DPA232858-Annual Report - Pilbara...areas of the port’s activities. • A record trade throughput...

DAM

PIER PORT AU

THO

RITYD

AMPIER PO

RT AUTH

ORITY

ANNUAL REPORT

1989-2005 ~ 16 Years of Service to the Pilbara

2005

DAMPIER PORT AUTHORITY

2

CONTENTS

Page

Authority Directory .................................................................................................................................. 3

Directors’ Declaration ............................................................................................................................. 4

Chairman’s Report .................................................................................................................................. 5

Achievements 2004–2005 ...................................................................................................................... 7

Directors’ Report .................................................................................................................................. 12

Audit Report ......................................................................................................................................... 24

Statement of Financial Position ............................................................................................................ 25

Statement of Financial Performance .................................................................................................... 26

Statement of Cash Flows ...................................................................................................................... 27

Notes to Financial Statements .............................................................................................................. 28

New Bulk Liquids Berth (BLB) under construction.

Cover images Left: Woodside Energy announced plans to construct a third berth at the Withnell Bay Terminal, and to initiate a fi fth LNG train.

Right: Bureau of Statistics fi gures show that Port of Dampier supported regional industry that earned Australia $15B AUD in 2003-2004.

Bottom: Dugong are found basking in the warm waters of the Dampier Archipelago.

CONTENTSDAMPIER PORT AUTHORITY CONTENTSDAMPIER PORT AUTHORITY


3

AUTHORITY DIRECTORY

Board of Directors: Peter West Chairman

Robert Vitenbergs Deputy Chairman

Darren Yeates Member (representing Pilbara Iron)

Capt. Wynne Jones Member (representing Woodside Energy)

Danielle Nazzari Member

Chief Executive Offi cer: Steve Lewis

Principal Accounting Offi cer: Fiona Hodgkinson

Address of Offi ce: MOF Road Burrup Penninsula Dampier WA 6713 Telephone: 08 9159 6555 Internet: www.dpa.wa.gov.au

Auditors: Auditor General

Internal Auditors: Stanton Partners

Aerial view of King Bay and the Burrup Peninsula.

AUTHORITY DIRECTORYAUTHORITY DIRECTORYDAMPIER PORT AUTHORITY AUTHORITY DIRECTORYDAMPIER PORT AUTHORITY

Peter West

Darren Yeates


4

DIRECTORS’ DECLARATION

The Directors’ declare that the fi nancial statements and notes:

(a) comply with Accounting Standards, the Port Authorities Act 1999 and other mandatory professional reporting requirements; and

(b) give a true and fair view of the Authority’s fi nancial position as at 30 June 2005 and of its performance, as represented by the results of its operations and its cash fl ows, for the fi nancial year ended on that date.

In the Directors’ opinion:

(a) the fi nancial statements and notes are in accordance with the Port Authorities Act 1999; and

(b) there are reasonable grounds to believe that the Authority will be able to pay its debts as and when they become due and payable.

This declaration has been made in accordance with a resolution of the Directors.

___________________________________________

Chairman

___________________________________________

Director

23 August 2005

DIRECTORS’ DECLARATIONDIRECTORS’ DECLARATIONDAMPIER PORT AUTHORITY DIRECTORS’ DECLARATIONDAMPIER PORT AUTHORITY

(b) give a true and fair view of the Authority’s fi nancial position as at 30 June 2005 and of its


5

CHAIRMAN’S REPORT

It has been another signifi cant year for the Dampier Port Authority in 2004-05, with considerable activity occurring in construction of port facilities, improved safety and security arrangements, and land-use planning and development. The year has been very much about preparing the Port of Dampier for the substantial anticipated growth in trade over the next fi ve years and beyond.

The continued effort of all members of the Dampier Port Authority has achieved good progress on all areas of the port’s activities.

• A record trade throughput of 95.8 million tonnes was achieved - almost 8 per cent above the 88.8 million tonnes of the previous year. This record result is a foretaste of the projected increases in trade in iron ore and gas which will occur over the next few years.

• Construction activity in and around the Port of Dampier has been intense, and has contributed to a 32 per cent increase in trade through the Dampier Cargo Wharf. During 2004-05: Rio Tinto Ltd continued its major port expansion at Parker Point, and the upgrade of its Dampier Salt export facility; Burrup Fertilisers continued construction of its anhydrous ammonia plant and will be the fi rst gas-to-liquids exporter on the Burrup Peninsula; and the Dampier Port Authority has continued construction of a new bulk liquids berth to support the emerging gas-to-liquids industry.

• The Dampier Port Authority has made good progress toward establishing appropriate safety protocols and standards for the import and export of hazardous products and for improving its overall risk management. In addition, the Authority has continued to establish a reputation as a sound environmental manager through its research programs (including a recently published work on “Corals of the Dampier Harbour” in conjunction with the University of WA), environmental monitoring, and conservation practices undertaken during 2004-05.

• As part of its preparations for further trade growth the Dampier Port Authority has increased maintenance expenditure on the Dampier Cargo Wharf and related equipment, as well as new security operational arrangements. This necessary investment impacted upon the fi nancial performance of the Authority and resulted in a pre-tax loss for 2004-05 of $1.108 million, 11.4 per cent below the budgeted loss for the year .

• The Dampier Port Authority has fulfi lled its obligations under the new maritime security regime from 1 July 2004, with new security infrastructure and protocols. The Authority has received a number of visits from the Department of Transport and Regional Services and has been actively involved in security exercises in the port. Further infrastructure improvements have been approved and these will be implemented in 2005-06.

Looking ahead, the Port will continue to experience further change as it supports the exciting trade growth projected for the Port of Dampier. There will be tremendous opportunity for all members of the Dampier Port Authority to demonstrate their professionalism and expertise, and in turn to grow as individuals and as a team.

I thank my fellow Board members and all the people working at the Dampier Port Authority for their commitment, effort and support during the past year and look forward to continuing to make great strides together in forging the growing reputation of the Authority.

Peter WestCHAIRMAN

CHAIRMAN’S REPORTCHAIRMAN’S REPORTDAMPIER PORT AUTHORITY CHAIRMAN’S REPORTDAMPIER PORT AUTHORITY

It has been another signifi cant year for the Dampier Port Authority in 2004-05, with considerable activity

The continued effort of all members of the Dampier Port Authority has achieved good progress on all


6

The Dampier Port Authority was established on 1 March 1989 to oversee the safe, effi cient operation of the Port of Dampier, and to support State development in the Pilbara region. Sixteen years later, the Authority has continued to strive to improve the economic development of the region, the state, and the country, by providing professional port management and appropriate port facilities.

The vision for the team at the Dampier Port Authority is:

To be respected for our contribution to State development and as a port operator in the community we serve.

The direction provided by the vision, is reinforced by a clear statement of the purpose of the Dampier Port Authority...

To bring growth and prosperity to the region and the State through the provision of safe, secure, effi cient, and innovative management of the Port of Dampier.

Importantly, the Dampier Port Authority has determined the values which underpin how the organisation goes about its business, how it relates to its customers, environment, and community. The values are:

Integrity ...................... in our dealings.

Professionalism ......... in our work.

Value for money ......... to our customers.

Care ........................... for our environment, our staff, and community.

Teamwork .................. for shared success.

VISION – MISSION – VALUES

The Port Communications VTIS equipment upgrade.

VISION – MISSION – VALUESVISION – MISSION – VALUESDAMPIER PORT AUTHORITY VISION – MISSION – VALUESDAMPIER PORT AUTHORITY

The Dampier Port Authority was established on 1 March 1989 to oversee the safe, effi cient operation

VISION – MISSION – VALUES


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MAJOR ACHIEVEMENTS IN 2004-2005

The 2004-05 year was essentially a year of preparation at the Port of Dampier as further implementation works were undertaken to facilitate signifi cant increases in export activity in future years, and as the port prepares for construction activity associated with substantial major projects in the Port of Dampier and adjacent areas.

The Dampier Port Authority has made substantial progress in the implementation of its strategic plan, and during 2004-05 has recorded the following major achievements:

• Construction of a new bulk liquids berth, services corridor, and access road continued during 2004-05 in preparation for the emerging gas-to-liquids industry on the Burrup Peninsula. The fi rst export for this new facility will occur in early 2006;

• A Port Development Plan was published in October 2004. This 20 year plan provides a comprehensive outline of the land requirements of the Port of Dampier, and identifi es the strategic development of the port over the next two decades;

• In anticipation of the increased trade through the Dampier Cargo Wharf, a range of maintenance works were carried out, including establishing a strong point (to allow larger vessel size), reinforcement works, replacement of fenders, and maintenance of parts of the wharf surface;

• Further work was conducted in 2004-05 to progress a comprehensive Environmental Management Plan for the Port of Dampier;

• In 2004-05, the Dampier Port Authority completed coral research papers on the environmental monitoring associated with the successful dredging works undertaken in 2003-04;

• A traineeship position, and a graduate engineer position were established, as part of the Dampier Port Authority’s commitment to create opportunities for young people to be involved in the maritime industry, and in particular port administration and operations;

• Australia’s fi rst port authority Automated Identifi cation System (AIS) was introduced at Dampier and certifi cation by the Australian Maritime Safety Authority was obtained; and

• Extensive staff training was undertaken during 2004-05, with particular emphasis on enhancing the Authority’s operational and emergency response capabilities.

MAJOR ACHIEVEMENTS IN 2004-2005

Escort Towage.

MAJOR ACHIEVEMENTS IN 2004-2005MAJOR ACHIEVEMENTS IN 2004-2005DAMPIER PORT AUTHORITY MAJOR ACHIEVEMENTS IN 2004-2005DAMPIER PORT AUTHORITY MAJOR ACHIEVEMENTS IN 2004-2005


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Port Facilities

The Port of Dampier consists of four terminal operators within a single Port. Dampier Salt Limited has its own terminal (i.e. berth and load-out facilities) at Mistaken Island; Hamersley Iron has two private iron ore terminals at Parker Point and East Intercourse Island, and a service wharf; Woodside Energy Limited maintains two private LNG, LPG, and condensate terminals at Withnell Bay; and the Dampier Port Authority provides a heavy load out facility, barge ramp, and Dampier Cargo Wharf. In addition, Mermaid Marine provides an extensive range of commercial marine services.

Western Stevedores (Toll Ports) is licensed by the Dampier Port Authority to provide stevedoring services on the Dampier Cargo Wharf. Port services are provided by Mermaid Sound Pilotage and Marine Services (MSPMS) and Hamersley Iron (through its operating joint venture, Pilbara Iron) maintains its own pilotage services. Woodside and Pilbara Iron provide tug services in the Port, as well as Riverwijs.

Bunkering of fuel in the port is provided by Shell.

Port Operations

Trade to and from the Port of Dampier totalled 95.8 million tonnes for the year. This is a new record for the port, and exceeds the previous record of 92.2 million tonnes achieved in 2002-03. The Port remains the second largest tonnage port in Australia for 2004-05.

A record 2,669 vessels visited the Port of Dampier in 2004-05, indicating the signifi cance of the Port as a trade centre, and the level of construction and exploration currently occurring in the region. Exploration and production activity in the oil and gas industry continues to drive strong demand for facilities at the Port.

The Dampier Port Authority has seen unprecedented growth in trade through the Dampier Cargo Wharf, with a 32 per cent increase over the previous year. The utilisation of the facility continues to increase and this is expected to continue as the projected regional development activities in the oil and gas industry and planned construction activities take place.

Operational planning continues to prepare for the advent of major gas-to-liquids exports – the fi rst being anhydrous ammonia in early 2006. This planning includes development of operating procedures and revision of emergency response plans.

Port Developments

The construction of a bulk liquids berth at the Port of Dampier is the most signifi cant development undertaken by the Dampier Port Authority in its 16 year history. Once it is completed in November 2005 it will provide a substantial export capacity for future gas-to-liquids proponents. In addition to the berth, a new access road was constructed and the services corridor has been extended right through to the new berth.

OVERVIEW OF PORT OPERATIONS

Hamersley Iron’s layby berth at East Intercourse Island – photo courtesy of Pilbara Iron.

OVERVIEW OF PORT OPERATIONSOVERVIEW OF PORT OPERATIONSDAMPIER PORT AUTHORITY OVERVIEW OF PORT OPERATIONSDAMPIER PORT AUTHORITY OVERVIEW OF PORT OPERATIONS

iron ore terminals at Parker Point and East Intercourse Island, and a service wharf; Woodside Energy

9

A 20-year port development plan was completed during 2004-05, which provides information to the community, developers, proponents, and government, about the way in which land could be developed in the port to cope with future demand, and the conditions and timing under which those developments will occur.

Extensive maintenance works were undertaken to the Dampier Cargo Wharf to ensure that the facility continues to play its valuable role in supporting trade, and the oil and gas industry. Additional maintenance will be undertaken in 2005-06, to other parts of the Wharf, and to the barge ramp and heavy load-out facility.

Rio Tinto (Hamersley Iron) is undertaking a major upgrade program at is Parker Point terminal to increase its export capacity. Further proposed works will see Rio Tinto’s export capacity increase to 120mtpa. Rio Tinto (Dampier Salt) also completed its upgrade of its salt storage and export facility in 2004-05, providing a much more efficient operation at Mistaken Island.

Woodside Energy Limited is also embarking on the construction of a 5th Train addition to its gas plant at Dampier. The project will include the establishment of a second LNG tanker berth and associated dredging works in 2005-06.

Port development planning in 2004-05 has included the review of the King Bay Estate, preliminary work on the prospect of a common-user fuel facility, the development of a permanent security gate, modifications to existing office accommodation, and minor but important engineering improvements within the operational areas of the Dampier Port Authority.

Environmental Management

In 2004-05 the Dampier Port Authority has continued its program of monitoring the health of coral in the port, as well as conducting regular sampling of the water habitat and other environmental indicators. It is pleasing to report that the dredging program conducted in early 2004 has had minimal impact on the environment, and that, where effects were felt, habitats have recovered well.

The Dampier Port Authority continues to work with the University of Western Australia in the monitoring of coral in the port, and has recently published a booklet of research papers on the progress to date. More research work is underway to further develop our understanding of the environment of the Port of Dampier.

A revised Environmental Management Plan (EMP), to replace the existing EMP, is currently in progress and will be completed in 2005. The plan provides a blueprint for all users of the port as to the key environmental considerations for operations and future development works.

Work has continued in 2004-05 in the identification of a new spoil ground area for future dredging works which will occur in the port from time to time. It is hoped that this preliminary work will culminate in the identification of a new area in 2005-06.

The Dampier Port Authority continues to show leadership in oil spill management. In 2004-05, this included equipment maintenance, oil spill training, and oil spill exercises. The cooperation of port users and emergency services in supporting emergency response training during the year has been greatly appreciated.

OVERVIEW OF PORT OPERATIONS (Continued)

Dugong are found basking in the warm waters of the Dampier Archipelago.

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Safety

As strong emphasis has been placed on safety during 2004-05, particularly in the operational areas of the port. Speeding, securing of loads, vehicle standards, and the use of protective personal equipment have been particular areas of interest. The Dampier Port Authority continues to work with its contracted stevedore company (Toll Ports), and with other users of the Dampier Cargo Wharf to increase safety awareness and improve operational processes.

A number of Authority personnel have undertaken further safety training during the year, including senior first aid courses, safety management, and safety awareness training.

The Dampier Port Authority commissioned an independent safety audit of its operations in 2004-05, undertaken by the Chamber of Commerce and Industry. Work has continued on addressing those areas which the audit identified could be improved. The Authority is committed to maintaining high standards of safety across the port.

Security

A range of security arrangements were established at the Dampier Port Authority from 1 July 2004, in compliance with the new Maritime Security and Offshore Facilities Act 2003. In addition to the physical security measures introduced, the Authority also undertook a community awareness campaign, and worked closely with port users to ensure coordination and collaboration in the maintenance of good port security. All users of the port completed new inductions.

A number of security exercises have occurred in the port during 2004-05 to check the effectiveness of existing controls and to finetune operating procedures.

Planning is underway for the roll-out of electronic security passes in 2005-06, and construction will commence shortly on a permanent security gatehouse and truck turnaround area.

OVERVIEW OF PORT OPERATIONS (Continued)

Two Armidale Patrol Boats to be base-ported in Dampier.


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OTHER REPORTING ITEMS

Environmental Management

The Dampier Port Authority has in place an Environmental Management Plan. The plan is currently being updated as the port moves toward achieving quality accreditation for environmental management in 2005-06.

Record Keeping

The Dampier Port Authority acknowledges the importance of adequate and proper recordkeeping principles and practices, and is compliant with Principle 6 of SRC Standard 2 – “Recordkeeping Plans”.

By way of information the minimum compliance requirements are:

1. the effi ciency and effectiveness of the organisation’s record keeping systems is evaluated not less than once every 5 years. (Approval given for draft Record Keeping Plan (RKP) 14/10/04)

2. the organisation conducts a record keeping training program (RecFind 2004)

3. the effi ciency and effectiveness of the record keeping training is reviewed from time to time

4. the organisations induction program addresses employees roles and responsibilities in regard to their compliance with the organisations RKP

5. the organisation refl ects this in the Annual Report.

Compliance with Code of Conduct

Based on the current extent of assessment, all staff observed the DPA’s Code of Conduct during 2004-05.

Corruption Prevention

In addition to the compliance with the Dampier Port Authority’s Code of Conduct, the DPA has assessed the elements of the Code where corruption can occur.

As part of its annual internal audit function during 2004-05, the Dampier Port Authority has conducted a review of its information systems controls. As a result, a new information systems policy has been published outlining new standards.

The Authority will continue to develop other measures in 2005-06 for ensuring the prevention of corruption in all areas of the organisation.

OTHER REPORTING ITEMSOTHER REPORTING ITEMSDAMPIER PORT AUTHORITY OTHER REPORTING ITEMSDAMPIER PORT AUTHORITY


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DIRECTORS’ REPORT

In accordance with Schedule 5, Division 9 we report on the operations of the Dampier Port Authority (DPA) for the year to 30th June, 2005 as follows:

BOARD MEMBERS

The following persons were members of the Board of the Dampier Port Authority during the whole of the fi nancial year and up to the date of this report:

Name Position Expiry Date of Tenure

Mr Peter West Chairman 31 December 2006

Mr Robert Vitenbergs Deputy Chairman 31 December 2005

Mr Darren Yeates Member 30 June 2006

Mr Wynne Jones Member 30 June 2006

Mrs Danielle Nazzari Member 31 December 2006

Current Board Members

Chairman: Mr Peter West

Ministerial Appointment commenced May 2002. Re-appointed in December 2004. Expiry of term December 2006.

Qualifi cation: Bachelor of Science (Honours)

Experience: 34 years with BP in a variety of management positions culminating in being Manufacturing Director for BP in Australasia and Managing Director of BP Kwinana Refi nery.

Deputy Chairman: Mr Robert Vitenbergs

Re-appointed to the Board July 2003. Re-appointed in December 2004. Expiry of term December 2005.

Qualifi cation: Bachelor of Science (Honours)

Experience: 22 years Royal Australian Navy. Marine Manager Hamersley Iron. Councillor of the Shire of Roebourne.

Pilbara Iron Nominee: Mr Darren Yeates

Appointed to the Board January 2004. Expiry of term June 2006.

Qualifi cations: Mine Managers Certifi cate, Master of Business Administration, Graduate Diploma Applied Finance and Investment, Graduate Diploma Management and Bachelor Engineering – Mining.

Experience: Currently employed as General Manager of Dampier and Cape Lambert Ports for the new Pilbara Iron entity, he will be initiating the Dampier Port Expansion project and assisting with closer cooperation between Hamersley Iron and Robe River. Previously General Manager Operations – Tarong Coal for Pacifi c Coal.

DIRECTORS’ REPORTDIRECTORS’ REPORTDAMPIER PORT AUTHORITY DIRECTORS’ REPORTDAMPIER PORT AUTHORITY

In accordance with Schedule 5, Division 9 we report on the operations of the Dampier Port Authority

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Woodside Nominee: Mr Wynne Jones

Appointed to the Board December 2003. Expiry of term June 2006.

Qualifications: Master Mariner. Fellow of the Nautical Institute. Member of the Australian Institute of Company Directors.

Experience: 40 years in the Shipping Industry, with 30 years in pilotage and marine management in various areas of the world. Currently employed as Manager of Woodside Energy’s Marine subsidiary with responsibility for pilotage, marine operations and marine assurance for the Woodside Group.

Member: Mrs Danielle Nazzari

Appointed to the Board in March 2004. Expiry of term December 2006.

Qualification: Diploma of Horticulture

Experience: Chairperson – Pilbara Regional Council (May 2005). Proprietor of Poinciana Nursery since 1998, controlling all facets of business operations. Shire President and Councillor of the Shire of Roebourne.

RETIREMENT, ELECTION AND CONTINUATION OF OFFICE OF MEMBERS

The following changes in Board Membership occurred during 2004-2005:

Mr Richard Cohen was appointed as an Alternate Director for Mr Darren Yeates. This appointment expires on 30 June 2006.

During the financial year 8 Directors’ meetings were held. The number of meetings in which the Directors were in attendance are shown in the table below.

No. of Meetings eligible to attend Meetings attended

Peter West 8 8

Robert Vitenbergs 8 8

Danielle Nazzari 8 7

Wynne Jones 8 6

Darren Yeates 8 6

Richard Cohen (alternate for Darren Yeates)

1 1

DIRECTORS’ REPORT (Continued)

14


STAFF

Name Position

Mr Steve Lewis Chief Executive Officer

Capt. Vic Justice Harbour Master

Mr Stephen Nicholson Port Development Manager

Mrs Fiona Hodgkinson Acting Corporate Services Manager

Mr Andre Billstein Wharf Manager

Mr Tony Smith Assistant Wharf Manager (Temporary)

Mr Chris Burgess Safety and Security Officer

Mr Peter Smith Environment & Community Liaison Manager

Mrs Vicki Lorantas Executive Officer

Mrs Tanya Rea Corporate Services Officer

Ms. Paula West Graduate Port Officer

Mrs Kathy Homes Port Liaison Administration Officer

Mr Daniel Holmes Port Liaison Administration Officer

Ms Denyce MacDonald Port Liaison Administration Officer

Ms Sharon Tickner Port Liaison Administration Officer

Mrs Joanne Waterstrom-Muller Port Liaison Administration Officer

Ms Paige Asplin Trainee (Business and Administration)

In addition, the Dampier Port Authority has a special project team, made up of staff on fixed term contracts and augmented by consultant advice, set up to manage the construction and commissioning of the new bulk liquids berth.

PRINCIPAL ACTIVITIES

The principal activities of the Dampier Port Authority can be summarised as follows –:

Manage the safe operations of the Port

• Exercise the powers of Harbour Master to control shipping in the port to achieve safe and efficient operations.

• Operate port communications 24 hours 7 days per week.

• Check and monitor compliance with port regulations that set standards and procedures for vessels using the port, and other marine matters.

• Provide emergency response planning.

Plan for the future development of the Port to meet industry needs

• Oversee the strategic planning for the port’s development in conjunction with port users and other relevant Government agencies.

15

Facilitate trade in the Port

• Ensure that port users have access to the facilities of the Port.

• Negotiate Port Facilities Agreements for the Major Gas to Liquids Projects that propose to utilise the Burrup.

Manage the environment within the Port

• Monitor marine pollution issues associated with port operations.

• Provide marine pollution response planning and capability.

Maintain security within the Port

• Ensure the Port meets the Maritime Security Act 2003 requirements.

There was no significant change in the nature of the Authority’s activities this year.

NET PROFIT AFTER TAX

The Authority finished the financial year with a loss after compliance with the “National Tax Equivalent” legislation of $786,211 compared to last year’s profit result of $485,640.16 after tax. See the accompanying Financial Statements for further details.

DIVIDEND

In accordance with the current dividend policy the Directors have recommended no dividend be paid as the entity was in a loss situation this financial year. An Efficiency Dividend of $24,000 required by the State Government will be paid in 2005/2006.

Normal dividend 0

Efficiency dividend 24

2005 2004$’000 $‘000

Total dividends recommended in respect of the financial year 24 230

Total dividends paid during the financial year 230 150

In 2002-03 the operating dividend was overstated by $37,162.50 due to the capital gains liability being realised on the sale of 3 Authority houses. This overstatement has been adjusted against the 2003-04 operating dividend.

SIGNIFICANT CHANGES TO THE STATE OF AFFAIRS

Significant changes to the state of affairs of the Authority that occurred during the financial year, and are reported in the financial statements, were as follows:

• Increase in the value of the Port’s Property, Plant & Equipment, due to $31,152 million being spent on the Port Expansion project.

• The Port currently has $49,126 million in borrowings at 30 June 2005. The total of the loan facility is $77.14 million and is expected to be fully drawn down next financial year. The loan term is for 25 years.


16

REVIEW OF OPERATIONS

Finance

The Dampier Port Authority projected an operating loss before tax of $995,000 for the financial year ending 30 June 2005.

The Authority has dual goals of sound financial management and trade facilitation. In achieving these goals, the Authority aims to achieve its rate of return on assets, while providing the most cost-effective service to port users.

The final result was a pre-tax loss of $1,108,385 against budgeted loss of $995,000.

The Port as at the 30th June 2005 has a total outstanding debt of $49,125,872.

A summary of revenues according to significant operating areas is set out below:

2005 2004$’000 $‘000

Port Dues 2,945 2,606

Dampier Cargo Wharf Operations 1,982 1,715

Barge Ramp 44 51

Lease-King Bay Industrial Estate 221 275

Interest 39 147

Net proceeds from sale of Non Current Assets 8 133

Other Revenues 86 70

Total Revenue 5,325 4,997

Less unallocated expenses

Administration & Provisions 1,993 1,433

Maintenance 631 283

Power & Water 255 239

Depreciation 921 917

Insurance 160 151

Consulting, Legal & Audit 1,518 1,188

Security 609 90

Other 346 183

Total Expenditure 6,433 4,484

Profit from ordinary activities before income tax expense (1,108) 513

Income tax benefit/(expense) 322 (27)

Profit from ordinary activities after income tax expense (786) 486

Comments on the operations and the results of those operations are set out below:

(a) Port Dues.

Port Dues increased compared to last year, mainly due to the increase in the number of ships entering the port.


17

(b) Dampier Cargo Wharf (DCW) Operations.

The significant increase in revenue is due to higher volume of operations occurring at the DCW. This is in part due to the increase in activity both onshore and offshore, and the significant construction growth occurring in the Port and Region.

(c) Barge Ramp.

Income from the barge ramp has remained similar to last financial year. With the onset of the Gorgon Project the DPA anticipates an increased volume of vessels using the barge ramp during the second half of next financial year.

(d) Lease – King Bay Industrial Estate.

The decrease in the lease payments is attributed to the DPA not leasing out office space in the 2004-2005 financial year. In the 2003-2004 financial year office space was leased for a 6 month period. Growth in the number of staff members and contractors over the last 18 months has resulted in no spare office spaces.

(e) Interest.

The interest income generated was lower, as the DPA maintained minimum cash levels to reduce borrowing costs. The DPA also had no investments during the 2004-2005 financial year.

(f) Other Revenues.

Other income is similar to previous financial year.

(g) Net Proceeds from the sale of Non Current Assets.

Net proceeds from sale of Non Current Assets are low this year as the Authority sold one house in the previous financial year.

(h) Administration & Provisions.

This has increased from last financial year due to the increase in staff levels.

(i) Maintenance.

General maintenance was higher than the previous financial year. The main contributor to this was the additional maintenance performed on the Dampier Cargo Wharf.

(j) Power & Water.

The increase in expenditure is largely due to an increase in water usage and electricity consumption at the DCW.

(k) Depreciation.

Depreciation is similar to previous financial year.

(l) Insurance.

Costs for insurance increased slightly compared to last financial year, with increases in Workers Compensation and Property & Business Insurance.

(m) Consulting, Legal and Audit.

Consultancy costs were also higher due the need to outsource certain functions due to staff availability and expertise, and to cope with increased demand.

Legal fees were substantially lower than the previous financial year as there were not as many negations with major resource projects this financial year.


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(n) Security.

These costs are associated with the Port complying with the Maritime Transport Security Act 2003, which became effective on 1 July 2004. The increase in security costs is due to the need to have security guards on a 24hr, 7 days a week basis and the hire of a temporary gatehouse whilst waiting on the completion of the permanent security gate house.

(o) Other.

Other expenditure is greater than the previous financial year mainly due to additional land development costs and hire costs.

(p) Asset Write Down to Recoverable Amount.

In the current and previous financial year the Authority was not carrying any assets greater than the recoverable amount.

The graphs below indicate the relative percentage of total revenue and total expenditure spent in each operating classification.


Cargo Wharf37.2%

Port Dues55.3%

Other1.6%

Profit on sale of assets0.2%

Lease King Bay4.2%

Interest0.7%

Barge Ramp0.8%

Consulting, Legal, Audit23.6%

& Administration Provisions

31.0%

Maintenance9.8%

Power & Water4.0%Depreciation

14.3%

Insurance2.5%

Other5.4%

Security9.5%

Sources of Revenue 2005

Expenditure Allocation 2005

19

KEY PERFORMANCE INDICATORS

Economic

Trade

The table below shows commodity throughput for the past 4 years. Export of Iron Ore continues to be the predominant contributor.

PORT TRADE AND GENERAL STATISTICS

Commodity 2004/2005 2003/2004 2002/2003 2001/2002

Iron Ore 75,847,351 71,442,883 74,059,983 64,947,306

Salt 3,121,401 3,806,487 3,947,512 4,074,307

Condensate 3,603,478 4,193,684 4,883,480 4,264,609

Liquified Natural Gas 11,279,152 8,088,635 7,899,173 7,743,799

Liquified Petroleum Gas 1,341,409 814,098 1,024,973 1,261,048

Petroleum Products 254,495 247,693 206,287 189,196

General Cargo - Supply Base 378,600 286,339 205,185 215,080

Total Cargo Tonnes 95,825,886 88,879,819 92,226,593 82,695,345

Total Vessel Numbers 2,669 2,510 2,302 2,265

Total Gross Registered Tonnage 77,721,593 68,775,815 69,539,088 65,497,258

The following commodities experienced an increase in export trade: Iron Ore, LNG, Petroleum and General Cargo.


Port of Dampier Annual Cargo Throughput

20

Financial

Rate of Return.

The Minister for Planning & Infrastructure sets the Authorities target rate of return. The expected rate of return for the 2004/2005 financial year was -0.74%. The rate of return achieved was -1.21%.

The target rate of return is calculated on profit before borrowing and taxation cost divided by the written down deprival cost of total assets less gifted assets.

Real Price Index (1994/95 = 100).

Dampier Port’s real price index shows prices deflated by the consumer price index for Perth, to give an indication of the relative value of money over the years shown.

As the graph for port dues indicates the real price index for port dues has fallen by 36.59% between 1994/95 and 2004/2005. As at the 1st July 2005 the DPA has increased port dues from $0.0374/tonne to $0.049/tonne. As a result the real price index should rise by 29.73%.

Port Dues

While wharfage charges have not been increased since 1995/96, the price index has fallen by 27.71% in real terms between 1994/95 and 2004/2005. Wharfage charges are scheduled to increase by 10% on the 1st January 2006. As from 1 July 2004 the DPA increased berth hire charges to $25 per hour per 50m of vessels LOA. As a result the real price index for berth hire rose by 37.77%.

Wharfage and Berth Hire

Stability of Workforce.

Staff Turnover was 25.8 per cent for 2004-2005.

Occupational Health and Safety.

Two Workers Compensation claims were made during the financial year. Minor medical expenses were claimed with both incidents. Only one resulted in loss of time, this being two weeks off work.


Rea

l Pri

ce In

dex

21

SIGNIFICANT EVENTS AFTER YEAR END

There were no matters occurring subsequent to the end of the financial year and the date of this report.

LIKELY DEVELOPMENTS AND FUTURE RESULTS

The Authority expects that trade volumes for 2005/2006 financial year to increase by twenty million tonnes, mostly due to the increases in iron ore exports. As a consequence, revenue is expected to rise proportionately over this financial year.

Significant changes in the Authority’s operations are occurring due to a number of development projects coming to fruition.

Construction work on the new bulk liquids berthing facility will finish in November 2005 and it is anticipated that Burrup Fertilisers will commence regular export shipments in 2006.

ENVIRONMENTAL PERFORMANCE

Section 51(1)(b) of the Port Authorities Act 1999 requires the Port Authority to have an environmental management plan for the Port. The Port Authority has a current plan and is constantly working to improve its performance in this area.

ELECTORAL ACT

As required by the Electoral Act S175ZE, the Authority declares that it did not incur any expenditure greater than $1,600 during the reporting period in relation to advertising agencies, market research organisations, polling organisations and direct marketing organisations, except for $10,718 on media advertising.

DIRECTORS BENEFITS

During the financial year, no Director has received or become entitled to receive a benefit, other than the benefits disclosed in the financial statements as emoluments, by reason of a contract made by the Authority with the Director or with a firm of which he or she is a member, or an entity in which he or she has substantial interest.

DIRECTORS INTEREST IN CONTRACTS

During the financial year, the Authority did not enter into any contracts with entities, in which Directors declared an interest, except as set out in Note 20.

DIRECTORS AND OFFICERS REMUNERATION

The Minister determines remuneration of directors of the Dampier Port Authority. The Board oversees the remuneration of the Chief Executive Officer on an annual performance basis. Remuneration of officers other than the Chief Executive Officer is based on their individual contract agreements.

Details of the nature and amount of each element of the emoluments of each Director at the Dampier Port Authority and of the Chief Executive Officer and Senior Managers of the Authority are as follows: –


22

Board Members

Name Directors’ Fees $

Superannuation $

Total $

P West - Chairman 22,000 1,980 23,980

R. Vitenbergs 11,000 990 11,990

D. Nazzari 11,000 990 11,990

Note that Directors appointed from Woodside Energy and Pilbara Iron do not receive remuneration for board member duties.

Other Executives

Name Base Salary$

Motor Vehicle $

Other $

Super $

Total $

Steve LewisChief Executive Officer

132,500 10,091 4,200 11,926 158,717

Stephen NicholsonPort Development Manager

168,278 9,882 3,000 15,707 196,867

Victor Justice from 1 Sept 2004Harbour Master

100,842 11,600 1,083 9,055 122,580

Malcolm Bolderson to 1 Sept 2004Deputy Harbour Master

98,338 7,520 3,219 3,667 112,744

INDEMNIFICATION OF DIRECTORS

During the financial year the Directors’ and Officers’ Liability Insurance Policy was renewed to ensure that the directors and officers of the Authority had adequate coverage. The policy provides insurance against all liabilities and expenses arising as a result of work performed in their capacities, to the extent permitted by law.

The Authority paid an insurance premium of $8,525.55 GST exclusive in respect of the Directors’ and Officers’ Liability Insurance Policy for the reporting period.

At the date of this report no claims have been made against the policy.

REMUNERATION OF AUDITORS

The Auditor Generals Office has been appointed as the Port Authority’s auditor in accordance with Schedule 5 Section 37(2) of the Port Authorities Act 1999.

The total fee payable for the financial year ended 30 June 2005 is $30,700 GST exclusive.


23

ROUNDING OF AMOUNTS

The Authority satisfies the requirements of clause 31 of Schedule 5 contained in the Port Authorities Act 1999 and accordingly, amounts in the financial statements and Directors’ Report have been rounded to the nearest thousand dollars unless specifically stated to be otherwise.

This report has been made in accordance with a resolution of the Board.

___________________________________________ ___________________________________________

Peter West Robert VitenbergsChairman Deputy Chairman

Dated this 23rd day of August, 2005Dampier WA


Dampier Cargo Wharf (DCW).


24

AUDIT REPORTAUDIT REPORTDAMPIER PORT AUTHORITY AUDIT REPORTDAMPIER PORT AUTHORITY


25

AS AT 30 JUNE 2005

Note 2005$’000

2004$’000

CURRENT ASSETS

Cash Assets 23(a) 960 707

Receivables 5 1,044 785

Current Tax Assets 6 99 –

Other 7 112 172

TOTAL CURRENT ASSETS 2,215 1,664

NON-CURRENT ASSETS

Property, Plant and Equipment 9 72,364 41,212

Deferred Tax Assets 8 524 183

TOTAL NON-CURRENT ASSETS 72,888 41,395

TOTAL ASSETS 75,103 43,059

CURRENT LIABILITIES

Payables 10 4,472 4,683

Interest Bearing Liabilities 11 667 457

Unearned Income 13 73 170

Current Tax Liabilities 14 – 98

Provisions 15 108 331

TOTAL CURRENT LIABILITIES 5,320 5,739

NON-CURRENT LIABILITIES

Deferred Tax Liabilities 16 78 68

Interest Bearing Liabilities 11 48,459 15,185

Unearned Income 13 – 27

Provisions 15 68 52

TOTAL NON-CURRENT LIABILITIES 48,605 15,332

TOTAL LIABILITIES 53,925 21,071

NET ASSETS 21,178 21,988

EQUITY

Contributed Equity 17 17,002 17,002

Retained Profi ts 18 4,176 4,986

TOTAL EQUITY 21,178 21,988

The Statement of Financial Position should be read in conjunction with the accompanying notes.

STATEMENT OF FINANCIAL POSITIONSTATEMENT OF FINANCIAL POSITIONSTATEMENT OF FINANCIAL POSITIONDAMPIER PORT AUTHORITY STATEMENT OF FINANCIAL POSITIONDAMPIER PORT AUTHORITY STATEMENT OF FINANCIAL POSITION


26

STATEMENT OF FINANCIAL PERFORMANCE

FOR THE YEAR ENDED 30 JUNE 2005

Note 2005$’000

2004$’000

Revenue from Ordinary Activities 3 5,368 5,173

Employee expenses 2 (1,868) (1,334)

Maintenance (631) (283)

Power & Water (255) (239)

Depreciation 2 (921) (917)

Legal (639) (924)

Insurance (160) (151)

Consultants (841) (233)

Carrying amount of non current assets disposed of 2 (43) (176)

Audit Fees 2 (38) (31)

Security (609) (90)

Supplies and services(a) (125) (99)

Other expenses from Ordinary Activities (346) (183)

(Loss)/Profi t from ordinary activities before income tax expense 2 (1,108) 513

Income tax benefi t (expense) 4 322 (27)

(Loss)/Profi t from ordinary activities after income tax (786) 486

(a) Administration expenses are included in supplies and services.

The Statement of Financial Performance should be read in conjunction with the accompanying notes.

STATEMENT OF FINANCIAL PERFORMANCESTATEMENT OF FINANCIAL PERFORMANCEDAMPIER PORT AUTHORITY STATEMENT OF FINANCIAL PERFORMANCEDAMPIER PORT AUTHORITY STATEMENT OF FINANCIAL PERFORMANCE


27

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2005

Note 2005$’000

2004$’000

CASH FLOW FROM OPERATING ACTIVITIES

Receipts from customers 4,956 4,877

Payments to suppliers and employees (5,339) (3,714)

Interest received 39 86

Interest received on investments – 76

Interest paid (1,937) (12)

Income tax “equivalents” paid (206) –

GST receipt on sales 496 457

GST receipt from taxation authority 2,906 1,922

GST payments on purchases (3,402) (2,379)

Net cash infl ow/(outfl ow) from operating activities 23(b) (2,487) 1,313

CASH FLOW FROM INVESTING ACTIVITIES

Proceeds from sale of property, plant and equipment 51 309

Payment for property, plant and equipment (30,565) (21,722)

Net cash infl ow/(outfl ow) from investing activities (30,514) (21,413)

CASH FLOW FROM FINANCING ACTIVITIES

Payment of dividends 12 (230) (150)

Proceeds from borrowings 33,773 15,660

Repayment of borrowings (289) (18)

Net cash infl ow/(outfl ow) from fi nancing activities 33,254 15,492

Net increase/(decrease) in cash held 253 (4,608)

Cash at beginning of fi nancial year 707 5,315

Cash at end of fi nancial year 23(a) 960 707

The Statement of Cash Flows should be read in conjunction with the accompany notes.

STATEMENT OF CASH FLOWSSTATEMENT OF CASH FLOWSDAMPIER PORT AUTHORITY STATEMENT OF CASH FLOWSDAMPIER PORT AUTHORITY STATEMENT OF CASH FLOWS


28

NOTES TO FINANCIAL STATEMENTS

Notes to and forming part of the Financial Statements for the year ended 30 June 2005

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The fi nancial report is a general-purpose fi nancial report that has been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board and Urgent Issues Group Consensus Views and the Port Authorities Act 1999. The fi nancial report is prepared on an accrual basis and in accordance with historical cost convention. The accounting policies are consistent with those adopted in previous years, unless otherwise stated.

The following is a summary of the signifi cant accounting policies adopted by the Authority in the preparation of the fi nancial report.

(a) Income Tax “Equivalent”.

From 1 July 2001 the Authority is subject to the National Tax Equivalent Regime (NTER) administered by the Australian Taxation Offi ce (ATO). Prior to the introduction of the NTER, the Authority complied with the State TER.

As a consequence of participation in the NTER, the Authority is required to comply with Australian Accounting Standard AAS3 “Accounting for Income Tax (Tax-effect Accounting)”.

The Authority adopts the liability method of tax-effect accounting whereby the income tax attributable to operating profi t shown in the Statement of Financial Performance is based on the operating profi t before income tax adjusted for any permanent differences. Income tax on cumulative timing differences is set aside to the deferred income tax or future income tax benefi t accounts at the rates which were expected to apply when those timing differences reverse.

Future income tax benefi ts in relation to timing differences are not brought to account unless realisation of the asset is assured beyond reasonable doubt. Future tax benefi ts in relation to tax losses are not brought to account unless the benefi t can be regarded as being virtually certain of realisation.

(b) Acquisition of Assets.

The cost method of accounting is used for all acquisition of assets. Cost is measured as the fair value of the assets given up or liabilities undertaken at the date of acquisition plus incidental costs directly attributable to the acquisition. Assets acquired at no cost or for nominal consideration, are initially recognised at their fair value at the date of acquisition.

(c) Property, Plant & Equipment.

Property, plant and equipment are measured on the cost basis less, where applicable, any accumulated depreciation or amortisation. The depreciable amount of all fi xed assets including buildings but excluding freehold land, are depreciated on a straight line basis over their useful lives to the Authority commencing from the time the asset is held ready for use.

Useful lives for each class of depreciable assets are:

Class of Fixed Asset Depreciation Rate Buildings & Improvements 40 – 50 years Plant & Equipment 3 – 5 years

NOTES TO FINANCIAL STATEMENTSNOTES TO FINANCIAL STATEMENTSDAMPIER PORT AUTHORITY NOTES TO FINANCIAL STATEMENTSDAMPIER PORT AUTHORITY NOTES TO FINANCIAL STATEMENTS

Notes to and forming part of the Financial Statements for the year ended 30 June 2005

The fi nancial report is a general-purpose fi nancial report that has been prepared in accordance with

29

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Berths/Wharves 25 years Navigational Aids 50 years Software 3 – 5 years

The Authority has a general policy of expensing at the time of purchase all individual assets costing $300 or less or with a useful life of less than three (3) years. The materiality of the item purchased is also taken into consideration when adopting this policy. Regardless of cost, physical control over all the Authority’s assets is maintained.

(d) Maintenance and Repairs.

Plant and equipment of the Authority is required to be overhauled on a regular basis. This is managed as part of an ongoing cyclical maintenance program. The costs of this maintenance are charged as expenses as incurred. Other routine maintenance, repair costs and minor renewals are charged as expenses as incurred.

(e) Employee Benefits.

Annual leave is recognised at the reporting date in respect of employees’ services up to that date and is measured at the nominal amounts expected to be paid when the liabilities are settled.

Long service leave benefits are calculated at remuneration rates expected to be paid when the liabilities are settled.

The requirements of AASB 1028 with regard to long service leave have been investigated and found not to materially differ from the undiscounted method of calculation. The undiscounted method has therefore been adopted in determining the Authority’s liability.

The liabilities for superannuation charges under the West State Superannuation Scheme or other funds of the employees’ choosing are extinguished by fortnightly (West State) and other payments of employer contributions to the appropriate funds.

The note disclosure required by paragraph 6.10 AASB 1028 (being the employer’s share of the difference between employees’ accrued superannuation benefits and the attributable net market value of plan assets) has not been provided. State scheme deficiencies are recognised by the State in its whole of government reporting. The Government Employees Superannuation Board’s records are not structured to provide the information for the Authority. Accordingly, deriving the information for the Authority is impractical under current arrangements, and thus any benefits thereof would be exceeded by the cost of obtaining the information.

(f) Cash Assets.

For the purposes of the Statement of Cash Flows, cash includes cash on hand and at call deposits with banks or financial institutions and investments in money market instruments maturing within six months.

(g) Revenue.

Revenue from the rendering of a service is recognised upon the delivery of the service to customers (e.g. when a vessel enters the port limits). Interest revenue is recognised on a proportional basis as it accrues, taking into account the interest rates applicable to the financial assets.

Revenue from the sale of Authority houses is recognised at settlement.

Notes to and forming part of the Financial Statements for the year ended 30 June 2005 (Continued)

30


(h) Payables.

Payables, including trade creditors, amounts payable and accrued expenses, are recognised when the Authority is obliged to make future payments as a result of a purchase of goods and services. Trade creditors are unsecured and are usually paid within 30 days of recognition.

(i) Interest Bearing Liabilities.

Borrowings are recognised and carried at the amount of net proceeds received. Borrowing costs expense is recognised on an accrual basis.

(j) Investments.

Investments are recognised at cost, and the interest revenue is recognised on an accrual basis.

(k) Receivables.

Trade debtors are recognised at the amounts due and are generally settled within 30 days except for property rentals, which are governed by individual lease agreements.

Collectability of debtors is reviewed on an ongoing basis. A provision for doubtful debts is raised following a review of all outstanding amounts at reporting date. Bad debts are written off in the period in which they were identified.

(l) Recoverable Amount of Non-Current Assets.

The recoverable amount of an asset is the net amount expected to be recovered through the cash inflows and outflows arising from its continued use and subsequent disposal.

Where the carrying amount of a non-current asset is greater than its recoverable amount, the asset is written down to its recoverable amount. Where net cash inflows are derived from a group of assets working together, recoverable amount is determined on the basis of the relevant group of assets. The decrement in the carrying amount is recognised as an expense in the Statement of Financial Performance in the reporting period in which the recoverable amount write-down occurs.

The expected net cash flows included in determining the recoverable amounts of non-current assets are discounted to their present values using a risk-adjusted discount rate. The discount rate used was 5% for 2005 (2004:5%).

(m) Payment of Dividend to the State.

In accordance with section 84 of the Port Authorities Act 1999 the Board of the Authority intends to make a recommendation to the Minister for Planning and Infrastructure that dividends amounting to $24,000 (2004: $229,607) be declared in respect for the year ended 30 June 2005. The proposed dividend is in accordance with the dividend policy included in the Authority’s statement of corporate intent for 2004-2005.

(n) Goods and Services Tax.

Goods and Services Tax legislation became effective on 1 July 2000. The Authority is registered for GST.

Revenue, expenses and assets are recognised net of the amount of Goods and Services Tax.


31


(o) Borrowing Costs.

Borrowing costs are recognised as expenses on an accrual basis, except where they relate to qualifying assets in which case they are capitalised as part of the qualifying assets (note 9 iv).

(p) Comparative Figures.

Comparative figures are, where appropriate, reclassified so as to be comparable with the figures presented in the current financial year.

(q) Rounding.

Amounts in the financial statements have been rounded to the nearest thousand dollars, or in certain cases, to the nearest dollar.

NOTE 2: PROFIT FROM ORDINARY ACTIVITIES

(Loss)/Profit from ordinary activities before income tax expense has been determined after charging the following:

2005$’000

2004$’000

Employee Benefit

Annual Leave 122 91

Long Service Leave 40 32

Superannuation 106 87

Depreciation

Building and improvements 92 95

Plant and equipment 129 118

Berths/wharves 620 624

Navigation aids 80 80

Auditors Remuneration 31 24

Gain (loss) on sale of non current assets

Proceeds from sale of non current assets 51 309

Carrying amount (43) (176)

Gain on sale of plant and equipment 8 133

NOTE 3: REVENUE FROM ORDINARY ACTIVITIES

Operating activities of the Authority

Rendering of services – port dues 2,945 2,606

Rendering of services – Dampier Cargo Wharf/Barge Ramp 2,026 1,766

Leases revenue 221 275

Other 86 70

Non-operating activities of the Authority

Proceeds on disposal of property, plant and equipment 51 309

Interest received 39 86

Interest received on investments – 61

5,368 5,173


32

NOTE 4: INCOME TAX

The income tax attributable to the financial year differs from the amount prima facie payable on the(loss)/profit from ordinary activities and is reconciled as follows:

2005$’000

2004$’000

(Loss)/Profit from ordinary activities: (1,108) 513

Prima facie income tax on operating profit at 30% (2004 – 30%) 332 (154)

Tax effect on permanent differences:

Sundry Items (2) (11)

Income tax adjusted for permanent differences 330 (165)

Adjustment to over/(under) provision of previous year’s liability (8) 138

Income tax attributable to profit from ordinary activities 322 (27)

Income tax expense comprises:

Provision attributable to current year (8) 33

(Increase)/ decrease in deferred income tax provision (10) (47)

Increase/(decrease) in future income tax benefit 340 (13)

322 (27)

NOTE 5: RECEIVABLES

Trade debtors 1,044 785

NOTE 6: CURRENT TAX ASSETS

Income tax refundable 99 –

NOTE 7: OTHER

Prepayments 87 83

Accrued Income 25 89

112 172

NOTE 8: DEFERRED TAX ASSETS

The future income tax benefit is made up of the following estimatedtax benefits:

Future income tax benefit 524 183


33

NOTE 9: PROPERTY, PLANT AND EQUIPMENT

2005$’000

2004$’000

Land and buildings

Land

Vested Crown – at cost (i) – –

Freehold - at cost (ii) 200 200

Land leased to operating parties pursuant to operating leases

At cost 50 50

Total Land 250 250

Building and improvements (iii)

At cost 3,714 3,439

Accumulated depreciation (1,288) (1,129)

Total buildings and improvements 2,426 2,310

Building and improvements leased to external parties pursuant to operating leases

At cost – 172

Accumulated depreciation – (62)

Total buildings and improvements – 110

Total land buildings and improvements 2,676 2,670

Plant and equipment

At cost 1,773 1,325

Accumulated depreciation (958) (820)

Total plant and equipment 815 505

Software

At cost 9 –

Accumulated depreciation (1) –

Total software assets 8 –

Infrastructure

Berths / Wharves

At cost 19,146 19,141


At recoverable amount 339 339

Accumulated depreciation (28) (14)

Total berths/wharves 9,575 10,189

Navigation aids

At cost 3,283 3,283


Total navigation aids 2,058 2,137


34

Infrastructure (continued)2005$’000

2004$’000

Infrastructure in the course of construction - at cost (iv and v)

Dampier Cargo Wharf 2,010 173

Bulk Liquids Berth Project 54,518 25,538

Security Upgrade 533 –

Strategic Environmental Assessment 171 –

57,232 25,711

Total infrastructure 68,865 38,037

Total property, plant and equipment 72,364 41,212

(i) The Authority has 2 parcels of land Lot 471 and Lot 472 Reserve 41636, vested to the Authority for port purposes. The current non improved market valuation is $425,000. The valuation has been determined by the Valuer Generals Office as at the 1st July 2003.

(ii) Freehold land has been independently valued by Fudali Waterhouse PRP at $438,000, based on the property’s market value as at 30 June 2003.

(iii) Buildings and Improvements were independently valued by Fudali Waterhouse PRP at $2,168,000 based on the Optimised Depreciated Replacement Cost as at 30 June 2003. The Authority’s Directors are aware the recoverable amount test gives a higher value than that derived by Fudali Waterhouse PRP and accordingly no write down in buildings and improvements is required at balance date.

(iv) Borrowing costs in the form of interest, capitalised during the year as part of the cost of the Bulk Liquids Berths in the course of construction as a qualifying asset, amounted to $2,255,368 (2004: $153,461), at a weighted average interest rate of 5.95% (2004 : 5.85%).

(v) The Bulk Liquid Berth (BLB) was in the course of construction at balance date with a carrying value of $54,518,450 (inclusive of the cost of a related new shipping channel, construction of which was completed in April 2004), as disclosed above and further capital expenditure commitments exist of $20,014,000 as disclosed in note 25. Construction of the BLB commenced in January 2004, as a project to enhance the infrastructure of the State of Western Australia, after approval for its construction was obtained by the Minister for Planning and Infrastructure (the Minister) under the provisions of the Port Authorities Act 1999 and after funding approval was obtained from the Government of Western Australia’s (the Government) Expenditure Review Committee (Note 11). Such approvals were granted in the knowledge, that at a later date, a revenue subsidy from the Government to the Dampier Port Authority (the Authority) would be put in place, as the economic viability of the BLB, would take some years to establish.

Accounting Standard AASB 1010 “Recoverable Amount of Non-Current Assets” (the Standard), requires that the carrying amount of an asset is not to exceed the recoverable amount from the future economic benefits that the asset is expected to generate. At 30 June 2005, the Authority has one confirmed end user of the BLB, from which net cash inflows will be derived and the Directors of the Authority believe that it will receive annual revenue subsidies from the Government during the early years of operation of the BLB that, when coupled with expected revenue to be received from the confirmed and other end users, will satisfy the future economic benefits provision of the Standard.


NOTE 9: PROPERTY, PLANT AND EQUIPMENT (continued)

35


The Authority is aware that the Government’s forward budgetary estimates for the four years commencing 2005/06 include provision for the revenue subsidy it is to receive and the Authority expects the Government’s Department of Treasury & Finance, to have formalised the subsidy it is to receive, before construction of the BLB is completed in or about November 2005 and it is held ready for commercial use. Therefore, in the opinion of the Directors of the Authority, no impairment provision relating to the BLB under construction, is required at 30 June 2005.

Reconciliation of carrying amounts of each class of property, plant and equipment at the beginning and end of the current and previous financial year are set out below:

2005$’000

2004$’000

Land

Carrying amount at 1 July 250 300

Disposals – (50)

Carrying amount 30 June 250 250

Building and improvements

Carrying amount at 1 July 2,420 2,586

Additions 103 34

Disposals – (163)

Accumulated depreciation on disposal – 58

Depreciation for the year (92) (95)

Depreciation capitalised (5) –

Carrying amount 30 June 2,426 2,420

Plant and equipment

Carrying amount at 1 July 505 283

Additions 545 361

Disposals (95) (92)

Accumulated depreciation on disposal 52 71


Depreciation capitalised (63) –

Carrying amount 30 June 815 505

Infrastructure

Berths/Wharves

Carrying Amount at 1 July 10,189 10,813

Additions 5 –



Navigational Aids





36

Work in Progress2005$’000

2004$’000


Additions 31,521 24,643


Total property, plant and equipment 72,364 41,212

NOTE 10: PAYABLES

Trade creditors 3,873 2,952

Sundry creditors 599 1,731

4,472 4,683

Trade creditors are non-interest bearing and are normally settled on 30 day terms.

NOTE 11: INTEREST BEARING LIABILITIES

Current Loan – Western Australian Treasury Corporation 667 457

Non Current Loan – Western Australian Treasury Corporation 48,459 15,185

Total Loan 49,126 15,642

Terms and conditions.

The Western Australian Treasury Corporation (WATC) loan is repayable, by quarterly instalments of principal and interest over 25 years in accordance with a fixed instalment repayment schedule. Apart from the contractual obligation to repay the WATC under its normal portfolio lending arrangements, the Authority has not provided any security in respect of the loan.

ERC Approvals.

The Authority received approval from Expenditure Review Committee (the ERC) on the 10th December 2003 to borrow $75.64 million (including $3m interest capitalisation) for the purpose of providing multi-user infrastructure to meet the future needs of the gas to liquids industry. A further approval from the ERC was received by the Authority on the 17th December 2003 to borrow $1.5 million for the purpose of complying with the Maritime Transport Security Act 2003 which takes effect from 1 July 2004 to fund new security requirements in order to meet International trade requirements.

As a consequence of the ERC approvals, the Authority anticipates that a $77.14 million loan facility from Western Australia Treasury Corporation (the WATC) will be fully drawn down by 30 June 2006. The WATC’s approved lending facility to the Authority at balance date, is as disclosed in Note 23(c).

NOTE 12: DIVIDENDS

2004 Operating Dividend declared – 243

2003 Operating Dividend overstated – (37)

– 206

Efficiency Dividend 24 24

24 230



37

NOTE 12: DIVIDENDS (continued)

In accordance with the current dividend policy the Directors have recommended no dividend be paid. An Efficiency Dividend of $24,000 required by the State Government will be paid in 2005/2006.

In 2002-03 the DPA overstated the operating dividend by $37,162 due to capital gains from the sale of 3 houses being realised. This overstatement has been adjusted against the Authority’s 2003-04 operating dividend.

NOTE 13: UNEARNED INCOME

Amounts under current and non-current unearned income relate to an arrangement originally with WA Petroleum Ltd. (WAPET) which has been assigned to Chevron (Aust.) Pty Ltd. Under the arrangement, in return for the title to the barge ramp built by WAPET, the Authority rebates amounts due and payable for the use of the ramp and wharf by Chevron.

The barge ramp is recognised as an asset, while the rebates outstanding have been recognised as unearned income. The original liability of $1,056,000 has reduced to $72,838 as at 30 June 2005.

2005$’000

2004$’000

Barge Ramp 73 122

Contribution from DOIR* – Strategic Land Assessment – 75

73 197

*Department of Industry and Resources

NOTE 14: CURRENT TAX LIABILITIES

Provision for current income tax – 98

NOTE 15: PROVISIONS

(a) Current

Dividends (note 12) 24 230

Employee benefits

Annual leave 82 84

Long service leave 2 17

Total employee benefits 84 101

108 331

(b) Non-current

Employee benefits – long service leave 68 52

Total employee benefits 152 153

NOTE 16: DEFERRED TAX LIABILITIES

Provision for deferred income tax 78 68


38

NOTE 17: CONTRIBUTED EQUITY

On 1st March 1989 the Authority was deemed to have acquired from Woodside Energy, the original fixed assets and support infrastructure required to effectively manage and operate the Port. These “gifted” assets included the original Dampier Cargo Wharf, the original administration building, staff houses, navigational aids, plant and other equipment.

The Authority also received refunds from State Treasury for sales and income tax equivalent.

These funds are not available for distribution.

2005$’000

2004$’000

Developers Contribution 16,111 16,111

State Equity Contribution 891 891

17,002 17,002

NOTE 18: RETAINED PROFITS

Retained profits at the beginning of the financial year 4,986 4,730

Net profit/(loss) (786) 486

Dividends (Note 11) (24) (230)

Retained profits at the end of the financial year 4,176 4,986

NOTE 19: EQUITY

Total equity at the beginning of the financial year 21,988 21,732

Total changes in equity recognised in the statement of financial performance (786) 486

Transactions with owners as owners

Dividends (24) (230)

Total equity at the end of financial year 21,178 21,988

NOTE 20: REMUNERATION OF DIRECTORS AND EXECUTIVES

(a) Remuneration of Directors 2005 2004

Remuneration and other benefits received or receivable from the Authority by all Directors of the Authority: 44 31

The number of Directors whose total of fees and retirement benefits received or due and receivable, for the financial year are shown in the following bands:

$0 - $10,000 – 3

$10,000 - $20,000 2 1

$20,000 - $30,000 1 –


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(a) Remuneration of Executives 2005 2004

Remuneration and other benefits received or receivable from the Authority by the Executives of the Authority: 591 480

The number of Executives whose total salaries and retirement benefits received or due and receivable, for the financial year are shown in the following bands:

$20,000 - $30,000 – 1

$110,000 - $120,000 1 –

$120,000 - $130,000 1 1

$140,000 - $150,000 – 1

$150,000 - $160,000 1 –

$170,000 - $180,000 – 1

$180,000 - $190,000 1 –

NOTE 21: RELATED PARTY TRANSACTIONS

(a) Directors.

The names of persons who were directors of Dampier Port Authority any time during the financial year are as follows: P West, R Vitenbergs, D Yeates, W Jones and D Nazzari.

(b) Remuneration and Retirement Benefits.

Information on remuneration of directors is disclosed in note 20.

(c) Other Transactions with Directors and Director related entities:

• In terms of the Port Authorities Act 1999 (Schedule 6, Division 1), 2 directors are nominated by companies that have contractual dealings on normal commercial terms and conditions with the Authority from time to time, being Mr. Wynne Jones for Woodside Energy and Mr. Darren Yeates for Pilbara Iron.

NOTE 22: SEGMENT REPORTING

The Authority operates in one reportable business segment and predominantly provides a service to mining and other industries involved with importing and exporting products in the region.


NOTE 19: REMUNERATION OF DIRECTORS AND EXECUTIVES (continued)

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NOTE 23: NOTES TO STATEMENT OF CASH FLOWS

2005$’000

2004$’000

(a) Reconciliation of cash

Cash at the end of the financial year as shown in the Statement of Cash Flows and Statement of Financial Position comprises the following:

Cash at bank 959 706

Cash on hand 1 1

960 707

(b) Reconciliation of net cash inflow from operating activities to profit from ordinary activities after income tax:

Profit/(loss) from ordinary activities after income tax (786) 486

Depreciation 921 917

Net (gain) loss on sale of property, plant and equipment (8) (133)

Changes in assets and liabilities

Receivables (259) (36)

Prepayments (4) (83)

Accrued income 64 (128)

Payables (1,762) 255

Unearned income (124) (44)

Movements in provisions

Employee benefits (1) 52

Income taxes (197) (20)

Deferred income taxes (331) 47

Net cash inflows from operating activities (2,487) 1,313

(c) Financing facility

At the date of this report, the financing arrangement available to the Authority from the Western Australian Treasury Corporation is:

Loan facility 77,140 48,000

Amount utilised 49,126 15,642

Unused loan facility 28,014 32,358


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NOTE 24: FINANCIAL INSTRUMENTS

(a) Interest Rate Risk.

The Authority’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on those financial assets and financial liabilities, is as follows:

2005 Floating Interest

Rate

Fixed Interest

maturingin 1 yearor less

Fixed Interest

maturing 1 to 5 years

Fixed Interest

maturing over

5 years

Non Interest Bearing

Total

$’000 $’000 $’000 $’000 $’000 $’000

Financial Assets

Cash at bank 960 – – – – 960

Short term deposits – – – – – –

Receivables – – – – 1,044 1,044

960 – – – 1,044 2,004

Weighted average interest rate

5%

Financial liabilities

Payables – – – – 4,472 4,472

Borrowings from WATC – 667 4,050 44,409 – 49,126

– 667 4,050 44,409 4,472 53,598


5.95% 5.95% 5.95%

2004 Floating Interest

Rate

Fixed Interest

maturingin 1 yearor less

Fixed Interest

maturing 1 to 5 years

Fixed Interest

maturing over

5 years

Non Interest Bearing

Total

$’000 $’000 $’000 $’000 $’000 $’000

Financial Assets

Cash at bank 707 – – – – 707

Receivables – – – – 785 785

707 – – – 785 1,492


4%

Financial liabilities

Payables – – – – 4,683 4,683

Borrowings from WATC – 457 2,004 13,181 – 15,642

– 457 2,004 13,181 4,683 20,325


5.54% 5.85% 5.85%


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NOTE 24: FINANCIAL INSTRUMENTS (continued)

(b) Credit Risk.

All financial assets are unsecured and the Authority does not believe it is materially exposed to any credit risk. The credit risk is therefore considered to be their carrying amount.

The Authority does not have any material credit risk exposure to any single debtor or group of debtors.

(c) Net Fair Values.

For financial assets and liabilities, net fair value approximates their carrying value. No financial assets and financial liabilities are readily traded on organised markets in a standardised form.

The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the Statement of Financial Position and in the notes to and forming part of the financial statements.

NOTE 25: CAPITAL COMMITMENTS

2005$’000

2004$’000

Commitments for the acquisition of plant and equipment contracted for at the reporting date but not recognised as liabilities, payable:

Within one year 22,081 38,522

Capital commitments include amounts for:

Bulk liquids berth project 20,014 38,494

Security upgrade 2,067 –

5m boat and trailer – 28

22,081 38,522

NOTE 26: LEASE REVENUE RECEIVABLE IN THE FUTURE

Lease revenue receivable in the future in relation to leases contracted for at the reporting date but not recognised as assets, are receivable as follows:

Within 1 year 223 217

Later than 1 year and not later than 5 years 726 752

Later than 5 years 960 1,231

1,855 2,200

The Authority leases at the King Bay Industrial Estate are leased to companies that provide essential services to the shipping industry. The leasing of surplus residential houses of the Authority is based on commercial terms.


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NOTE 27: CONTINGENT LIABILITY

On 8 August 2005, the principal contractor to the Bulk Liquids Project, submitted a two part consolidated claim for $61.5 milllion, relating to a:

• Consolidated Extension of Time Claim; and including a

• Dampier Cargo Wharf Claim and Acceleration Claim.

In accordance with the terms of the construction contract, the Project’s Superintendent has previously rejected the latter claim, except for admitting an amount of less than $100,000 and on 7 September 2005, the Superintendent re-affirmed that office’s earlier decision not to amend its determination of the date for Practical Completion of the contract. That earlier determination about the date for Practical Completion and its re-affirmation, invalidates the contractor’s former claim, for an extension of time.

The contractor can seek arbitration under the construction contract, but to date has not brought the claim to arbitration.

The Directors are of the opinion that in the above circumstances, the Authority is not liable for the consolidated claim and accordingly, no estimate of the potential financial effect of it, is disclosed.

NOTE 28: IMPACT OF ADOPTING AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (AIFRS)

Australia is adopting Australian equivalents to International Financial Reporting Standards (AIFRS) for reporting periods beginning on or after 1 January 2005. The Authority will adopt these Standards for the first time for the year ended 30 June 2006.

AASB 1047 ‘Disclosing the Impacts of Adopting Australian Equivalents to International Financial Reporting Standards’ requires disclosure of any known or reliably estimable information about the impacts on the financial statements had they been prepared using AIFRSs.

The information provided below discloses the main areas impacted due to the effects of adopting AIFRS. Management have determined the quantitative impacts using their best estimates available at the time of preparing the 30 June 2005 financial statements. These amounts may change in circumstances where the accounting standards and/or interpretations applicable to the first AIFRS financial statements are amended or revised.

(a) Reconciliation of total equity as presented under previous AGAAP to that under AIFRS:

30 June 2005$’000

1 July 2004$’000

Total equity under previous AGAAP 21,178 21,988

Adjustment to retained profits

Adjustment to account for deferred tax (i) 55 51

Adjustment to reverse dividend provision (ii) 24 267

Total equity under AIFRS 21,257 22,306

The adjustments are explained as follows:(i) Adjustment to account for deferred tax calculated using the balance sheet method under

AASB 112 Income Taxes.(ii) Adjustment to reverse dividend provision as the dividend approval date was after 30 June

2005. This is to comply with AASB 110 Events After the Balance Sheet Date.


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(b) Reconciliation of net loss for the period as presented under previous AGAAP to that under AIFRS:

30 June 2005$’000

Net loss for the period under previous AGAAP (786)

Adjustment of account for deferred tax (iii) 55

Net loss for the period under AIFRS (731)

The adjustments are explained as follows:(iii) Adjustment to account for deferred tax calculated using the balance sheet

method under AASB 112 Income Taxes.

(c) Statement of Cash Flows

No material impacts are expected from adopting AIFRS with respect to the Statement of Cash Flows.


NOTE 28: IMPACT OF ADOPTING AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (AIFRS) (continued)

DPA232858-Annual Report - Pilbara...areas of the port’s activities. • A record trade throughput...

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