Generation Lessor Corporation (GLC) was established as a subsidiary of the Treasurer in July 1999 pursuant to the Public Corporations (Generation Lessor Corporation) Regulations 1999.
The functions of GLC include being the lessor under a lease granted in respect of certain prescribed assets transferred to GLC pursuant to the Electricity Corporations (Restructuring and Disposal) Act 1999.
Prescribed electricity generation assets of $121.2 million were transferred from Optima Energy Pty Ltd (Optima Energy) and Synergen Pty Ltd (Synergen).
Prepaid rentals from the lease of the prescribed electricity generation assets to external parties were $315.1 million.
A dividend of $198.2 million was paid to the Treasurer.
In accordance with section 31 of the Public Finance and Audit Act 1987 and subclause 13(3) of the Schedule to the Public Corporations Act 1993, the Auditor-General may at any time, and must in respect of each financial year, audit the accounts and financial statements of the Generation Lessor Corporation.
The audit program was directed primarily towards obtaining sufficient evidence to enable an audit opinion to be formed with respect to the financial statements and internal control.
During 1999-2000 a specific area of audit attention was the accounting for the transfer and lease of the prescribed electricity generation assets.
As required by subsection 36(1)(a)(iii) of the Public Finance and Audit Act 1987, the audit of Generation Lessor Corporation included an assessment of the controls exercised in relation to the receipt, expenditure and investment of money, the acquisition and disposal of property and the incurring of liabilities.
Audit formed the opinion that the controls exercised by Generation Lessor Corporation in relation to the receipt, expenditure and investment of money; the acquisition and disposal of property; and the incurring of liabilities, were sufficient to provide reasonable assurance that the financial transactions of the organisation were conducted properly and in accordance with the law.
On 4 May 2000 and 11 May 2000, the South Australian Treasurer signed an agreement with external parties for the lease and transfer of the assets and liabilities of Optima Energy and Synergen respectively. Although settlement of these transactions did not take place until 6 June 2000, the benefits and risks associated with the businesses were transferred as at the date of the agreement, ie 4 May 2000 for Optima Energy and 11 May 2000 for Synergen.
To give effect to these agreements assets, including prescribed electricity generation assets as defined by the Electricity Corporations (Restructuring and Disposal) Act 1999, were transferred from Optima Energy and Synergen to GLC.
These transfers, which were made through Ministerial Transfer Orders pursuant to the Electricity Corporations (Restructuring and Disposal) Act 1999, transferred the following assets:
|
|
|
|
2000 |
|
|
|
|
$’000 |
Prescribed electricity generation assets - Optima Energy |
|
|
|
96 381 |
Prescribed electricity generation assets - Synergen |
|
|
|
18 036 |
Prescribed electricity generation land - Optima Energy |
|
|
|
1 923 |
Prescribed electricity generation land - Synergen |
|
|
|
573 |
Other land |
|
|
|
4 315 |
|
|
|
|
121 228 |
Under the subsequent lease agreements prepaid lease rentals of $315.1 million were received by the State, resulting in an:
accounting profit of $200.1 million with respect to the lease of the prescribed generation assets;
accounting loss of $1.9 million with respect to finance leases over prescribed generation land.
On 3 August 2000 the South Australian Treasurer signed an agreement with NRG Asia Pacific Ltd for the disposal of the assets and liabilities of Flinders Power Pty Ltd. Although settlement of the transaction did not occur until 8 September 2000, the benefits and risks associated with the business were transferred as at the date of the agreement, ie 3 August 2000.
As part of this agreement, further prescribed generation assets were transferred to GLC in the 2000-01 financial year.