW's right to receive the dividend/distribution
is established.
Interest income
Interest income is recognised as interest accrues using the effective interest method. This is a method of calculating
the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective
interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to the net carrying amount of the financial asset.
34
NEW ENERGY SOLARAnnual Report INCOME TA X
Under current Australian income tax laws, NEW is liable to pay income tax at the prevailing corporate tax rate,
currently 30%.
Deferred tax is accounted for using the balance sheet liability method. Temporary differences are differences
between the tax base of an asset or liability and its carrying amount in the statement of financial position. The tax
base of an asset or liability is the amount attributed to that asset or liability for tax purposes.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are
recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible
temporary differences or unused tax losses can be utilised. However, deferred tax assets and liabilities are not
recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities
(other than as a result of a business combination) which affects neither taxable income nor accounting profit.
Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from the
initial recognition of goodwill.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the
asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted
or substantively enacted by the reporting date. The measurement of deferred tax liabilities and assets reflects
the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to
recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority
and NEW intends to settle its current tax assets and liabilities on a net basis.
CA SH AND CA SH EQUIVALENTS
Cash and cash equivalents includes cash at bank and in hand and short-term deposits with original maturities of
three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value.
TR ADE RECEIVABLES AND OTHER SHORT-TERM FINANCIAL A SSE TS
Short term trade receivables and other financial assets are recorded at amortised cost if the following conditions
are met, otherwise they are measured at fair value:
• where the financial asset is held within a business model with the objective to collect contractual cash flows; and
• contractual terms of the financial asset give rise on specific dates to cash flows that are solely repayment of
principal and interest on the principal amount outstanding.
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial instruments may be utilised to manage exposure to foreign exchange rate risks (foreign
currency forward contracts) and interest rate risks (interest rate swap contracts).
Derivatives are recognised initially at fair value at the date a derivative contract is entered into and are
subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in profit
or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the
timing of the recognition in profit or loss depends on the nature of the hedge relationship.
35
NEW ENERGY SOLARAnnual Report A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair
value is recognised as a financial liability. Derivatives are not offset in the financial statements unless the Company
and/or the Trust have both legal right and intention to offset. A derivative is presented as a non-current asset or a
non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be
realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities.
INTERESTS IN A SSOCIATES AND JOINT VENTURES
An associate is an entity over which the Company has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the investee but is not control or joint control over
those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights
to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities require unanimous consent of the
parties sharing control.
Pursuant to AASB 128 ‘Investments in Associates and Joint Ventures’, NEW, as an Investment Entity, has elected to
measure investments in associates and joint ventures at fair value through profit or loss.
FINANCIAL A SSE TS
Being an “Investment Entity”, the financial assets of NEW are measured initially and (except for trade receivables
and other short term financial assets) on an ongoing basis at fair value through profit or loss. Financial assets of the
Company measured at fair value includes investments in subsidiaries, loan receivables and investments in listed
equity instruments.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and
the Company has transferred substantially all the risks and rewards of ownership. When there is no reasonable
expectation of recovering part or all of a financial asset, its carrying value is written off.
Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset is
transferred to another party whereby the entity no longer has any significant continuing involvement in the risks
and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are
discharged or cancelled or expire. The difference between the carrying value of the financial liability extinguished
or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or
liabilities assumed, is recognised in profit or loss.
Fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants under current market conditions at the measurement date. The directors of NEW
determine the fair value of subsidiary investments based on underlying assets information received from the
Investment Manager. The Investment Manager’s assessment of fair value of underlying investments is determined
in accordance with AASB 13 – ‘Fair Value Measurement’, using discounted cash flow principles unless a more
appropriate methodology is applied. The Investment Manager may at its discretion source independent valuers to
undertake these valuations, or to corroborate the results of its own valuations.
Impairment of financial assets
NEW assesses at each reporting date whether there is an indication that an asset may be impaired. If any such
indication exists, an estimate is made of the expected loss, which is recognised in profit or loss.
36
NEW ENERGY SOLARAnnual Report Debt instruments carried at amortised cost (principally trade receivable balances) are assessed on a forward-
looking basis for any lifetime expected credit losses. The impairment methodology applied depends on whether
there has been a significant increase in credit risk.
For trade receivables and interest receivable, NEW applies the simplified approach permitted by AASB 9 – ‘Financial
Instruments’, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
No impairment assessment is performed in respect of financial assets where fair value changes are recorded in
profit or loss.
TR ADE AND OTHER PAYABLES
These amounts represent liabilities for goods and services provided to NEW prior to the end of the financial year
and which are unpaid. Due to their short-term nature, they are measured at amortised cost and are not discounted.
The amounts are unsecured and are usually paid within 30 days of recognition.
BORROWINGS
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost using the effective interest method, with interest expense recognised on an effective
yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated
future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to
the net carrying amount on initial recognition.
Borrowings are classified as current liabilities unless there is an unconditional right to defer settlement of the
liability for at least 12 months after the reporting date.
PROVISIONS
Provisions are recognised when NEW has a present (legal or constructive) obligation as a result of a past event, it
is probable NEW will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
ISSUED CAPITAL
Ordinary shares are classified as equity. Issued capital is recognised at the fair value of consideration received
by NEW.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net
of tax, from the proceeds.
DIVIDENDS
Dividends are recognised in the reporting year in which they are declared by the Board of NEW.
E ARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit or loss attributable to shareholders by the weighted
average number of share outstanding during the financial year. Diluted earnings per share is the same as there are
no potential dilutive ordinary share as at reporting date.
37
NEW ENERGY SOLARAnnual Report GOODS AND SERVICES TA X ('GST')
Revenues, expenses and assets are recognised net of the amount of GST, except to the extent the amount of GST
incurred is not recoverable from the Australian Taxation Office. In these circumstances, the unrecoverable GST is
recognised as part of the cost of acquisition of the asset or as part of an item of expense.
Where fees are stated to be exclusive of GST and GST is payable on any fee, the fee will be increased by an amount
equal to the GST payable. Cash flows are included in the Statement of Cash Flows on a gross basis, except for the GST
component of cash flows arising from investing and financing activities which are disclosed as operating cash flows.
COMPAR ATIVE INFORMATION
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
GOING CONCERN
NEW incurred a loss after tax for the year of $20.2 million. After excluding fair value losses of financial assets and
liabilities and disposal fees in relation to asset sales, an operational profit before tax of $1.1 million was recognised.
During the financial period, the Company generated net cash outflows from operating activities of $4.3 million, net
cash inflows from investing activities of $30.4 million and net cash outflows from financing activities totalling $22.6
million, and had an available cash balance of $6 million at 31 December 2021.
Further, management has prepared a cash flow forecast for the Company for the 14-month period following the
reporting date through to 28 February 2023, which incorporates recurring operating cash flows and certain
assumptions relating to asset sales and repayment of debt facilities maturing during the forecast period. Included
in the cash flow forecast are the following events which occurred during the period, but which impact cash flows
subsequent to balance date:
• NEW has satisfactorily progressed extension with KeyBank regarding the US$45.0 million revolving loan facility.
The facility, which was scheduled to mature on 31 December 2021, has been extended to 19 July 2024; and
• As announced to the market during the reporting period, the sale process for its two Australian solar plants,
being Manildra and Beryl was successfully completed and the proceeds were received in July 2021. The
majority of the proceeds from these assets sales assisted NEW to undertake capital management initiatives
which included repayment of debt facilities expiring during the forecast, as well as share buybacks. At reporting
date, deferred consideration connected with the sales are forecast for collection in 2022.
As a result, the Board is satisfied that NEW will be able to meet its working capital requirements and other
obligations for a period of at least 12 months from the date of the financial statements. The Board believes it is
appropriate to prepare the financial report on the going concern basis which contemplates the continuity of normal
business activities and the realisation of assets and the settlement of liabilities in the normal course of business.
NE W ACCOUNTING STANDARDS AND INTERPRE TATIONS NOT YE T
MANDATORY OR E ARLY ADOPTED
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by NEW for the annual reporting period ended 31 December 2021. NEW
has not yet assessed the impact of these new or amended Accounting Standards and Interpretations.
38
NEW ENERGY SOLARAnnual Report 3. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND
ASSUMPTIONS
In the application of NEW's accounting policies, management is required to make judgements, estimates and
assumptions about carrying values of assets and liabilities that are not readily apparent from other sources.
Estimates and judgements are continually evaluated and based on historic experience and other factors believed to
be reasonable under the circumstances.
INVESTMENT ENTIT Y CL A SSIFICATION
The Board has assessed that NEW continues to meet the definition of an Investment Entity. This assessment
includes judgement of the factors supporting Investment Entity classification as set out in note 2.
FAIR VALUE RECOGNITION
As the definition of an Investment Entity under AASB 10 is met, NEW accounts for its subsidiaries at fair value
through profit or loss, rather than consolidating them. In performing this fair value assessment equity interests are
therefore measured at fair value for financial reporting purposes. Once an underlying operating solar asset held by
a subsidiary has been owned for a period of no more than twelve months, the Board will appoint the Investment
Manager to produce formal investment valuations on an appropriate basis. Such valuations will be performed at
least annually thereafter. The valuations of the solar asset equity interests are based on discounted post tax equity
cash flow models which are subject to key estimates and assumptions relating to cost of equity, electricity prices,
electricity production, operating expenses, gearing levels and taxation. The valuations include unobservable inputs
and will therefore be categorised as Level 3 investments. The Investment Manager may at its discretion source
independent valuers to undertake these valuations. Refer note 8 and note 14 for further information relating to fair
value assessments.
4. FINANCE INCOME
Interest income on cash at bank
2021
$
7,741
2020
$
9,834
39
NEW ENERGY SOLARAnnual Report 5. INCOME TA X
Income tax expense/(benefit)
Current tax
Deferred tax – in respect of current year
Deferred tax – in respect of prior years
Aggregate income tax expense/(benefit)
2021
2020
$
-
$
-
4,363,088
-
4,363,088
(1,449,138)
-
(1,449,138)
Numerical reconciliation of income tax expense/(benefit) and tax at the statutory rate
Loss before income tax (expense)/benefit
Tax at the statutory Australian tax rate of 30%
(15,811,395)
(4,743,419)
(66,507,103)
(19,952,131)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Fair value losses not deductible
Non-deductible expenses
Deferred tax asset on loss derecognised*
Income tax expense/(benefit)
Deferred tax assets recognised at balance date comprises
Tax revenue
Deductible temporary differences
Total
(1,331,321)
9,198
10,428,630
18,479,815
23,178
-
4,363,088
(1,449,138)
-
-
-
4,092,593
291,463
4,384,056
* In the year, the Company has derecognised realised and unrealised tax and capital losses of $35 million with the tax effect of
$10.4 million.
6. CURRENT ASSETS – CASH AND CASH EQUIVALENTS
For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand and in banks. Cash
and cash equivalents at the end of the reporting period as shown in the statement of cash flows can be reconciled to
the related items in the statement of financial position as follows:
Cash and bank balances
2021
$
2020
$
5,987,334
2,329,798
7. CURRENT ASSETS – TRADE AND OTHER RECEIVABLES
Other receivables - subsidiary entity, New Energy Solar US Corp
GST receivable
Other receivable
40
2021
$
11,023,127
66,103
66,717
2020
$
114,538
26,815
-
11,155,947
141,353
NEW ENERGY SOLARAnnual Report 8. NON-CURRENT ASSETS – FINANCIAL ASSETS HELD AT FAIR
VALUE THROUGH PROFIT OR LOSS
NEW owns its existing underlying solar asset portfolio through its immediate subsidiary companies. As an
Investment Entity NEW records its equity investment at fair value, which comprises the assessed fair value of the
underlying solar asset portfolio and associated debt and the residual net assets of NEW and its controlled entities.
At balance date, the fair value of NEW’s total investment in immediate subsidiaries and its controlled entities
comprises the following:
Investment in New Energy Solar Australia HoldCo #1 Pty Limited
Investment in New Energy Solar US Corp
2021
$
2020
$
Equity
Equity
33,046,318
104,879,695
329,079,841
272,489,311
362,126,159
377,369,006
The investment in subsidiaries comprises on a ‘look-through’ basis as follows:
Fair value of equity interests held in solar assets (i)
Fair value of debt in solar assets
Cash or cash equivalents
2021
$
2020
$
368,686,830
486,141,490
427,654,792
732,268,920
12,842,338
24,934,950
Loan funding provided by New Energy Solar Fund to New Energy Solar US Corp
-
(56,006,873)
3rd party loan funding provided (ii)
(437,976,510)
(710,693,192)
Fair value of interest rate swaps on 3rd party loan funding provided (ii)
(39,768,489)
(99,573,517)
Deferred tax assets
Other net assets/(liabilities)
19,042,966
11,144,600
11,644,232
(10,847,372)
362,126,159
377,369,006
(i) The balance recorded at 31 December 2021 relates to the company’s interest in underlying solar assets
constituting the NC-31, NC-47, Stanford, TID, Cypress Creek portfolio, Boulder and a 75% interest in
Mount Signal 2 solar power plants. The fair value of these assets totaling $368.7 million is based on a
discounted cash flow valuation as further described in note 14.
As disclosed to security holders on 7 June 2021, the Australian Manildra and Beryl solar plants assets held
indirectly through the Company’s subsidiary New Energy Solar Australia Holdco #1 Pty Limited (NESAH1)
at market value of $105.4 million (31 December 2020: $112.2 million) were sold and the transaction was
completed on 30 July 2021. Net proceeds of approximately $88 million were available to NEW for capital
management initiatives and reduce debt below NEW’s long-term gearing target of 50% and undertake both
an off-market and on-market buyback.
41
NEW ENERGY SOLARAnnual Report
As disclosed to shareholders on 19 March 2021, NEW closed the first tranche of the sale to US Solar
Fund plc (USF) of a 25% interest in the 200MWDC Mount Signal 2 solar plant operating in the Imperial
Valley of Southern California. The buyer has exercised the option to acquire a further 25% asset interest
within a 12-month period of financial close of the Tranche 1 sale for consideration of US$22 million subject
to a performance-based adjustment mechanism that can adjust the price upwards or downwards by
US$1 million.
(ii) 3rd party loan funding is comprised of the following. Total drawn face value is A$425.3 million and total
drawn fair value is A$438.0 million.
HELD BY:
NES US Funding 1 LLC (i)
NES Antares HoldCo LLC (ii)
NES Perseus HoldCo LLC (iii)
NES Hercules Class B
Member LLC (iv)
NES Hercules Class B
Member LLC (iv)
NES Galaxy LLC (v)
NES Orion HoldCo LLC (vi)
AVAILABLE
FACILITY (BASE
CURRENCY)
(US$M)
DRAWN DOWN
FACE VALUE*
(BASE CURRENCY)
(US$M)
31 DEC 2021
FX RATE
DRAWN
FACE VALUE
(A$M)
DRAWN
FAIR VALUE
(A$M)
19.1
58.2
22.7
150.9
6.4
45.0
21.6
19.1
58.2
22.7
0.7263
0.7263
0.7263
26.3
80.1
31.3
26.3
88.6
35.5
150.9
0.7263
207.8
207.8
-
36.4
21.6
0.7263
0.7263
0.7263
-
50.1
29.7
-
50.1
29.7
*Balance outstanding as at 31 December 2021. Facility face values adjusted for committed amortisation payments.
(i) In June 2019, NEW refinanced the existing term credit facility held by NES US Funding 1 LLC, a wholly-owned
indirect subsidiary of NEW, with KeyBank National Association to increase the term facility to US$27.3 million.
The refinanced term facility is fully amortising and matures in March 2027. The facility has an underlying LIBOR
rate which is hedged with a fixed interest rate swap for the full duration of the Loan. As part of the refinancing
agreement, KeyBank National Association holds a charge over the NC-31 and NC-47 solar plant assets.
(ii) US$62.5 million senior secured fixed rate notes issued in October 2017 by NES Antares HoldCo LLC, a wholly-
owned indirect subsidiary of NEW, to notes purchasers via the United States private placement market. The
notes are amortising over 24 years maturing 30 September 2041. As part of the note purchase agreements, the
noteholders hold a charge over the Stanford SGS and TID SGS asset interests held.
(iii) US$22.7 million senior secured fixed rate notes issued in July 2018 by NES Perseus HoldCo LLC, a wholly-
owned indirect subsidiary of NEW, to notes purchasers via the United States private placement market. The
notes are amortising over 18.5 years maturing 28 February 2037. As part of the note purchase agreements, the
noteholders hold a charge over NES Perseus HoldCo LLC, the entity which owns the underlying membership
interest in the Boulder solar asset.
(iv) US$203.4 million term loan facility held by NES Hercules Class B Member LLC, a wholly-owned indirect subsidiary
of NEW, with Santander Bank N.A., Cobank ACB, CIT Bank N.A., Société Générale, Canadian Imperial Bank
of Commerce – New York Branch, KeyBank National Association and Seine Funding, LLC as lenders. In March
2020 the previously existing Construction Loan facility was converted to this term facility, which also resulted in
the cancellation of the ITC bridge loan facility. As at 31 December 2021, the term loan was fully drawn. The loan
matures on 31 January 2028. NEW owns 75% interest in the plant therefore only 75% of the drawn face value and
facility size have been recorded.
42
NEW ENERGY SOLARAnnual Report
NES Hercules Class B Member LLC also has a US$8.5 million revolving loan facility which became available at
the Term Loan Conversion Date on 31 March 2020. The purpose of this facility is to provide short-term liquidity
for the payment of Debt Service and O&M Expense as required by the project. As at 31 December 2021, the
revolving loan drawn down value was nil. The loan matures on 31 January 2028. NEW owns 75% interest in the
plant therefore only 75% of the available facility value has been recorded.
The Term Loan is secured by the assets of NES Hercules Class B Member LLC with collateral pledges of various
material project documents.
(v) US$45.0 million revolving loan and letter of credit facility established in June 2018 held by NES Galaxy LLC, a
subsidiary of NEW, with KeyBank National Association (KeyBank). As at 31 December 2021, the revolving loan
expiring on 19 July 2024 was drawn down to US$36.4 million. This loan is secured by a first lien on cash flows
from underlying subsidiaries of NES Galaxy LLC.
(vi) In February 2019, NES Orion HoldCo LLC, a wholly-owned subsidiary of NEW, entered into a US$22.6 million
Corporate Revolving Credit Facility with KeyBank National Association. The amortising loan is repayable no
later than February 2026. As at 31 December 2021, the loan was drawdown to US$21.6 million. As part of the
financing agreement, KeyBank National Association hold a charge over the Cypress Creek solar plant assets.
In addition to the above, the following Letters of Credit have been issued:
• KeyBank National Association has provided Letter of Credit to NES US Funding 1 LLC to the value of US$7.7
million expiring in March and May 2027, and to NES Antares HoldCo LLC to the value of US$21.5 million
expiring on 6 June 2027.
• CoBank, ACB provides a Letter of Credit Facility to NES Hercules Class B Member LLC on behalf of Imperial
Valley Solar 2, LLC. There are currently two Letters of Credit issued under this facility – a US$17.0 million LC
expiring in December 2027 and a US$7.9 million LC expiring in March 2021.
• KeyBank National Association has provided a Letter of Credit to NES Perseus HoldCo LLC to the value of
US$8.3 million expiring on 25 July 2028.
• KeyBank National Association has provided a Letter of Credit to NES Orion HoldCo LLC to the value of US$1.7
million expiring on 14 February 2026.
• KeyBank National Association, Ltd has provided a Letter of Credit to NES Galaxy LLC to the value of US$89,979
expiring on 5 February 2022.
Movement in the equity investments associated with NEW in immediate subsidiaries during the year were as follows:
Investment in financial assets held at fair value through profit or loss
opening balance
Total funds (returned)/invested during the year in New Energy Solar Australia
HoldCo #1 Pty Limited
Total funds invested during the year in New Energy Solar US Corp
Movement in fair value through profit or loss (i)*
MSA fee income – recognised as other income for the Company (ii)*
Dividend income (iii)*
Investment in financial assets held at fair value through profit or loss
closing balance
*Net movement in fair value through profit or loss is a loss of $21,311,539.
2021
$
2020
$
377,369,006
353,178,601
(46,084,102)
52,152,794
(4,588,987)
(6,000,000)
(10,722,552)
(8,544,190)
94,333,979
(61,599,384)
-
-
362,126,159
377,369,006
43
NEW ENERGY SOLARAnnual Report
(i) NEW’s ‘movement in fair value’ decrement amount of $4.6 million is comprised of a $2.1 million decrease in the value of its
investment in its immediate subsidiary New Energy Solar US Corp (NES US), which is net of a $10.7 million decrease from the
dividend paid to NEW (refer note (iii) below) an unrealised foreign exchange translation gain of $17.2 million, and a $19.7 million
decrease in the value of its investment in its immediate subsidiary New Energy Solar HoldCo #1 (NESAH1).
The $2.1 million decrease in the value of its investment in NES US (net decrease from dividend, refer to (iii) below) includes a fair
value loss impact of $7.4 million relating to NES US’s investment in entities holding its underlying solar assets, offset by a $5.4
million fair value gain in respect of interest bearing loans made to NES US Corp by the Trust that were repaid in full during the year.
As at 31 December 2021, the fair value of NEW’s US dollar investment in NES US has been converted to Australian dollars at
the prevailing A$:US$ spot rate of 0.7263 (31 December 2020 spot rate 0.7694) resulting in the unrealised foreign exchange
gain noted of $17.2 million.
The $19.7 million decrease in the value of its investment in NESAH1 mainly attributable to the difference between the sale price
net of transaction fees and costs and the fair value of NESAH1's investments in entities holding its underlying Australian solar
assets as a result of the asset sales.
(ii) On 25 May 2021, NEW entered into a Management Services Agreement (MSA) with its subsidiary NESAH1. The Board,
with further assistance by delegation of its duties to the Investment Manager, provides strategic management services to
NESAH1 relating to its portfolio of Australian Solar assets. The net movement in fair value through and loss for the year to 31
December 2021 includes an MSA fee of $6,000,000 (period to 31 December 2020: $nil). At a group level, this movement is
offset at the Company which recognises MSA fee income in the statement of profit or loss and other comprehensive income.
(iii) NES US reported net realised profits and determined a distribution to the Company, for it to pass on to NEW shareholders as
current year profits. NEW recognises the dividend income in the statement of profit or loss and other comprehensive income.
9. CURRENT LIABILITIES – TRADE AND OTHER PAYABLES
Trade payables
Accrued liabilities
Other liabilities
Other liabilities - New Energy Solar Fund
Other liabilities - New Energy Solar Australia HoldCo #1 Pty Limited
2021
$
387,771
160,519
20,876
2020
$
66,637
558,238
91,878
-
4,982,656
10,006,851
10,576,017
1,669,999
7,369,408
The average credit period for trade payables is generally 30 days. No interest is charged on trade payables from the date
of invoice. NEW has risk management policies to ensure payables are paid within credit terms.
Refer to note 13 for further information on financial instruments.
44
NEW ENERGY SOLARAnnual Report
10. EQUIT Y – ISSUED CAPITAL
Ordinary shares – fully paid
320,587,986
355,269,911
447,284,628
424,480,516
2021
Shares
2020
Shares
2021
$
2020
$
Details
Balance
Capital reallocation – December 2020
Issue of securities – February 2020
Issue of securities – August 2020
Balance
Issue of securities – March 2021
Capital reallocation – June 2021
Share buybacks
Issue and share buyback costs (net of tax)
Date
Shares
$
1 January 2020
351,059,886
339,372,774
-
81,727,242
2,282,068
2,002,451
1,927,957
1,378,049
31 December 2020
355,269,911
424,480,516
2,148,490
1,588,331
-
54,741,257
(36,830,415)
(33,419,462)
-
(106,014)
Balance
31 December 2021
320,587,986
447,284,628
All issued shares are fully paid. The holders of shares were entitled to one vote per share at meetings of the
Company and are entitled to receive dividends declared from time to time by NEW.
SHARE BUY-BACK
NEW announced an on-market security buyback program on 31 May 2021 to be conducted over the period from
16 June 2021 to 1 June 2022. Practically, the on-market buyback was undertaken following the completion of the
Australian solar asset sales and subsequent off-market buyback as an active capital management tool to provide
liquidity to existing shareholders who sought to exit their investment at a discount to net asset value (NAV). Since
the completion of the off-market buyback, NEW commenced an on-market buyback, within any applicable ASX
trading restrictions. On 11 February 2022, NEW issued a business update announcement advising that the Board
would be revisiting the recommendations of its Strategic Review and that, as a result, the on-market buyback would
not operate at this time.
45
NEW ENERGY SOLARAnnual Report 11. EQUIT Y – DIVIDENDS
Dividends paid during the financial year were as follows:
Interim dividend for the six-months ended 30 June 2021 of 3 cents (30
June 2020: nil cents) per ordinary share
2021
$
10,722,552
2020
$
-
In the prior period, and prior to the de-stapling of the Company and the Trust, distributions of $10.6 million were
paid to securityholders by the Trust.
Dividends paid or declared by the Company during, or since the end of the year were as follows:
• Dividend of 3 cents per share for the six months ended 30 June 2021, paid on 26 August 2021 amounting to
$10,722,552.
• Dividend of 1 cent per share for the six months to 31 December 2021, announced on 11 February 2022, to be
paid on or around 6 April 2022.
12. OPERATING SEGMENTS
IDENTIFICATION OF REPORTABLE OPER ATING SEGMENTS
NEW operated solely in a single segment being investing in solar assets. Solar assets were in Australia and the
United States of America. Revenue, profit/(loss), net assets and other financial information reported to and
monitored by the Chief Operating Decision Maker (CODM) for the single identified operating segment are the
amounts reflected in the Statement of Profit & Loss and Other Comprehensive Income, Statement of Financial
Position, Statement of Changes in Equity and Statement of Cash Flows.
The Board is considered to represent the CODM for the purposes of assessing performance and determining the
allocation of resources.
GEOGR APHICAL INFORMATION
NEW operates in two principal geographic areas – Australia (country of domicile) and the United States of America.
NEW 's revenue and information about its segment assets (non-current assets excluding financial instruments,
deferred tax assets and other financial assets) by geographical location are detailed below:
Revenue
Australia
INCOME
NON-CURRENT ASSETS
2021
$
2020
$
2021
$
2020
$
(19,736,947)
(8,770,025)
33,046,318
104,879,695
United States of America
15,313,005
(52,967,129)
329,079,841
272,489,311
(4,423,942)
(61,737,154)
362,126,159
377,369,006
46
NEW ENERGY SOLARAnnual Report 13. FINANCIAL INSTRUMENTS
CAPITAL MANAGEMENT
NEW manages its capital to ensure it will be able to continue as a going concern, while maximising the return to
shareholders. NEW's principal use of cash raised was to fund investments as well as ongoing operational expenses.
The directors monitor and review the broad structure of NEW on an ongoing basis. At balance date, the capital
structure consists of equity only. There are no externally imposed capital requirements.
FINANCIAL RISK MANAGEMENT OBJECTIVES
NEW is exposed to the following risks from its use of financial instruments:
• market risk (market price risk, foreign exchange risk and interest rate risk)
• credit risk
•
liquidity risk.
The Board has overall responsibility for the establishment and oversight of the risk management framework,
including developing and monitoring risk management policies.
A) MARKE T RISK
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices, such as foreign exchange rates, interest rates and equity prices. NEW is primarily exposed
to market risks arising from fluctuations in market prices, foreign currency and interest rates. Refer to note 14 for
further details of market price risk relating to NEW’s investment portfolio.
The objective of market risk management is to manage and control market risk exposures within acceptable
parameters while optimising the return.
Foreign exchange risk
Foreign exchange risk arises on financial instruments that are denominated in a foreign currency. Foreign exchange
rate movements will impact on the Australian dollar value of NEW 's financial assets and liabilities denominated in a
currency that is not NEW's functional currency.
NEW is exposed to US$ foreign exchange risk through their US$ denominated cash and receivable balances, their
investment activities and income derived from these activities.
The table below details the carrying amounts of NEW's foreign currency denominated assets and liabilities (US$)
at the reporting date that are denominated in a currency different to the functional currency. This represents the
Australian dollar exposure, converted at an exchange rate of 0.7263 at 31 December 2021.
Cash and cash equivalents
Financial assets (equity investments)
2021
$
4,721
2020
$
96
329,079,841
272,489,311
Other receivables - subsidiary entity, New Energy Solar US Corp
11,023,127
114,538
340,107,689
272,603,945
47
NEW ENERGY SOLARAnnual Report Sensitivity Analysis
The effect of the foreign exchange risk relating to equity investments (in New Energy Solar US Corp) is recorded in
profit or loss as part of the overall fair value movement in the assets. The effect of foreign exchange risk relating to
cash and cash equivalents, and other receivables is recorded in profit or loss as a foreign exchange gain or loss.
NEW considers a 5% movement in the A$ against US$ as at balance date to be a reasonable possibility at the end of
the reporting period. The impact of the strengthening and weakening of A$ against US$ in profit or loss is shown by
the amounts below as it relates to cash and cash equivalents, debt investments and other receivables. This analysis
assumes that all other variables remain constant.
2021
Cash and cash equivalents
Financial assets (equity investments)
Financial assets (loans receivables)
AUD
STRENGTHENED
EFFECT ON PROFIT
BEFORE TAX
% Change
5%
5%
5%
$
(225)
(15,670,469)
(524,911)
(16,195,605)
AUD
STRENGTHENED
EFFECT ON PROFIT
BEFORE TAX
% Change
(5%)
(5%)
(5%)
AUD
WEAKENED
EFFECT ON PROFIT
BEFORE TAX
$
248
17,319,992
(580,165)
16,740,075
AUD
WEAKENED
EFFECT ON PROFIT
BEFORE TAX
2020
Cash and cash equivalents
Financial assets (equity investments)
% Change
5%
5%
$
(5)
(12,975,681)
(12,975,686)
% Change
(5%)
(5%)
$
5
14,341,543
14,341,548
In management’s opinion the above sensitivity analysis is not representative of the inherent foreign exchange risk,
as the period end exposure does not necessarily reflect the exposure during the course of the entire period.
Interest rate risk
Interest rate risk is the risk that cash flows associated with financial instruments will fluctuate due to changes in
market interest rates.
NEW was directly exposed to interest rate risk on their variable rate bank deposits and currently does not hedge
against this exposure.
48
NEW ENERGY SOLARAnnual Report
Sensitivity analysis
NEW considers a 50-basis point increase or decrease to be a reasonably possible change in interest rates. The
impact of a 50-basis point movement in interest rates on profit or loss and equity is shown in the table below.
+50 BASIS POINTS
EFFECT ON PROFIT
BEFORE TAX
EFFECT ON
EQUITY
-50 BASIS POINTS
EFFECT ON PROFIT
BEFORE TAX
EFFECT ON
EQUITY
2021
$
$
Variable rate deposits
29,937
-
(29,937)
-
+50 BASIS POINTS
EFFECT ON PROFIT
BEFORE TAX
EFFECT ON
EQUITY
-50 BASIS POINTS
EFFECT ON PROFIT
BEFORE TAX
EFFECT ON
EQUITY
2020
$
$
Variable rate deposits
11,649
-
(11,649)
-
NEW did not hold significant cash balances exposed to interest rates in other currencies and did not have any
borrowings or other financial liabilities or assets with direct exposure to changes in interest rates and accordingly
was not exposed to material interest rate risk.
B) CREDIT RISK
Credit risk is the risk that contracting parties to a financial instrument will cause a financial loss for NEW by failing
to discharge an obligation. NEW manages credit risk by ensuring deposits are made with reputable financial
institutions and power purchase agreements with underlying solar projects are made with investment grade
counterparties.
The majority of funds of the Company was deposited with Australia and New Zealand Banking Group Limited and
Macquarie Bank Limited.
The carrying amount of financial assets that represents the maximum credit risk exposure at the reporting date are
detailed below:
Summary of exposure
Cash and cash equivalents
Other receivables – related party
GST receivables
2021
$
2020
$
5,987,334
2,329,798
11,023,127
66,103
114,538
26,815
17,076,564
2,471,151
49
NEW ENERGY SOLARAnnual Report C) LIQUIDIT Y RISK
Liquidity risk is the risk that NEW will encounter difficulty in meeting the obligations associated with their financial
liabilities that are settled by delivering cash or another financial asset. NEW 's approach to managing liquidity is to
ensure, as far as possible, that they will always have sufficient liquidity to meet their liabilities when due, under both
normal and stressed conditions, without incurring unacceptable losses or risking damage to NEW's reputation.
NEW's liquidity primarily comprised cash at bank totalling $5,987,334 at which was held to cover their day-to-day
running costs and expenditures.
The following is the contractual maturity of financial liabilities. The table has been drawn based on the undiscounted
cash flows of liabilities based on the earliest date on which NEW can be required to settle the liability.
2021
Non-derivatives
Non-interest bearing
Trade and other payables
Total non-derivatives
2020
Non-derivatives
Non-interest bearing
Trade and other payables
Total non-derivatives
ON CALL
LESS THAN
12 MONTHS
REMAINING
CONTRACTUAL
MATURITIES
$
-
-
$
10,576,017
10,576,017
$
-
-
ON CALL
LESS THAN
12 MONTHS
REMAINING
CONTRACTUAL
MATURITIES
$
-
-
$
7,369,408
7,369,408
$
-
-
14. FAIR VALUE MEASUREMENT
NEW is exposed to market price risk based on investments in underlying solar assets which were measured on a fair
value basis.
FAIR VALUE
The fair value of financial assets and financial liabilities approximate their carrying values at the reporting date.
The table below analyses recurring fair value measurements for financial assets. The fair value measurements are
categorised into different levels in the fair value hierarchy based on the inputs to the valuation techniques used. The
different levels are defined as follows:
• Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (that is, as prices) or indirectly (that is, derived from prices)
• Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
50
NEW ENERGY SOLARAnnual Report 2021
Assets
Financial assets held at fair value through profit or loss
Total assets
2020
Assets
Financial assets held at fair value through profit or loss
Total assets
LEVEL 1
LEVEL 2
LEVEL 3
$
-
-
$
-
-
$
362,126,159
362,126,159
LEVEL 1
LEVEL 2
LEVEL 3
$
-
-
$
-
-
$
377,369,006
377,369,006
Refer below for a description of the valuation basis adopted for the material asset class constituting NEW’s equity
investment in its subsidiaries, being the underlying solar assets held at balance date.
TR ANSFERS DURING THE YE AR
NEW recognises transfers between levels of the fair value hierarchy during the reporting period which the transfer
has occurred. There were no transfers between levels during the financial period.
Reconciliation of level 3 fair value measurements
Movements in level 3 assets and liabilities during the current and previous financial year are set out below:
Balance at 1 January 2020
Losses recognised in profit or loss
Return of capital during the year from New Energy Solar Australia HoldCo #1 Pty Limited
Total funds invested during the year in New Energy Solar US Corp
Balance at 31 December 2020
Return of capital during the year from New Energy Solar Australia HoldCo #1 Pty Limited
Total funds invested during the year in New Energy Solar US Corp
Losses recognised in profit or loss
MSA fee income - recognised as other income for the Company
Dividend income
Balance at 31 December 2021
INVESTMENTS HELD AT
FAIR VALUE THROUGH
PROFIT OR LOSS
$
353,178,601
(61,599,384)
(8,544,190)
94,333,979
377,369,006
(46,084,102)
52,152,794
(4,588,987)
(6,000,000)
(10,722,552)
362,126,159
51
NEW ENERGY SOLARAnnual Report
SOL AR A SSE T VALUATION ME THODOLOGY AND PROCESS
For investments in underlying entities holding solar assets which are operational at balance date, the Board bases
the fair value of the investments on valuation information received from the Investment Manager. At a minimum,
valuations will be performed annually and otherwise as determined by the Board. The investment Manager engages
suitably qualified independent valuation firms to assist in its assessment of fair value.
The Board reviews and considers the fair value arrived at by the Investment Manager, including any independent
external valuation obtained, before making their assessment of the fair value of the investments. Fair value is
calculated with reference to a discounted cash flow (DCF) methodology.
In a DCF analysis, the underlying investment entity valuation is derived using discounted post tax equity cash flows
that are comprised of cash flows from the underlying solar assets after allowing for debt. The future cash flows
incorporate a range of operating assumptions for revenues, costs, gearing, and an appropriate post tax cost of
equity range. Given the long-term nature of the solar asset investments, the valuation inputs are assessed using
long-term historical data to reflect the asset’s lives. Where possible, assumptions are based on observable market
and externally sourced technical data. The Investment Manager uses technical experts such as independent
engineers to assess operating and asset life assumptions as well as long-term electricity price forecasters to provide
reliable long-term data of use in valuations.
In the current reporting period, an independent valuation of the equity interest held in underlying entities holding of
each of NEW's solar power assets was obtained.
FAIR VALUE OF SOL AR A SSE T INVES TMENTS
As at 31 December 2021, the fair value of equity interests held in operating solar asset investments (valued by DCF
methodology) was $368.7 million, comprising:
PLANT
Stanford/TID
NC-31/NC-47
Boulder Solar I
Rigel
MS2
Subtotal US plants (US$)
A$ to US$ foreign exchange rate at balance date
Subtotal US plants (A$)
Manildra
Beryl
Subtotal AUS plants (A$)
TOTAL (A$)
FAIR VALUE AS AT
31 DECEMBER 2021
FAIR VALUE AS AT
31 DECEMBER 2020
(US$ million)
(US$ million)
69.3
62.3
35.3
23.6
77.2
267.7
0.7263
368.7
-
-
-
-
74.1
62.3
35.0
25.5
90.8
287.7
0.7694
373.9
51.1
61.1
112.2
486.1
The fair value of NEW's renewable energy asset investments as at 31 December were determined as described
above, using a cost of equity range of 5.00% to 5.75% for contracted cash flows, and 5.75% to 6.75% for
uncontracted cash flows.
52
NEW ENERGY SOLARAnnual Report NEW has established a control framework with respect to measurement and assessment of fair values. The Board
has overall responsibility for analysing the performance and fair value movements of underlying US investments
during each reporting period.
While NEW's day-to-day operations have continued relatively unimpacted by the effects of COVID-19 variants,
the Investment Manager has identified a number of potential longer-term risks impacting both the current period
and potentially future period solar asset values. The unfavourable macroeconomic impact of the pandemic, together
with the high degree of uncertainty as to future economic conditions (particularly the outlook for US inflation) may
impact the future availability and cost of debt, and more broadly volatility in the electricity market pricing. These
factors may impact the future fair value of solar plant interests held by NEW.
SENSITIVIT Y ANALYSIS
Set out below are the key assumptions the Board believes would have a material impact upon the fair value of
NEW’s solar asset investments and NAV per Share should they change. The following sensitivities assume the
relevant input is changed over the entire useful life of each of the underlying renewable energy assets, while all
other variables remain constant. All sensitivities have been calculated independently of each other.
The Board considers the changes in inputs to be within a reasonable expected range based on their understanding
of market transactions. This is not intended to imply that the likelihood of change or that possible changes in value
would be restricted to this range.
Input
AUD/USD foreign
exchange rate (+/-5%)
Discount rate (+/- 0.5%)
Electricity production
(change from P50)
Merchant Period
Electricity Prices
Operations and
maintenance expenses
Change in
input
5.0%
- 5.0%
0.5%
- 0.5%
P90
P10
- 10.0%
10.0%
10.0%
- 10.0%
31 DECEMBER 2021
31 DECEMBER 2020
Change in
fair value of
investments
(A$ million)
(17.2)
19.0
(26.9)
29.9
(73.2)
57.7
(30.1)
29.9
(25.7)
23.8
Change in
NAV per Share
(A$ cents)
(5.4)
5.9
(8.4)
9.3
(22.8)
18.0
(9.4)
9.3
(8.0)
7.4
Change in
fair value of
investments
(A$ million)
(17.8)
19.6
(36.6)
39.7
(103.2)
91.4
(46.9)
46.7
(34.9)
32.4
Change in
NAV per Share
(A$ cents)
(5.0)
5.5
(10.3)
11.2
(29.1)
25.7
(13.2)
13.1
(9.8)
9.1
FOREIGN E XCHANGE R ATE
The fair value of NEW's solar asset investments located in the United States of America are first determined in US$
for financial reporting purposes. The sensitivity shown looks at the impact of a change in the A$ to US$ exchange
rate. A 5% appreciation and 5% depreciation of the assumed US$ to A$ exchange rate (of A$: US$0.7263 as at
31 December 2021) has been considered to determine the resultant impact on NEW's fair value of investments
and NAV per Share.
DISCOUNT R ATE
As at 31 December 2021, the fair value of the underlying solar asset investments were determined using a post-
tax cost of equity approach based on the Capital Asset Pricing Model. This approach takes into account long-term
assumptions regarding risk-free rates, market risk premia, gearing, counterparty quality and asset specific items.
53
NEW ENERGY SOLARAnnual Report The post-tax cost of equity range used is 5.00% to 5.75% for contracted cash flows, and 5.75% to 6.75% for
uncontracted cash flows.
The sensitivity demonstrates the impact of a change in the post-tax cost of equity applied to the equity interest of all
of NEW's renewable energy asset investments as at 31 December 2021. A range of + / - 0.5% has been considered
to determine the resultant impact on NEW's NAV per Share and the fair value of its solar asset investments.
ELECTRICIT Y PRODUCTION
NEW's solar asset investments are valued based upon a forecast P50 solar energy generation profile (being a 50%
probability that this generation estimate will be met or exceeded). A technical adviser has derived this generation
estimate by taking into account a range of irradiation datasets, satellite and ground-based measurements, and site-
specific loss factors including module performance degradation, module mismatch and inverter losses. These items
are then considered in deriving the anticipated production of the individual solar asset (MWh per annum) based
upon a 50% probability of exceedance.
The sensitivity shown looks at the impact on the fair value of solar asset investments and NAV per Share of a
change of production estimates to P90 (90% likely probability of exceedance) and a P10 generation estimate (10%
probability of exceedance).
As P10 generation estimates were not independently obtained for each solar asset on or about the time of the asset
acquisition, the Board has determined a proxy P10 estimate for those assets by assessing the relationship between
the independently determined P50 and P90 generation estimates for each of the assets in the Operating Portfolio
(e.g. a 1-year P90 generation estimate might be 92.5% of a 1-year P50 generation estimate, implying that it is 7.5%
lower than the P50 generation estimate).
In determining the proxy P10 generation estimate, the Board has assumed that the relationship between a P50
generation estimate and a P10 generation estimate is the same as that between a P50 generation estimate and a
P90 generation estimate in absolute terms. Therefore a 1-year P10 generation estimate by this methodology would
be 107.5% (i.e. 100% + 7.5%) of the asset’s P50 generation estimate.
MERCHANT PERIOD ELECTRICIT Y PRICES
Each of the assets underlying NEW’s solar asset investments have long-term PPAs in place with creditworthy
energy purchasers and thus the PPA prices are not impacted by energy price changes during this period. For the
post-PPA period of each solar asset, the Board uses long-term electricity price forecasts that have been prepared
by a market consultant in their determination of the fair value of NEW’s operating solar asset investments. As noted
above the COVID-19 pandemic poses risks in the form of economic uncertainty and related volatility in future
electricity price forecasts applicable to the post PPA periods.
The sensitivities show the impact of an increase / decrease in power prices for each year of the power price curve
for each plant over the plant’s remaining economic life after the conclusion of the existing PPAs. A flat 10% increase/
decrease in market electricity prices from forecasted levels over the remaining asset life of all plants have been used
in the sensitivity analysis.
OPER ATING E XPENSES
The operating costs of the assets underlying NEW’s solar asset investments include annual operations and
maintenance (O&M), asset management (AM), insurance expenses, land lease expenses, major maintenance and
general administration expenses.
The sensitivity above assumes a 10% increase/decrease in annual operating costs for all underlying assets and
the resultant impact on NEW’s fair value of investments and NAV per Share.
54
NEW ENERGY SOLARAnnual Report 15. CONTROLLED AND JOINTLY CONTROLLED ENTITIES
As an ‘Investment Entity’ NEW recognises all underlying investments in their direct and indirect subsidiaries and
jointly controlled entities at fair value through profit or loss. Below is the legal name for the Holding Company
and the remaining legal entities controlled or jointly controlled through the investment in the HoldCo entities at
reporting date.
New Energy Solar US Corp. and New Energy Solar Australia HoldCo #1 Pty Limited are directly held and all other
entities are indirectly held.
NAME OF ENTITY
New Energy Solar US Corp.
NES Rosamond 1S, LLC
PRINCIPAL PLACE OF
BUSINESS / COUNTRY
OF INCORPORATION
PRINCIPAL
ACTIVITIES
ECONOMIC
INTEREST
2021
ECONOMIC
INTEREST
2020
United States of America
HoldCo
100.00%
100.00%
United States of America
SSCA XLI Class B Member HoldCo, LLC
United States of America
SSCA XLI Class B Member, LLC
NES Rosamond 2T, LLC
GFS I Class B Member HoldCo, LLC
GFS I Class B Member, LLC
NES US NC-31 LLC
NES US NC-47 LLC
NES US Funding 1, LLC
NES Antares HoldCo, LLC
NES Orion HoldCo, LLC
NES Callisto Lender, LLC (ii)
SSCA XLI Holding Company, LLC (i)
GFS I Holding Company, LLC
US-NC-31 Sponsor, LLC
IS-31 Holdings, LLC (i)
Innovative Solar 31, LLC (i)
US-NC-47 Sponsor, LLC
IS-47 Holdings, LLC (i)
Innovative Solar 47, LLC (i)
NES Rigel HoldCo, LLC
NES Rigel MM, LLC
NES Rigel Tenant, LLC (i)
NES Rigel Lessor, LLC (i)
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
100.00%
100.00%
99.90%
99.90%
99.90%
99.90%
100.00%
100.00%
99.90%
99.90%
99.90%
99.90%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
-
-
100.00%
-
-
100.00%
100.00%
-
-
-
-
100.00%
100.00%
-
-
-
-
100.00%
100.00%
100.00%
100.00%
-
-
-
-
New Energy Solar Australia HoldCo #1 Pty Limited
Australia
Holdco
100.00%
100.00%
NES Galaxy, LLC
NES Perseus HoldCo, LLC
BSPCB Class B Member, LLC
BSP Class B Member Holdco, LLC (i)
BSP Class B Member, LLC (i)
United States of America
United States of America
United States of America
United States of America
United States of America
SPV
SPV
SPV
SPV
SPV
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
-
-
-
55
NEW ENERGY SOLARAnnual Report NAME OF ENTITY
BSP Holding Company, LLC (i)
NES Hercules HoldCo, LLC
NES Hercules Class B Member, LLC
NES Hercules Buyer, LLC
NES Hercules TE Holdings, (i)
PRINCIPAL PLACE OF
BUSINESS / COUNTRY
OF INCORPORATION
United States of America
United States of America
United States of America
United States of America
United States of America
NES Hercules Project Holdings, LLC (i)
United States of America
NES Hercules ProjectCo, LLC (i)
Imperial Valley Solar 2, LLC (i)
NES IVS Holdings, LLC (ii)
NES SREC Holdco, LLC
VivoRex, LLC
Manildra Hold Trust
Manildra Prop Hold Pty Limited
Manildra Asset Trust
Manilda Prop Pty Limited
Manildra Finco Pty Limited
Manildra Solar Farm Pty Limited
FS NSW Project No 1 Hold Trust
FS NSW Project No 1 HT Pty Limited
FS NSW Project No 1 Asset Trust
FS NSW Project No 1 AT Pty Limited
FS NSW Project No 1 Finco Pty Limited
United States of America
United States of America
United States of America
United States of America
United States of America
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
PRINCIPAL
ACTIVITIES
ECONOMIC
INTEREST
2021
ECONOMIC
INTEREST
2020
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
SPV
-
75.00%
75.00%
75.00%
-
100.00%
100.00%
100.00%
-
-
-
-
-
-
-
-
-
100.00%
100.00%
100.00%
100.00%
100.00%
-
-
-
-
-
-
-
-
-
-
-
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
(i) The economic interest percentage held is not readily determinable since the investors have different classes
of shares with entitlements which change over time, including preferential entitlements and entitlements to
tax losses.
(ii) Entity was dissolved during the year.
16. KEY MANAGEMENT PERSONNEL
DIRECTORS
The following persons were directors of New Energy Solar Limited during the financial year:
Jeffrey Whalan Non-Executive Chair
James Davies Non-Executive Director
John Holland
Non-Executive Director
Maxine McKew Non-Executive Director
John Martin
Non-Independent, Non-Executive Director (from 1 October 2021)*
*Prior to 1 October 2021, John was an executive director. John remains as a non-independent director because he was an officer
of New Energy Solar Manager Pty Limited within three years of the date of this report. John resigned as an officer of New Energy
Solar Manager Pty Limited on 26 August 2021.
56
NEW ENERGY SOLARAnnual Report KE Y MANAGEMENT PERSONNEL REMUNER ATION
The aggregate compensation made to directors and other members of key management personnel of the Company
is set out below:
Short-term benefits
Superannuation
Long-term benefits
Termination benefits
Share-based payments
Other
2021
$
255,817
16,683
-
-
-
18,000
290,500
2020
$
213,779
12,471
-
-
-
18,000
244,250
17. RELATED PART Y DISCLOSURES
KE Y MANAGEMENT PERSONNEL
Disclosures relating to key management personnel are set out in note 16.
INVESTMENT IN OTHER ENTIT Y MANAGED BY THE INVESTMENT MANAGER
Related Party Fees
John Martin is a director of New Energy Solar Limited at the date of this report and was also a director of New
Energy Solar Manager Pty Limited, the Investment Manager, until 26 August 2021. The fees below represent the
total transactions between the Company and the Investment Manager for the year ended 2021, however only the
fees relating to the period up to 26 August 2021 are deemed related party transactions.
Paid or payable for the year ended:
Investment Manager Fee (a)
Project Management Fee (b)
Asset Management Fee (c)
Disposal Fee (d)
Fund Administration Fee (e)
2021
$
2020
$
1,286,385
-
763,660
3,971,536
114,000
6,135,581
1,466,521
25,308
462,474
-
86,400
2,040,703
(A) INVES TMENT MANAGEMENT FEE
New Energy Solar Manager Pty Limited, as Investment Manager of NEW and for part of the period E&P Investment
Pty Ltd as Responsible Entity for the Trust (together the "Fund") receives an Investment Manager Fee based on
the sliding scale fee structure as set out below. Fees are calculated on the Enterprise Value of the Fund, payable
quarterly in arrears.
Effective 16 April 2019, the Investment Manager waived payment of part of the Base Management Fee that’s
otherwise payable by the Fund in respect of its investment in US Solar Fund plc (USF). The Enterprise Value used to
calculate the Base Management Fee is reduced by market value of the Fund’s investment in USF.
57
NEW ENERGY SOLARAnnual Report The waiver results in a lower Base Management Fee structure set out in the following table:
Threshold Value
< A$1.0bn
A$1.0bn to A$1.5bn
A$1.5bn to A$2.0bn
> A$2.0bn
Threshold Value means:
BASE MANAGEMENT
FEE (% OF ENTERPRISE
VALUE (EV))
ACQUISITION AND DISPOSAL
FEE (% OF CUMULATIVE
PURCHASE PRICE OR
NET SALE PROCEEDS)
0.625%
0.55%
0.40%
0.40%
1.50%
0.90%
0.90%
0.40%
Base Management Fee – Percentage of Enterprise Value: Enterprise Value is calculated as the total of NEW’s
market capitalisation, external borrowing, debt or hybrid instruments issued by NEW as defined in the Investment
Management Agreement. All fees are applied on a marginal basis to each Threshold Value band and calculated at
the end of each quarter. For example, the revised Base Management Fee for a Threshold Value of A$1,500 million
would be A$9.0 million (excluding GST) which is the sum of (A$1,000 million multiplied by 0.625%) and (A$500
million multiplied by 0.55%).
Total Investment Management fees paid or payable for the period ended 31 December 2021 was $1,286,385 (31
December 2020: $1,466,521), exclusive of GST, and included in Investment management fees in profit or loss.
Acquisition and Disposal Fee – Percentage of Cumulative Purchase Price or Net Sale Proceeds: Purchase Price
and Sale price as defined in the Investment Management Agreement and assessed in A$ at the time the purchase
or sale takes effect where purchases add to the cumulative total and sales reduce the cumulative total. All fees are
applied on a marginal basis to each Cumulative Purchase Price or Net Sale Proceeds band. Gross purchase price
and gross sale price as they are referred to in the definitions of Purchase Price and Net Sale Proceeds respectively
mean the value of the equity and debt of an Asset acquired or disposed.
(B) PROJECT MANAGEMENT FEE
New Energy Solar US Corp, a subsidiary of the Company, entered into a non-exclusive arrangement dated
27 October 2017 with NES Project Services, LLC for the provision of asset management, operations and
maintenance services and/or construction management services (Services). The agreement is for an initial one year
term, with rolling one year extensions if the agreement has not been terminated. The Services will be provided upon
request by NES US Corp. at market rates. The primary focus of these activities is to ensure that construction service
providers successfully deliver projects on time and cost. Key tasks include construction project management, regular
site visits, contract supervision, identification and resolution of potential issues and construction payment approvals.
For the year ended 31 December 2021, $nil project services fees (31 December 2020: $25,308) were paid or
payable by New Energy Solar US Corp, a Controlled Entity of the Company.
(C) A SSE T MANAGEMENT SERVICE FEE
New Energy Solar US Corp, a subsidiary of NEW, entered into a non-exclusive arrangement dated 17 September
2018 with NES Project Services, LLC for the provisions of asset management services in relation to construction and
operation of solar farms. The Services will be provided upon request by NES US Corp, at an agreed hourly rate.
Key tasks include facility development and operations services, insurance, government approvals, reporting
and inspections.
58
NEW ENERGY SOLARAnnual Report For the full-year ended 31 December 2021, asset management fees of $763,660 (31 December 2020: $462,475)
calculated at average exchange rate were paid or payable by New Energy Solar US Corp, a Controlled Entity of NEW.
(D) DISPOSAL FEE
New Energy Solar Manager Pty Limited, in its capacity as Investment Manager, is responsible for identifying and
providing recommendations to NEW with respect to Asset acquisitions and disposals, sourcing and undertaking
due diligence investigations, recommending solar energy asset acquisitions as well as advising, providing
recommendations, and executing investment exit strategies.
The Investment Manager receives a Disposal fee based on the sliding scale fee structure in Table 1 under
"Investment Manager Fee" above. The fees are calculated on the sale pricing (excluding selling costs) of assets
disposal by NEW or its respective Controlled Entities. The Disposal fee is payable to the Investment Manager upon
completion of the disposal of any assets by NEW or its Controlled Entities, and pro-rated fee payment in the case of
an disposal by instalments/part-payments.
For the full-year ended 31 December 2021, Disposal fee of $3,971,536 (31 December 2020: nil), exclusive of GST,
was paid or payable to the Investment Manager by NEW.
(E) FUND ADMINISTRATION SERVICES
Australian Fund Accounting Services Pty Limited, a related party of the Investment Manager, provides fund
administration services to the Company under an agreement with the Investment Manager. Time spent by
staff is charged to the Company at agreed rates up to an annual cap. These services include net asset valuation,
management accounting, statutory reporting, capital management and taxation.
Total fund administration fees paid or payable for the period ended 31 December 2021 was $114,000
(31 December 2020: $86,400), exclusive of GST, and included in Accounting and audit fees in profit or loss.
18. REMUNERATION OF A UDITORS
During the financial period the following fees were paid or payable for services provided by Deloitte Touche
Tohmatsu, the auditor of the Company:
Deloitte Touche Tohmatsu
Audit or review of the financial statements*
Other advisory services
Taxation services*
2021
$
2020
$
274,800
200,880
1,155
92,874
37,800
5,250
368,829
243,930
*New Energy Solar Limited has agreed to bear the fees paid or payable to Deloitte Touche Tohmatsu for audit and taxation
services incurred.
Fees were also paid by subsidiaries of NEW to Deloitte Touche Tohmatsu as follows:
Audit of subsidiary financial statements: $124,800 (2020: $120,000)
Taxation services:
$2,400 (2020: $2,400)
Fees were also paid by subsidiaries of NEW to other firms affiliated with the parent auditor, including Deloitte Tax LLP
as follows:
Taxation services:
Nil (2020: $11,671)
59
NEW ENERGY SOLARAnnual Report 19. CAPITAL COMMITMENTS
As at 31 December 2021, NEW does not have any direct outstanding capital commitments.
20. CONTINGENT LIABILITIES
Other than as disclosed in the financial report, the Board is not aware of any other potential liabilities or claims
against NEW as at the end of the reporting period.
21. RECONCILIATION OF LOSS AFTER INCOME TA X TO NET
CASH USED IN OPERATING ACTIVITIES
Cash and cash equivalents at the end of the reporting period as shown in the statement of cash flows can be
reconciled to the related items in the statement of financial position as follows:
Loss after income tax (expense)/benefit for the year
(20,174,483)
(65,057,965)
Adjustments for:
Payment of transaction costs relating to disposal of assets
7,495,182
-
Fair value movement of financial assets at fair value through profit or loss
21,311,539
61,599,384
2021
$
2020
$
Net foreign exchange (gains)/losses
Amortisation of deferred borrowing costs
Payments of transaction costs relating to loans and borrowings
Change in operating assets and liabilities:
– Increase in receivables
– Decrease/(increase) in deferred tax assets
– (Decrease)/increase in payables
– (Increase)/decrease in provision for income tax
Net cash used in operating activities
(152,717)
-
-
147,604
1,067,649
147,260
(10,999,812)
(102,612)
4,431,548
(1,449,138)
(6,148,450)
(68,459)
227,897
13,746
(4,305,653)
(3,406,175)
22. CHANGES IN LIABILITIES ARISING FROM FINANCING
ACTIVITIES
Balance at 1 January 2020
Non-cash transactions
Financing cash movements
Balance at 31 December 2020
Financing cash movements
Non-cash transactions
Balance at 31 December 2021
60
OTHER LIABILITIES
$
-
(477,522)
5,460,178
4,982,656
(499,084)
(4,483,572)
-
NEW ENERGY SOLARAnnual Report 23. EARNINGS PER SHARE
Loss after income tax
Weighted average number of ordinary shares used in
calculating basic earnings per share
Weighted average number of ordinary units used in
calculating diluted earnings per unit
Basic earnings per share
Diluted earnings per share
2021
$
2020
$
(20,174,483)
(65,057,965)
Number
Number
350,277,183
353,061,372
350,277,183
353,061,372
Cents
(5.76)
(5.76)
Cents
(18.43)
(18.43)
There are no transactions that would significantly change the number of units at the end of the reporting period.
24. EVENTS AFTER THE REPORTING PERIOD
On 11 February, the Board announced an unfranked dividend of 1 cent per share for the six-months ended 31
December 2021, payable on or around 6 April 2022.
On 10 February 2022, US Solar Fund plc announced its intention to exercise its option over a second 25% tranche
of Mt Signal 2. Pursuant to the agreement signed in December 2020, the acquisition price for the second tranche
was US$21 million, with financial close anticipated in April 2022. The investment value of MS2 at 31 December
2021 shown in the balance sheet reflects the fair market value of NEW’s 75% interest in the solar power plant on a
discounted cash flow basis at that time, unadjusted for option value.
On 11 February 2022, the Board advised that following its Strategic Review announced in October 2020 and the
implementation of measures recommended by the review to reduce the share price discount to net asset value of
the business, it had assessed the impact of the first phase of the Strategic Review. The Board recognised that the
first phase had succeeded in reducing gearing and returning some value to shareholders. However, as the NEW
share price has continued to trade at a significant discount to net asset value, the Board and its adviser RBC Capital
Markets are revisiting the recommendations of the Strategic Review with the objective of maximising shareholder
value. These recommendations include the sale of NEW’s remaining United States solar assets either in whole-of-
portfolio or individual asset transactions.
Other than the matter noted above, no matter or circumstance has arisen since 31 December 2021 that has
significantly affected, or may significantly affect NEW's operations, the results of those operations, or NEW's state
of affairs in future financial years.
61
NEW ENERGY SOLARAnnual Report Independent Auditor’s Report
FOR THE YE AR ENDED 31 DECEMBER 2021
Directors’ Declaration
FOR THE YE AR ENDED 31 DECEMBER 2021
In the directors’ opinion:
•
•
•
•
the attached financial statements and notes comply with the Corporations Act 2001, including compliance with
the Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations
2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued
by the International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of NEW's financial position as at
31 December 2021 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that NEW will be able to pay its debts as and when they become due
and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the Board
JEFFREY WHALAN
Chair of the NEW
25 February 2022
62
NEW ENERGY SOLARAnnual Report Independent Auditor’s Report
FOR THE YE AR ENDED 31 DECEMBER 2021
63
NEW ENERGY SOLARAnnual Report 64
NEW ENERGY SOLARAnnual Report 65
NEW ENERGY SOLARAnnual Report 66
NEW ENERGY SOLARAnnual Report Stock Exchange
Information
TID PV modules – ground
view – September 2017
TID panel rows closeup – September 2017
67
NEW ENERGY SOLARAnnual Report
N E W E N E R G Y S O L A R
Annual Report
Stock Exchange Information
STATEMENT OF QUOTED SECURITIES AS AT 31 JANUARY 2022
• There are 7,657 shareholders holding a total 320,587,986 ordinary shares
• The 20 largest shareholders between them hold 27.08% of the total shares on issue.
DISTRIBUTION OF QUOTED UNITS AS AT 31 JANUARY 2022
DISTRIBUTION OF SECURITYHOLDERS
CATEGORY (SIZE OF HOLDING)
NUMBER OF
SECURITYHOLDERS
PERCENTAGE
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Totals
Holding less than marketable parcel
1,308
1,679
764
3,326
580
7,744
603
17.08%
21.93%
9.98%
43.44%
7.57%
100%
7.88%
SUBSTANTIAL SECURIT YHOLDINGS AS AT 31 JANUARY 2022
There are no substantial shareholders pursuant to the provisions of section 671B of the Corporations Act 2001.
DIRECTORS’ SHAREHOLDINGS
As at 31 January 2022 directors of NEW held a relevant interest in the following NEW securities on issue.
DIRECTOR OF THE COMPANY
ORDINARY SECURITIES
Jeffrey Whalan
John Holland
James Davies
Maxine McKew
John Martin
RESTRICTED SECURITIES
There are no restricted securities on issue by NEW.
68
541,552
256,754
43,016
66,666
657,479
NEW ENERGY SOLARAnnual Report TOP 20 HOLDERS OF ORDINARY SECURITIES AT 31 JANUARY 2022
SECURITYHOLDER NAME
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
BNP PARIBAS NOMS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
A B DIXON PTY LTD
BNP PARIBAS NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
ZONDA CAPITAL PTY LTD
BNP PARIBAS NOMINEES PTY LTD BARCLAYS
DIXON PRIVATE INVESTMENTS PTY LIMITED
NWOD MONTPELIER INVESTMENTS PTY LIMITED
NETWEALTH INVESTMENTS LIMITED
MR LESLIE PETER WOZNICZKA
NEWECONOMY COM AU NOMINEES PTY LIMITED
CONTINENTAL HOLDINGS PTY LTD
JOBE FAMILY HOLDINGS NO 3 PTY LTD
MR SEAN MICHAEL NUNAN
KATDAR PTY LTD
GRUEN SUPERANNUATION PTY LTD
MR DAMIEN JOSEPH KENNEALLY & MRS CANDACE LYNN KENNEALLY
NUMBER OF
SECURITIES HELD
% OF
TOTAL
33,176,319
10.349%
12,929,629
8,537,090
7,901,947
6,616,660
3,576,799
3,116,708
1,333,334
1,174,357
941,598
843,995
822,403
765,776
757,835
750,000
750,000
599,139
572,762
567,074
566,575
4.033%
2.663%
2.465%
2.064%
1.116%
0.972%
0.416%
0.366%
0.294%
0.263%
0.257%
0.239%
0.236%
0.234%
0.234%
0.187%
0.179%
0.177%
0.177%
Total held by top 20 holders of ordinary securities
86,300,000
26.919%
69
NEW ENERGY SOLARAnnual Report Unaudited Aggregated Historical
Financial Information
FOR THE YE AR ENDED 31 DECEMBER 2021
Stanford at sunset
– September 2017
Unaudited Aggregated
historical financial
information
70
TID ground view – September 2017
NEW ENERGY SOLARAnnual Report
N E W E N E R G Y S O L A R
Annual Report
Unaudited Aggregated Historical
Financial Information
FOR THE YE AR ENDED 31 DECEMBER 2021
UNAUDITED AGGREGATED HISTORICAL FINANCIAL STATEMENTS
New Energy Solar Limited (the Parent Company) and E&P Investments Pty Ltd (E&P) as Responsible Entity for
New Energy Solar Fund (the Trust) were stapled together to form a stapled entity known as New Energy Solar
whose securities were officially quoted on the Australian Securities Exchange (ASX).
At a general meeting of the Trust held on 25 June 2021, the members of the Trust resolved that E&P be directed
to wind up the Trust in accordance with its constitution. As a result of the above resolution, the Trust units were
unstapled from the Parent Company shares with effect from 30 June 2021. The Trust units were delisted from the
ASX on 2 July 2021 with the Parent Company continuing as a single listed investment company, NEW, carrying on
the New Energy Solar business. ASIC has confirmed the Trust was de-registered as a managed investment scheme
on 14 February 2022.
The unaudited aggregated historical statement of profit or loss and other comprehensive income, aggregated
historical statement of financial position, aggregated historical statement of changes in equity and aggregated
historical statement of cash flows (together “Aggregated Historical Financial Information”) of the Parent
Company and the Trust set out below is presented to provide investors with the comprehensive and relevant
information about the performance and position of New Energy Solar for the entire 12 months including the
stapling period.
The unaudited aggregated historical financial information has been prepared to reflect the combined interest in
the Parent Company and the Trust by aggregating the Parent Company and the Trust financial information after
eliminating transactions and balances between the Parent Company and the Trust. The accounting policies adopted
in the preparation of the unaudited aggregated historical financial information is consistent with that adopted in
respect of the Parent Company and the Trust financial statements.
The unaudited aggregated historical financial information is a presentation of the financial results of the Parent
Company and the Trust for the period of 1 January 2021 to 31 December 2021. The comparative information
presented in the aggregated historical financial information represents the stapled group financial information as of
31 December 2020.
The unaudited aggregated historical financial information does not form part of the financial statements of NEW.
71
NEW ENERGY SOLARAnnual Report AGGREGATED HISTORICAL STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME – FOR THE YEAR ENDED 31 DECEMBER 2021
NEW ENERGY
SOLAR LIMITED
(COMPANY)
NEW ENERGY
SOLAR FUND
(TRUST)
TOTAL
(COMBINED)
NEW ENERGY
SOLAR LIMITED
(COMPANY)
NEW ENERGY
SOLAR FUND
(TRUST)
TOTAL
(COMBINED)
31-Dec-21
31-Dec-21
31-Dec-21
31-Dec-20
31-Dec-20
31-Dec-20
$
-
$
-
$
-
$
$
$
-
(3,944,789)
(3,944,789)
(21,311,539)
152,717
7,741
10,722,552
6,000,000
4,587
(4,423,942)
(2,664)
-
(3,928,149)
(105,234)
1,403,389
-
-
369
(2,629,625)
(381)
(23,538)
(25,239,688)
47,483
1,411,130
10,722,552
6,000,000
4,956
(7,053,567)
(3,045)
(23,538)
(61,599,384)
(147,604)
9,834
-
-
-
(18,191,755)
1,212,574
8,074,341
331,131
-
-
(61,737,154) (12,518,498)
(559)
(1,215,256)
(140,979)
-
(79,791,139)
1,064,970
8,084,175
331,131
-
-
(74,255,652)
(1,215,815)
(140,979)
(1,322,670)
(442,568)
(7,495,182)
(112,696)
(8,633)
-
(1,435,366)
(451,201)
(7,495,182)
(1,501,384)
(353,420)
-
(674,991)
(132,130)
-
(2,176,375)
(485,550)
-
(1,264,112)
(306,041)
(29,320)
(67,299)
(4,437)
(62,583)
(1,315,828)
(310,478)
(91,903)
(1,073,075)
(241,864)
(16,196)
(283,898)
(15,630)
(75,521)
(1,356,973)
(257,494)
(91,717)
(370,041)
(154,855)
(11,387,453)
(34,954)
(25,052)
(404,996)
(195,490)
(339,573) (11,727,027)
(107,621)
(261,133)
(4,769,949)
(93,606)
(102,382)
(1,519,696)
(201,227)
(363,515)
(6,289,645)
(15,811,395)
(2,969,198)
(18,780,594)
(66,507,103) (14,038,194) (80,545,297)
(4,363,088)
-
(4,363,089)
1,449,138
-
1,449,138
(20,174,483)
(2,969,198)
(23,143,682)
(65,057,965) (14,038,194)
(79,096,159)
-
-
-
-
-
-
(20,174,484)
(2,969,198)
(23,143,682)
(65,057,965) (14,038,194)
(79,096,159)
(5.76)
(0.84)
(6.61)
(18.43)
(0.15)
(22.40)
Net income
Fair value loss of assets
classified as held for sale
Fair value loss of financial
assets at fair value through
profit or loss
Foreign exchange (loss)/gain
Finance income
Dividend income
Finance income
Dividend income
Total net loss
Finance expenses
Responsible entity fees
Investment management
fees
Accounting and audit fees
Disposal fee and costs
Legal and advisory
expenses
Director fees
Marketing expenses
Listing and registry
expenses
Other operating expenses
Total expenses
Loss before tax
Income tax (expense)/
benefit
Loss after tax for the year
Other comprehensive
income, net of income tax
Total comprehensive loss
for the year
Earnings per security
Basic and diluted loss
(cents per security)
72
NEW ENERGY SOLARAnnual Report
AGGREGATED HISTORICAL STATEMENT OF FINANCIAL POSITION
NEW ENERGY
SOLAR
LIMITED
(COMPANY)
NEW ENERGY
SOLAR FUND
(TRUST)
TOTAL
(COMBINED)
NEW ENERGY
SOLAR LIMITED
(COMPANY)
NEW ENERGY
SOLAR FUND
(TRUST)
TOTAL
(COMBINED)
31-Dec-21
31-Dec-21
31-Dec-21
31-Dec-20
31-Dec-20
31-Dec-20
ASSETS
Current assets
Cash and cash
equivalents
Trade and other
receivables
Total current assets
Non-current assets
Financial assets held
at fair value through
profit or loss
Deferred tax assets
Total non-current
assets
Total assets
LIABILITIES
Current liabilities
Trade and other
payables
Current tax payable
Total current
liabilities
Total liabilities
Net assets
EQUITY
Issued capital
(Accumulated losses)/
retained earnings
Total equity
$
5,987,333
11,155,947
17,143,280
362,126,159
-
362,126,159
379,269,439
10,576,020
-
10,576,020
10,576,020
368,693,419
$
-
-
-
$
$
$
$
5,987,333
2,329,798
7,186,008
9,515,806
11,155,948
17,143,281
141,353
2,471,151
5,188,142
12,374,150
346,839
9,862,645
- 362,126,159
-
-
377,369,006
4,384,056
56,006,873 433,375,879
4,384,056
-
- 362,126,159 381,753,062
379,269,440 384,224,213
-
437,759,935
56,006,873
68,381,023 447,622,580
-
-
10,576,020
-
7,369,408
68,459
249,807
-
2,636,559
68,459
10,576,020
10,576,020
7,437,867
-
-
7,437,867
- 368,693,420 376,786,346
249,807
249,807
2,705,018
2,705,018
68,131,216 444,917,562
447,284,627
- 447,284,627
424,480,516
49,280,653
473,761,169
(78,591,207)
368,693,420
- (78,591,207)
(47,694,170)
- 368,693,420 376,786,346
18,850,563 (28,843,607)
68,131,216 444,917,562
73
NEW ENERGY SOLARAnnual Report AGGREGATED HISTORICAL STATEMENT OF CHANGES IN EQUIT Y
Balance at 1 January 2020
Loss after tax for the year
Total comprehensive loss for the year
Issue of securities
Capital reallocation
NEW ENERGY SOLAR LIMITED (COMPANY)
Issued
capital
$
Retained
earnings/
(accumulated losses)
$
Total
$
339,372,774
17,363,795
356,736,569
-
-
(65,057,965)
(65,057,965)
(65,057,965)
(65,057,965)
3,380,500
81,727,242
-
-
3,380,500
81,727,242
Balance at 31 December 2020
424,480,516
(47,694,170)
376,786,346
Balance at 1 January 2021
Loss after tax for the year
Other comprehensive income, net of income tax
Total comprehensive loss for the year
Issue of shares
Share buybacks
Buyback costs, net of income tax
Capital reallocation
Dividend
NEW ENERGY SOLAR LIMITED (COMPANY)
Issued
capital
$
Retained
losses
$
Total
$
424,480,516
(47,694,170)
376,786,346
-
-
-
(20,174,484)
(20,174,484)
-
-
(20,174,484)
(20,174,484)
1,588,331
(33,419,462)
(106,014)
54,741,257
-
-
-
-
1,588,331
(33,419,462)
(106,014)
54,741,257
-
(10,722,552)
(10,722,552)
Balance at 31 December 2021
447,284,628
(78,591,206)
368,693,422
74
NEW ENERGY SOLARAnnual Report
AGGREGATED HISTORICAL STATEMENT OF CHANGES IN EQUIT Y (CONT'D)
Balance at 1 January 2020
Loss after tax for the year
Total comprehensive loss for the year
Issue of securities
Capital reallocation
Distributions
NEW ENERGY SOLAR FUND (TRUST)
Issued
capital
$
Retained
earnings/
(accumulated losses)
$
Total
$
134,313,666
38,454,937
172,768,603
-
-
(14,038,194)
(14,038,194)
(14,038,194)
(14,038,194)
1,728,309
(81,727,242)
(5,034,080)
-
-
1,728,309
(81,727,242)
(5,566,180)
(10,600,260)
Balance at 31 December 2020
49,280,653
18,850,563
68,131,216
Balance at 1 January 2021
Loss after tax for the year
Other comprehensive income, net of income tax
Total comprehensive income for the year
Issue of securities
Capital reallocation
Distributions
Balance at 31 December 2021
NEW ENERGY SOLAR FUND (TRUST)
Issued
capital
$
Retained
earnings/
(accumulated losses)
$
Total
$
49,280,653
18,850,563
68,131,216
-
-
49,280,653
237,337
(42,985,998)
(6,531,992)
-
(2,969,198)
(2,969,198)
-
-
15,881,365
65,162,018
-
237,337
(11,755,260)
(54,741,258)
(4,126,105)
(10,658,097)
-
-
75
NEW ENERGY SOLARAnnual Report AGGREGATED HISTORICAL STATEMENT OF CHANGES IN EQUIT Y (CONT'D)
Balance at 1 January 2020
Loss after tax for the year
Other comprehensive income, net of income tax
Total comprehensive loss for the year
Issue of securities
Distributions
Balance at 31 December 2020
Balance at 1 January 2021
Loss after tax for the year
Total comprehensive loss for the year
Issue of securities
Securities buybacks
Buyback costs, net of income tax
Capital reallocation
Distributions
Dividends
FUND (COMBINED COMPANY AND TRUST)
Issued
capital
$
Retained
earnings/
(accumulated losses)
$
Total
$
473,686,440
55,818,732
529,505,172
-
-
-
5,108,809
(5,034,080)
473,761,169
(79,096,159)
(79,096,159)
-
-
(79,096,159)
(79,096,159)
-
5,108,809
(5,566,180)
(10,600,260)
(28,843,607)
444,917,562
FUND (COMBINED COMPANY AND TRUST)
Issued
capital
$
Accumulated
losses
$
Total
$
473,761,169
(28,843,607)
444,917,562
-
-
(23,143,682)
(23,143,682)
(23,143,682)
(23,143,682)
1,825,668
(33,419,462)
(106,014)
66,496,517
(6,531,992)
-
-
-
1,825,668
(33,419,462)
(106,014)
(11,755,260)
54,741,257
(4,126,105)
(10,658,097)
-
(10,722,552)
(10,722,552)
Balance at 31 December 2021
502,025,885
(78,591,206)
423,434,679
76
NEW ENERGY SOLARAnnual Report
AGGREGATED HISTORICAL STATEMENT OF CASH FLOWS
NEW ENERGY
SOLAR LIMITED
(COMPANY)
NEW ENERGY
SOLAR LIMITED
(COMPANY)
NEW ENERGY
SOLAR FUND
(TRUST)
NEW ENERGY
SOLAR FUND
(TRUST)
FUND
(COMPANY
AND TRUST)
FUND
(COMPANY
AND TRUST)
31-Dec-21
31-Dec-20
31-Dec-21
31-Dec-20
31-Dec-21
31-Dec-20
$
$
$
$
$
$
7,741
4,587
(4,317,981)
-
-
(4,305,653)
(6,082,609)
64,594,538
33,419,462
(7,495,183)
51,016,746
Cash flows from operating activities
Interest income received
Other income received
Payments to suppliers
Income tax refund
Dividend income received
Net cash flow from
operating activities
Cash flows from investing activities
Payments for investments
Repayments from/(loans to)
subsidaries
Repayments from/(loans to)
related parties
Disposal fee and costs
Net cash flow from
investing activities
Cash flows from financing activities
Proceeds from issue of
securities
Payments for securities
buybacks
Payment of issue and
buyback costs
Share issue transaction costs
Payments of transaction
costs relating to loans
Receipt of foreign currency
derivatives
Proceeds/(repayment) of
loans from New Energy
Solar Fund to New Energy
Solar Limited
1,588,330
-
(33,419,462)
(153,507)
9,834
-
(3,429,755)
13,746
-
1,514,174
-
(563,182)
-
-
4,482,394
-
(1,554,771)
-
418,725
1,521,915
4,587
(4,881,163)
-
-
4,492,228
-
(4,984,526)
13,746
418,725
(3,406,175)
950,992
3,346,348
(3,354,661)
(59,827)
(4,062,547)
-
18,487,913
(6,082,609)
14,425,366
1,248,164
2,392,668
10,908,070
64,594,538
2,392,668
(7,495,183)
12,156,234
(2,814,383)
2,392,668
29,395,983
53,409,414
26,581,600
3,380,500
237,337
1,728,309
1,825,667
5,108,809
-
-
-
-
(147,260)
-
-
-
-
-
-
-
-
- (33,419,462)
(153,507)
-
-
-
-
-
2,311,540
-
-
(147,260)
2,311,540
(499,084)
5,460,178
-
(5,460,178)
(499,084)
-
Distributions paid
Dividends paid
Net cash flow from
financing activities
Net (decrease)/increase in
cash and cash equivalents
Cash at beginning of the year
Effect of exchange rate changes
Cash and cash equivalents
at the end of the year
-
(10,722,552)
- (10,658,097)
-
-
(24,642,654)
(10,658,097)
- (10,722,552)
(24,642,654)
-
(43,206,275)
8,693,418 (10,420,760) (26,062,983) (53,627,035)
(17,369,565)
3,504,818
2,329,798
152,717
2,472,860
4,542
(147,604)
(7,077,100)
7,186,008
(108,908)
6,679,348
1,610,618
(1,103,958)
(3,572,282)
9,515,806
43,809
9,152,208
1,615,160
(1,251,562)
5,987,333
2,329,798
-
7,186,008
5,987,333
9,515,806
77
NEW ENERGY SOLARAnnual Report
Additional Disclosures
FOR THE YE AR ENDED 31 DECEMBER 2021
Additional Disclosures
Stanford at sunset
– September 2017
78
TID ground view – September 2017
NEW ENERGY SOLARAnnual Report
N E W E N E R G Y S O L A R
Annual Report
Additional Disclosures
FOR THE YE AR ENDED 31 DECEMBER 2021
OTHER
Since admission to the ASX on 4 December 2017 to the date of the financial report, NEW has used the cash assets
at the time of admission in a way consistent with its business objectives.
79
NEW ENERGY SOLARAnnual Report Directory
31 DECEMBER 2021
The Company's securities are quoted on the official list of the Australian Securities Exchange Limited (ASX).
ASX Code is NEW.
NEW ENERGY SOLAR
INVESTMENT MANAGER
New Energy Solar Limited (ACN 609 396 983)
New Energy Solar Manager Pty Limited
(ACN 609 166 645)
Level 15, 100 Pacific Highway
NORTH SYDNEY NSW 2060
T 1300 454 801
F 1300 883 159
AUDITOR
Deloitte Touche Tohmatsu
Grosvenor Place, 225 George Street
SYDNEY NSW 2000
T +61 2 9322 7000
F +61 2 9322 7001
www.deloitte.com.au
Level 15, 100 Pacific Highway
NORTH SYDNEY NSW 2060
T 1300 454 801
F 1300 883 159
E info@newenergysolar.com.au
www.newenergysolar.com.au
DIRECTORS
Jeffrey Whalan (Non-Executive Chair)
John Holland (Non-Executive Director)
Maxine McKew (Non-Executive Director)
James Davies (Non-Executive Director)
John Martin (Non-Independent, Non-Executive Director)
SECRETARIES
Hannah Chan
Caroline Purtell
SHARE REGISTRAR
Link Market Services Limited
Level 12, 680 George Street
SYDNEY NSW 2000
80
NEW ENERGY SOLARAnnual Report