ASX Announcement/Press Release | 31 August 2022
TPC Consolidated Limited (ASX:TPC)
TPC Consolidated releases its Appendix 4E and FY22 Annual Report
TPC Consolidated Limited (ASX:TPC) provides the attached Appendix 4E and
Annual Report for the year ended 30 June 2022 (FY22).
Authorised for release by the Board of TPC.
For further information, please contact:
TPC Consolidated
Charles Huang
Chief Executive Officer
M: +61 (2) 9009 6888
E: charles.huang@tpc.com.au
Media & Investor Enquiries
The Capital Network
Julia Maguire
M: +61 2 8999 3699
E: julia@thecapitalnetwork.com.au
About TPC Consolidated
TPC Consolidated Limited (ASX:TPC) owns and operates leading Australian-based
electricity and gas retailer CovaU (pronounced “cover you”), which offers
competitively priced products to household as well as business (Small Medium
enterprises and Commercial and Industrial) customers.
The client base of TPC’s CovaU business, spread across most Australian states and
territories, can choose from a wide range of products, from conventional gas and
electricity through to solar, wind and ‘greenpower’ plans.
TPC is focussed on further expanding CovaU’s market presence in the energy
segment of the Australian utilities sector. The Company’s expansion plans include
additions to its current suite of renewables segment-related energy products, as
consumers preference energy sources that accelerate the decarbonisation process.
To learn more, please visit:
www.tpc.com.au
www.covau.com.au
TPC Consolidated Limited (ASX:TPC) | ABN 99 073 079 268
Level 11, 201 Kent Street Sydney NSW 2000 Australia | www.tpc.com.au
1
Appendix 4 E
Final Report
TPC CONSOLIDATED LIMITED
ABN 99 073 079 268
Current Reporting Period:
Previous Corresponding Period:
Year Ended 30 June 2022
Year Ended 30 June 2021
Results for Announcement to the Market
Revenue from ordinary activities
Earnings from continuing operations before interest
taxation, depreciation, amortisation and
expense,
impairment (EBITDA)
Profit from continuing operations after tax
Net profit for the period attributable to members
Up
Up
Up
Up
Dividends
Final dividend for current reporting period
Interim dividend for current reporting period
Total dividend for current reporting period
Record date for determining entitlements to final dividend:
7 September 2022 and payable on 21 September 2022
Review of Operations
Change
31.4%
44.3%
11.2%
11.2%
To
To
To
To
Amount
$122,984,701
$9,052,210
$5,212,706
$5,212,706
Amount per Security
Franked amount per
Security
Cents
10.00
3.00
13.00
Cents
10.00
3.00
13.00
$000’s
Revenue
EBITDA (1)
NPAT
Year ended
30 June 2022
Year ended
30 June 2021
% Change
122,985
9,052
5,213
93,629
6,271
4,687
31.4%
44.3%
11.2%
(1) EBITDA is a non-IFRS measure and is used internally by management to assess the performance of the business. EBITDA has been
extracted from the full financial report.
Revenue from operations for the consolidated entity was $123 million in FY22, which was up by $29.4 million or 31.4% on the previous
corresponding period (PCP). This gain was attributable to the continuing growth of TPC’s core energy business, with its revenues increasing by
$29.6 million or 32.0% to $122.2 million in FY22. This was underwritten by an increase of $20.7 million or 30.4% in the electricity service segment
and a gain of $8.9 million or 36.1% in the gas service segment. However, telecommunication revenue decreased by $0.2 million (or 24.6%) from
$1.0 million to $0.8 million in FY22, due to a further decline in prepaid mobile revenue.
Gross profit and gain on sale of derivatives totalling $27.8 million in FY22, up by $5.6million or 25.4% on PCP. This included the gains realised
on the sale of some future derivative instruments, as the TPC Group strategically realigned its hedging position during the last quarter of its
FY22.
Total operating expenses and employee benefit expense for the consolidated entity increased to $19.2 million in its FY22, up 11.9% on the PCP
figure of $17.1 million. Despite this increase in operating expenses, the consolidated entity’s efficiency ratio (expenses divided by revenue)
improved to 15.6% in FY22, from 18.3% in the prior year.
Earnings before interest expense, taxation, depreciation, amortisation and impairment (EBITDA) from operations in FY22 was $9.1 million, up by
44.3% or $2.8 million on the PCP total of $6.3 million.
Profit before tax of the consolidated entity totalled $8.3 million in FY22, up by $2.9 million or 53.9% on the PCP figure of $5.4 million.
Net profit after tax (NPAT) from operations in FY22 was $5.2 million, up 11.2% on the PCP result of $4.7 million.
TPC Group net assets as at end-FY22 totalled $52.3 million, up $35.3 million or 207.9% on PCP. This big increase was mainly attributable to the
current year's profit after tax of $5.2 million and the increase reported in the positive fair value movement on derivatives of $31.6 million.
Current assets for the consolidated entity were $80.4 million as at end-FY22, up $52.0 million or 182.8% on PCP. This significant increment was
mainly attributable to a $0.3 million gain in cash and bank deposits, a sizable $46.7 million increase in derivatives held at fair value, and a $4.8
million rise in trade receivables. The end-FY22 non-current assets were total of $0.9 million, down $2.5 million or 74.5% on PCP. The drop was
mainly due to a $1.9 million decrease in deferred tax assets.
Current liabilities for the consolidated group were $16.3 million as at end-FY22, up $2.1 million or 14.8% on PCP. This gain was due to higher
borrowings (up $1.5 million), tax liabilities (up $2.3 million) and contract liabilities (up $0.5 million), which were partially offset by a $2.3 million
decrease in trade payables. Non-current liabilities increased to $12.6 million, up by $12.0 million or 2,010.2% on PCP. The latter up was mainly
due to a $12.5 million increase in deferred tax liabilities.
As at end-FY22, cash and bank deposits totalled $10.6 million (including an amount of $5.3 million held as security for bank facilities). This cash
and bank balances total was up $0.3 million or 3.3% on the year-earlier figure.
Net Tangible Asset Backing
Net tangible assets per
security
Controlled Entities
30 June 2022
Cents
30 June 2021
Cents
456.6
141.9
The Group does not have any interests in associates or joint ventures outside the group.
Audit Report
The financial report is based on consolidated financial statements which have been audited.
TPC CONSOLIDATED LIMITED
A.B.N. 99 073 079 268
Annual Report
For the year ended 30 June 2022
Contents
Chairman's Letter
CEO and Managing Director's Review
Board of Directors
Directors' Report
Corporate Governance Statement
Auditor's Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors' Declaration
Independent Auditor's Report
Shareholder Information
Corporate Directory
Page
2
4
6
8
18
19
20
21
22
23
24
62
63
67
69
Chairman's Letter
Dear Shareholder,
On behalf of the Board of TPC Consolidated Limited (‘TPC’ or ‘the Company’), I am pleased to present TPC’s Annual
Report for its financial year ended 30 June 2022 (FY22).
We are proud of our team’s efforts over the course of the year. They delivered a satisfactory result in the face of a
cavalcade of macroeconomic and geopolitical events, all of which were totally outside of our control. This included further
waves of the COVID-19 pandemic. On a brighter note here, it is now clearly apparent that the world has come round to
the view that it needed to live with the pandemic. At home, all levels of Australian government have gradually moved to re-
open the domestic economy, a welcome move for our economic well-being. This move helped facilitate a pick-up in
Australian business activity, which went hand in hand with a bounce in consumption levels of both power and gas
services. While a return to pre COVID-19 trading conditions has still not occurred, we have continued to monitor trends in
the still-volatile operating environment and reacted appropriately to shifts occurring in customer requirements over the
course of the year.
Your Company’s operational performance over FY22 was also significantly impacted by the ongoing Russia-Ukraine war.
This geopolitical event underwrote a material increase in global energy commodity prices, as it severely disrupted the
flow of Russian gas exports to countries across Western Europe and beyond. This supply squeeze prompted a bidding
frenzy for available global gas supplies, including those produced in Australia. It, in turn, delivered a sharp uplift in
international energy prices, key gas price benchmarks included. Indicative of these gains, the closely watched Henry Hub
gas price in mid-August 2022 was around 150% above its level at the end of calendar 2021. The jumps seen in Australian
Energy Regulator-determined wholesale gas prices over the past six months or so have been even larger.
Despite the tough operating environment confronting your Company over its FY22, we achieved above-expectations
growth in earnings over the year, a testament to the TPC team’s commitment to successfully executing our business
strategy. Revenue of the consolidated entity increased to $123.0 million in FY22, up 31.4% on the previous year. Gross
profit decreased by 25.3% on a previous corresponding period basis. However, on a brighter note, other earnings and
profit metrics were bolstered by a gain of $11.2 million realised on the sale of some future derivative instruments. EBITDA
increased to $9.1 million in FY22, up by 44.3% on last year’s level, while TPC’s FY22 NPAT of $5.2 million was up by
11.2% on its year-earlier figure.
Due to the TPC management team’s ability to deliver increased profits, I am pleased to announce the Board decision to
declare a fully franked final dividend of 10 cents per share for the Company’s FY22.
Looking to our 2023 financial year (FY23) outlook, we expect elevated gas prices to remain in place as long as the
Russia-Ukraine war continues – and possibly even beyond the end of this conflict. This pricing challenge is not something
that affects TPC alone. It presents an ongoing challenge to all players in retail energy markets both here in Australia and
overseas.
All the signs are there that the operating environment for our core CovaU business will remain difficult for some time yet.
Despite this, our management and staff remain committed to coming out of this situation better and stronger than ever
and ready to deliver on our stated growth strategy.
Taking a longer-term perspective, the Board holds out hope that some improvement in the tough trading conditions
currently being experienced in wholesale electricity pricing will materialise later in the new financial year. However, it has
nevertheless decided to take a proactive approach to this challenge. We believe the best way to manage the ability for
the Company to deliver continued satisfactory financial performance is to create a new wholly owned subsidiary focussed
on investments that will enhance TPC’s financial performance. The executive team is currently looking at the best way to
implement this subsidiary and we will share more information on this process further down the track.
Should there be no further major deterioration in overall energy market conditions, the Group expects to maintain its
profitability and cash flow in FY23. CovaU's energy business will remain the largest contributor to revenues and profits. Its
performance will be underpinned by diligent management and stringent cost control alongside the implementation of
initiatives targeting further growth in the energy business. This is the best way to have your Company primed for growth
when operating conditions eventually return to more normal settings.
2 Chairman's Letter
On behalf of the entire Board, I would like to thank our management and staff for their hard work over FY22 and our
shareholders for their patience and continued support. I sincerely hope that we will be able to report improved financial
results for the Company in the coming years as a reward for the continuing support provided by you, our stakeholders.
Yours sincerely,
Greg McCann
Chairman
3
CEO and Managing Director’s Review
In the context of another year of seemingly never ending macroeconomic and geopolitical event challenges that adversely
impacted TPC’s operating environment, we delivered a quite satisfactory 2022 financial year (FY22) financial performance.
Despite retail consumer demand for energy being checked by an ongoing COVID-19 pandemic and a sustained spike in
wholesale electricity and gas prices brought on by the Russia/Ukraine war, our staff remained focussed on delivering TPC’s
plans to meet these external challenges. Upfront, I want to thank them for their efforts during what has been a testing year.
While COVID-19 failed to totally fade from view over FY22, as new variants materialised, countries across the globe,
Australia included, developed strategies to live with the pandemic. This meant that its adverse impact on macroeconomic
conditions abated over the course of year, engendering an improvement in business conditions, our own operations
included. However, Russia’s invasion of Ukraine in February 2022 destroyed nascent hopes of a gradual return to normal
trading conditions in retail energy markets over our FY22. While this geopolitical event was Europe-focussed, it immediately
had global ramifications from an energy commodity pricing perspective.
The coal and gas supply squeeze this ongoing war created, a direct result of disruptions to all-important Russian coal and
gas exports, needing to find alternatives of the Russian coal and gas exports, has caused a sharp rise in global energy
prices. Domestic power (NSW) price has also moved from $60-70/megawatt hour (MWh) in early 2022 to $320-400/MWh
towards the end of FY2022. The accompanying jump in gas prices was even more pronounced, more than quadrupling,
from $8-10/gigajoules (GJ) to exceeding $40/GJ (NSW) towards the end of FY 2022.
But the jump seen in domestic retail energy prices over the past 12 months is not just the result of the Russia/Ukraine
conflict. Australian domestic energy prices have also been pushed higher by an outage at the Longford gas plant in Victoria
and issues at Callide gas generator in Queensland.
These price spikes are also a function of the operating parameters of the broader Australian energy market. It is TPC’s view
that as long as Australian coal and gas manufacturers are exporting large amount of uncontracted coal and gas overseas,
retail energy providers will be confronted by continued shortages of supply of coal and gas in domestic market – a shortfall
that will likely be exacerbated by a failure to quickly resolve the current Russia/Ukraine war. CovaU has a conservative
policy of hedging its load. However, with gas price curves now elevated, new hedges will be more expensive to procure,
leading to higher prices for customers into the future. In the face of the challenges presented by currently high spot and
futures prices, we will continue to manage our hedging strategies in a responsible manner, that balances the aim to be
profitable, but also delivers on our mission to be a challenger retailer providing lower and more competitive energy prices to
its client base.
The increased NPAT TPC achieved in FY22 was a direct consequence of our successful hedge book strategy over the year.
While the Company is proud of this achievement, it prefers to operate in a less volatile pricing environment where the focus
can be on further penetration of its addressable Australian retail energy consumer market.
While the spike in fossil energy prices since the start of calendar 2022 has received an inordinate amount of attention, TPC
has continued to explore ways to broaden its product offering. In an initiative led by myself and our Chief Strategy Officer,
TPC has laid the groundwork to further penetrate the renewable generation market segment. We are currently working on
our second renewable Power Purchase Agreement with a major renewable power developer, the delivery of which will help
strategically position CovaU as an energy retailer with a strong renewable future. We will continue to evolve our green
power offering as opportunities arise.
We anticipate that energy prices will remain volatile in our 2023 financial year (FY23), reflective of ongoing tight
demand/supply equation as well as a continued run of planned and unplanned outages across Australia’s energy production
infrastructure (that will add to the shutdown of the NSW-based Liddell Unit 3 generator that occurred in April 2022). Even
with the implementation of a regulatory price cap of $40/GJ and the creation of a pricing framework designed to protect
Australian consumers, we expect domestic energy prices to remain elevated over the coming 12 months.
TPC’s mobile phone business continued to operate over the course of the Company’s FY22. We continue to explore the
best options for this business over the longer-term.
4 CEO and Managing Director’s Review
As we enter FY23, our business remains subject to a number of risks that may impact our strategy even after careful
planning and management. These risks include:
• Sales competition from rivals that have no regard for commercial viability
• The unreliability of aging fossil fuel-powered energy generation and the delivery volatility of still evolving green
generation, which together could result in extreme or prolonged high wholesale energy prices.
Despite these risks and ongoing macroeconomic and geopolitical challenges that continue to impact the performance of our
core energy retailer operation, we are confident that TPC is well-positioned to achieve a satisfactory FY23 result. This as the
Company’s senior executive team focusses on the delivery of prudent management practices that meet the expectations of
shareholders and regulatory requirements and simultaneously protect profitability.
the
Be rest assured that your senior leadership team will continue to manage the TPC business well and target
simultaneous delivery of both profitable growth for our shareholders and the provision of competitively energy services to
our retail customer base.
Chiao-Heng (Charles) Huang
CEO and Managing Director
5 Board of Directors
Greg McCann B Bus, FCA, FAICD
Non-Executive Chairman
Appointed 2 April 2007
Greg holds a Bachelor of Business (Accounting) degree and is a Fellow of the Institute of Chartered Accountants in Australia
and the Australian Institute of Company Directors.
He has had 24 years of financial consulting experience with Deloitte Touche Tohmatsu. During this time he held a variety of
senior leadership positions including the roles of Managing Partner for Papua New Guinea (1987 to 1990), Managing Partner
for Queensland (1990 to 1995), Managing Partner for New South Wales (1995 to 1997), Managing Director of Deloitte
Consulting / ICS Australia (1979 to 2001) and most recently Associate Managing Director of Deloitte Consulting for Australia
and New Zealand (1999 to 2004).
Greg has extensive experience with boards and senior executives at CEO level. He is currently the Executive Chairman of the
Executor Group of Companies, an independent software and consulting services supplier to the Asia Pacific region, employing
over 1200 professionals. Greg has also chaired other ASX and NASDAQ listed companies and was on the board of the law
firm, Lander & Rogers for ten years. He was also Chairman of NBN Tasmania.
He has not held any other directorships in the last 3 years.
Chiao-Heng (Charles) Huang B Eng
Managing Director and Chief Executive Officer
Appointed 28 February 1996
Charles founded the Company in 1996 as an ISP whilst in his third year of studying towards a Bachelor of Mechanical
Engineering degree at Sydney University. Following the deregulation of the telecommunications industry, Charles sought the
opportunity to resell voice products in Australia and in 1999 he decided to transform the Company from a technology oriented
ISP to a marketing and innovation-oriented player in the prepaid calling card sector.
He has successfully steered TPC Consolidated Limited (formerly Tel.Pacific Limited) from a start-up company to a public
company which was listed on the Australian Securities Exchange in 2007.
He has not held any other directorships in the last 3 years.
Jeffrey Ma B A, FCA, F Fin
Executive Director, Chief Financial Officer and Company Secretary
Appointed 22 November 2004
Jeffrey joined the Company in 2000 with more than 15 years financial services experience. He holds a Bachelor of Arts
(Accounting and Financial Management) degree from the University of Sheffield, England and is a Fellow of the Institute of
Chartered Accountants in England and Wales. He is also a Fellow of the Institute of Chartered Accountants in Australia and a
Fellow of the Financial Services Institute of Australia.
He has over 11 years of financial services experience gained with Credit Lyonnais Australia Limited, a merchant bank, where
he held the position of Company Secretary and Head of Finance and Administration in his last five years and was a Member of
the Management Committee. Jeffrey also worked for two years in Westfield Holdings Limited; a listed property management
and development company. He has an extensive professional background, having also worked for Coopers and Lybrand (now
PricewaterhouseCoopers) in Hong Kong and with a chartered accounting firm in London.
He has not held any other directorships in the last 3 years.
6
Board of Directors
Steven Goodarzi B A
Executive Director and Chief Strategy Officer
Appointed 30 November 2015
Steven joined the Company as Chief Strategy Officer in 2013.
Steven has extensive management and operational experience internationally in strategy, business development, sales and
marketing across the telecommunications and IT industries. He has been involved in leading the development of strategy of
the financial markets across the major financial centres of Asia, North America and Europe. Most recently, Steven was based
in Tokyo with KVH, a Fidelity Investment company, as Director of Strategy and Business Development.
Steven’s vision and leadership is the driver behind the establishment of the energy business.
He has not held any other directorships in the last 3 years.
7
Directors' Report
Your directors present
Company) and the entities it controlled during the year ended 30 June 2022.
the Group's report on the consolidated entity consisting of TPC Consolidated Limited (the
Directors
The names of the directors in office during the year and until the date of this report are as below. Other than as noted,
directors were in office for this entire period.
Greg McCann
Chiao-Heng (Charles) Huang Managing Director, Chief Executive Officer
Jeffrey Ma
Steven Goodarzi
Director, Chief Financial Officer, Company Secretary
Director, Chief Strategy Officer
Chairman (Non-executive)
Principal Activities
The principal activities of the consolidated entity during the year were the provision of retail electricity and gas services to
residential and business customers and of the provision of pre-paid mobile and related services in Australia. These
activities have not changed during the period.
Review of Operations
Key Highlights:
• TPC Consolidated Limited (TPC Group or consolidated entity) operating revenue was $122,984,701 in the year ended 30
June 2022 (FY22), up 31.4% on the previous corresponding period (PCP) figure of $93,628,570.
• Earnings before interest expense, taxation, depreciation, amortisation and impairment (EBITDA) from operations in FY22
was $9,052,210, up 44.3% on the PCP total of $6,271,335.
• Net profit after tax (NPAT) from operations in FY22 was $5,212,706, up 11.2% on the PCP result of $4,686,824.
$000’s
Revenue
EBITDA (1)
NPAT
Year ended
30 June 2022
Year ended
30 June 2021
% Change
on PCP
122,985
9,052
5,213
93,629
6,271
4,687
31.4%
44.3%
11.2%
(1) EBITDA is a non-IFRS measure and is used internally by management to assess the performance of the business.
EBITDA has been extracted from the full financial report.
8
Directors' Report
Revenue from operations for the consolidated entity was $123 million in FY22, which was up by $29.4 million or 31.4% on
the previous corresponding period (PCP). This gain was attributable to the continuing growth of TPC’s core energy
business, with its revenues increasing by $29.6 million or 32.0% to $122.2 million in FY22. This was underwritten by an
increase of $20.7 million or 30.4% in the electricity service segment and a gain of $8.9 million or 36.1% in the gas service
segment. However, telecommunication revenue decreased by $0.2 million (or 24.6%) from $1.0 million to $0.8 million in
FY22, due to a further decline in prepaid mobile revenue.
Gross profit and gain on sale of derivatives totalling $27.8 million in FY22, up by $5.6million or 25.4% on PCP. This
included the gains realised on the sale of some future derivative instruments, as the TPC Group strategically realigned its
hedging position during the last quarter of its FY22.
Total operating expenses and employee benefit expense for the consolidated entity increased to $19.2 million in its FY22,
up 11.9% on the PCP figure of $17.1 million. Despite this increase in operating expenses, the consolidated entity’s
efficiency ratio (expenses divided by revenue) improved to 15.6% in FY22, from 18.3% in the prior year.
Earnings before interest expense, taxation, depreciation, amortisation and impairment (EBITDA) from operations in FY22
was $9.1 million, up by 44.3% or $2.8 million on the PCP total of $6.3 million.
Profit before tax of the consolidated entity totalled $8.3 million in FY22, up by $2.9 million or 53.9% on the PCP figure of
$5.4 million.
Net profit after tax (NPAT) from operations in FY22 was $5.2 million, up 11.2% on the PCP result of $4.7 million.
TPC Group net assets as at end-FY22 totalled $52.3 million, up $35.3 million or 207.9% on PCP. This big increase was
mainly attributable to the current year's profit after tax of $5.2 million and the increase reported in the positive fair value
movement on derivatives of $31.6 million.
Current assets for the consolidated entity were $80.4 million as at end-FY22, up $52.0 million or 182.8% on PCP. This
significant increment was mainly attributable to a $0.3 million gain in cash and bank deposits, a sizable $46.7 million
increase in derivatives held at fair value, and a $4.8 million rise in trade receivables. The end-FY22 non-current assets
were total of $0.9 million, down $2.5 million or 74.5% on PCP. The drop was mainly due to a $1.9 million decrease in
deferred tax assets.
Current liabilities for the consolidated group were $16.3 million as at end-FY22, up $2.1 million or 14.8% on PCP. This
gain was due to higher borrowings (up $1.5 million), tax liabilities (up $2.3 million) and contract liabilities (up $0.5 million),
which were partially offset by a $2.3 million decrease in trade payables. Non-current liabilities increased to $12.6 million,
up by $12.0 million or 2,010.2% on PCP. The latter up was mainly due to a $12.5 million increase in deferred tax liabilities.
As at end-FY22, cash and bank deposits totalled $10.6 million (including an amount of $5.3 million held as security for
bank facilities). This cash and bank balances total was up $0.3 million or 3.3% on the year-earlier figure.
Dividends
A fully franked interim dividend $341,268 equivalent to 3 cents per share (11,235,613 shares) was declared on 22
February 2022 with a record date of 9 March 2022 and was paid on 23 March 2022. A fully franked final dividend
$1,137,561 equivalent to 10 cents per share (11,375,613 shares) was declared on 31 August 2022 with a record date of 7
September 2022 and payment date of 21 September 2022.
9 Directors' Report
Significant Changes in State of Affairs
There were no significant changes in the state of affairs of the consolidated entity during the financial year ended 30 June
2022.
Events Subsequent to the End of the Financial Year
On 31 August 2022, the directors declared a fully franked final dividend for the year ended 30 June 2022 of 10 cents per
share to be paid on 21 September 2022, a total estimated distribution of $1,137,561 based on the number of ordinary
shares on issue as at 7 September 2022.
Likely Developments and Expected Results
To date the Group, specifically the CovaU business, has experienced minimal financial impacts from COVID-19 in the year
ended 30 June 2022. The Group recognises that the market situation continues to be influenced by such factors and
remains vigilant in identifying, continuing and evaluating mechanisms that mitigate the risks posed. Overall, the Group
considers such contextual factors within the broader scope of maintaining a robust and resilient business position.
The directors expect continued growth in the energy business and that the Group will maintain its profitability and cash
flow in the financial year ending 30 June 2023. Management are exploring strategies to grow the energy business through
strategic partnerships, acquisitions and organic means.
Environmental Issues
As a reseller of the electricity and gas services, CovaU Pty Limited is required to purchase renewable energy certificates
and surrender to regulation authority. Apart from that, the consolidated entity's operations are not subject to any significant
environmental regulation under any law of the Commonwealth or a State or Territory.
Directors' Securities Holdings
As at the date of this report, the interests of the directors in the shares of the Company were:
Director
Greg McCann
Chiao-Heng (Charles) Huang
Jeffrey Ma
Steven Goodarzi
See the Remuneration Report for further details.
Number of
Ordinary
Shares
85,000
4,463,393
423,003
210,335
10
Directors' Report
Directors' Meetings
The number of directors' meetings (including meeting of committees of directors) held during the year and the number of
meetings attended by each director were as follows:
Number of Meetings
Greg McCann
Chiao-Heng (Charles) Huang
Jeffrey Ma
Steven Goodarzi
Board
Meetings
Attend /
Held (1)
7/7
7/7
7/7
7/7
Audit and
Risk
Committee
Attend /
Held (1)
2/2
2/2
n/a
n/a
(1) Number of meetings held while a director or a member.
n/a denotes director is not and was not a member of the committee during the year.
Members acting on the committee of the Board were:
Audit and Risk Committee
Greg McCann (Chairman)
Chiao-Heng (Charles) Huang
As at the date of this report the Company had an Audit and Risk Committee and the functions of the previously
established Remuneration and Nomination Committee were handled by the full Board.
Indemnification and Insurance of Directors and Officers and Auditors
The entity has entered into a directors' & officers' insurance contract on 28 January 2022 for the purpose of insuring
against any liability that may arise from the directors carrying out their duties and responsibilities in their capacity as
officers of the Company. The amount of the premium was $108,762.
The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an auditor of the entity or of any related body corporate against a liability incurred as
such an auditor.
11
Directors' Report
Remuneration Report (Audited)
The remuneration report, which has been audited, outlines the key management personnel remuneration arrangements
for the consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations.
Details of Directors and Executives
The names and positions of each director and executive in the Company who received the highest remuneration and
having the greatest authority within the Company, along with the components of their remuneration are provided below.
Directors
Greg McCann
Chiao-Heng (Charles) Huang
Jeffrey Ma
Steven Goodarzi
Chairman (Non-executive)
Managing Director, Chief Executive Officer
Director, Chief Financial Officer, Company Secretary
Director, Chief Strategy Officer
Executives
Bing Zhou
Gang Gu
Chief Revenue Officer
General Manager, Technology
Remuneration Policy
The Board of Directors of the Company is responsible for determining remuneration arrangements for the directors, the
Managing Director and the senior management team. The Board assesses the appropriateness of the nature and amount
of the remuneration of directors and senior executives on a periodic basis by reference to relevant employment market
conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board
and executive team.
Employee Share Ownership Plan
The 2009 Employee Share Ownership Plan, which was implemented on 30 November 2009, was amended and approved
by shareholders at the Annual General Meeting on 30 November 2015 (2009 ESOP). This plan replaced the previously
approved Employee Option Plan instituted on 23 May 2007, which the Board believed was no longer as effective following
changes to the taxation of options in recipients hands.
The 2009 ESOP aims to motivate, retain and attract quality employees and directors of the Company to create a
commonality of purpose between the employees and directors and the Company. The 2009 ESOP is operated by way of
the Company issuing new shares to participants, with an amount equal to the subscription price for those shares being
loaned to the participant by the Company. That loan is secured by the Company taking security over the shares which are
subject to a holding lock period of five years, and is interest free with recourse only to the shares. The loan is to be repaid
over time by the participant (whether through dividends, specific payments to reduce the loan, or on sale of the underlying
shares).
Shares issued under the 2009 ESOP will rank from the date of issue equally with the other shares in the Company then on
issue.
12
Directors' Report
Non-executive Director Remuneration
The Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be
determined from time to time by a general meeting. An amount not exceeding the amount determined is then divided
among the directors as agreed. The latest determination was at the Annual General Meeting held on 20 April 2007 when
shareholders approved an aggregate remuneration of $350,000 per year payable to non-executive directors for their
services as directors, including their services on a committee of directors.
The Board determines payments to the non-executive directors and will review their remuneration annually, based on
market practice, duties and accountability. Independent external advice is sought when required.
Each non-executive director receives a fee for being a director of the Company. An additional fee may also be paid for
each Board committee on which a director sits.
Non-executive directors are eligible to be granted shares under the Employee Share Ownership Plan.
Executive Director and Executives Remuneration
Remuneration granted to the executive directors and other executives has regard to the Company's financial and
operational performance.
The Board determines the base salary of the executive directors and will review their remuneration annually against the
external market and individual contribution to the Company. Performance pay based on overall corporate performance
may be made available to the executive team.
Each executive director and executive receives remuneration commensurate with their position and responsibilities within
the Company.
Executive directors and executives are eligible to be granted shares under the Employee Share Ownership Plan.
Voting and Comments made at the Company's 2021 Annual General Meeting ("AGM")
At the 2021 AGM, shareholders voted to approve the adoption of the remuneration report for the year ended 30 June
2021.
The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
Remuneration of Directors and Executives
The following tables set out the remuneration received by the directors and executives of the Company during the financial
years ended 30 June 2022 and 30 June 2021.
2022
Short Term Benefits
Post
Employment
Long Term
Benefits
Equity
Based
Total
Salary and
Fees
$
Chairman (Non-Executive Director)
Greg McCann
Executive Directors
Chiao-Heng (Charles) Huang
Jeffrey Ma
Steven Goodarzi
Executives
Bing Zhou
Gang Gu
476,068
236,068
240,000
72,765
213,000
160,138
1,398,039
Cash
Benefits (1)
$
Non-Cash
Benefits
$
Super-
annuation
$
Accrued
Leave
Entitlement
$
Share-based
Payments (2)
$
-
-
-
-
-
-
-
-
-
7,277
-
8,242
5,254
-
-
-
22,231
3,417
5,318
48,000
-
34,462
-
-
82,462
-
-
2,253
8,826
4,401
15,480
27,500
27,500
23,568
20,000
15,500
121,345
13
$
80,042
559,810
268,822
300,283
219,595
183,456
1,612,008
Directors' Report
2021
Short Term
Benefits
Post
Employment
Long Term
Benefits
Equity
Based
Total
Salary and
Fees
$
Chairman (Non-Executive Director)
Greg McCann
Executive Directors
Chiao-Heng (Charles) Huang
Jeffrey Ma
Steven Goodarzi
Executives
Bing Zhou
Gang Gu
277,308
236,694
386,694
72,765
217,072
155,949
1,346,482
Cash
Benefits (1)
$
Non-Cash
Benefits
$
Super-
annuation
$
Accrued
Leave
Entitlement
$
Share-based
Payments (2)
$
-
-
-
-
-
-
-
-
-
-
2,212
9,288
4,417
15,917
6,913
25,000
25,000
21,694
18,604
14,725
111,936
-
8,020
5,392
-
21,828
3,376
38,616
$
79,678
419,714
267,086
301,214
-
-
-
-
17,234
-
-
284,026
178,467
1,530,185
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Chairman (Non-Executive Director)
Greg McCann
Executive Directors
Chiao-Heng (Charles) Huang
Jeffrey Ma
Steven Goodarzi
Executives
Bing Zhou
Gang Gu
Fixed Remuneration
2022
2021
100%
100%
79%
100%
100%
99%
100%
93%
100%
92%
96%
100%
Performance
2022
2021
0%
21%
0%
0%
1%
0%
0%
7%
0%
8%
4%
0%
(1) Cash benefits represented the payout of unused annual leave entitlements.
(2) This represents the value of shares that have been issued to the named directors and executives under the 2009
Employee Share Ownership Plan (2009 ESOP). The share of issue of shares under the 2009 ESOP has been treated
as issue of share options and accounted for the Australian Accounting Standards AASB 2 Share-based Payment.
14
Directors' Report
Key Terms of Employment Agreements
Apart
from the non-executive directors, all key management personnel are employed under standard company
employment agreements. With the exception of the executive directors (where either party may terminate the agreement
by giving a three months notice to the other), the notice period of standard company employment agreements is one
month.
None of these agreements provide for termination conditions or payments. The Board considers that the significant equity
holding of executive directors mitigates any risk of not having formal termination clauses.
Any termination entitlements payable to the key management personnel would be considered in light of the relevant
circumstances and would be determined after consideration of entitlements of common law rights.
Directors and Executives Share Holdings
The number of ordinary shares in the Company held directly, indirectly or beneficially during the financial year by key
management personnel and their related entities are as follows:
Greg McCann
Chiao-Heng (Charles) Huang
Jeffrey Ma
Steven Goodarzi
Bing Zhou
Gang Gu
Total
Shares Held
at
Beginning
and End of
Year
85,000
4,463,393
423,003
210,335
201,000
83,826
5,466,557
Total shareholdings include shares held by key management personnel and their related entities. Unless related to the
Employee Share Ownership Plan (2009 ESOP), shares acquired or disposed during the year were on an arm's length
basis at market price.
No director or key management personnel were issued options to acquire shares during the year, held any options at the
end of the year or had any options that expired during the year.
15
Directors' Report
Company Performance, Shareholder Wealth and Director and Executive Remuneration
The remuneration policy has been tailored to increase goal congruence between shareholders, directors and executives.
There have been two methods applied in achieving this aim, the first being a performance based bonus based on key
performance indicators, and the second being the issue of equity to the majority of directors and executives to encourage
the alignment of personal and shareholder interests. No bonus have been paid in the current year.
The following table shows gross revenue, profits and dividends over the last
discontinued operations).
five years (including continuing and
Revenue
Profit after tax
2022
$122.98 m
2021
$93.63 m
2020
$86.35 m
2019
$83.34 m
2018
$80.18 m
$5.27 m
$4.69 m
$3.36 m
$2.21 m
$3.17 m
Share price at year end
$1.51
$3.50
$0.95
$0.40
$1.01
Interim dividend
Final dividend
3 cents
10 cents
8 cents
10 cents
0 cents
8 cents
0 cents
0 cents
0 cents
0 cents
This concludes the Remuneration Report which has been audited.
Shares under Options
There were no ordinary shares of the company issued on exercise of options during the year (2021:Nil), nor are there any
ordinary shares under option at the end of the financial year and the date of this report.
Proceedings on Behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the consolidated entity or intervene in any
proceedings to which the consolidated entity is a party for the purpose of
the
consolidated entity for all or any part of those proceedings.
taking responsibility on behalf of
The consolidated entity was not a party to any such proceedings during the year.
Auditor's Independence Declaration
A copy of the Auditor's independence declaration as required under section 307C of the Corporations Act 2001 has been
provided to the directors and is set out immediately after this directors' report.
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 7 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 7 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 the Company,
acting as advocate for the Company or jointly sharing economic risks and rewards.
16
Directors' Report
Corporate Governance Statement
The directors of the Company support and adhere to the principle of corporate governance, recognising the need for the
highest standard of corporate behaviour and accountability. A review of the Company's corporate governance practices
was undertaken during the year to ensure they remained optimal. Please refer to the corporate governance statement in
this report.
Rounding of Amounts
issued by the Australian Securities and
The Company is of a kind referred to in Legislative Instrument 2016/191,
Investment Commission, relating to "rounding-off". Amounts in this report have been rounded off in accordance with that
Class Order to the nearest dollar. Amounts could have been rounded off to nearest thousand, but management has
selected not to do so at this point in time.
This report is made in accordance with a resolution of Directors, pursuant to Section 298 (2) (a) of the Corporation Act
2001.
On behalf of the Directors,
Greg McCann
Chairman
Chiao-Heng (Charles) Huang
Managing Director
Dated this 31 August 2022
17
Corporate Governance Statement
The Company is committed to implementing standards of corporate governance consistent with the ASX Corporate
Governance Council's Corporate Governance Principles and Recommendations (4th Edition).
Where the Company's corporate governance practices do not correlate with the Recommendations, the Company does not
currently regard it appropriate to meet that specific Recommendation, due to the nature and size of the Company's
operations. The Board's reasoning for any departure to the Recommendations is explained in the Corporate Governance
Statement which is available on the Company website http://www.tpc.com.au/investor_reports.asp.
18
Grant Thornton Audit Pty Ltd
Level 17
383 Kent Street
Sydney NSW 2000
Locked Bag Q800
Queen Victoria Building NSW
1230
T +61 2 8297 2400
Auditor’s Independence Declaration
To the Directors of TPC Consolidated Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
of TPC Consolidated Limited for the year ended 30 June 2022, I declare that, to the best of my knowledge and
belief, there have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
S M Thomas
Partner – Audit & Assurance
Sydney, 31 August 2022
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
19
#7665981v2
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
For the year ended 30 June 2022
Revenue
Delivery of services
Gross profit
Gain on sale of derivatives
Gross profit and gain on sale of derivatives
Other income
Operating expenses
Employee benefits expense
(Loss)/gain on fair value of derivatives
Earnings before interest, taxation, depreciation, amortisation and
impairment (EBITDA)
Depreciation and amortisation
Earnings before interest and taxation (EBIT)
Finance revenue
Finance costs
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income for the year, net of tax
Amounts that may subsequently be transferred to profit or loss
Exchange differences on translating foreign operations
Fair value movement on derivatives designated for Hedge Accounting
Tax relating to gain in fair value of cash flow hedges
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Note
2022
$
2021
$
2
2
2
3
3
3
3
3
4
122,984,701
(106,427,702)
16,556,999
11,226,781
27,783,780
534,902
28,318,682
(10,188,362)
(9,059,516)
(18,594)
93,628,570
(71,465,097)
22,163,473
-
22,163,473
974,210
23,137,683
(8,511,647)
(8,633,161)
278,460
9,052,210
6,271,335
(794,630)
8,257,580
7,969
(70,360)
8,195,189
(2,982,483)
5,212,706
(904,153)
5,367,182
10,338
(76,211)
5,301,309
(614,485)
4,686,824
(19,780)
46,731,335
(15,130,348)
31,581,207
(3,648)
4,669,925
-
4,666,277
36,793,913
9,353,101
Profit attributable to Members of TPC Consolidated Limited
5,212,706
4,686,824
Total comprehensive income attributable to Members of TPC Consolidated
Limited
36,793,913
9,353,101
Earnings per share for the year attributable to the members of TPC
Consolidated Limited
Cents
Cents
Earnings per share
- Basic earnings per share
- Diluted earnings per share
5
5
45.82
45.82
41.43
41.43
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
20
Consolidated Statement of Financial Position
As at 30 June 2022
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivatives held at fair value
Bank deposits
Other assets
Total Current Assets
Non-Current Assets
Property, plant and equipment
Right of use assets
Deferred tax assets
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Borrowings
Derivatives held at fair value
Lease liabilities
Current tax liabilities
Short term provisions
Contract liabilities
Total Current Liabilities
Non-Current Liabilities
Long term provisions
Lease liabilities
Deferred tax liabilities
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained earnings
TOTAL EQUITY
Note
2022
$
2021
$
8
9
23
10
11
13
14
4
15
16
23
14
4
17
18
17
14
4
19
20
5,264,938
18,154,730
45,376
50,434,492
5,296,676
1,183,541
80,379,753
7,026,110
13,393,476
45,791
3,711,263
3,196,676
1,050,088
28,423,404
482,363
374,992
-
857,355
659,092
851,736
1,856,072
3,366,900
81,237,108
31,790,304
6,732,985
1,455,481
10,488
385,818
3,135,339
1,995,564
2,587,726
16,303,401
99,592
26,399
12,493,619
12,619,610
8,957,430
-
-
572,677
868,919
1,668,047
2,137,110
14,204,183
144,335
453,691
-
598,026
28,923,011
14,802,209
52,314,097
16,988,095
10,499,308
35,298,739
6,516,050
52,314,097
10,488,388
3,717,532
2,782,175
16,988,095
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes.
21
Consolidated Statement of Changes in Equity
For the year ended 30 June 2022
Issued
Capital
$
Note
Reserves
$
Retained
Earnings
$
Total
$
Balance at 1 July 2021
9,920,068
(939,264)
(122,467)
8,858,337
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with Shareholders
Payment related to partially paid shares
-
-
-
-
4,666,277
4,666,277
4,686,824
-
4,686,824
4,686,824
4,666,277
9,353,101
19
568,320
-
-
568,320
Dividend paid
Employee equity benefits reserve
Transfer relating to Employee equity benefits reserve
-
-
-
-
17,234
(26,715)
(1,808,897)
-
26,715
(1,808,897)
17,234
-
Balance at 30 June 2021
10,488,388
3,717,532
2,782,175
16,988,095
Balance at 1 July 2021
10,488,388
3,717,532
2,782,175
16,988,095
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with Shareholders
Received related to partially paid shares
Dividend paid
-
-
-
-
31,581,207
31,581,207
5,212,706
-
5,212,706
5,212,706
31,581,207
36,793,913
19
10,920
-
-
-
-
(1,478,831)
10,920
(1,478,831)
Balance at 30 June 2022
10,499,308
35,298,739
6,516,050
52,314,097
The above consolidated statement of changes in equity should be read in conjunction with the accompanying
notes.
22
Consolidated Statement of Cash Flows
For the year ended 30 June 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Interest and other financial costs paid
Income tax paid
NET CASH PROVIDED BY OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant & equipment
Payment to bank deposits
NET CASH USED IN INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from partially paid share capital
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
Dividends paid
NET CASH USED IN FINANCING ACTIVITIES
Net increase in cash held
Cash held at the beginning of the financial year
Note
2022
$
2021
$
130,959,691
(128,296,120)
7,991
(51,267)
(1,505,480)
1,114,815
105,037,424
(94,811,775)
10,416
(76,211)
(270,205)
9,889,649
8(b)
(142,225)
(2,100,000)
(2,242,225)
(191,424)
(1,974,575)
(2,165,999)
10,920
5,333,439
(3,877,958)
(621,331)
(1,478,832)
(633,762)
(1,761,172)
7,026,110
568,320
3,398,995
(4,150,363)
(561,045)
(1,808,897)
(2,552,990)
5,170,660
1,855,450
CASH AT THE END OF FINANCIAL YEAR
8(a)
5,264,938
7,026,110
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
23
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 1: Statement of Significant Accounting Policies
This financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting
Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards
Board (AASB) and the Corporations Act 2001 as applicable to for-profit entities.
The consolidated financial report of the Group also complies with International Financial Reporting Standards (IFRSs) and
interpretations adopted by the International Accounting Standards Board (IASB).
The following is a summary of the material accounting policies adopted in the preparation of the financial report. The accounting
policies have been consistently applied, unless otherwise stated, with all balances being presented in Australian dollars.
This financial report includes the consolidated financial statements and notes of TPC Consolidated Limited and the controlled
entities (consolidated group or group).
TPC Consolidated Limited is a company limited by shares, incorporated and domiciled in Australia, whose shares are publicly
traded on the Australian Securities Exchange, under the ticker TPC.
Basis of Preparation
The financial report has been prepared on an accruals basis and is based on historical costs except where applicable as
modified by the revaluation of financial assets and financial liabilities for which the fair value basis of accounting has been
applied.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report
containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with
Australian Accounting Standards ensures that the consolidated financial statements and notes also comply with International
Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented
below. They have been consistently applied unless otherwise stated.
The financial report of TPC Consolidated Limited and its controlled entities for the year ended 30 June 2022 was authorised for
issue in accordance with a resolution of the TPC Board of Directors on 31 August 2022.
Parent Entity Information
In accordance with Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in Note 28.
Accounting Policies
New, Revised or Amended Accounting Standards and Interpretations Adopted
The Company has applied the required amendments to the Standards that are relevant to its operations and effective for the
current reporting period.
The application of the amendments to Standards do not have a material impact on disclosure or amounts recognised in these
financial statements.
(a) Principles of Consolidation
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as of 30 June 2022. The
Parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has
the ability to affect those returns through its power over the subsidiary. All subsidiaries have a reporting date of 30 June.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses
on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on consolidation,
the underlying asset is also tested for impairment from a group perspective. Amounts reported in the financial statements of
subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
24
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 1: Statement of Significant Accounting Policies (continued)
Accounting Policies (continued)
(a) Principles of Consolidation (continued)
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the
effective date of acquisition, or up to the effective date of disposal, as applicable.
(b) Income Tax
The income tax expense or benefit represents the sum of current tax and deferred tax. Current tax is calculated on accounting
profit after adjustment for any non-taxable and non-deductible items. Deferred tax is calculated at the tax rates that are
expected to apply to the period when the asset is realised or the liability is settled.
It is calculated using the tax rates that have
been enacted or are substantially enacted at reporting date.
The current tax and deferred tax is recognised as an expense in the consolidated statement of profit or loss and other
comprehensive income, except when it relates to items directly charged or credited to equity, in which case the current and
deferred tax is also recognised directly in equity.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the
tax base of assets and liabilities and their carrying amounts in the consolidated financial statements.
Deferred tax liabilities are recognised for all taxable temporary differences, except to the extent that the deferred tax liabilities
arises from:
- the initial recognition of goodwill; or
- the initial recognition of an asset or liability in a transaction that is not a business combination and affects neither
the accounting profit or taxable income at the time of the transaction.
Deferred tax assets are recognised for all deductible temporary differences and for carrying forward of unused tax losses and
tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences,
and the carrying forward of unused tax losses and tax credits can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates and joint ventures, deferred
tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it
is not probable that the reversal will be occurring in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and
liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income
taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that
net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in
which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
for the purposes of
Effective 1 July 2003,
income taxation, TPC Consolidated Limited and its 100% owned Australian
subsidiaries formed a tax consolidated group. As part of the election to enter tax consolidation, the tax consolidated group is
treated as a single entity for income tax purposes. Gotalk Pty Limited and its wholly owned subsidiaries joined the tax
consolidated group upon acquisition on 23 December 2011.
TPC Consolidated Limited, as the head entity in the tax consolidated group, recognises, in addition to its own, the current tax
liabilities and the deferred tax assets arising from unused tax losses and tax credits of all entities in the group.
(c) Inventories
Inventories are initially measured and recorded at cost and are valued at the lower of cost and net realisable value.
25
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 1: Statement of Significant Accounting Policies (continued)
Accounting Policies (continued)
(d) Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost less any accumulated depreciation and any provision for
impairment loss.
Plant and Equipment
Plant and Equipment are measured on the cost basis less depreciation and impairment losses.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable
amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows which will be
received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to their
present values in determining recoverable amounts.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All
other repairs and maintenance are charged to the consolidated statement of profit or loss and other comprehensive income
during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised lease assets, but excluding freehold land, is
depreciated on a straight line basis over their useful lives to the consolidated entity commencing from the time the asset is held
ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the
estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Plant & Equipment
Office Fittings & Furniture
Office Equipment
Network Equipment
10%
13%
20% - 33%
20% - 33%
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
consolidated entity. Gains or losses between the carrying amount and the disposal proceeds are taken to profit or loss.
(e) Leases
A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period
of time in exchange for consideration’. To apply this definition the Group assesses whether the contract meets three key
evaluations which are whether:
• the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being
identified at the time the asset is made available to the Group
• the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the
period of use, considering its rights within the defined scope of the contract
• the Group has the right to direct the use of the identified asset throughout the period of use. The Group assess whether it has
the right to direct ‘how and for what purpose’ the asset is used throughout the period of use.
Measurement and recognition of leases as a lessee
At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet. The right-of-
use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred
by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments
made in advance of the lease commencement date (net of any incentives received).
26
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 1: Statement of Significant Accounting Policies (continued)
Accounting Policies (continued)
(e) Leases (continued)
Measurement and recognition of leases as a lessee (continued)
The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the
end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for
impairment when such indicators exist.
At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that
date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group’s incremental borrowing
rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed),
variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments
arising from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured
to reflect any reassessment or modification, or if there are changes in in-substance fixed payments.
When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if
the right-of-use asset is already reduced to zero.
The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead
of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or
loss on a straight-line basis over the lease term.
(f) Financial Instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the
financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the
liability is derecognised when it is
financial asset and substantially all the risks and rewards are transferred. A financial
extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction
price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for transaction costs (where
applicable)
Financial assets, other than those designated and effective as hedging instruments, are classified into the following categories:
• amortised cost
• fair value through profit or loss (FVTPL)
• fair value through other comprehensive income (FVOCI).
In the periods presented the corporation does not have any financial assets categorised as FVOCI.
The classification is determined by both:
• the entity’s business model for managing the financial asset
• the contractual cash flow characteristics of the financial asset.
All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs,
finance income or other financial items, except for impairment of trade receivables which is presented within other expenses.
27
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 1: Statement of Significant Accounting Policies (continued)
Accounting Policies (continued)
(f) Financial Instruments (continued)
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVTPL):
• they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows
• the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the
principal amount outstanding
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where
the effect of discounting is immaterial.
Financial assets at fair value through profit or loss (FVTPL)
Financial assets that are held within a different business model other than ‘hold to collect’ or ‘hold to collect and sell’ are
categorised at fair value through profit and loss. Further, irrespective of business model financial assets whose contractual cash
flows are not solely payments of principal and interest are accounted for at FVTPL. All derivative financial instruments fall into
this category, except for those designated and effective as hedging instruments, for which the hedge accounting requirements
apply.
Assets in this category are measured at fair value with gains or losses recognised in profit or loss. The fair values of financial
assets in this category are determined by reference to active market transactions or using a valuation technique where no
active market exists.
Financial assets at fair value through other comprehensive income (FVOCI)
The Group accounts for financial assets at FVOCI if the assets meet the following conditions:
• they are held under a business model whose objective it is “hold to collect” the associated cash flows and sell and
• the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Any gains or losses recognised in other comprehensive income (OCI) will be recycled upon derecognition of the asset.
Impairment of financial assets
AASB 9’s impairment requirements use more forward-looking information to recognise expected credit losses – the ‘expected
credit loss (ECL) model’. Instruments within the scope of the requirements included loans and other debt-type financial assets
measured at amortised cost and FVOCI, trade receivables, contract assets recognised and measured under AASB 15 and loan
commitments and some financial guarantee contracts (for the issuer) that are not measured at fair value through profit or loss.
Recognition of credit losses is no longer dependent on the Group first identifying a credit loss event. Instead the Group
considers a broader range of information when assessing credit risk and measuring expected credit losses, including past
events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows
of the instrument.
In applying this forward-looking approach, a distinction is made between:
• financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit risk
(‘Stage 1’) and
• financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not
low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised for
the second category.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected
life of the financial instrument.
28
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 1: Statement of Significant Accounting Policies (continued)
Accounting Policies (continued)
(f) Financial Instruments (continued)
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting for trade and other receivables as well as contract assets and
records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows,
considering the potential for default at any point during the life of the financial instrument. In calculating, the Group uses its
historical experience, external
indicators and forward-looking information to calculate the expected credit losses using a
provision matrix.
The Group assess impairment of trade receivables on a collective basis as they possess shared credit risk characteristics they
have been grouped based on the days past due.
Classification and measurement of financial liabilities
The Group’s financial liabilities include borrowings, trade and other payables and derivative financial instruments.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group
designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives and
financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in profit or
loss (other than derivative financial instruments that are designated and effective as hedging instruments).
interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are
All
included within finance costs or finance income.
Derivative financial instruments and hedge accounting
Derivative financial instruments are accounted for at fair value through profit and loss (FVTPL) except for derivatives designated
as hedging instruments in cash flow hedge relationships, which require a specific accounting treatment. To qualify for hedge
accounting, the hedging relationship must meet all of the following requirements:
• there is an economic relationship between the hedged item and the hedging instrument
• the effect of credit risk does not dominate the value changes that result from that economic relationship
• the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the entity
actually hedges and the quantity of the hedging instrument that the entity actually uses to hedge that quantity of hedged item.
For the reporting periods under review, the Group has designated certain forward currency contracts as hedging instruments in
cash flow hedge relationships. These arrangements have been entered into to mitigate foreign currency exchange risk arising
from certain highly probable sales transactions denominated in foreign currency.
All derivative financial instruments used for hedge accounting are recognised initially at fair value and reported subsequently at
fair value in the statement of financial position.
To the extent that the hedge is effective, changes in the fair value of derivatives designated as hedging instruments in cash flow
hedges are recognised in other comprehensive income and included within the cash flow hedge reserve in equity. Any
ineffectiveness in the hedge relationship is recognised immediately in profit or loss.
At the time the hedged item affects profit or loss, any gain or loss previously recognised in other comprehensive income is
reclassified from equity to profit or loss and presented as a reclassification adjustment within other comprehensive income.
However, if a non-financial asset or liability is recognised as a result of the hedged transaction, the gains and losses previously
recognised in other comprehensive income are included in the initial measurement of the hedged item.
If a forecast transaction is no longer expected to occur, any related gain or loss recognised in other comprehensive income is
transferred immediately to profit or loss. If the hedging relationship ceases to meet the effectiveness conditions, hedge
accounting is discontinued and the related gain or loss is held in the equity reserve until the forecast transaction occurs.
29
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 1: Statement of Significant Accounting Policies (continued)
Accounting Policies (continued)
(g) Impairment of Assets
At each reporting date, the group reviews the carrying values of assets to determine whether there is any indication that those
assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset's fair
value less costs to sell and value in use, is compared to the asset's carrying value. Any excess of the asset's carrying value
over its recoverable amount is charged to the consolidated statement of profit or loss and other comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount
of the cash generating unit to which the asset belongs.
(h) Foreign Currency Transactions and Balances
Functional and Presentational Currency
The functional currency of each group entity is measured using the currency of the primary economic environment in which the
entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity's functional
and presentational currency.
Transactions and Balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the
transaction. Foreign currency monetary items are translated at the year end exchange rate. Non monetary items measured at
historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair
value are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the consolidated statement of profit or loss
and other comprehensive income.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the
gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the consolidated statement of
profit or loss and other comprehensive income.
Group Companies
The financial results and position of foreign operations whose functional currency is different from the group's presentational
currency are translated as follows:
- Assets and liabilities are translated at year end exchange rates prevailing at the reporting date;
- Income and expenses are translated at average exchange rates for the period; and
- Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the group's foreign currency
translation reserve in the consolidated statement of financial position. These differences are recognised in the consolidated
statement of profit or loss and other comprehensive income in the period in which the operation is disposed.
(i) Employee Benefits
Annual Leave/Long Service Leave
Provision is made for the consolidated entity's liability for employee benefits arising from services rendered by employees to
reporting date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected
to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been
measured at the present value of the future cash outflows to be made for those benefits.
Superannuation
Contributions are made by the consolidated entity to employee superannuation funds and are charged as expenses when
incurred.
30
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 1: Statement of Significant Accounting Policies (continued)
Accounting Policies (continued)
(i) Employee Benefits (continued)
Share-based Payments
The group operates equity-settled share-based payment employee share and option schemes. The fair value of the equity to
which employees become entitled is measured at grant date and is recognised as an expense over the vesting period, with a
corresponding increase in equity. The fair value of shares is ascertained as the market bid price. The fair value of options (and
ESOP awards accounted for as options) is ascertained using a Black-Scholes pricing model which incorporates all market
vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at each reporting date such
that the amount recognised for services received as consideration for the equity instruments granted shall be based on the
number of equity instruments that eventually vest.
(j) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short term highly liquid investments
with original maturities of three months or less, and bank overdrafts.
(k) Trade Receivables
Trade and other receivables are stated at amortised cost less any provision for impairment loss.
Expected Credit Loss
The Group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at
amortised cost. The loss allowance methodology applied depends on whether there has been a significant increase in credit
risk. For trade receivables, the Group applies the simplified approach, which requires expected lifetime losses to be recognised
from initial recognition of the receivables. The Group uses an allowance matrix to measure expected credit losses of trade
receivables and contract assets from its customers. Trade receivable amounts are disaggregated into customer segments. Loss
rates are estimated in each age category and are based on the probability of a receivable progressing through to write-off.
Factors to estimate the loss rate are based on risk assessment performed per customer segment and economic factors such as
wholesale electricity forward curves.
The amount of the expected credit loss is recognised in profit or loss within other expenses. When a trade receivable for which
an expected credit loss had been recognised becomes uncollectible in a subsequent period, it is written off against the provision
account. Subsequent recoveries of amounts previously written off are credited against other expenses in profit or loss.
Expected credit loss on trade receivables and contract assets
The Group uses an allowance matrix to measure expected credit losses of trade receivables and contract assets from its
customers. Trade receivable amounts are disaggregated into customer segments.
(l) Trade and Other Payables
Trade and other payables are stated at amortised cost.
(m) Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is
probable that an outflow of economic benefits will result and that outflow can be reliably measured.
(n) Contract Liabilities
Contract liabilities represents the unused component of prepaid mobile products as at the reporting date and relates to cards
that have been activated.
Contract liabilities also represents receipts in advance from customers of the energy business as at the reporting date.
31
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 1: Statement of Significant Accounting Policies (continued)
Accounting Policies (continued)
(o) Revenue Recognition
The Group’s primary revenue streams relate to the retail sale of electricity and gas to residential and business customers in
Australia. Revenue from contracts with customers is recognised when control of the goods or services is transferred to a
customer at an amount that reflects the consideration to which the Group expects to be entitled to receive in exchange for those
goods or services.
The majority of contractual energy supply arrangements with customers have no fixed duration, generally require no minimum
consumption by the customer and are able to be terminated by either party at any time without incurring significant penalty.
Given this, the enforceable contracts are considered short term (less than 12 months) in nature.
The Group has generally concluded that it is the principal in its revenue arrangements because it controls the goods or services
before transferring them to the customer. The Group’s primary performance obligations are the supply of energy (gas or
electricity) over the contractual term. There are either individual contracts representing separate purchasing decisions of
customers, or the units of supply of energy represent a series of distinct goods that are substantially the same and have the
same pattern of transfer to the customer and hence is considered one performance obligation satisfied over time. For the
shorter term contracts, the performance obligations are considered to be satisfied, and revenue is recognised, as and when the
units of energy are delivered.
Residential electricity and gas sales
Residential energy sales relate to the sales of energy (gas and electricity) to retail customers. Residential sales are classified as
individual, short term, day-by-day contracts and are recognised as revenue on a day-by-day basis upon delivery of energy to
customers. The Group recognises revenue from contracts with its residential customers at the electricity and gas portfolio
levels.
Business electricity and gas sales
Business sales represent the sale of energy to business customers. The nature and accounting treatment of this revenue
stream is consistent with residential sales.
Revenue from the rendering of telecommunication service
Revenue from the rendering of telecommunication service is recognised upon the delivery of the service to customers. A sales
incentive provided to a customer in the form of non-cash consideration, for example bonus time, is considered to be a separate
deliverable in a multiple deliverable arrangement. Sales revenue is allocated proportionally to the aggregate of the service paid
for and the incentive, and is recognised when the customer utilises the incentive i.e. when TPC provides the service.
Customer contract liabilities are recognised for cash received in advance and services not used yet.
Costs to obtain and fulfil a contract
Costs that are incurred regardless of whether an energy contract is obtained are expensed as incurred, unless those costs are
explicitly chargeable to the customer.
Variable consideration and constraints
The Group includes variable consideration in the transaction price as estimated at the inception of a contract. However, if it is
considered 'highly probable' that a significant reversal of revenue recognised will occur in the future, the variable consideration
is constrained and not included in the transaction price. The Group's contractual arrangements contain a number of variable
pricing elements including discounts. Some of these variable elements are resolved during the reporting periods. Where they
are not, management estimates the likelihood of the variable pricing element eventuating and recognises the variable pricing
element to the extent it is not highly probable that it will reverse.
Government Grant Income - Jobkeepers Payment
Intended to help keep more Australians in jobs and support businesses affected by the significant economic impact of COVID-
19, the Government announced Jobkeeper Payment Scheme that provides eligible employers with wages subsidy for wages
paid to eligible employees started on 30 March 2020 and finished 28 March 2021. The Jobkeeper payment grant is recognised
as income when the Group is reasonably assured that it will comply with the conditions attaching to it, and the grant will be
received.
32
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 1: Statement of Significant Accounting Policies (continued)
Accounting Policies (continued)
(o) Revenue Recognition (continued)
Government Grant Income - Jobsavers Payment
Intended to help business maintain their NSW employee headcount, NSW and Commonwealth Governments announced
Josaver Payment Scheme that provides eligible employers with wages subsidy for wages paid to eligible NSW employees
started on 18 July 2021 and finished 30 November 2021. The Jobsaver payment grant is recognised as income when the
Group is reasonably assured that it will comply with the conditions attaching to it, and the grant will be received.
Interest revenue is recognised using the effective interest method.
(p) Goods and Services Tax
Revenues and expenses are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable
from the Australian Taxation Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset
or as part of an item of expense.
Receivables and payables in the statement of financial position are shown inclusive of GST. The net amount of GST due, but
not paid, to the Australian Taxation Office is included under payables.
Cash flows are presented in the cash flow statements on a gross basis, except for the GST component of investing and
financing activities, which are disclosed as operating cash flows.
(q) Earnings per Share
Basic earnings per share is calculated as net profit or loss attributable to ordinary equity holders of TPC Consolidated Limited
divided by the weighted average number of ordinary shares outstanding during the period.
Diluted earnings per share is calculated as adjusted net profit or loss attributable to ordinary equity holders of TPC Consolidated
Limited divided by the weighted average number of shares outstanding adjusted for the effects of all dilutive potential ordinary
shares during the period.
(r) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Board of Directors.
(s) Comparatives
Where required by accounting standards, comparative figures have been adjusted to conform to changes in the current year.
(t) Critical Accounting Estimates and Judgments
The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best
available current information. Estimates assume a reasonable expectation of future events and are based on current trends and
consolidated data, obtained both externally and within the group.
Expected Credit Loss of Receivables
The Group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at
amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade receivables, the Group applies the simplified approach, which requires expected lifetime losses to be recognised from
initial recognition of
trade
receivables from its customers. Trade receivable amounts are disaggregated into customer segments. Loss rates are estimated
in each age category and are based on the probability of a receivable progressing through to write-off. Factors to estimate the
loss rate are based on risk assessment performed per customer segment and economic factors such as wholesale electricity
forward curves.
the receivables. The Group uses an allowance matrix to measure expected credit
losses of
33
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 1: Statement of Significant Accounting Policies (continued)
Accounting Policies (continued)
(t) Critical Accounting Estimates and Judgments (continued)
Contract Assets
The Group recognises revenue from gas and electricity sales once the gas and/or electricity has been consumed by the
customer. Management estimates customer consumption between the last invoice date and the end of the reporting period
when determining gas and electricity revenue for the financial period. Various assumptions and financial models are used to
determine the estimated unbilled consumption.
Some of the assumptions and estimates include:
• Volume and timing of energy consumed by the customers
• Various pricing plans and allocation of the estimated volume to such pricing plans
• Loss factors
• Behavioural discounts
The Group makes uses of simplified approach in accounting for contract assets and records the loss allowance as life expected
credit losses.
Fair Value of Financial Instruments
When the fair value of financial assets and financial liabilities recorded in the statement of financial position cannot be derived
from active markets, the fair value is determined using valuation techniques including the discounted cash flow model. The
inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement
is required in establishing fair values. The judgements include considerations of inputs such as liquidity risk, credit risk and
volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 26
for further discussion.
34
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 2: Revenue
Disaggregated Revenue
Services transferred over time
- Electricity Service
- Gas Service
- Telecommunication Services
Gain on sale of derivatives (1)
Other Income
- Foreign Exchange Gain
- Government Grant Income - Jobsaver/Jobkeeper Payment
- Sundry Income
2022
$
2021
$
88,653,094
33,582,362
749,245
122,984,701
67,960,501
24,674,598
993,471
93,628,570
11,226,781
-
12,133
332,192
190,577
534,902
-
889,350
84,860
974,210
(1) This represents the gains recognised on the sale of energy derivatives to third parties. As detailed in note 26 (a) the
group is exposed to energy price risks and manages these through entering into derivative instruments. The group
strategically enters into these arrangements to manage this risk and the intention is not to trade their position to make a
profit, however, from time to time there is a commercial rationale to exit the hedged position. Any material surplus / (loss)
is recognised separately on the face of the profit and loss.
AASB 15 requires entities to disaggregate revenue from contracts with customers into categories that depict how the
nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The Group has
determined that a disaggregation of revenue using existing segments and the nature of revenue best depicts the Group's
revenue.
For 2022, revenue includes $1,789,763 (2021: $1,816,276) included in contract liability balance at the beginning of the
period.
Note 3: Profit Before Income Tax
Short Term Lease Expense
Advertising and Promotion Expense
Communication Expense
Professional Fees
Bank and Merchant Fees
Travel Expense
Expected Credit Losses
Foreign Exchange Losses
Other Expenses
Total Operating Expenses
Employee Benefits Expenses
Superannuation
Total Employee Benefits Expenses
Depreciation of Non-current Assets
Total Depreciation and Amortisation
Finance Costs
35
2022
$
518,418
836,074
90,624
1,275,543
519,335
185,293
3,207,592
-
3,555,483
10,188,362
8,383,922
675,593
9,059,515
2021
$
270,650
791,692
109,983
921,824
498,408
205,694
2,686,105
100,591
2,926,700
8,511,647
8,046,161
587,000
8,633,161
794,630
794,630
904,153
904,153
70,360
76,211
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 4: Income Tax Expense
(a) Income Tax Expense
The major components of income tax expense are:
Income tax payable for the year
Underprovision in respect of prior years
Movement in deferred tax
Movement in deferred tax in respect of prior periods
Income tax expense
(b) The prima facie income tax expense on profit from ordinary activities differs
from the income tax expense provided in the financial statements and is reconciled
as follows:
Profit before income tax expense
Prima facie tax expense on profit from ordinary activities at
30% (2021: 30%)
Non-assessable items
Underprovision in respect of prior years
2022
$
2021
$
3,355,439
407,701
(780,657)
-
2,982,483
893,179
14,299
(257,098)
(35,895)
614,485
2022
$
2021
$
8,195,189
5,301,309
2,458,557
1,590,393
116,225
407,701
(990,207)
14,299
Income tax expense attributable to profit from ordinary activities
2,982,483
614,485
(c) Current Tax Balances
Current tax liabilities
Income tax payable
2022
$
2021
$
3,135,339
868,919
36
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 4: Income Tax Expense (continued)
(d) Deferred Tax Balances
Deferred tax liabilities
Property, plant and equipment
Right of use assets
Accrued Income
Others
Balance as at 30 June 2021
Derivatives held at fair value
Property, plant and equipment
Right of use assets
Accrued Income
Others
Charged to
Other
Opening
Balance
$
Charged to Comprehensive
Income
$
Income
$
Closing
Balance
$
7,696
256,738
1,282,488
231,174
6,127
(106,773)
(694,668)
(231,165)
1,778,096
(1,026,479)
-
-
-
-
-
13,823
149,965
587,820
9
751,617
-
13,823
149,965
587,820
9
-
29,106
(99,977)
(587,820)
7,115
15,130,348
-
-
-
-
15,130,348
42,929
49,988
-
7,124
Balance as at 30 June 2022
751,617
(651,576)
15,130,348
15,230,389
Charged to
Other
Opening
Balance
$
Charged to Comprehensive
Income
$
Income
$
Closing
Balance
$
Deferred tax assets
Provisions
Carry forward tax losses
Allowance of expected credit loss
Trade and other payables
Others
424,389
579,861
1,303,430
744,389
325,002
119,326
(579,861)
(22,969)
(160,869)
(125,009)
Balance as at 30 June 2021
3,377,071
(769,382)
Provisions
Carry forward tax losses
Allowance of expected credit loss
Accrued Income
Trade and other payables
Others
543,715
-
1,280,461
-
583,520
199,993
87,002
-
-
330,170
(174,431)
(113,660)
Balance as at 30 June 2022
2,607,689
129,081
Deferred tax assets
Deferred tax liability
Net deferred tax (liabilities)/assets
37
-
-
-
-
-
-
-
-
-
-
-
-
543,715
-
1,280,461
583,520
199,993
2,607,689
630,717
-
1,280,461
330,170
409,089
86,333
2,736,770
2022
$
2021
$
2,736,770
(15,230,389)
(12,493,619)
2,607,689
(751,617)
1,856,072
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 4: Income Tax Expense (continued)
(e) Tax Consolidation
Effective 1 July 2003, for the purposes of income taxation, TPC Consolidated Limited and its 100% owned Australian
subsidiaries formed a tax consolidated group. As part of the election to enter tax consolidation, the tax consolidated group
is treated as a single entity for income tax purposes. Gotalk Pty Limited and its wholly owned subsidiaries joined the tax
consolidated group upon acquisition on 23 December 2011.
TPC Consolidated Limited, as the head entity in the tax consolidated group, recognises,
in addition to its own
transactions, the current tax liabilities and the deferred tax assets arising from unused tax losses and tax credits of all
entities in the group.
Note 5: Earnings Per Share
Basic earnings per share
Diluted earnings per share
2022
Cents
2021
Cents
45.82
45.82
41.43
41.43
Net earnings used in the calculation of basic and diluted EPS
5,212,706
4,686,824
Weighted average number of ordinary shares outstanding during the year
in the calculation of basic EPS
in the calculation of diluted EPS
Number
11,375,613
11,375,613
Number
11,311,558
11,311,558
Note 6: Dividends Paid and Proposed
(a) Recognised Amounts
(i) Dividends paid during the year:
Final dividend (prior year) - fully franked
Interim dividend - fully franked
Total
(ii) Dividends declared and not recognised as
a liability:
Final dividends - fully franked (1)
2022
Cents per Share
Total
$
2021
Cents per Share
Total
$
10.0
1,137,561
8.0
898,849
3.0
341,268
8.0
910,049
13.0
1,478,829
16.0
1,808,898
10.0
1,137,561
10.0
1,137,561
(1) The final dividend was proposed on 31 August 2022. This amount has not been recognised as a liability in the 2022
financial year but will be brought into account in the 2023 financial year.
38
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 6: Dividends Paid and Proposed (continued)
Franking Credit Balance
The amount of franking credits available for the subsequent financial year are:
- Franking account balance as at the end of the financial year at 30% (2021: 30%)
The amount of franking credits available for future reporting periods:
- Impact on franking account balance of dividends proposed after the reporting date
Note 7: Auditor's Remuneration
During the financial year the following fees were paid or payable for services provided
by Grant Thornton, the auditor of the Company:
Auditors of Parent Entity
Audit and Review of Financial Reports
Non-assurance Services
Taxation Services
Total Auditors Remuneration
Note 8: Cash and Cash Equivalents
(a) Cash Balance
Cash at bank and in hand
(b) Reconciliation of Net Cash Flow from
Operations with Profit after Income Tax
Profit after income tax
Non-cash flows in profit
Depreciation and amortisation
Loss/(gain) on fair value of derivatives
Changes in assets and liabilities
Decrease in prepayments
(Increase)/decrease in trade & other receivables
Increase in trade & other payables
Increase in other provisions
Increase in deferred tax liabilities
39
2022
$
2021
$
1,637,892
1,637,892
(487,526)
1,150,366
970,796
970,796
(487,526)
483,270
2022
$
2021
$
120,750
111,235
16,850
137,600
15,850
127,085
2022
$
2021
$
5,264,938
5,264,938
7,026,110
7,026,110
2022
$
2021
$
5,212,706
4,686,824
794,630
18,594
904,153
(278,460)
238,151
(5,200,548)
549,165
282,774
(780,657)
1,114,815
962,646
465,479
3,008,351
397,753
(257,097)
9,889,649
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 9: Trade and Other Receivables
Current
Trade Receivables
Expected Credit Losses of Receivables
Contract Assets (a)
Goods and Services Tax Receivable
Other Receivables
(a) Contract Assets comprises of:
- Contract Assets
- Other Accrued Income
Opening contract assets
Contract assets billed during the year
Contract assets accrued for the year
Closing contract assets
2022
$
2021
$
14,918,635
(4,703,829)
6,514,256
1,392,156
33,511
18,154,729
12,139,340
(4,264,534)
5,424,242
68,751
25,677
13,393,476
6,514,246
10
6,514,256
5,424,210
32
5,424,242
5,424,210
(74,823,770)
75,913,806
6,514,246
8,515,093
(80,588,722)
77,497,839
5,424,210
The movement in the expected credit losses in respect of trade receivables and other receivables are detailed below:
Opening balance
- Expected credit losses recognised during the year
- Expected credit losses reversed during the year
- Receivables written off during the year as uncollectible
Closing balance
Credit Policy
(4,264,534)
(4,143,545)
935,953
2,768,297
(4,703,829)
(4,344,517)
(3,090,852)
404,747
2,766,088
(4,264,534)
The Group requires customers to pay in accordance with agreed terms. Trade receivables are non-interest bearing and
are generally on 20-90 days terms. A provision for impairment is recognised based on expected credit loss model. All
credit and recovery risk associated with trade receivables has been provided for in the consolidated statement of financial
position.
Ageing of trade receivables at the reporting date was:
Not past due
Past due 0 - 30 days
Past due 31 - 60 days
Past due 61 - 90 days
Past due 90 days over
Total
Expected credit losses
Trade receivables net of expected credit losses
8,577,308
1,751,336
758,139
635,088
3,196,764
14,918,635
6,047,765
1,518,484
656,717
543,434
3,372,939
12,139,340
(4,703,829)
10,214,806
(4,264,534)
7,874,806
40
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 9: Trade and Other Receivables (continued)
The expected credit loss for trade receivables as at 30 June 2022 and 30 June 2021 was determined as follows:
At 30 June 2022
Not past due
Past due 0 - 30 days
Past due 31 - 60 days
Past due 61 - 90 days
Past due 90 days over
Total
At 30 June 2021
Not past due
Past due 0 - 30 days
Past due 31 - 60 days
Past due 61 - 90 days
Past due 90 days over
Total
Note 10: Bank Deposits
Current
Bank Deposits
Expected
Credit Loss
Rate
%
6.24%
23.94%
44.87%
76.66%
91.42%
Expected
Credit Loss
Rate
%
5.99%
22.74%
41.99%
77.02%
84.88%
Gross Carrying
Amount
$
Expected Credit
Loss
$
8,577,308
1,751,336
758,139
635,088
3,196,764
14,918,635
535,170
419,211
340,209
486,884
2,922,355
4,703,829
Gross Carrying
Amount
$
Expected Credit
Loss
$
6,047,765
1,518,484
656,717
543,434
3,372,939
12,139,339
362,016
345,272
275,760
418,554
2,862,932
4,264,534
2022
$
2021
$
5,296,676
3,196,676
Bank deposits include term deposits which are held as security for bank guarantee amounting to $5,296,676 (2021:
$3,196,676).
Note 11: Other Assets
Current
Deferred Commission Costs
Prepayments
Security Deposit
2022
$
2021
$
3,358
624,172
556,011
1,183,541
3,499
862,323
184,266
1,050,088
41
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 12: Controlled Entities
Parent Entity
TPC Consolidated Limited
Controlled Entities Interest at Cost
CovaU Pty Limited
iGENO Pty Limited
Tel.Pacific ESOP Pty Limited
Gen Earth Pty Limited
Kinect Inc.
Investment in controlled entities
Impairment losses
Total investment in controlled entities
Note 13: Property, Plant and Equipment
Plant & Equipment
Less: Accumulated Depreciation
Network Equipment & Software
Less: Accumulated Depreciation
Office Equipment
Less: Accumulated Depreciation
Office Fittings & Furniture
Less: Accumulated Depreciation
Country
of
Incorporation
Effective Interest
2022
2021
%
%
Company's recorded
amount of Investment
2022
$
2021
$
Australia
Australia
Australia
Australia
Australia
Philippines
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
12
100
1
200
115,693
116,006
-
116,006
12
100
1
200
115,693
116,006
-
116,006
2022
$
2021
$
57,264
(11,452)
45,812
826,271
(763,698)
62,573
57,264
(5,726)
51,538
801,700
(735,443)
66,257
1,626,608
(1,397,913)
228,695
1,545,404
(1,304,213)
241,191
1,953,409
(1,808,126)
145,283
1,935,133
(1,635,027)
300,106
482,363
659,092
42
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 13: Property, Plant and Equipment (continued)
Movement in Carrying Amount
2022
Balance at the beginning of the year
Additions
Disposal
Depreciation expense
Foreign currency exchange difference
Plant &
Equipment
Network
Equipment
& Software
$
Office
Equipment
& Software
$
Office
Fittings &
Furniture
$
Total
$
51,538
66,257
241,191
300,106
659,092
-
-
(5,726)
-
24,571
-
(28,255)
-
90,752
(577)
(98,889)
(3,782)
26,902
-
(181,423)
(302)
142,225
(577)
(314,293)
(4,084)
Balance at the end of the year
45,812
62,573
228,695
145,283
482,363
2021
Balance at the beginning of the year
Additions
Disposal
Depreciation expense
Foreign currency exchange difference
Plant &
Equipment
$
Network
Equipment
& Software
$
Office
Equipment
& Software
$
Office
Fittings &
Furniture
$
Total
$
-
90,774
218,135
587,389
896,298
57,264
-
(5,726)
-
5,372
-
(29,889)
-
123,693
-
(92,350)
(8,287)
5,095
(1,631)
(284,874)
(5,873)
191,424
(1,631)
(412,839)
(14,160)
Balance at the end of the year
51,538
66,257
241,191
300,106
659,092
43
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 14: Leases
(a) Amounts recognised in the balance sheet
The balance sheet shows the following amounts relating to leases:
Right-of-use asset
- Properties
At cost
Less: Accumulated depreciation
Balance at 1 July 2020
Addition
Depreciation
Foreign currency exchange difference
Balance at 30 June 2021
Balance at 1 July 2021
Addition
Depreciation
Foreign currency exchange difference
Balance at 30 June 2022
Lease liabilities
Current
Non-current
2022
$
2021
$
2,107,520
(1,732,528)
374,992
2,103,060
(1,251,324)
851,736
910,375
436,784
(491,313)
(4,110)
851,736
851,736
-
(480,336)
3,592
374,992
2021
$
572,677
453,691
1,026,368
2022
$
385,818
26,399
412,217
The lease liabilities are secured by the related underlying assets. Future minimum lease payments at 30 June 2022 were
as follows:
At 30 June 2022
Lease payments
Finance charges
Net present value
At 30 June 2021
Lease payments
Finance charges
Net present value
Within 1 year
$
1-2 year
$
2-3 year
$
3-4 year
$
Total
$
392,137
(6,319)
385,818
616,496
(43,820)
572,676
26,423
(24)
26,399
397,823
(11,762)
386,061
-
-
-
68,474
(843)
67,631
-
-
-
-
-
-
418,560
(6,343)
412,217
1,082,793
(56,425)
1,026,368
(b) Amounts recognised in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to leases:
Depreciation charge of right-of-use asset
Right-of-use asset
Interest expense (included in finance cost)
Expense relating to short-term leases
2022
$
2021
$
480,336
491,313
34,385
152,689
65,739
149,665
44
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 15: Trade and Other Payables
Current
Trade Payables
Accrued Expenses
Sundry Payables
Note 16: Borrowings
Current
Bank borrowings - Trade finance facility
Note 17: Provisions
Short Term Provisions
Leave Entitlement (1)
Make Good
Long Term Provisions
Leave Entitlement (1)
2022
$
2021
$
2,998,165
3,345,751
389,068
6,732,984
2,851,770
5,929,900
175,760
8,957,430
2022
$
2021
$
1,455,481
1,455,481
-
-
2022
$
2021
$
1,745,564
250,000
1,995,564
1,668,047
-
1,668,047
99,592
99,592
144,335
144,335
(1) Leave Entitlement Provision represents provision for employee entitlements relating to annual leave and long service
leave. In calculating the present value of future cash flows in respect of long service leave, the probability of long service
leave being taken is based on historical data. The measurement and recognition criteria relating to employee benefits
have been included in Note 1.
45
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 18: Contract Liabilities
Unearned revenue relating to energy services
Unearned revenue relating to telecommunication services
2022
$
2,255,381
332,345
2,587,726
2021
$
1,776,636
360,474
2,137,110
The amounts recognised as a contract liability will generally be utilised within the next reporting period.
Opening contract liabilities
Contract liabilities extinguished during the year
Contract liabilities accrued for the year
Closing contract liabilities
Note 19: Issued Capital
(a) Ordinary Shares
Issued and Fully Paid
Issued and Partially Paid (1)
(b) Movements in Ordinary Shares on Issue
2,137,110
(24,311,177)
24,761,793
2,587,726
1,880,240
(19,666,990)
19,923,860
2,137,110
2022
2021
Number
$
Number
$
11,235,613
140,000
11,375,613
10,481,668
17,640
10,499,308
11,235,613
140,000
11,375,613
10,481,668
6,720
10,488,388
Balance at the beginning of the year
11,375,613
10,488,388
11,235,613
9,920,068
Issue of 140,000 ordinary ESOP shares at
$1.35 per share on 15 December 2020
Received related to ESOP shares
-
-
-
10,920
140,000
-
-
568,320
Balance at the end of the year
11,375,613
10,499,308
11,375,613
10,488,388
(1) The issue of shares under the 2009 Employee Shares Ownership Plan (2009 ESOP) has been treated as issue of share
options in accordance with the pronouncement of the International Financial Reporting Interpretations Committee. Where
the company funds the acquisition of its own shares via a loan to employees with recourse only to the shares, it is treated
as an option grant and accounted for under AASB 2 Share-based Payment. No loan or equity is booked initially. The
Company has effectively given the employee an option exercisable sometime in the future to buy a share at a set price.
For information relating to shares issued under the 2009 ESOP during the financial year, refer to Note 25(a).
Effective 1 July 1998, the Corporations legislation in place abolished the concepts of authorised capital and par value
shares. Accordingly, the company does not have authorised capital nor par value in respect of its issued shares.
Ordinary shares carry one vote per share and carry the right to dividends.
46
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 19: Issued Capital (continued)
(c) Capital Management
Management controls the capital of the group in order to maintain a good debt to equity ratio, provide the shareholders
with adequate returns and ensure that the group can fund its operations and continue as a going concern.
The group's capital includes ordinary shares supported by financial assets, and structured debt facilities.
Management effectively manages the group's capital by assessing the group's financial risks and adjusting its capital
structure in response to changes in these risks and in the market. These responses include the management of debt
levels, distributions to shareholders, buy-back shares and share issues.
Apart from the above, there have been no changes in the strategy adopted by management to control the capital of the
group since the prior year.
Note 20: Reserves
Foreign Currency Translation Reserve
2022
$
2021
$
The foreign currency translation reserve records exchange differences arising on translation of foreign controlled entities.
Balance at the beginning of the year
Loss on translation of overseas controlled entities
Balance at the end of the year
Employee Equity Benefits Reserve
(2,860)
(19,780)
(22,640)
788
(3,648)
(2,860)
The employee equity benefits reserve records the value of equity benefits provided to employees and directors as part of
their remuneration.
Balance at the beginning of the year
Share-based payment
Transferred to retained earnings
Balance at the end of the year
Cash flow Hedge Reserve
Balance at the beginning of the year
Cash flow hedge gain recognised in equity (net of tax)
Balance at the end of the year
Total Reserves
17,234
-
-
17,234
26,715
17,234
(26,715)
17,234
3,703,158
31,600,987
35,304,145
(966,767)
4,669,925
3,703,158
35,298,739
3,717,532
47
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 21: Contingent Liabilities
As at 30 June 2022 the consolidated entity has issued bank guarantees totalling $5,296,676 (2021: 3,196,676) for which
term deposits are held to secure this amount.
Apart from the bank guarantees, there are no contingent liabilities as at the date of signing of this report.
Note 22: Related Party Transactions
Information relating to controlled entities is set out in Note 13. Transactions occurred between certain of these entities
during the period, all of which are eliminated from the consolidated accounts.
During the year, the Company has paid loan standby fee totalling $6,164 (2021: $Nil) on normal commercial terms and
conditions no more favourable than those available to other parties, to Chiao-Heng (Charles) Huang.
During the year, the Company has paid loan standby fee totalling $822 (2021: $Nil) on normal commercial terms and
conditions no more favourable than those available to other parties, to Jeffrey Ma.
During the year, the Company has paid loan standby fee totalling $96 (2021: $Nil) on normal commercial terms and
conditions no more favourable than those available to other parties, to Steven Goodarzi.
During the year, the Company has paid loan standby fee totalling $384 (2021: $Nil) on normal commercial terms and
conditions no more favourable than those available to other parties, to Bing Zhou.
48
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 23: Fair Value of Financial Instruments
Current Assets
Derivative financial instruments
Current Liabilities
Derivative financial instruments
2022
$
2021
$
50,434,492
50,434,492
3,711,263
3,711,263
10,488
10,488
-
-
At balance date, the Company has a number of derivative financial instruments which are recorded at fair value in the
Statement of Financial Position.
Current Assets
Derivative financial instruments
Opening Balance
- Designated
- Non designated
Acquired
Closing Balance
- Designated
- Non designated
Current Liabilities
Derivative financial instruments
Opening Balance
- Designated
- Non designated
Acquired
Closing Balance
- Designated
- Non designated
Fair Value
$
Carrying
Amount
$
3,703,158
8,105
3,711,263
3,703,158
8,105
3,711,263
46,723,229
46,723,229
50,434,492
-
50,434,492
50,434,492
-
50,434,492
-
-
-
-
-
-
10,488
10,488
-
10,488
10,488
-
10,488
10,488
49
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 23: Fair Value of Financial Instruments
These financial instruments are classified as "Level 2" instruments per the fair value hierarchy in AASB 13. Level 2 refers
to instruments where the fair value is determined using inputs other than quoted prices other than those traded on an
active market.
Financial assets
Derivative financial instrument
- Energy derivatives - cash flow hedges
Financial liabilities
Derivative financial instrument
- Foreign currency derivatives - cash flow hedges
Carrying
Amount
$
Level 2
$
Total
$
50,434,492
50,434,492
50,434,492
50,434,492
50,434,492
50,434,492
10,488
10,488
10,488
10,488
10,488
10,488
The fair value of the instruments has been determined by reference to comparable similar instrument prices as at the
balance sheet date.
The instruments include Cap and Swap agreements mitigating exposure to significant increases in energy prices over the
next twelve months.
50
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 24: Directors and Executives Disclosures
(a) Remuneration of Key Management Personnel
Short-term Employee Benefits
Long-term Employee Benefits
Post-employment Benefits
Equity Based Benefits
2022
$
1,495,981
(5,318)
121,345
-
1,612,008
2021
$
1,362,399
38,616
111,936
17,234
1,530,185
The remuneration paid to the key management personnel is detailed in the Directors' Report.
Note 25: Employee Benefits
(a) Employee Share Ownership Plan
The 2009 Employee Share Ownership Plan, which was implemented on 30 November 2009, was amended and
approved by shareholders at the Annual General Meeting on 30 November 2015 (2009 ESOP).
The 2009 ESOP aims to motivate, retain and attract quality employees and directors of
the company to create
commonality of purpose between the employees and directors and the company. The ESOP is operated by way of the
company issuing new shares to participants, with an amount equal to the subscription price for those shares being
loaned to the participant by the company. That loan secured by the company taking security over the shares which are
subject to a holding lock period of five years, is interest free with recourse only to the shares. The loan is to be repaid
over time by the participant (whether through dividends, specific payments to reduce the loan, or on sale of the
underlying shares).
Shares issued under the 2009 ESOP will rank from the date of issue equally with the other shares in the company then
on issue.
All shares issued pursuant to the 2009 ESOP are held by a trustee appointed by the company in trust for the participant
until such time as the loan is repaid. The loan becomes immediately repayable in the event of dismissal, resignation,
death or retirement of the participant. 60% of all dividends and distributions made in respect of the shares must be
applied towards repayment of the loan. Voting rights attached to the shares may only be exercised by the trustee holder
in the best interest of the participant.
On 15 December 2020, a total of 140,000 shares were granted to an employee of the company under the 2009 ESOP.
For accounting purposes, the share issue under the 2009 ESOP has been treated as option grant and the value of the
options vested has been accounted for and included in the result of the period. Any repayment of the loan will be treated
as partial payment to be applied towards the payment of shares issued under the 2009 ESOP.
The fair value of the option grant relating to the 2009 ESOP is estimated at the date of grant using a Black-Scholes
Options Pricing Model applying the following inputs:
Number of Options on Issue
Exercise Price
Time to Maturity
Underlying Share Price
Expected Share Price Volatility
Risk-free Interest Rate
Dividend Yield
140,000
$1.350
3 years
$1.340
24.73%
0.87%
5.97%
51
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 25: Employee Benefits (continued)
(a) Employee Share Ownership Plan (continued)
ESOP shares in issue
- At started of year
- At year ended
Number of
shares
Exercise Price
$
140,000
140,000
1.350
1.350
The number of ESOP shares on issue represents the number of shares issued under the 2009 ESOP on 15 January
2016 and 15 December 2020. The expected life of the shares is based on historical data, which may not eventuate in the
future. The expected share price volatility reflects the assumption that the historical volatility is indicative of future trends,
which may not necessarily be the actual outcome.
Details of options provided as remuneration and shares issued on the exercise of such options, together with terms and
conditions of the options, can be found in the Remuneration Report on pages 12-16.
(b) Expenses Arising from Share-based Payment Transactions
Total expenses arising from share-based payment transactions recognised during the year as part of employee benefits
expenses were as follows:
Payments related to 2009 ESOP Shares
(c) Superannuation Plan
2022
$
2021
$
-
17,234
The company contributes to employee superannuation plans in accordance with contractual and statutory requirements.
Defined contribution superannuation expense
675,593
587,000
2022
$
2021
$
52
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 26: Financial Instruments and Financial Risk Management Objectives and Policies
The group undertakes transactions in a range of financial instruments including:
- Cash assets;
- Trade and other receivables;
- Trade and other payables;
- Investments; and
- Derivative financial instruments.
The main risks arising from the group's financial instruments are energy price risk, interest rate risk, foreign currency risk
and credit risk. The Board reviews and agrees policies for managing each of these risks.
(a) Energy Price Risk
The group is exposed to energy price risk associated with the purchase and/or sale of electricity, gas and environmental
products. The group manages energy risk through an established risk management framework consisting of policies to
place appropriate risk limits on overall energy market exposures and transaction limits for approved energy commodities,
requirements for delegations of authority on trading, regular reporting of exposures and segregation of duties.
It is the group's policy to actively manage the energy price exposure arising from both forecast energy supply and retail
customer energy load. The Group’s risk management policy for energy price risk is to hedge forecast future positions for
up to 12 months into the future.
Exposures to fluctuations in the wholesale market energy prices are managed through the use of various types of hedge
contracts including derivative financial instruments, such as energy swaps, caps and options.
The Group uses the following types of derivative instruments to mitigate energy price risk.
- Forwards: A contract documenting the underlying reference rate (such as benchmark price or exchange rate) to be
paid or received on a notional principal obligation at a future date.
- Futures: An exchange-traded contract to buy or sell an asset for an agreed price at a future date. Futures are net-
settled in cash without physical delivery of the underlying asset.
- Swaps: A contract in which two parties exchange a series of cash flows for another.
- Options: A contract in which the buyer has the right, but not the obligation, to buy (a call option) or sell (a put option) an
instrument at a fixed price in the future. The seller has the corresponding obligation to fulfil the transaction if the buyer
exercises the option.
Derivatives are carried on the balance sheet at fair value. Movements in the price of the underlying variables, which
cause the value of the contract to fluctuate, are reflected in the fair value of the derivative.
The Group currently uses Cashflow hedge accounting relationships as detailed below:
Objective of hedging arrangement
To hedge our exposure to variability in the cash flows of a recognised asset or liability, or a highly probable forecast
transaction caused by commodity price movements.
Effective hedge portion
The effective portion of changes in the fair value of derivatives designated as cash flow hedges are recognised in the
hedge reserve.
Hedge ineffectiveness
Certain determinants of fair value, such as credit charges included in derivatives, or mismatches between the timing of
the instrument and the underlying item in the hedge relationship, can cause hedge ineffectiveness. Any ineffectiveness is
recognised immediately in profit or loss as a change in the fair value of derivatives.
Hedged item sold or repaid
Amounts accumulated in the hedge reserve are transferred immediately to profit or loss.
53
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 26: Financial Instruments and Financial Risk Management Objectives and Policies
(continued)
(a) Energy Price Risk (continued)
Hedging instrument expires, is sold, is terminated or no longer qualifies for hedge accounting
The amount previously deferred in the hedge reserve is only transferred to profit or loss when the hedged item is also
recognised in profit or loss.
Set out below are the fair values of derivatives designated in hedge accounting relationships at reporting date.
Cashflow Hedge
Current
Assets
$
50,434,492
50,434,492
Current
Liabilities
$
10,488
10,488
A number of derivative contracts have been designated as cash flow hedges of the Group's exposure to foreign
exchange, interest rate and commodity price fluctuations. Designated derivatives include swaps, options, futures and
Electricity
Gas
RECs
FX
Nominal hedge volume
376,005 MWh
687,800 GJ
140,000 units
PHP 35M
Hedge rates
$15.00 -
$370.00
$7.70 -
$17.00
$14.75 -
$70.05
37.13 -
38.58
Carry amounts
Hedging instrument - assets/(liabilities)
Hedge reserve
Fair value increase/(decrease)
Hedging instrument
Hedged item
Hedge ineffectiveness
Electricity
$
36,818,042
25,772,630
Gas
$
11,944,700
8,361,290
RECs
$
1,671,750
1,170,225
FX
$
(10,488)
-
Total
$
50,424,004
35,304,144
34,177,225
(34,177,225)
11,979,360
(11,979,360)
-
-
574,750
(574,750)
-
(18,594)
-
(18,594)
46,712,741
(46,731,335)
(18,594)
Reconciliation of hedge reserve
Effective portion of hedge gains
Tax relating to gain in fair value of cash flow
hedges
Change in hedge reserve
34,177,225
11,979,360
574,750
(11,045,413)
23,131,812
(3,583,410)
8,395,950
(501,525)
73,225
-
-
-
46,731,335
(15,130,348)
31,600,987
54
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 26: Financial Instruments and Financial Risk Management Objectives and Policies
(continued)
(b) Interest Rate Risk
The group’s exposure to interest rate risk is the risk that the financial
changes in market interest rates. The effective weighted average interest rates on those financial assets is as follows:
instrument's value will fluctuate as a result of
2022
Financial Assets
Cash
Trade and other receivables (1)
Bank deposit (1)
Financial Liabilities
Trade and other payables (2)
Borrowing (2)
2021
Financial Assets
Cash
Trade and other receivables (1)
Bank deposit (1)
Financial Liabilities
Trade and other payables (2)
Borrowing (2)
(1) Loans and receivables category
(2) Financial liabilities at amortised cost category, excluding GST payable
Average
Effective
Interest Rate
Total
Note
$
8
9
11
15
16
8
9
11
15
16
5,264,938
18,154,730
5,296,676
28,716,344
0.00%
0.00%
0.35%
6,732,985
1,455,481
8,188,466
0.00%
11.40%
7,026,110
13,393,476
3,196,676
23,616,262
8,957,430
-
8,957,430
0.01%
0.00%
0.17%
0.00%
2.63%
55
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 26: Financial Instruments and Financial Risk Management Objectives and Policies
(continued)
(c) Foreign Currency Risk
The group operates internationally and is exposed to foreign currency risk arising from various currency exposures,
primarily with respect to the US dollar, NZ dollar and Philippine Peso.
Foreign exchange risk arises from future commercial transactions and net investments in foreign operations.
The transactional currency exposure will be minimised by seeking economically favourable local suppliers. When it is
required, the group will enter into forward exchange contracts to reduce and minimise its currency exposures.
Foreign currency risk also arises on translation of the net assets of our non Australian controlled entities which have
different functional currency. The foreign currency gains or losses arising from this risk are recorded through the foreign
currency translation reserve. The group does not seek to hedge this exposure taking consideration of current net
investment position.
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at
the reporting date was as follows:
Consolidated
US dollars
New Zealand dollars
Philippine Peso
(d) Credit Risk
Assets
2022
18,432
17,461
153,530
189,423
2021
225,054
18,018
157,453
400,525
Liabilities
2022
18,920
-
3,622
22,542
2021
16,342
-
11,953
28,295
The group's maximum exposure to credit risk at reporting date in relation to each class of recognised financial assets is
the carrying amount of those assets as indicated in the consolidated statement of financial position.
Trade receivables consist of residential and business customers. Prior to contracting, customers must agree to and
successfully pass a credit check and all results are individually assessed for approval by our credit team under the
credit risk management policy.
In the event that a credit check result is declined by our credit team all offers of supply
and sale are withdrawn from the customers.
The group does not have any significant credit risk exposure to any single counter-party or any group of counter-parties
having similar characteristics. In addition, receivable balances are monitored on an ongoing basis.
There are no significant concentrations of credit risk within the group.
56
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 26: Financial Instruments and Financial Risk Management Objectives and Policies
(continued)
(e) Liquidity Risk
The group's objective is to be self-funding by the generation of positive cash flow. The group manages liquidity risk by
monitoring cash flow requirements on a continuing basis.
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities.
Both interest and principal cash flows are disclosed as remaining contractual maturities and therefore these totals may
differ from their carrying amount in the statement of financial position.
2022
Non-derivatives financial assets
Non-interest bearing
Trade and other receivables
Interest-bearing
Cash and cash equivalents
Bank Deposits
Non-derivatives financial liabilities
Non-interest bearing
Trade and other payables
Interest-bearing
Borrowing
Total non-derivatives
Derivatives financial assets
Non-interest bearing
Derivatives held at fair value
Derivatives financial liabilities
Non-interest bearing
Derivatives held at fair value
Total derivatives
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Total
$
11.40%
18,154,730
5,264,938
5,296,676
(6,732,985)
(1,455,481)
20,527,878
50,434,492
(10,488)
50,424,004
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18,154,730
5,264,938
5,296,676
(6,732,985)
(1,455,481)
20,527,878
50,434,492
(10,488)
50,424,004
57
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 26: Financial Instruments and Financial Risk Management Objectives and Policies
(continued)
(e) Liquidity Risk (continued)
2021
Non-derivatives financial assets
Non-interest bearing
Trade and other receivables
Interest-bearing
Cash and cash equivalents
Bank Deposits
Non-derivatives financial liabilities
Non-interest bearing
Trade and other payables
Interest-bearing
Borrowing
Total non-derivatives
Derivatives financial assets
Non-interest bearing
Derivatives held at fair value
Derivatives financial liabilities
Non-interest bearing
Derivatives held at fair value
Total derivatives
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Total
$
2.63%
13,393,476
7,026,110
3,196,676
(8,957,430)
-
14,658,832
3,711,263
-
3,711,263
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,393,476
7,026,110
3,196,676
(8,957,430)
-
14,658,832
3,711,263
-
3,711,263
As at 30 June 2022, the group maintained a total $10,561,614 in cash balance and bank deposits.
58
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 26: Financial Instruments and Financial Risk Management Objectives and Policies
(continued)
(f) Summarised Sensitivity Analysis
Energy Price Risk
The sensitivity analysis is based on energy price risk exposures arising from the electricity and gas prices from 10 per
cent movement in the wholesale market with all other variables remaining constant.
A sensitivity of 10 per cent has been selected as this is considered reasonable given the current level of market contract
price and the volatility observed both on an historical basis and market expectations for future movements.
Year Ended 30 June 2022
Year Ended 30 June 2021
Profit/Loss
Equity
+10%
$
-10%
$
+10%
$
-10%
$
Profit/Loss
+10%
$
-10%
$
Equity
+10%
$
-10%
$
2,606,716
(1,284,665)
1,322,051
(2,606,716)
1,284,665
(1,322,051)
2,606,716
(1,284,665)
1,322,051
(2,606,716)
1,284,665
(1,322,051)
(184,725)
(587,565)
(772,290)
230,632
587,565
818,197
(184,725)
(587,565)
(772,290)
230,632
587,565
818,197
(Decrease)/increase
- Electricity
- Gas
Interest Rate Risk
The following sensitivity analysis is based on interest rate exposures arising from the effect on interest income on net
average balance of cash and cash equivalents and term deposits from 50 basis point (0.5%) movement in interest rates
during the year.
A sensitivity of plus or minus 50 basis point (0.5%) has been selected as this is considered reasonable given the current
level of both short term and long term Australian interest rates.
Year Ended 30 June 2022
Year Ended 30 June 2021
Profit/Loss
+0.5%
$
-0.5%
$
Equity
+0.5%
$
-0.5%
$
Profit/Loss
+0.5%
$
-0.5%
$
Equity
+0.5%
$
-0.5%
$
Financial Assets
Cash and cash
equivalents
Other assets - term
deposit
Financial Liabilities
Borrowings
Increase/(decrease)
21,512
(21,512)
21,512
(21,512)
15,543
(15,543)
15,543
(15,543)
14,863
(14,863)
14,863
(14,863)
7,733
(7,733)
7,733
(7,733)
(2,547)
33,828
2,547
(33,828)
(2,547)
33,828
2,547
(33,828)
(1,315)
21,961
1,315
(21,961)
(1,315)
21,961
1,315
(21,961)
59
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 26: Financial Instruments and Financial Risk Management Objectives and Policies
(continued)
(f) Summarised Sensitivity Analysis (Continued)
Foreign Exchange Risk
The sensitivity analysis is based on foreign currency risk exposures on financial instruments and net foreign investment
balances as at reporting date. Foreign currency risk arising from financial instruments represents a financial risk.
A sensitivity of 10 per cent has been selected as this is considered reasonable given the current level of exchange rates
and the volatility observed both on an historical basis and market expectations for future movements.
Year Ended 30 June 2022
Year Ended 30 June 2021
Profit/Loss
Equity
+10%
$
-10%
$
+10%
$
-10%
$
Profit/Loss
+10%
$
-10%
$
Equity
+10%
$
-10%
$
(Decrease)/increase
(10,620)
(10,620)
12,980
12,980
(10,620)
(10,620)
12,980
12,980
(23,687)
(23,687)
28,951
28,951
(23,687)
(23,687)
28,951
28,951
Note 27: Segment Reporting
The consolidated entity has identified its operating segments based on the internal reports and that are reviewed and
used by the chief operating decision makers in assessing performance and in determining the allocation of resources.
The operating segments are identified by management based on revenue stream. Discrete financial information about
each of those operating business is reported on a monthly basis.
The consolidated entity operates in the provision of retail electricity and gas services to residential and businesses and of
the of pre-paid mobile and related services in Australia. However, the revenue contributed by pre-paid mobile and related
services is minimal. Therefore, management has concluded that the consolidated entity has one reportable segment,
being the provision of retail electricity and gas services.
60
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Note 28: Parent Entity Disclosures
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Employee equity benefits reserve
Retained earnings
Shareholders' equity
Profit for the year
Total comprehensive income
Parent entity contingencies
Company
2022
$
6,169,687
7,338,553
4,269,131
4,351,167
2021
$
2,690,874
4,424,834
8,978,826
9,427,111
10,499,308
17,234
(7,529,156)
2,987,386
10,488,388
17,234
(15,507,899)
(5,002,277)
9,457,574
2,293,878
9,457,574
2,293,878
The details of all contingent liabilities in respect to TPC Consolidated Limited are disclosed in Note 21.
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in Note 1.
Note 29: Events Subsequent to the End of the Financial Year
On 31 August 2022, the directors declared a fully franked final dividend for the year ended 30 June 2022 of 10 cents per
share to be paid on 21 September 2022, a total estimated distribution of $1,137,561 based on the number of ordinary
shares on issue as at 7 September 2022.
Note 30: Company Details
The Company is incorporated and domiciled in Australia.
The registered office and principal place of business of the Company is:
Suite 1103, Level 11, 201 Kent Street, Sydney NSW 2000, Australia
61
Directors' Declaration
The directors of the Company declare that:
1.
2.
3.
4.
The financial statements, comprising the consolidated statement of profit or loss and other comprehensive
financial position, consolidated statement of changes in equity,
income, consolidated statement of
consolidated statement of cash flows, accompanying notes, are in accordance with the Corporations Act 2001
and:
(a)
(b)
comply with Accounting Standards and the Corporations Regulations 2001; and
give a true and fair view of the consolidated entity’s financial position as at 30 June 2022 and of its
performance for the year ended on that date.
The Company has included in the notes to the financial statements an explicit and unreserved statement of
compliance with International Financial Reporting Standards.
In the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
The directors have been given the declarations by the chief executive officer and chief financial officer required
by section 295A.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf
of the directors by:
Greg McCann
Chairman
Chiao-Heng (Charles) Huang
Managing Director
Sydney, 31 August 2022
62
Grant Thornton Audit Pty Ltd
Level 17
383 Kent Street
Sydney NSW 2000
Locked Bag Q800
Queen Victoria Building NSW
1230
T +61 2 8297 2400
Independent Auditor’s Report
To the Members of TPC Consolidated Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of TPC Consolidated Limited (the Company) and its subsidiaries (the
Group), which comprises the statement of financial position as at 30 June 2022, the statement of profit or
loss and other comprehensive income, statement of changes in equity and statement of cash flows for the
year then ended, and notes to the financial statements, including a summary of significant accounting
policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a Giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance
for the year ended on that date; and
b Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
www.grantthornton.com.au
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Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
63
#7665980v4
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Key audit matter
How our audit addressed the key audit matter
Contract asset recognition -
Note 9
Contract Assets
Contract Assets of $6,514,256 disclosed in Note 9 of
the financial statements represents the value of
electricity and gas supplied to customers between the
date of the last meter reading and the reporting date,
where no bill has been issued by TPC's subsidiary
CovaU to the customer at the reporting date.
Detailed calculations utilising estimates of the
electricity and gas consumption of CovaU’s customers
and applicable pricing plans are used to estimate
contract assets.
This area is a key audit matter due to the significant
estimation uncertainty involved in determining the
estimated customer consumption between the last
invoice date and the end of the reporting period to
determine the gas and electricity contract assets at the
reporting date and the application of pricing
assumptions to the calculation including energy losses.
For contract assets, our procedures included, amongst
others:
• Obtained an understanding of the key controls
management has in place to determine and review
the estimate of contract assets;
• Compared the Group’s previous estimates against
subsequent billings to evaluate the historical
accuracy of the Group’s calculations and estimates;
• Agreed managements reconciliation of purchase
volumes to revenue volumes recognised;
• Challenged management’s calculations and
assumptions and comparing:
-
-
average pricing rates used in the accrual
calculation to historical and current rates;
internally generated estimates of physical
energy loss levels through the distribution
process to published industry averages; and
• Assessed the adequacy of the Group’s disclosures
in respect of contract assets.
Accrued Expenses – Note 15
Management estimates energy consumption between
the date of the last invoice from the energy distributor
to the Group, and the end of the reporting period when
estimating accrued expenses.
Detailed calculations utilising estimates of the
electricity and gas consumption of CovaU’s customers
are used to determine the estimate of accrued
expenses.
This area is a key audit matter due to the significant
estimation uncertainty involved in determining the
estimated customer consumption between the last
invoice date and the end of the reporting period to
determine distribution costs payable at the reporting
date.
Our procedures included, amongst others:
• Obtained an understanding of the process flows and
key controls management has in place to determine
the estimate of the accrued expenses;
• Tested the volume of wholesale energy purchased
by the Group to AEMO and network invoices on a
sample basis;
• Reconciled purchase volumes to consumption
volumes recognised;
• Compared post period-end invoices to
management’s estimate of accrued expenses; and
• Assessed the appropriateness and adequacy of the
disclosures in the financial report.
64
#7665980v4
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included
in the Group’s annual report for the year ended 30 June 2022 but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors’ for the financial report
The Directors of the Group are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the Directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf.This
description forms part of our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 12 to 16 of the Directors’ report for the year
ended 30 June 2022.
In our opinion, the Remuneration Report of TPC Consolidated Limited, for the year ended 30 June 2022
complies with section 300A of the Corporations Act 2001.
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Responsibilities
The Directors of the Group are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
S M Thomas
Partner – Audit & Assurance
Sydney, 31 August 2022
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Shareholder Information
Shareholder information required by the Australian Securities Exchange Limited and not shown elsewhere in this report
is as follows.
(a) Shares and Options as at 26 August 2022
Equity Security
Shares on issue
(b) Distribution of Equity Securities as at 26 August 2022
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
Number
11,375,613
Class of Equity Securities
Ordinary
Shares Holders
Ordinary Shares
Units
% of Issued
Capital
270
102
22
39
17
450
217,210
243,238
173,979
1,278,434
9,462,752
11,375,613
1.91
2.14
1.53
11.24
83.18
100.00
There were 35 holders of less than a marketable parcel of 3,306 ordinary shares.
(c) Substantial Shareholders as at 26 August 2022
Rank Shareholder
1 Mr Chiao Heng Huang
2 Mr Barry Christopher Chan
3
4 Megaway Group Limited
5 Mr Guonan Guan
Focus Capital Finance Limited
Number of
Shares
% of Issued
Capital
4,163,393
700,000
544,500
544,500
440,809
36.60
6.15
4.79
4.79
3.88
67
Shareholder Information
(d) Twenty Largest Shareholders as at 26 August 2022
Rank Shareholder
Number of
Shares
% of Issued
Capital
4,163,393
700,000
544,500
544,500
440,809
424,924
379,488
340,000
332,105
300,000
228,888
228,888
222,851
210,335
140,000
137,112
124,959
83,826
83,003
80,000
9,709,581
36.60
6.15
4.79
4.79
3.88
3.74
3.34
2.99
2.92
2.64
2.01
2.01
1.96
1.85
1.23
1.21
1.10
0.74
0.73
0.70
85.35
Focus Capital Finance Limited
Fortune Giant International Limited
1 Mr Chiao Heng Huang
2 Mr Barry Christopher Chan
3
4 Megaway Group Limited
5 Mr Guonan Guan
6
7 Mr Bob Cheng
8 Mr Jeffrey Wu Kin Ma
9 Ms Wei Chun Wu
10 CTC Supa Pty Ltd (CTC Superfund A/C)
11 Mr Maobin Guan
12 Mrs Xiaohong Xue
13
14 Mr Steven Goodarzi
15 Tel.Pacific ESOP Pty Limited
16
17 Mr Chiao Ting Huang
18 Mr Gang Gu
19 JMM Wealth Management Pty Ltd (Ma Superfund A/C)
20 Dr David George M Welsh
CX & J Pty Ltd (CXJ Superannuation Fund A/C)
Global Property Services Pty Limited (Global Property SPL SF A/C)
Total
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Corporate Directory
Directors
Greg McCann
Chiao-Heng (Charles) Huang
Jeffrey Ma
Steven Goodarzi
Company Secretary
Jeffrey Ma
Registered Office
Suite 1103, Level 11, 201 Kent Street
Sydney NSW 2000
Australia
Telephone
Facsimile
Web Site
(02) 8448 0633
1300 369 222
www.tpc.com.au
Share Registry
Computershare Investor Services Pty Limited
Level 3, 60 Carrington Street
Sydney NSW 2000
Stock Exchange Listing
Australian Securities Exchange Limited
ASX Code: TPC
Auditor
Grant Thornton Audit Pty Ltd
Level 17, 383 Kent Street
Sydney NSW 2000
Solicitor
Baker & McKenzie
Level 46, 100 Barangaroo Avenue
Sydney NSW 2000
Banker
Commonwealth Bank
48 Martin Place
Sydney NSW 2000
Westpac Banking Corporation
425 Victoria Avenue
Chatswood NSW 2067
69