FLINDERS COAL PTY LTD

FUNCTIONAL RESPONSIBILITY AND STRUCTURE

SA Generation Corporation was established on 1 January 1997 pursuant to the Electricity Corporations (Generation Corporation) Amendment Act 1996.  During 1998-1999 the operations of SA Generation Corporation (SAGC) were disaggregated into a number of subsidiary corporations (Flinders Power Pty Ltd, Optima Energy Pty Ltd, Synergen Pty Ltd and Terra Gas Trader Pty Ltd).  The SA Generation Corporation did not retain effective control over those companies due to a Ministerial Direction issued pursuant to section 6 of the Public Corporations Act 1993 that required SAGC ‘… not to exercise any power of direction … so as to create or maintain an impediment to the autonomous trading activities …’ of its subsidiaries.

In March 2000 the shares held by SAGC in its subsidiaries were transferred to the Treasurer.  Further, pursuant to a Ministerial Transfer Order, the assets and liabilities of SAGC were transferred to RESI Corporation and the Treasurer of South Australia.

Following those transfers SAGC was ‘converted’ to a Corporations Law company entitled Flinders Coal Pty Ltd.

The primary function of Flinders Coal Pty Ltd was to hold the right to mine coal at the Leigh Creek coal mine site.

AUDIT MANDATE AND COVERAGE

Audit Authority

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 must in respect of each financial year, audit the accounts and financial statements of Flinders Coal Pty Ltd.

Scope of Audit

Work undertaken included a review of the accounting treatment for the transfer of assets and liabilities to RESI Corporation and the Treasurer.

CONTROLS OPINION

As required by subsection 36(1)(a)(iii) of the Public Finance and Audit Act 1987, the audit of Flinders Coal Pty Ltd (formerly SA Generation 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 Flinders Coal Pty Ltd (formerly SA Generation 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.

INTERPRETATION AND ANALYSIS OF FINANCIAL STATEMENTS

Transfer of Assets and Liabilities to RESI Corporation and the Treasurer

During the year Ministerial Transfer Orders were made by the Treasurer pursuant to the Electricity Corporations (Restructuring and Disposal) Act 1999.  These Orders transferred the following assets and liabilities, at their book value, from SAGC to RESI Corporation and the Treasurer.

Financial Performance of Flinders Coal Pty Ltd (formerly SA Generation Corporation)

The results of operations for the year ended 30 June 2000 for Flinders Coal Pty Ltd (formerly SA Generation Corporation) are set out below.

Abridged Financial Statement

Profit and Loss Statement for the year ended 30 June 2000

Flinders Coal Pty Ltd (formerly SA Generation Corporation) had no assets or liabilities as at 30 June 2000.

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