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ASX RELEASE

25 August 2009

The Manager

Company Announcements Office Australian Securities Exchange 4[th] Floor, 20 Bridge Street Sydney NSW 2000

Electronic Lodgement

Dear Sir or Madam

Company Announcement

Attached are the following documents relating to APA Group’s results for the year ended 30 June 2009:

APT 4E
APT Full Year Accounts
APTIT Full Year Accounts

Yours sincerely

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Mark Knapman Company Secretary

Australian Pipeline Trust

Results For Announcement To The Market For the Year Ended 30 June 2009 Appendix 4E

Revenue and Net Profit/(Loss)

Revenue and Net Profit/(Loss)
		Percentage	Amount
		Change
		%	$’000
Underlying Results
Underlying Revenue	up	6.8	to 958,770
Underlying EBITDA	up	6.5	to 458,728
Underlying Operating profit after tax and minorities	up	34.0	to 110,134
Underlying Operating cash flow	up	21.6	to 233,565
Underlying Operating cash flow per security	up	12.8	to 48.2c
Earnings per security before significant items (cents per	up	24.3	to 22.7c
security)

The underlying results for APA Group exclude one-off significant items and include two adjustments to revenue and earnings arising from their treatment under A-IFRS, as follows:

Significant items totalling a loss of $21.012 million ($20.972 million after tax) (2008: loss of $6.0 million, $4.2 million after tax);
Capital distributions received from Envestra ($9.9 million) and the Ethane Pipeline Income Fund ($0.5 million) are included in the underlying result, ie. the capital components of $10.4 million of the distributions received have been reclassified to revenue and earnings – (2008: $10.8 million); and
Earnings from a number of complementary assets which are treated as finance leases under A- IFRS, ie. finance lease principal repayments of $4.0 million have been reclassified to revenue – (2008: $5.3 million).

The Directors are of the view that the underlying results provide a more accurate portrayal of the results of operations of APA Group.

of operations of APA Group.
		Percentage		Amount
		Change
		%		$’000
Statutory Results
Revenue before significant items	up	7.1	to	944,416
EBITDA before significant items	up	7.2	to	444,374
EBIT before significant items	up	9.0	to	348,735
Operating profit after tax and minorities before significant
items	up	39.7	to	99,744
Profit after tax and significant items attributable to
members	up	17.2	to	78,772
Operating cash flow	up	21.4	to	226,366
Operating cash flow per security	up	12.7	to	46.7c
Earnings per security (cents per security)	up	8.8	to	16.2c
EBIT = Earnings before interest and tax
EBITDA = EBIT before depreciation and amortisation

Australian Pipeline Trust

Results For Announcement To The Market For the Year Ended 30 June 2009 Appendix 4E

Dividends (Distributions)

Dividends (Distributions)
Distributions paid and proposed in relation to the year ended 30 June 2009 – Australian Pipeline Trust: All distributions are profit distributions Final distribution proposeda Interim distributions paid Total distributions paid and proposed - APT June 2009 Distributions paid and proposed in relation to the year ended 30 June 2009 – APT Investment Trust: Final distribution proposeda - tax deferred income - capital distribution - interest income Interim distributions paid - income distribution - capital distribution Total distributions paid and proposed - APTIT Total APA Group distributions in relation to the year ended 30 a The final distributions have not been recorded in the financial report as required by AASB 137 “Provisions, Contingent Liabilities and Contingent Assets”. Record date for determining entitlements to the unrecognised final distribution in respect of the year ended 30 June 2009 • final distribution	Amount per security Franked Amount per security
		2.7¢ 9.0¢
		11.7¢ -
		0.5¢ - 11.1¢ - 1.7¢ 2.8¢ - 3.2¢ -
		19.3¢ -
		31.0¢

		30 June 2009

Brief Explanation of Revenue, Net Profit/(Loss) and Dividends (Distributions)

Refer Directors’ Report. The Directors have proposed a final distribution of 2.7 cents per unit, unfranked, to be paid on 15 September 2009. The Directors also note that APT Investment Trust has proposed a final distribution of 13.3 cents per unit (refer above), also to be paid on 15 September 2009.

This takes the total distribution for the APA Group stapled security for the June half year to 16.0 cents per stapled security and 31.0 cents per stapled security for the full year.

Australian Pipeline Trust

Results For Announcement To The Market For the Year Ended 30 June 2009 Appendix 4E

Reporting Period

Current Reporting Period: Year ended 30 June 2009 Previous Corresponding Period: Year ended 30 June 2008

Distribution Reinvestment Plan

The dividend or distribution plans shown below are in operation.

The distribution reinvestment plan that is in operation is the Australian Pipeline Trust Distribution Reinvestment Plan. The plan became effective on 15 August 2003.

The last date(s) for receipt of election notices for the dividend or 24 June 2009 distribution plans

Details of Businesses Over Which Control Has Been Gained or Lost

During the year, APA divested a number of annuity-style assets into the unlisted vehicle Energy Infrastructure Investments (EII). APA established EII in December 2008, selling its electricity transmission assets, gas-fired power generators, gas processing facilities and two pipelines – the Telfer/Nifty Gas Pipeline and the Bonaparte Gas Pipeline (including the Wickham Point Pipeline) into that vehicle. APA then sold 49.9% of EII to Marubeni Corporation and 30.2% of EII to Osaka Gas. APA retained a 19.9% interest in the vehicle and remains the operator of the assets. The net proceeds received from Marubeni Corporation, Osaka Gas and debt raised in EII totalled $647 million.

Net Tangible Assets Per Security

Net Tangible Assets Per Security
Net tangible assets per security	2009 $ 2008 $
	1.18 1.24

Australian Pipeline Trust

Results For Announcement To The Market For the Year Ended 30 June 2009 Appendix 4E

Compliance Statement

Information on Audit or Review

(a) The Annual Report is based on accounts to which one of the following applies.

The accounts have been audited. The accounts have been subject to review. The accounts are in the process of The accounts have not yet being audited or subject to review. been audited or reviewed.

(b) Description of likely dispute or qualification if the accounts have not yet been audited or subject to review or are in the process of being audited or subjected to review.

N/A -

N/A -

(d) The entity has a formally constituted audit committee.

25 August 2009 Sign here: Chairman Date Print name: L F Bleasel AM

Australian Pipeline Trust ARSN 091 678 778

Annual Report For the Financial Year ended 30 June 2009

Australian Pipeline Trust and its Controlled Entities Directors’ Report

The directors of Australian Pipeline Limited (“Responsible Entity”) submit their report and the annual financial report of Australian Pipeline Trust (“APT”) and its controlled entities (together “Consolidated Entity” or “APA”) for the financial year ended 30 June 2009. This report and the financial report refer to the consolidated results of APT and APT Investment Trust (“APTIT”).

Directors

The names of the directors of the Responsible Entity during and since the year are:

Leonard Bleasel AM Chairman

John Fletcher

Russell Higgins AO

Muri Muhammad

Manharlal Ratilal

Robert Wright

Michael McCormack Managing Director

Details of the directors, their qualifications, experience, special responsibilities and directorships of other listed entities are set out on page 13.

Alternate directors who served during the year are as follows:

W S Saidi as alternate for Muri Muhammad, retired as of 14 August 2009. W Z W Ariffin as alternate for Manharlal Ratilal, retired as of 19 August 2009.

Company Secretary

Mark Knapman

Details of the Company Secretary, his qualifications and experience are set out on page 14.

Principal activities

The principal activities of the Consolidated Entity during the course of the year were the ownership and operation of energy infrastructure, including:

gas transmission and distribution businesses located across Australia;
energy investments, including Envestra Limited (“Envestra”), SEA Gas Pipeline and Energy Infrastructure Investments Pty Limited; and
asset management and operations services for APA’s energy investments and other third parties.

Significant changes in state of affairs

The following significant changes in the state of affairs of APA occurred during the year:

divestment of a number of assets with annuity-style income into the unlisted vehicle Energy Infrastructure Investments Pty Limited (“EII”). APA established EII in December 2008, and sold to EII its electricity transmission assets, gas-fired power generators, gas processing facilities and three gas pipelines – the Telfer/Nifty Gas Pipeline, the Bonaparte Gas Pipeline and the Wickham Point Pipeline. The new equity partners, Marubeni Corporation and Osaka Gas, hold 49.9% and 30.2% equity interests in EII respectively, while APA retains a 19.9% equity interest and continues to operate and maintain the assets. The net impact of the transaction on APA was a reduction in its borrowings of $647 million;

Australian Pipeline Trust and its Controlled Entities Directors’ Report

completion of the Bonaparte Gas Pipeline. Construction began in April 2008 and was completed in December 2008. APA sold the pipeline to EII in December 2008; and
increased its interest in Envestra Limited from 18.3% to 30.4% through participation in and partial underwriting of Envestra’s rights issue, for a total cost of $64.4 million, as well as participation in Envestra’s Distribution Reinvestment Plan, reinvesting $7.3 million for the year.

Distributions

Distributions paid to securityholders during the year were:

	Final FY 2008 distribution paid 10 September 2008	Final FY 2008 distribution paid 10 September 2008	Interim FY 2009 distribution paid 27 March 2009	Interim FY 2009 distribution paid 27 March 2009
	Cents per security	Total distribution $000	Cents per security	Total distribution $000
APT dividend distribution	9.0	42,142	9.0	44,095
APTIT tax deferred distribution	2.6	12,081	3.1	15,176
APTIT interest income	3.4	16,014	2.9	14,221
Total	15.0	70,236	15.0	73,491

On 25 August 2009, the directors declared a final distribution for APA for the year of 16.0 cents per security (“cps”) payable 15 September 2009, made up of:

	Final FY 2009 distribution payable 15 September 2009	Final FY 2009 distribution payable 15 September 2009
	Cents per security	Total distribution $000
APT dividend distribution	2.7443	13,684
APTIT tax deferred income	0.4553	2,271
APTIT capital distribution	11.0882	55,293
APTIT interest income	1.7122	8,538
Total	16.0	79,786

Total distribution for the year is 31.0 cps, an increase of 1.5 cps or 5.1% on last year.

Financial and operational review

Underlying results

The underlying results for APA exclude one-off significant items (refer Note 7 to the financial statements) and include two adjustments to revenue and earnings arising from their treatment under the Australian equivalent of International Reporting Standards (“A-IFRS”). Accordingly, the following items have been reclassified to revenue and earnings in the underlying result:

the capital distributions received from Envestra (prior to 10 February 2009) and the Ethane Pipeline Income Fund (previously Mariner Pipeline Income Fund) i.e. the capital components of the distributions received totalling $10.4 million (2008: $10.8 million); and
earnings from a number of complementary assets which are treated as finance leases under A- IFRS i.e. finance lease principal repayments of $4.0 million (2008: $5.3 million).

The directors are of the view that the underlying results provide a more accurate portrayal of the results of operations of APA.

Australian Pipeline Trust and its Controlled Entities Directors’ Report

The table below summarises the underlying results for key financial performance measures for the year:

year:
Underlying results Year ended 30 June	2009	2008	Changes
	$000	$000	$000	%
Total revenue Total revenue excluding pass-through EBITDA	958,770 687,383 458,728	897,792 614,918 430,535	60,978 72,465 28,193	6.8 11.8 6.5
Net interest expense Operating profit after tax and minorities Operating cash flow(1)	212,991 110,134 233,565	223,779 82,218 192,117	(10,788) 27,916 41,448	4.8 34.0 21.6
Operating cash flow per security (cents) Earnings per security (cents) Distribution per security (cents)	48.2 22.7 31.0	42.7 18.3 29.5	5.5 4.4 1.5	12.8 24.3 5.1

(1) Operating cash flow = net cash from operations after interest and tax payments, adjusted for significant items.

Underlying profit

APA reported underlying operating profit after tax and minorities of $110.1 million, an increase of 34.0% compared with $82.2 million reported last year.

The main factors driving the increase in underlying profit include:

full 12 months contribution of tariffs from the recent Access Arrangement on the Victorian Transmission System, which took effect 1 January 2008, combined with an increase in volume transported through the System;
increase in contracted and spot demand for capacity and storage services on the Moomba Sydney Pipeline;
increase in capacity and throughput tariffs on the Moomba Sydney Pipeline;
strong growth from Western Australia’s Goldfields Gas Pipeline due to expanded capacity and new revenue contracts;
full 12 months operation and maintenance savings as a result of the termination in October 2007 of the Alinta Pipeline Management Agreement which provided operational services to APA’s foundation gas transmission pipelines; and
reduction in net interest costs due to the decrease in net debt position.

These improved results were despite the sell down of $703 million of assets to EII in December 2008.

Revenue

Underlying revenue was $958.8 million, a 6.8% increase on last year’s revenue of $897.8 million. Excluding pass-through revenue of $271.4 million, revenue was $687.4 million, an 11.8% increase on last year’s revenue of $614.9 million.

Earnings per security

Underlying earnings per security calculated on a weighted average basis was 22.7 cps, an increase of 24.3% compared to 18.3 cps last year. The weighted average number of securities on issue during the year was 485,077,000, up from 450,262,000 last year, due to capital raised under the operation of the Distribution Reinvestment Plan and the Security Purchase Plan.

Australian Pipeline Trust and its Controlled Entities Directors’ Report

Operating cash flow

Underlying operating cash flow per security grew by 5.5 cps to 48.2 cps, an increase of 12.8% compared to 42.7 cps last year. Cash generation grew strongly by 21.6% to $233.6 million (2008: $192.1 million) more than covering distributions returned to securityholders.

Distributions

APA’s distributions for the financial year totalled 31.0 cps, an increase of 5.1%, or 1.5 cps on last year, achieving its distribution growth target of at least 5% for the full year. The distribution payout ratio for the financial year was 65.6%, further demonstrating APA’s ability to pay fully funded distributions out of operating cash flows each year.

Statutory results

Excluding underlying adjustments and after significant items, reported profit attributable to APA securityholders for the year was $78.8 million, an increase of $11.6 million or 17.2% above the $67.2 million reported last year.

The following table provides a summary of key financial data for the year.

Statutory results Year ended 30 June	2009	2008	Changes	Changes
	$000	$000	$000	%
Operating results before significant items Total revenue Total revenue excluding pass-through(1) EBITDA Depreciation and amortisation	944,416 673,029 444,374 (95,639)	881,729 598,855 414,472 (94,459)	62,687 74,174 29,902 (1,180)	7.1 12.4 7.2 (1.3)
EBIT Net interest expense	348,735 (212,991)	320,013 (223,779)	28,722 10,788	9.0 4.8
Pre-tax profit Income tax expense Minorities	135,744 (35,922) (78)	96,234 (24,766) (56)	39,510 (11,156) (22)	41.1 (45.0) (39.7)
Operating profit after tax and minorities, before significant items Significant items after income tax	99,744 (20,972)	71,412 (4,220)	28,332 (16,752)	39.3 -
Profit after income tax and minorities	78,772	67,192	11,580	17.2

Significant items amounted to $21.0 million and relate to “one-off” items, tabled below:

Significant items Year ended 30 June 2009	Pre tax	Post tax
	$000	$000
Costs associated with the creation of EII Settlement of acquisition related liabilities Revaluation loss on interest rate hedges deemed ineffective, acquired as part of the GasNet acquisition Envestra underwriting fee DUOS revenue accrual on APA Gas Network Queensland Overprovision of prior year income tax	(16,167) (1,475) (8,733) 1,551 3,812 -	(23,126) (1,475) (6,113) 1,086 2,668 5,988
Total	(21,012)	(20,972)

Australian Pipeline Trust and its Controlled Entities Directors’ Report

Segment performance

APA’s operations and financial performance for the year reflect full and part year contributions of businesses sold into EII, growth in existing businesses, and benefits achieved through the continued integration and consolidation of its business.

Underlying revenue and EBITDA performance of APA’s business segments is tabled below.

Underlying revenue and EBITDA performanc	e of APA’s bus	iness segment	s is tabled below.	s is tabled below.
Segment performance Year ended 30 June	2009	2008	Changes
	$000	$000	$000	%
Revenue Gas transmission and distribution Queensland(1) New South Wales Victoria South Australia Western Australia(2) Northern Territory Electricity transmission(3) Asset management(4) Complementary assets(5) Energy Investments(6)	546,221 144,337 107,915 126,378 1,943 148,260 17,388 13,120 69,723 12,847 22,118	490,624 137,385 82,087 102,049 1,894 148,774 18,435 25,227 51,980 15,683 18,084	55,597 6,952 25,828 24,329 49 (514) (1,047) (12,107) 17,743 (2,836) 4,034	11.3 5.1 31.5 23.8 2.6 (0.3) (5.7) (48.0) 34.1 (18.1) 22.3
Total Pass-through revenue Unallocated revenue	664,029 271,387 23,354	601,598 282,874 13,320	62,431 (11,487) 10,034	10.4 (4.1) 75.3
Total underlying revenue	958,770	897,792	60,978	6.8
EBITDA Gas transmission and distribution Queensland(1) New South Wales Victoria South Australia Western Australia(2) Northern Territory Electricity transmission(3) Asset management(4) Complementary assets(5) Energy Investments(6)	391,799 97,666 83,430 98,428 1,720 107,585 2,970 8,728 29,970 6,275 21,956	354,265 96,777 66,534 75,187 1,700 111,052 3,015 18,939 27,913 11,292 18,126	37,534 889 16,896 23,241 20 (3,467) (45) (10,211) 2,057 (5,017) 3,830	10.6 0.9 25.4 30.9 1.2 (3.1) (1.5) (53.9) 7.4 (44.4) 21.1
Total underlying EBITDA	458,728	430,535	28,193	6.6

(1) Includes APA-owned cogeneration assets (previously included in the complementary assets segment).

(2) Includes the Telfer/Nifty Gas Pipeline in the current year until December 2008, and includes APA-owned NGV assets (previously included in the complementary assets segment).

(3) Assets sold to EII in December 2008.

(4) Includes third party NGV assets managed and operated by APA (previously included in the complementary assets segment).

(5) Includes the generation and gas processing assets sold to EII In December 2008. The APA-owned cogeneration assets and NGV assets have been included in the gas transmission and distribution segment, under Queensland and Western Australia respectively. The management and operation of third party NGV assets has been included in the asset management segment.

(6) Includes distributions and equity accounted profits of Envestra, SEA Gas, EII and the Ethane Pipeline Income Fund.

Australian Pipeline Trust and its Controlled Entities Directors’ Report

Gas transmission and distribution

Revenue (excluding pass-through revenue) was $546.2 million, an increase of 11.3% on the $490.6 million reported last year. The increase was principally due to the growth in revenue and services on the Victorian Transmission System and the Moomba Sydney Pipeline, partly offset by a decrease in revenue due to the sale of the Telfer/Nifty Gas Pipeline to EII in December 2008.
The increase in the Victorian Transmission System revenue of $24.3 million was primarily the result of a full 12 month effect of the tariff increase at the last regulatory reset, which took effect 1 January 2008.
Moomba Sydney Pipeline revenue increased by $25.8 million due to additional pipeline peaking services, new contracted services for the 2008 and 2009 winter periods, and increased tariffs.
Goldfields Gas Pipeline revenue increased due to increased throughput and reservation capacity and new transportation services, partly offset by the closure of the Cawse plant.
EBITDA increased by 10.6% to $391.8 million, reflecting the additional revenue outlined above, reduced operating expenses resulting from synergy benefits and the removal of third party operating fees since October 2007, and offset by the margins not received in the second half due to the sale of the Telfer/Nifty Gas Pipeline to EII.

Electricity transmission

The decrease in revenue and EBITDA is due to the sale of the assets to EII.

Asset management

Revenue (excluding pass-through revenue) increased by 34.1% to $69.7 million (2008: $52.0 million), primarily due to new work undertaken by APA in Western Australia and the inclusion of APA’s NGV (natural gas for vehicles) revenue in this segment.

Complementary assets

The decrease in revenue and EBITDA is due to the sale of the assets to EII. Cogeneration and NGV assets, previously classified as complementary assets, have been moved to gas transmission and distribution Queensland and asset management segments respectively.

Energy investments

EBITDA increased by 21.1% to $22.0 million (2008: $18.1 million) due mainly to the increase in the Envestra investment. Envestra distributions are included up to 10 February 2009, and equity accounted since this date.
This new segment includes APA’s investments which were previously in the gas transmission and distribution segment, namely Envestra, SEA Gas Pipeline and the Ethane Pipeline Income Fund. EII is also included in this segment from 12 December 2008.

Operational highlights

Gas transmission and distribution

APA continued to operate and develop its gas transmission and distribution assets across mainland Australia.

Queensland

Carpentaria Gas Pipeline

Construction of the new compressor station at Davenport Downs was completed in June 2009, on time and on budget. The compressor station has increased pipeline capacity by 15% to 119 TJ/day, with approximately 98% of the additional capacity fully contracted.

Australian Pipeline Trust and its Controlled Entities Directors’ Report

Roma Brisbane Pipeline Negotiations commenced with several parties for capacity that becomes available in 2012. A gas transport agreement for 9 TJ/day was signed with negotiations for the remaining capacity (57 TJ/day) that becomes available in 2012 being at an advanced stage.
APA Gas Network, Queensland

Connections increased to 76,631 from 73,960 at the start of the year. Throughput for the year was 13.6 PJ. Demand for natural gas continues to increase, driven in part by the Queensland Government’s ClimateSmart 2050 Policy. Construction of a new gate station and lateral in south western Brisbane was completed, enabling APA to deliver gas to a natural gas bus refuelling depot that commenced supplying the Brisbane City Council bus fleet in April 2009. This lateral will also enable the connection of new residential estates in this area.

Expansion of the gas network into new housing developments in the Gold Coast area continued, having begun in June 2008. Gas mains laid totalled 29 km, reaching approximately 1,800 new home sites. A new high pressure main, completed in October 2008, connects the existing network to the northern end of Coomera and will allow APA to connect approximately 9,000 homes in this suburb over the coming years.

New South Wales

Moomba Sydney Pipeline

Work was completed on increasing the capacity of the Moomba Sydney Pipeline, with the additional capacity being made available by winter 2009. The increased capacity of the pipeline is fully contracted. Expansion costs for the year were $36.6 million, with the total completed expansion cost of approximately $100 million, being fully underwritten by long-term shipper arrangements, which commenced 1 January 2009.

Central Ranges Pipeline

In August 2008, APA acquired the Central Ranges Pipeline and associated distribution network in Tamworth for $23.5 million. The 294 km Central Ranges Pipeline is connected to APA’s Central West Pipeline at Dubbo, and is capable of providing additional storage capacity in the Moomba Sydney Pipeline system as well as delivering gas to the Central Ranges region.

In July 2008, APA entered into a Heads of Agreement with gas producer, Eastern Star Gas, to investigate transport of its Gunnedah Basin coal seam gas to south east Australian gas markets.

Victoria and South Australia

Victorian Transmission System

Total gas volume transported through the System for the year was 244.6 PJ, surpassing last year’s record volume of 244.1 PJ. Gas demand for power generation was 20.5 PJ for the year, 6.6 PJ lower than last year. Peak day delivery was 1,255 TJ/day, (2008: 1,279 TJ/day).

Flows of up to 66 TJ/day between Victoria and New South Wales were achieved. Interstate flow for the year was 7.1 PJ and continues to grow.

The Brooklyn Lara Pipeline was commissioned in July 2008 and allowed the System to meet extreme winter demand in August 2008, including four successive days of greater than 1,200 TJ/day.

Engineering work on the northern expansion project on the System commenced in October 2008. This project will see the installation of two new compressors added to enhance the capacity of the northern section of the System as well as flows between Victoria and New South Wales.

Western Australia

Goldfields Gas Pipeline

Two compressor stations were under construction during the year, with Wyloo West completed in May 2009 and Ned’s Creek completed in August 2009. Pipeline capacity has increased by 20%, and agreements with a number of mining operations underpin this additional pipeline capacity.

Goldfields Gas Transmission, the APA-owned service provider to the Goldfields Gas Pipeline owners, submitted its revised Access Arrangement for the pipeline. A final decision is expected in October 2009 and is due to take effect from 1 January 2010.

Australian Pipeline Trust and its Controlled Entities Directors’ Report

In June 2008, gas supplies in Western Australia, including into the Goldfields Gas Pipeline and Telfer Gas Pipeline, were disrupted due to an explosion at the Apache Energy operated Varanus Island gas processing plant off the coast of Western Australia. Partial production resumed at the gas plant in early August 2008, with a further increase in production in December 2008 and full production expected to return in the second half of 2009. This incident has had no material financial impact on APA due to a combination of factors including the take or pay nature of APA’s revenue contracts on the Goldfields Gas Pipeline and the Telfer/Nifty Gas Pipeline, the ability of shippers to source some alternate gas supplies, and the retrieval of some revenue shortfall through business interruption insurance.

Parmelia Gas Pipeline and Mondarra Gas Storage Facility
The Parmelia Gas Pipeline and the Mondarra Gas Storage Facility increased operations during the initial interruption caused by the Varanus Island incident, significantly contributing to the emergency response in the months following the interruption.
Telfer/Nifty Gas Pipeline
The Telfer/Nifty Gas Pipeline was sold to EII in December 2008. APA continues to operate and maintain the pipeline for EII.

Northern Territory

Bonaparte Gas Pipeline and Wickham Point Pipeline In December 2008, APA completed construction of the Bonaparte Gas Pipeline, a 287 km pipeline that will transport gas from Wadeye to the Amadeus Gas Pipeline under a 25 year Gas Transportation Agreement with Northern Territory’s Power and Water Corporation. The pipeline will deliver gas once the Eni Blacktip gas processing plant is completed.

APA entered into a Memorandum of Understanding with Power and Water Corporation in August 2008 to build, own and operate the Wickham Point Pipeline, with construction completed in June 2009. The 12 km pipeline runs from the LNG Plant at Wickham Point near Darwin to the existing Amadeus Gas Pipeline, and will be used to supplement gas supply in peak periods or emergency supply situations. Power and Water Corporation is the long-term customer for the pipeline gas transportation and storage services.

The Bonaparte Gas Pipeline and the Wickham Point Pipeline were sold to EII in December 2008. APA continues to operate and maintain these pipelines for EII.

Asset management

APA provides asset management and operational services to a number of third parties with the main customers being Envestra, the Ethane Pipeline Income Fund and EII (since December 2008). These services are provided under long-term contracts.

Energy investments

APA has an interest in a number of energy investments, including Envestra Limited, SEA Gas Pipeline and EII.

Envestra

APA participated in Envestra’s Distribution Reinvestment Plan, increasing its interest in Envestra from 18.3% to 19.1%. The total value of distributions reinvested was $7.3 million for the year.

In February 2009, APA increased its interest in Envestra Limited to 30.4% through participation in and partly underwriting Envestra’s rights issue, for a total cost of $64.4 million.

Energy Infrastructure Investments

APA established the unlisted vehicle EII in December 2008, retaining a minority equity interest of 19.9% and providing the management and operation of EII assets under a long-term agreement.

Electricity transmission

APA’s two electricity transmission assets, Directlink and Murraylink, were sold to EII in December 2008. APA continues to operate both these assets for EII.

Australian Pipeline Trust and its Controlled Entities Directors’ Report

Complementary assets

The four energy assets included in this segment – the Daandine and X41 power stations, and the Kogan North and Tipton West gas processing plants – were developed by APA, and were sold to EII in December 2008. APA continues to operate these assets for EII.

For segment reporting purposes, the cogeneration and NGV (natural gas for vehicles) assets previously included in this segment have been reclassified. The APA-owned cogeneration and NGV assets have been reclassified under gas transmission and distribution, and the management and operation of third party NGV assets has been reclassified under the asset management segment.

Business consolidation

APA has continued to realise synergy and integration opportunities presented by its growth in recent years. A project office has been established to realise further productivity improvements and take advantage of synergy opportunities across the business. The focus of this work has been to identify and realise benefits through economies of scale, to achieve efficiencies through scalable and consistent processes, and to ensure the business has access to the intelligence required to drive strategic thinking and that its technology system environment is operating cost effectively.

Establishment of Energy Infrastructure Investments

In December 2008, APA established an unlisted investment vehicle Energy Infrastructure Investments Pty Limited (EII). APA achieved proceeds above the book value for the sale of a number of its assets with annuity-style income into EII. However, costs related to the establishment of EII, including debt costs, stamp duty and advisers’ fees, resulted in a net loss after tax of $23.1 million. The funds released from the transaction reduced APA’s borrowings by $647 million, with gearing (as calculated under APA’s debt covenants) falling to 69.7% at that time.

APA retains a minority equity interest of 19.9% in EII, with equity partners Marubeni Corporation and Osaka Gas, both of Japan, holding interests of 49.9% and 30.2% respectively. APA manages and operates the assets under a long-term agreement with a market-based fee structure.

The assets sold to EII are subject to either long-term contractual arrangements or regulatory frameworks, and comprise:

Electricity interconnectors – Directlink and Murraylink;
Gas power generation – Daandine and X41 power stations;
Coal seam gas processing plants – Kogan North and Tipton West; and
Gas pipelines – Telfer/Nifty Gas Pipeline, Bonaparte Gas Pipeline and Wickham Point Pipeline.

The enterprise value of EII is $703 million, with equity contribution of $165 million and new five year, non-recourse project debt facility of $538 million.

Finance and other activities

Capital management

During the current financial year, APA undertook capital raising activities to fund the continuing growth of its business. APA’s issued capital increased by $50.2 million to $894.4 million (2008: $844.2 million) due to the following equity movements (net of costs):

On 8 December 2008, APA issued 11,704,821 securities through a Security Purchase Plan, raising $30.4 million. The issue price was $2.5935 per security; and
APA issued two tranches of securities under its Distribution Reinvestment Plan:
On 10 September 2008, 9,995,267 securities at $2.65 per security, raising $26.5 million; and
On 26 March 2008, 8,722,354 securities at $2.54 per security raising $22.2 million.

Australian Pipeline Trust and its Controlled Entities Directors’ Report

In July 2008, APA executed three bilateral debt facility agreements totalling $165 million, each with terms running until July 2011. These supplemented APA’s debt facilities following the maturity of $150 million of Medium Term Notes in August 2008. Also, upon their maturity in March 2009, APA repaid the balance of its Medium Term Notes, being $300 million.

In addition to reducing gearing using proceeds of the EII transaction, there have been several other key initiatives to strengthen APA‘s balance sheet, including long term debt raisings and a bank syndication process aimed at refinancing all of APA’s debt maturities in 2010.

On 1 July 2009, APA issued A$185 million equivalent of US Private Placement notes with 7-year and 10-year tenures.

In the second half, APA commenced the early refinancing of a $900 million syndicated facility tranche which is due to mature in June 2010. A bank syndication was launched in July 2009. Interest from banks has been strong and commitments totalling $1.03 billion have been received for two new equalsized forward-start facilities maturing in July 2011 and July 2013. Documentation of these new facilities is well advanced with execution expected to occur around the end of August 2009.

Finally, a new $150 million bilateral debt facility with a term of five years has also just been executed.

The term structure of these new debt facilities is consistent with APA’s strategy to further extend the maturity of the debt portfolio to more reflect the long term nature of the asset profile.

APA’s debt portfolio has a healthy spread of maturities extending out to 2022, with an average maturity of 5 years. APA was geared at 70.3% at 30 June 2009, which is down from 72.0% at 30 June 2008.

At 30 June 2009, APA had available $324 million in cash and committed undrawn facilities to meet the continued capital growth needs of the business.

APA has a prudent treasury policy which requires conservative levels of hedging of interest rate exposures to minimise the potential impacts from adverse movements in rates. All interest rates and foreign currency exposures on US Private Placement Notes have been hedged. APA also enters into interest rate hedges for a proportion of the interest rate exposure on its other floating rate borrowings. Following the issue of new US Private Placement notes on 1 July 2009 and the hedging associated with that issue, 79.9% of interest obligations were either hedged or at fixed interest rates, for varying periods extending out more than 12 years.

A level of interest rate protection is also provided through CPI indexing in revenue contracts and the regulatory revenue setting process operating on many of APA’s assets.

Borrowings and finance costs

As at 30 June 2009, APA had borrowings of $3,056.7 million, principally from syndicated debt facilities, US Private Placement notes and bilateral debt facilities, compared to $3,401.1 million as at 30 June 2008.

The decrease in borrowings was principally due to debt reduction using part of the proceeds from the EII transaction, and partly offset by increased borrowings to fund organic capital expenditure projects, the acquisition of the Central Ranges Pipeline and the increase in investment in Envestra.

Net underlying finance costs decreased by $10.8 million or 4.8% to $213.0 million (2008: $223.8 million). The average interest rate (including credit margins) applying to drawn debt was 6.81% for the year.

APA’s Interest Cover Ratio for the year increased to 2.13 times from 1.86 times last year, well in excess of its debt covenant default ratio of 1.1 times.

Credit rating

On 25 June 2009, Standard & Poor’s Rating Services assigned a BBB long-term corporate credit rating (outlook Stable) to APT Pipelines Limited, the borrowing entity of APA. This is APA’s initial credit rating. The rating supports APA’s refinancing activities and will assist APA to access other debt capital markets for future funding requirements.

Income tax

The effective income tax rate before significant items is 26.5%, consistent with 25.7% last year.

Australian Pipeline Trust and its Controlled Entities Directors’ Report

Capital expenditure

Capital expenditure for the year totalled $298 million with 94% allocated to growth projects, including the Northern Territory Bonaparte Gas Pipeline and compressor stations in Western Australia, Queensland and New South Wales.

Growth capital expenditure is generally either fully underwritten through long-term gas transportation arrangements or has had regulatory approval through the relevant Access Arrangement.

Securityholder base

During the year, the board maintained the Distribution Reinvestment Plan.

At the Annual Meeting held on 30 October 2008, APA securityholders passed a special resolution approving amendments to the constitutions of Australian Pipeline Trust and APT Investment Trust to allow the Responsible Entity to require the sale of parcels of APA securities worth less than $500. In December 2008, APA opened a facility for the sale of those small parcels of APA securities, and another facility for the sale of parcels of APA securities with a value between $500 and $1,000. Subsequently, 2.6 million securities were sold under these facilities, reducing the number of securityholders on APA’s register by 26,565 to 75,620.

As at 30 June 2009, there were 498,663,596 APA securities on issue (2008: 468,241,154).

Regulatory matters

Key regulatory matters addressed during the year included:

National Gas Law

The new National Gas Law and Rules were introduced on 1 July 2008, in all states except Western Australia, to replace the previous Gas Pipelines Access Law and Gas Code. This new regulation applies to APA regulated gas assets in eastern states from 1 July 2008 onwards and is expected to apply in Western Australia in late 2009.

The new regulation is broadly similar to the previous regime but contains some changes, including the introduction of a light regulation option for some pipelines and networks in some circumstances and formalisation of the mechanism for regulatory holidays for new pipelines.

Where a pipeline is subject to light regulation, the pipeline owner does not have to submit a full access arrangement for regulatory approval, meaning that the regulator has no role in determining tariffs for the pipeline other than in the event of an access dispute with a user. Following the introduction of the new regulation, both the Carpentaria Gas Pipeline and the regulated section of the Moomba Sydney Gas Pipeline are now subject to light regulation. There is potential for other APA pipelines to be subject to light regulation in the future.

National Greenhouse and Energy Reporting Act 2007

Under the National Greenhouse and Energy Reporting Act 2007, corporations that emit greenhouse gases above certain thresholds are required to register for the federal emissions reporting scheme by 31 August 2009. Total emissions for the year ended 30 June 2009 are required to be reported by 31 October 2009. APA meets the reporting threshold and has therefore been recording, and will report, its greenhouse emissions in compliance with the Act.

The Australian Energy Market Operator and the short-term trading market in gas

The Australian Energy Market Operator (“AEMO”) commenced operations from 1 July 2009, replacing various organisations which previously administered gas and electricity markets in eastern Australia. The establishment of the AEMO is designed to facilitate consistency in the governance of the energy markets across Australia.

The AEMO will have responsibility for implementing and operating a short-term trading market (“STTM”) in natural gas in New South Wales and South Australia by mid 2010. The STTM will facilitate the

Australian Pipeline Trust and its Controlled Entities Directors’ Report

trading of natural gas at defined hubs and will have an impact on pipelines, such as the Moomba Sydney Pipeline, which deliver gas to markets where the STTM will operate.

Existing pipeline transportation contracts are preserved from the operation of the STTM, and the STTM will not directly affect the opportunity to negotiate long-term contracts to support the development or expansion of pipelines. The STTM is expected to provide an opportunity for new pipeline services to be sold in the market.

Environmental regulations

All pipeline, distribution and gas processing assets owned and/or operated by APA are designed, constructed, tested, operated and maintained in accordance with pipeline and distribution licences issued by the relevant state and territory technical regulators. All licences require compliance with relevant federal, state and territory environmental legislation and Australian standards.

The pipeline licences also require compliance with the Australian Standard AS 2885 “Pipelines – Gas and Liquid Petroleum”, which has specific requirements for the management of environmental matters associated with all aspects of the high pressure pipeline industry.

Environmental management plans satisfying Part A of the Australian Pipeline Industry Association Code of Environmental Practice are prepared and independently audited for construction activities. In accordance with Part 3 of AS 2885, environmental management plans satisfying Part B of the Code are in place for all operating pipelines and are managed in accordance with APA’s contracts and the terms and conditions of the licences that APA has been issued.

The Safety and Operating Plan for APA’s distribution networks have been audited in accordance with the Queensland and New South Wales technical regulator requirements.

The board reviews external audit reports and, on a monthly basis, the internal reports prepared relating to environmental issues. No breaches have been reported during the year and APA has managed the assets in accordance with the environmental management plans that are in place.

EII’s electricity transmission assets are designed, constructed, tested, operated and maintained in accordance with the requirements of its transmission licences complying with relevant federal and state environmental legislation and Australian standards. Environmental management plans for each asset are in place for all operating activities and are managed in accordance with EII’s contracts and the terms and conditions of licences that EII has been issued.

EII’s X41 Power Station is designed, constructed, tested and maintained in accordance with an agreement with MIM. The agreement requires compliance with relevant federal and state environmental legislation and Australian standards. EII’s Daandine Power Station is designed, constructed, tested, operated and maintained in accordance with the requirements of its generation authority. A permit has been issued by the Queensland Environmental Protection Agency in respect of the use of natural gas for power generation. EII’s contractor operates and/or maintains these assets in accordance with the relevant environmental management plan for each asset.

Subsequent events

Except as disclosed elsewhere in this report, the directors are unaware of any matter or circumstance occurring since the end of the year that has significantly affected or may significantly affect the operations of the Consolidated Entity, the results of those operations or the state of affairs of the Consolidated Entity in future years.

Future developments

Disclosure of information regarding likely developments in the operation of the Consolidated Entity in future years and the expected results of those operations, other than information disclosed elsewhere in this report, is likely to result in unreasonable prejudice to the Consolidated Entity. Accordingly, this information has not been disclosed in this report.

Australian Pipeline Trust and its Controlled Entities Directors’ Report

Information on directors and Company Secretary

Information relating to the qualifications and experience of the directors and Company Secretary is set out below:

Leonard F Bleasel AM	Leonard (Len) Bleasel is a non-executive director of QBE Insurance Group
FAICD FAIM	Limited and O’Connell Street Associates Pty Limited. He is chairman of the
*Independent Chairman*	Taronga Conservation Society Australia and a member of the Advisory Council for RBS Group (Australia) Pty Limited (formerly ABN AMRO Australia Holdings
Appointed 28 August 2007	Pty Limited) and a member of Westmead Children’s Advisory Committee. Len is
Appointed Chairman 30	also involved as a member of several charitable institutions.
October 2007	Len had a long career in the energy industry before retiring from management in
	2001. He started his career in AGL in 1958 and worked in a variety of roles,
	culminating in the position of Managing Director and CEO from 1990 to 2001.
	Len’s past appointments have included chairman of Foodland Associated
	Limited, ABN AMRO Australia Holdings Pty Limited, Solaris Power, the
	Australian Gas Association, Natural Gas Corporation Holdings Ltd (New
	Zealand), Elgas Ltd, Auscom Holdings Pty Ltd, Industrial Pipe Systems Pty Ltd
	and East Australian Pipeline Ltd; a director of St George Bank Limited and Gas
	Valpo (Chile); and vice president of the Royal Blind Society.
	Len was awarded an AM in the General Division of the Order of Australia for
	services to the Australian gas and energy industries and the community.
John A Fletcher	John Fletcher has over 35 years experience in the energy industry, having held a
BSc MBA FAICD	number of executive positions in AGL prior to his retirement in 2003, including
*Independent Director*	Chief Financial Officer. John has previously been a director of Integral Energy, Natural Gas Corporation Holdings Ltd (New Zealand) and Foodland Associated
Appointed 27 February 2008	Limited. He brings a wide commercial and financial practical knowledge to the
	board.
	John was previously an AGL appointed director of Australian Pipeline Limited
	from 2000 to 2005. He is also a director of Babcock & Brown Power and Sydney
	Water.
	John is the Chairman of the Remuneration Committee and a member of the
	Audit and Risk Management Committee.
Russell A Higgins AO	Russell Higgins has extensive experience both locally and internationally in the
BEc FAICD	energy sector and in economic and fiscal policy. He was Secretary and Chief
*Independent Director*	Executive Officer of the Department of Industry, Science and Resources from 1997 to 2002 and Chairman of the Australian Government’s Energy Task Force
Appointed 7 December 2004	from 2003 to 2004.
	Russell has recently been appointed Chairman of the Global Carbon Capture
	and Storage Institute. He is also Chairman of the CSIRO Energy Transformed
	Flagship Advisory Committee and a director of Ricegrowers Limited (trading as
	SunRice). He is a former Chairman of the Snowy Mountains Council and the
	Australian Government’s Management Improvement Advisory Committee and a
	former director of Australian Biodiesel Group Limited, EFIC, CSIRO, Austrade,
	the Australian Industry and Development Corporation as well as a former
	member of the Australian Government’s Joint Economic Forecasting Group. In
	2006-07, he was a member of the Prime Ministerial Task Group on Emissions
	Trading.
	Russell is Chairman of the Health Safety and Environment Committee and a
	member of the Audit and Risk Management Committee and the Remuneration
	Committee.

Australian Pipeline Trust and its Controlled Entities Directors’ Report

Muri Muhammad	Muri Muhammad retired from Petronas in August 2002 and was reappointed as
MSc	Petronas’ Adviser, Gas Business in the President’s Office until 30 March 2005.
*Director*	He brings 30 years experience in the chemicals and petroleum industry as well as expertise in the domestic and international gas transmission and distribution,
Appointed 8 March 2000	gas utilisation, cogeneration and conversion businesses where he has held
	various senior executive positions.
	Muri was Petronas’ Vice President for Gas Business from 1998 until his
	retirement and held several directorships, some as Chairman, of a number of
	Petronas’ subsidiaries and associate companies in Malaysia and abroad. He
	currently sits on the boards of gas transmission companies Transportadora de
	Gas Del Norte of Argentina, Petronas Gas Berhad of Malaysia, and Papua New
	Guinea’s national petroleum and minerals corporation, Petromin PNG Holdings
	Limited. He is also a member of the Malaysian Energy Commission, a Malaysian
	Government regulatory body.
	Muri is a member of the Remuneration Committee and the Health Safety and
	Environment Committee.
Manharlal Ratilal	Manharlal (George) Ratilal is Vice President (Finance) of Petronas. He is a
MBA	member of Petronas’ Management Committee and sits on the boards of several
*Director*	Petronas subsidiaries. Prior to joining Petronas in 2003, he was employed by a local Malaysian merchant bank for 18 years. During that time, George
Appointed 31 July 2007	specialised in corporate finance where he advised on mergers and acquisitions,
	and the capital markets.
	George holds an MBA from the University of Aston in Birmingham, United
	Kingdom.
Robert J Wright	Robert Wright has over 30 years financial management experience, having held
BComm FCPA	a number of Chief Financial Officer positions, including Finance Director of David
*Independent Director*	Jones Limited. He is currently the Chairman of Dexion Limited, SAI Global Limited and Babcock & Brown Residential Land Partners Group and a director of
Appointed 11 February 2000	Super Cheap Auto Group Limited.
	Robert is the Chairman of the Audit and Risk Management Committee and a
	member of the Health Safety and Environment Committee.
Michael J McCormack	Michael (Mick) McCormack has been Chief Executive Officer of APA since 1 July
BSurv GradDipEng	2005 and Managing Director since 1 July 2006. Mick has had a long career,
MBA FAICD	including extensive senior management experience, in the energy transmission
*Managing Director*	sector in Australia, with particular focus on gas transmission pipelines, where he has worked on the development of new and existing pipelines across Australia.
Appointed Managing Director 1 July 2006	Mick is Chairman of NT Gas Pty Ltd and a director of Envestra Limited, the Australian Pipeline Industry Association and the Australian Brandenburg
	Orchestra.
Mark T Knapman	Mark Knapman was appointed Company Secretary on 16 July 2008.
BComm LLB FCIS	In addition to being responsible for the secretariat function, he oversees
*Company Secretary*	corporate governance and the risk management, internal audit and compliance
Appointed 16 July 2008	functions.
	Mark has extensive experience as a Company Secretary for both listed public
	and proprietary companies. He was Company Secretary and General Counsel
	of ASX-listed Keycorp Limited prior to joining APA and, before moving into that
	and other corporate roles, was a partner of Australian law firm Hunt & Hunt.
	Mark holds degrees in law and commerce and a Graduate Diploma in Applied
	Corporate Governance. He is a Fellow of the Chartered Institute of Company
	Secretaries and is admitted to practice as a solicitor.

Directorships of other listed companies

Directorships of other listed companies held by directors at any time in the three years immediately before the end of the year are as follows:

Australian Pipeline Trust and its Controlled Entities Directors’ Report

Name	Company	Period of directorship
L F Bleasel AM	QBE Insurance Group Limited	Since January 2001
J A Fletcher	Babcock & Brown Power	Since October 2006
R A Higgins AO	Ricegrowers Limited	Since December 2005
	Australian Biodiesel Group Limited	May 2006 to November 2007
M Muhammad	-	-
M Ratilal	-	-
R J Wright	Dexion Limited	Since March 2005
	SAI Global Limited	Since October 2003
	Super Cheap Auto Group Limited	Since May 2004
	Babcock & Brown Residential Land	Since May 2006
	Partners Group
	APA Ethane Limited(1)	Since 10 July 2008
M J McCormack	Envestra Limited	Since July 2007

(1) APA Ethane Limited is the responsible entity of the registered investment schemes that comprise Ethane Pipeline Income Fund, the securities in which are quoted on the ASX.

Options granted

In this report, the term “APA securities” refers to the stapled securities each comprising a unit in Australian Pipeline Trust stapled to a unit in APT Investment Trust and traded on the Australian Securities Exchange (“ASX”) under the ticker symbol “APA”.

No options over unissued APA securities were granted during or since the end of the year.

No unissued APA securities were under option as at the date of this report.

No APA securities were issued during or since the end of the year as a result of the exercise of an option over unissued APA securities.

Indemnification of officers and external auditor

During the year, the Responsible Entity paid a premium in respect of a contract insuring the directors of the Responsible Entity, the Responsible Entity’s Company Secretary, and all executive officers of the Responsible Entity and any related body corporate of APA against any liability incurred in performing those roles to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

Australian Pipeline Limited, in its capacity as Responsible Entity of Australian Pipeline Trust and APT Investment Trust, indemnifies each person who is or has been a director or Company Secretary of the Responsible Entity or of any related body corporate of APA under a range of deed polls and indemnity agreements which have been in place since 1 July 2000. This indemnity may extend to such other officers or former officers of APA as the board in each case determines. The indemnity operates to the full extent allowed by law but only to the extent not covered by insurance and is on terms the board considers usual for arrangements of this type.

Under its constitution, Australian Pipeline Limited (in its personal capacity) indemnifies each person who is or has been a director, Company Secretary or executive officer of that company. The indemnity operates to the full extent allowed by law but only to the extent not covered by insurance.

The Responsible Entity has not otherwise, during or since the end of the year, indemnified or agreed to indemnify an officer or external auditor of the Responsible Entity or of any related body corporate of APA against a liability incurred as such an officer or auditor.

Australian Pipeline Trust and its Controlled Entities Directors’ Report

Directors’ meetings

During the year, 17 board meetings, four Remuneration Committee meetings, five Audit and Risk Management Committee meetings, and three Health Safety and Environment Committee meetings were held. The following table sets out the number of meetings attended by each director while they were a director or a committee member:

Directors	Board	Board	REM(1)	REM(1)	ARMC(2)	ARMC(2)	HSE(3)	HSE(3)
	A	B	A	B	A	B	A	B
L F Bleasel AM(4) J A Fletcher R A Higgins AO M Muhammad M Ratilal R J Wright M J McCormack W S Saidi(5) W Z W Ariffin(6)	17 17 17 17 17 17 17 - -	17 17 17 15 12 17 17 1 -	- 4 4 4 - - - - -	- 4 4 4 - - - - -	- 5 5 - - 5 - - -	- 5 5 - - 5 - - -	- - 3 3 - 3 - - -	- - 3 3 - 2 - - -

A: Number of meetings held during the time the director held office or was a member of the committee during the year.

B: Number of meetings attended.

(1) Remuneration Committee.

(2) Audit and Risk Management Committee.

(3) Health Safety and Environment Committee.

(4) The Chairman is entitled to attend all committee meetings.

(5) W S Saidi as alternate director for M Muhammad. Retired as of 14 August 2009.

(6) W Z W Ariffin as alternate director for M Ratilal. Retired as of 19 August 2009.

Directors’ securityholdings

The aggregate number of APA securities held directly, indirectly or beneficially by directors or their director related entities at the 30 June 2009 is 614,172 (2008: 530,314).

The following table sets out directors’ relevant interests in APA securities as at 30 June 2009:

Directors	Fully paid securities as at 30 June 2008	Securities acquired during theyear	Securities disposed of during theyear	Fully paid securities as at 30 June 2009
L F Bleasel AM J A Fletcher R A Higgins AO M Muhammad M Ratilal R J Wright M J McCormack	311,589 35,477 36,581 26,804 - 19,858 100,005	23,564 9,440 15,440 16,014 - 4,405 14,995	- - - - - - -	335,153 44,917 52,021 42,818 - 24,263 115,000
	530,314	83,858	-	614,172

The directors hold no other rights, nor options, over APA securities. There are no contracts to which a director is a party or under which the director is entitled to a benefit and that confer a right to call for or deliver APA securities.

The Company Secretary holds 3,000 APA securities.

Australian Pipeline Trust and its Controlled Entities Directors’ Report

Remuneration report

This report outlines the remuneration arrangements in place for directors of the Responsible Entity and executives of APA.

Section 1: Remuneration Committee

Governance and the oversight of executive remuneration are key focus areas for the Remuneration Committee.

The board has established a Remuneration Committee (“Committee”) to consider and make recommendations to the board on, among other things, remuneration policies and packages applicable to board members and to senior managers of APA. Three non-executive directors, John Fletcher (Chairman), Russell Higgins and Muri Muhammad are members of the Committee, which met four times this year.

The purpose of the Committee is to:

ensure the provision of a robust remuneration and reward system that provides for alignment of employee and securityholder interests;
facilitate effective attraction, retention and development of talented employees; and
ensure compliance with relevant legislation and corporate governance principles on remuneration practices and employment policies.

The Managing Director attends meetings of the Committee by invitation.

The Committee can seek external professional advice on any matter within its terms of reference.

Section 2: Remuneration of directors

We seek to attract and retain a high calibre of directors, who are equipped with diverse skills to oversee all functions of the company in an increasingly complex environment.

The directors of the Responsible Entity during the financial year were:

Leonard Bleasel AM Chairman

John Fletcher

Russell Higgins AO

Muri Muhammad

Manharlal Ratilal

Robert Wright

Michael McCormack Managing Director

Non-executive directors receive fees determined by the board, acting on advice of the Committee. External professional advice is sought in determining directors’ fees to ensure they are appropriate relative to fees paid by comparable listed companies. The board independently obtains data on the fees paid by a wide range of companies.

Non-executive director remuneration comprises a base board fee, an additional fee for serving on a committee of the board and superannuation guarantee contributions, as follows:

Fees(1)	Chairman $000	Member $000
Board fees	245	90
Remuneration Committee fees	16	8
Audit and Risk Management Committee fees	27	12
Health, Safety and Environment Committee fees	20	10

Australian Pipeline Trust and its Controlled Entities Directors’ Report

(1) Excludes Superannuation Guarantee Levy.

FY 2009 remuneration of directors

The table below sets out the remuneration of the directors for the financial year:

Directors	ShortTerm EmploymentBenefits	ShortTerm EmploymentBenefits	ShortTerm EmploymentBenefits	ShortTerm EmploymentBenefits	Post- employ- ment	Share- based payment (1) $	Other (2) $	Total $
	Salary/ fees $	Due Diligence C’ttee fees $	Short- term incentive scheme $	Non- monetary $	Super- annuation $
2009 Non-Executive Directors L F Bleasel AM (3) J A Fletcher R A Higgins AO M Muhammad W Ratilal R J Wright W S Saidi W Z W Ariffin Executive Director M J McCormack	236,477 49,000 101,200 108,000 89,167 128,200 - - 711,928	- - - - - - - - -	- - - - - - - - 523,125	- - - - - - - - 13,072	54,108 79,620 41,808 - - 11,538 - - 50,000	- - - - - - - - 285,663	- - - - - - - - 216,667	290,585 128,620 143,008 108,000 89,167 139,738 - - 1,800,455
Total	1,423,972	-	523,125	13,072	237,074	285,663	216,667	2,699,573
2008 Non-Executive Directors L F Bleasel AM J A Fletcher R A Higgins AO M Muhammad W Ratilal R J Wright W S Saidi W Z W Ariffin G H Bennett R M Gersbach Executive Director M J McCormack	125,315 20,724 106,678 97,000 78,333 108,817 - - 55,394 52,500 659,205	- - 5,200 - - 5,200 - - 2,600 5,200 -	- - - - - - - - - - 430,000	- - 2,753 - - - - - - - 40,795	10,605 20,014 11,219 - - 11,158 - - 4,754 4,725 50,000	- - - - - - - - - - 151,894	- - - - - - - - 98,100 - 216,667	135,920 40,738 125,850 97,000 78,333 125,175 - - 160,848 62,425 1,548,561
Total	1,303,966	18,200	430,000	43,548	112,475	151,894	314,767	2,374,850

(1) Cash settled security-based payments.

(2) Includes retention payment and director’s retirement benefit.

(3) Includes prior year remuneration adjustment of $48,727.

The board fees payable to non-executive directors of the Responsible Entity, including fees for serving on committees of the board, were reviewed in January 2009 taking into account a remuneration benchmarking report from remuneration consultants. At the time of the non-executive fee review in January 2009, the board decided not to increase the fees for non-executive directors in this calendar year. The next fee review will be in January 2010.

Non-executive directors do not receive incentive payments of any type.

Australian Pipeline Trust and its Controlled Entities Directors’ Report

payment on retirement of those directors. Robert Wright is the only current director entitled to benefits under the plan on his retirement from the board.

Section 3: Remuneration of key management personnel

The purpose of our remuneration strategy is to create long-term value for our shareholders and energise our executives to reach these goals.

Key management personnel during and since the end of the financial year were:

Ross Gersbach Group Manager Commercial Acting Chief Financial Officer from 1 January 2009 to 31 May 2009

Peter Fredricson Chief Financial Officer from 1 June 2009 Stephen Ohl Group Manager Operations Mark Knapman Company Secretary from 16 July 2008 Robyn Smith Group Manager Human Resources and HS&E Richard Francis Chief Financial Officer to 31 December 2008.

The board recognises that APA operates in a highly competitive national environment, and has policies and processes which:

enable APA to attract and retain key executives who will create long-term sustainable value for securityholders;
properly motivate and reward executives having regard to the overall performance of APA, the performance of the executive measured against pre-determined objectives and the external compensation environment;
appropriately align the interests of executives with those of securityholders; and
comply with applicable legal requirements and appropriate standards of governance.

All key management personnel receive a combination of fixed and variable (at-risk) remuneration, as described in the table below:

All key management personnel receive described in the table below:	a combination of fixed and variable (at-risk) remuneration, as	a combination of fixed and variable (at-risk) remuneration, as
Total Remuneration Opportunity (“TRO”)	TRO = TFR + STI + LTI
Total Fixed Remuneration (“TFR”)	The total of base salary (which includes cash, vehicles and parking) and other incidental benefits. TFR is determined by reference to appropriate remuneration benchmarking information, taking into account an individual’s responsibilities, performance, qualifications and experience.
Short-Term Incentive (“STI”)	Cash-based incentive based on a mix of financial and non-financial measures.	Maximum payable is 100% of STI target.
Long-Term Incentive (“LTI”)	Cash-settled incentive based on achievement of key financial measures.	Maximum payable is 120% of LTI target.

The proportion of fixed versus variable remuneration varies at different levels within APA, reflecting the varying capacity of employees to influence APA’s operational performance and returns to securityholders. For key management personnel, the relative proportions of FY 2009 remuneration that were fixed and performance based or “at risk” are set out in the table below. These proportions are based on 100% target performance levels.

	% of Total Remuneration Opportunity	% of Total Remuneration Opportunity	% of Total Remuneration Opportunity
	Total Fixed Remuneration	“At risk” – performance-based
		STI(1)	LTI(1)
Managing Director/CEO	40%	30%	30%
Other key management personnel	50%	25%	25%

Australian Pipeline Trust and its Controlled Entities Directors’ Report

(1) These amounts are based on 100% target performance levels being achieved.

The following sections provide further detail on the STI and LTI plans:

Short-term incentive plan

Our STI plan focuses our senior executives on the achievement of specific business objectives and rewards them for strong performance against these goals.

Key details of the STI plan

All senior executives have their STI plan opportunity based on the achievement of financial targets and the delivery of individual performance objectives incorporating strategic and non-financial objectives including health, safety and environment targets, and reinforcing a culture that is ethical and values based.

At the beginning of each financial year, the Committee considers the appropriate financial and nonfinancial performance targets to be met for the senior executives. The board has adopted financial goals which more closely reflect APA’s strategic goals, the foundation of which is increasing securityholder distributions annually by at least 5% over the cycle. Operating Cash Flow Per Unit (“OCFPU”) (a cash-based measure) has been identified as the most appropriate measure of APA management’s financial performance. All STI payments are made in cash following the completion of annual accounts.

At the end of each financial year, the Committee compares the financial results to the agreed financial targets and non-financial targets to determine what levels, in relation to those targets, have been achieved.

STIs are paid from a pool which is funded from cash over and above the budgeted OCFPU for the financial year. Executives participating in the STI will not receive any incentive payments unless at least the budgeted OCFPU for the financial year is reached and unless individual exceptional performance has been achieved.

FY 2009 STI outcomes are shown in the table below for all key management personnel:

Executive	STI awarded (%)	STI forfeited (%)
M J McCormack	90%	10%
R M Gersbach	90%	10%
S P Ohl	92%	8%
M T Knapman	92%	8%
R A Smith	89%	11%

Long-term incentive plan

We believe that an LTI plan best aligns the long-term interests of employees with those of securityholders.

The LTI plan is designed to incentivise eligible participants and align their interests with the interests of securityholders. Under the plan, participants can receive notional securities which mirror the value of APA securities. These notional securities are cash-based – not equity-based – due to complexities in issuing equity to employees of a managed investment fund (including differences in income tax treatment) and the additional costs of setting up an equity-based scheme. APA’s LTI plan is unaffected by the Federal Government’s proposals with respect to incentive plan schemes.

On the basis that APA met its financial targets for the financial year, an LTI allocation was made to key management personnel. These allocations are set out on page 21 and the total of all LTI allocations has been provided for in the financial statements at Note 24.

Key details of the LTI plan

Australian Pipeline Trust and its Controlled Entities Directors’ Report

LTI participants are advised of their maximum LTI opportunity, expressed as a percentage of their TRO. The actual individual LTI award is determined at the completion of the financial year and is based on OCFPU performance relative to budget.

Where APA exceeds its OCFPU budget, an LTI pool is funded and distributed to eligible participants. The OCFPU result determines the pool size and in turn, the size of participants’ LTI allocations up to their maximum LTI opportunity.

LTI awards are allocated to participants in the form of notional LTI securities. Each notional LTI security is valued at the equivalent of the 10-day volume weighted average market price of an APA security up to the date of allocation.

The LTI vests over four years. One third of the LTI vests at the first anniversary of the date of allocation, one third at the second anniversary, and one third at the third anniversary. As the LTI allocations are subject to, and arise from, a pre-allocation performance hurdle, they are not subject to further performance tests at the vesting dates. However, participants must remain employed by the Consolidated Entity to access the vested benefit.

Upon vesting, the LTI is delivered in cash. The cash payment is equal to the 10-day volume weighted average market price of the equivalent number of APA securities at the vesting date. APA makes a cash provision for the obligations of the LTI.

As the LTI is a cash-settled plan and does not allocate APA securities to participants at any stage, participants are not entitled to vote or participate in distributions.

No option or other equity instruments are issued to APA employees or directors.

Remuneration of key management personnel

The following table discloses the remuneration of other key management personnel of the Consolidated Entity for the financial year:

Key management personnel	Short term employment benefits	Short term employment benefits	Short term employment benefits	Post- employment	LTI scheme (1) $	Termination payments $	Total $
	Salary/ fees $	STI scheme $	Non- monetary $	Super- annuation $
2009 R M Gersbach (2) P J Fredricson (3) S P Ohl M T Knapman (4) R A Smith R F Francis (5)	524,333 38,226 336,523 294,950 245,480 180,293	320,000 - 184,000 119,600 115,700 200,000	11,922 - 28,732 - 775 5,961	13,745 3,440 34,745 33,964 13,745 6,874	105,857 - 92,095 37,504 49,438 83,557	- - - - - 487,237	975,857 41,666 676,095 486,018 425,138 963,922
Total	1,619,805	939,300	47,390	106,513	368,451	487,237	3,568,696
2008 R M Gersbach S P Ohl S M Dureau (6) R A Smith (7) R F Francis A J V James (8) P D Fox (9)	227,683 300,559 274,948 179,699 334,948 214,526 206,618	108,000 167,000 135,000 85,000 167,000 157,500 150,000	4,968 36,311 11,922 - 11,922 11,177 13,376	6,734 13,130 13,130 9,847 13,130 29,272 13,130	28,250 45,075 39,291 12,625 48,438 41,986 36,550	- - - - - 743,900 318,999	375,635 562,075 474,291 287,171 575,438 1,198,361 738,673
Total	1,738,981	969,500	89,676	98,373	252,215	1,062,899	4,211,644

(1) Cash settled security-based payments.

(2) Includes one-off ex-gratia component for undertaking Chief Financial Officer position from 1 January 2009 to 31 May 2009.

(3) Chief Financial Officer from 1 June 2009.

(4) Company Secretary from 16 July 2008.

(5) Chief Financial Officer to 31 December 2008.

(6) General Counsel and General Manager Regulatory, ceased as key management personnel.

(7) General Manager Human Resources & HSE from 2 October 2007.

Australian Pipeline Trust and its Controlled Entities Directors’ Report

(8) Company Secretary to 29 April 2008.

(9) General Manager Corporate Development to 30 June 2008.

Section 4: Contractual terms of key management personnel

The terms of the contractual arrangements for each of the key management personnel are set out below:

below:
Name and title and commencement date	Term and termination provisions/benefits
M J McCormack Managing Director since 1 July 2006 Chief Executive Officer 1 July 2005 to 30 June 2006 Commenced 1 March 2000	No defined term. On termination with cause or following certain long-term illness, the Company will pay any TFR due and owing at the date of termination and any accrued leave entitlements. On termination without cause, the Company will pay 52 weeks TFR, any incentives earned but not paid on their due date and any accrued leave entitlement. The Company will also pay any TFR due and owing at the date of termination. Following, a review of his entitlements, the board approved in August 2006, a retention award of $650,000 if Mr McCormack continued to be employed in a full time capacity by the Company or another member of the APA Group of entities at 1 August 2009. This award was paid in August 2009.
R M Gersbach Group Manager Commercial Commenced 1 February 2008	No defined term. On termination with cause or following certain long-term illness, the Company will pay any TFR due and owing at the date of termination and any accrued leave entitlements. On termination without cause, the Company will pay 26 weeks TFR, any incentives earned but not paid on their due date and any accrued leave entitlement. The Company will also pay any TFR due and owing at the date of termination. If Mr Gersbach gives notice to terminate his employment, the Company may (after consulting with the board) at its discretion agree to make a termination payment of an amount up to 26 weeks TFR.
P J Fredricson Chief Financial Officer Commenced 1 June 2009	No defined term. On termination with cause or following certain long-term illness, the Company will pay any TFR due and owing at the date of termination and any accrued leave entitlements. On termination without cause, the Company will pay 26 weeks TFR, any incentives earned but not paid on their due date and any accrued leave entitlement. The Company will also pay any TFR due and owing at the date of termination.
S P Ohl Group Manager Operations Commenced 2 May 2005	No defined term. On termination with cause or following certain long-term illness, the Company will pay any TFR due and owing at the date of termination and any accrued leave entitlements. On termination without cause, the Company will pay 26 weeks TFR, any incentives earned but not paid on their due date and any accrued leave entitlement. The Company will also pay any TFR due and owing at the date of termination. If Mr Ohl gives notice to terminate his employment, the Company may (after consulting with the board) at its discretion agree to make a termination payment of an amount up to 26 weeks TFR.

Australian Pipeline Trust and its Controlled Entities Directors’ Report

	Directors’ Report
Name and title and commencement date	Term and termination provisions/benefits
M T Knapman Company Secretary Commenced 16 July 2008	No defined term. On termination with cause or following certain long-term illness, the Company will pay any TFR due and owing at the date of termination and any accrued leave entitlements. On termination without cause, the Company will pay 26 weeks TFR, any incentives earned but not paid on their due date and any accrued leave entitlement. The Company will also pay any TFR due and owing at the date of termination.
R A Smith General Manager Human Resources & HSE Commenced 2 October 2007	No defined term. On termination with cause or following certain long-term illness, the Company will pay any TFR due and owing at the date of termination and any accrued leave entitlements. On termination without cause, the Company will pay 26 weeks TFR, any incentives earned but not paid on their due date and any accrued leave entitlement. The Company will also pay any TFR due and owing at the date of termination. If Ms Smith gives notice to terminate her employment, the Company may (after consulting with the board) at its discretion agree to make a termination payment of an amount up to 26 weeks TFR.

Information required for registered schemes

Fees paid to the Responsible Entity and its associates (including directors and secretaries of the Responsible Entity, related bodies corporate and directors and secretaries of related bodies corporate) out of APA scheme property during the year are disclosed in Note 45 to the financial statements.

Except as disclosed in this report, neither the Responsible Entity nor any of its associates holds any APA securities.

The number of APA securities issued during the year, and the number of APA securities at the end of the year, are disclosed in Note 28 to the financial statements.

The value of APA’s assets as at the end of the year is disclosed in the balance sheet in total assets, and the basis of valuation is included in Note 2 to the financial statements.

Australian Pipeline Trust and its Controlled Entities Directors’ Report

Auditor’s independence declaration

A copy of the Auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is included on page 130.

Rounding off of amounts

APA is an entity of the kind referred to in ASIC Class Order 98/0100 dated 10 July 1998 and in accordance with that Class Order, amounts in the directors’ report and the financial report are rounded off to the nearest thousand dollars, unless otherwise indicated.

Signed in accordance with a resolution of the directors of the Responsible Entity made pursuant to section 298(2) of the Corporations Act 2001.

On behalf of the directors

==> picture [171 x 48] intentionally omitted <==

==> picture [166 x 63] intentionally omitted <==

L F Bleasel AM Chairman

R J Wright Director

Sydney, 25 August 2009

Australian Pipeline Trust and its Controlled Entities Corporate Governance Statement

Corporate Governance Statement

APA Group (“APA”) comprises two registered investment schemes, Australian Pipeline Trust and APT Investment Trust, the securities in which are “stapled” together, and their controlled entities.

Australian Pipeline Limited (“Responsible Entity”) is the responsible entity of those trusts and is responsible for APA’s corporate governance practices.

The ASX Corporate Governance Council issued its revised Corporate Governance Principles and Recommendations in August 2007. That document articulates eight core principles of good corporate governance and, for each of those principles, recommendations as to their implementation. Adoption of the Council’s recommendations is not compulsory. However, under the Australian Securities Exchange (“ASX”) Listing Rules, companies are required to provide a statement in their annual report disclosing the extent to which they have followed the recommendations in the reporting period and, where companies have not followed all the recommendations, they must identify which ones they have not followed and give reasons for not following them.

Each of the principles of good corporate governance has been responded to in turn below and the table at the rear of this statement provides a checklist of APA’s adoption of the ASX Corporate Governance Council’s recommendations.

Various references are made below to APA’s web site as a source of information on corporate governance practices and documentation. The home page for APA’s web site is www.apa.com.au , and the link entitled “About APA” leads to the corporate governance material. Securityholders who do not have internet access but wish to read that material should telephone 1800 992 312 (or +61 2 8280 7132, if calling from outside Australia) and ask for a copy of the relevant material to be sent to them.

Principle 1: Lay solid foundations for management and oversight

The board is accountable to securityholders for the proper management of APA’s business and affairs. It operates in accordance with a charter, which is published on APA’s web site.

To assist the board in carrying out its responsibilities, the following standing committees of its members have been established:

Audit and Risk Management Committee;
Remuneration Committee; and
Health Safety and Environment Committee.

The board delegates responsibility for implementing the strategic direction and managing the day-today operations of APA to the Managing Director. The Managing Director consults with the Chairman, in the first instance, on matters that are sensitive, extraordinary or of a strategic nature.

The current non-executive directors have each received a letter of appointment documenting, among other issues:

the roles and responsibilities of the board and each of its committees;
expectations of the time commitment to be made by directors in serving on the board and its committees, and of their participation in an annual review of the board, its committees and individual directors;
requirements with respect to the disclosure of directors’ interests;
the fees payable to the directors; and
key policies that directors are required to comply with, such as APA’s securities trading policy.

Australian Pipeline Trust and its Controlled Entities Corporate Governance Statement

The Managing Director, Chief Financial Officer and other senior management have service contracts setting out their duties, responsibilities, conditions of service and termination entitlements.

Newly appointed senior executives complete an induction program on the management of the business covering topics that include financial matters, strategic direction, operations, risk management, health and safety, environmental issues and governance matters. APA also conducts annual processes relating to talent and succession management, and the development of leadership capabilities.

APA has processes in place to review the performance of senior management. Each senior executive, including the Managing Director, has personal objectives as well as objectives related to the performance of business units and APA as a whole. They are reviewed against those objectives at least annually. A review of senior management occurred during the financial year ended 30 June 2009.

Performance evaluation of the Managing Director is handled by the Chairman with the assistance of the Remuneration Committee and a report is provided to and reviewed by the board. Assessment and monitoring of the performance of other senior executives are handled by the Managing Director who reports on those matters to the Chairman and the Remuneration Committee.

Principle 2: Structure the board to add value

The board determines its size and composition, subject to limits imposed by the Responsible Entity’s constitution. The constitution provides for a minimum of three directors and a maximum of 12.

The board has determined that a board of seven directors is appropriate. The names, experience, terms of office and membership of board committees of the seven current directors are set out in the directors’ report.

The composition of the board is determined in accordance with the following principles:

a majority of the board will be comprised of independent directors;
the Chairman will be an independent director; and
a person cannot hold the positions of both Chairman and Chief Executive Officer.

Under the Responsible Entity’s constitution, Petronas Australia Pty Limited is entitled to appoint one director of the Responsible Entity while the Petronas Group holds not less than 10% of the issued securities in APA. Muri Muhammad is the current Petronas-appointed director.

The Responsible Entity’s constitution requires one-third of its directors (excluding the Managing Director, the Petronas-appointed director and any director who is standing for re-election after having been appointed as an additional director or to fill a vacancy) to retire from office at the annual general meeting each year. If the calculation of that one-third is not a whole number, the number of directors required to retire by this “rotation” process is rounded to the nearest whole number. Retiring directors are eligible for re-election. The Chairman, Leonard Bleasel AM, and Russell Higgins AO will retire and offer themselves for re-election under this provision of the constitution at the 2009 annual general meeting, the board (not including those two directors) having determined, under the board rotation and succession policy (published on APA’s web site) to support their re-election.

If the board appoints a director to fill a vacancy or as an addition to the board, the new director holds office until the end of the next annual general meeting and is eligible for re-election. No new director has been appointed since the last annual general meeting.

At least 60 days before annual general meetings of the Responsible Entity, securityholders are notified, by announcement to ASX, that they may nominate a person to fill a vacancy on the board that arises on retirement of either a director under the “rotation” process or a director appointed by the board since the last annual general meeting. If securityholders wish to exercise that right, at least 45 days before the annual general meeting they must send the Responsible Entity a signed nomination form and the nominee’s signed consent to act as director. If nominations are received by the required date, the

Australian Pipeline Trust and its Controlled Entities Corporate Governance Statement

Responsible Entity advises securityholders of all candidates who have been validly nominated and presents its nominations to the annual meeting of securityholders.

This past year, the board determined a new policy dealing with independence of directors, and that policy is published on APA’s web site. The board has reassessed the independence of the nonexecutive directors having regard to that policy and considers that Leonard Bleasel, John Fletcher, Russell Higgins and Robert Wright are independent. Muri Muhammad, George Ratilal and the Managing Director, Michael McCormack, are not considered to be independent.

The former Nominations and Remuneration Committee of the board became the Remuneration Committee in early 2008 so that the functions with respect to selection and appointment of new directors and related matters previously handled by that committee then reverted to the board. Ultimate responsibility for such matters rests with the full board and the board considers the efficient handling of those matters is not diminished by the absence of a Nominations Committee.

In considering potential new directors to commend to shareholders of the Responsible Entity and securityholders, the board seeks to identify candidates with appropriate skills and experience to contribute to the effective direction of APA and who can exercise an independent and informed judgement on matters which come to the board.

A review process to assess the performance of the board, its committees and individual directors is undertaken each year, the review for the 2009 financial year having been completed in July.

The review involves completion of a questionnaire by each director. The responses are then collated and the board meets to discuss and consider the results and to determine any actions arising from the review. The Chairman also meets with each director to discuss the review and the director’s own performance.

Matters covered by the review include the role and performance of the board and its committees, directors’ understanding of APA’s long-term objectives and key risks to the business and achievement of those objectives, succession planning and the effectiveness of the Chairman in leading the board.

Subject to normal privacy requirements, directors have access to APA’s records and information, and to the Company Secretary and other relevant senior management personnel. They receive regular detailed reports on financial and operational aspects of APA’s business and may request elaboration or explanation of those reports at any time.

Each director also has the right to seek independent professional advice at APA’s expense. Prior approval of the Chairman is required, but this may not be unreasonably withheld.

Directors and senior management are encouraged to broaden their knowledge of APA’s business and to keep abreast of developments in business more generally by attendance at relevant courses, seminars and conferences. Where appropriate, APA will meet expenses involved in such activities.

Principle 3: Promote ethical and responsible decision-making

The board and senior management are firmly committed to ensuring that they and all employees observe high standards of ethical behaviour and conduct.

APA’s code of conduct sets out the behaviour required of directors and employees and recognises the responsibilities of APA and its personnel to securityholders, customers, suppliers, employees and the community. It also requires that breaches of the code are reported and provides a mechanism to enable breaches to be reported without fear of retribution. The code of conduct is published on APA’s web site.

APA’s securities trading policy, published on its web site, provides that directors and designated management personnel may buy or sell APA securities only during the periods, each of one calendar month, starting on the second business day after each of three events, namely the release to ASX of the half year and full year results and APA’s annual meeting, unless exceptional circumstances apply. Directors and employees are precluded from buying or selling securities at any time if they are aware of any price-sensitive information which has not been made public.

Australian Pipeline Trust and its Controlled Entities Corporate Governance Statement

Principle 4: Safeguard integrity in financial reporting

The board has established an Audit and Risk Management Committee, the composition of which is determined in accordance with the following principles:

the committee will have at least three members;
all members of the committee will be independent, non-executive directors; and
the committee Chairman cannot also be the Chairman of the board.

The current members of the committee are Robert Wright (committee Chairman), John Fletcher and Russell Higgins and their qualifications are set out on in the directors’ report. The Chairman of the board, although not a member of the committee, usually attends committee meetings.

The roles and responsibilities of the committee are set out in the committee’s charter which is published on APA’s web site.

The Managing Director, Chief Financial Officer, Company Secretary, other senior management personnel, as required, and the external and internal auditors attend committee meetings at the discretion of the committee. The committee also meets with the external and internal auditors without management present.

The minutes of each committee meeting are reviewed at the subsequent meeting of the board and the committee Chairman reports on the committee’s activities and recommendations to the board.

The committee is required by its charter to meet at least four times each year. The number of times it met during the financial year ended 30 June 2009, and the committee members’ attendance at those meetings, are set out in the directors’ report.

The committee monitors the effectiveness of the external and internal auditors and the independence of the external auditor, and makes recommendations to the board on the appointment or replacement (subject to securityholders’ approval, if applicable) of the external auditor. The external auditor appointment and independence policy (published on APA’s web site) documents the process for appointment of the auditor and for monitoring the auditor’s independence. Pursuant to that policy, the lead partner and the review or concurring partner of the external auditor must be rotated at least every five years, followed by a two year minimum time-out period during which they may not take part in the audit.

The Responsible Entity’s costs incurred in acting as responsible entity of Australian Pipeline Trust and APT Investment Trust are reimbursed by APA. The actual cost recovery in the financial year ended 30 June 2009 was $2.8 million. The Responsible Entity does not make a profit, nor seek performance fees. The constitutions of Australian Pipeline Trust and APT Investment Trust enable the Responsible Entity to charge fees up to 0.5% per annum of the value of gross assets; however, the right to charge such fees has been waived to the extent it exceeds the Responsible Entity’s costs.

Principle 5: Make timely and balanced disclosure

APA has a market disclosure policy aimed at ensuring that information that a person could reasonably expect to have a material effect on the security price, whether the information is positive or negative, is announced to the market by release to ASX in accordance with the ASX Listing Rules and the Corporations Act 2001.

The Company Secretary is the nominated continuous disclosure officer.

All ASX announcements are posted on APA’s web site as soon as reasonably possible after notification to ASX.

The market disclosure policy is published on APA’s web site.

Australian Pipeline Trust and its Controlled Entities Corporate Governance Statement

Principle 6: Respect the rights of shareholders

APA aims to ensure its securityholders are informed of all significant developments affecting APA’s state of affairs and business. Information is communicated to securityholders by a number of means, including the following:

the interim (half yearly) report, the directors’ commentary on that report and the annual report;
APA’s web site which has a dedicated Investor Centre section;
announcements to ASX and media releases, copies of which are posted to APA’s web site;
a biannual securityholders’ report (securityholders who elect to receive the annual report do not also receive the securityholders report for the full year results);
“Open Briefings” prepared from time to time to provide an update to investors, and released to ASX;
analyst briefings released to ASX;
the annual meeting of securityholders; and
webcasting of half year and full year accounts presentations, the annual meeting and announcements of major events.

The recent redesign and expansion of APA’s web site support the provision of comprehensive and timely information to securityholders.

Securityholders and others may elect on APA’s web site to receive ASX and media announcements and newsletters by email.

At the annual meeting of securityholders, the Chairman encourages questions and comments from securityholders and seeks to ensure the meeting is managed to give securityholders an opportunity to participate. In the interests of clarity, questions on operational matters may be answered by the Managing Director or another appropriate member of senior management.

The external auditor attends the annual meetings and is available to respond to questions about the conduct of the audit and the preparation and content of the independent audit report.

Principle 7: Recognise and manage risk

The identification and effective management of risk, including calculated risk-taking, are viewed as an essential part of APA’s approach to creating long-term securityholder value.

The board is responsible for adopting and reviewing APA’s approach to the identification, evaluation and management of business risks that are material to the fulfilment of APA’s business objectives.

The board has delegated certain activities to its Audit and Risk Management Committee, the charter for which is published on APA’s web site. With respect to business risk, the committee’s primary function is to maintain and oversee a sound system of internal risk management controls based on the board’s adopted risk management approach.

Specific risk management responsibilities of the Audit and Risk Management Committee include:

reviewing and approving APA’s updated risk profile, and risk management policy and framework;
reviewing at least annually APA’s implementation of the risk management policy and framework; and

Australian Pipeline Trust and its Controlled Entities Corporate Governance Statement

receiving and reviewing management’s report on the effectiveness of risk management and internal control systems and otherwise monitoring the effectiveness of the risk management framework and the system of internal control, and progress against agreed risk management plans.

The Managing Director is accountable for ensuring that a risk management system is established, implemented and maintained in accordance with APA’s risk management policy and framework.

Senior management is accountable for risk management within the areas under their control, including devolution of the risk management process to operational managers, and is responsible for:

reviewing the measures of risk impact severity that underlies the identification of material business risks, to ensure the measures remain current to APA’s context;
identifying material business risks that may impact on APA’s business plans and objectives and the development, implementation, performance and review of risk management plans. In doing so, senior management considers both financial risk and non-financial risk, including operational, environmental, strategic, market-related, compliance and reputation risk;
aggregating operational risk data across APA, and monitoring external factors, to facilitate monitoring of APA’s risk profile; and
contributing advice, leadership and facilitation in the development of group-wide risk control solutions.

The Business Risk Manager, who reports to the Company Secretary, is responsible for:

overseeing and facilitating the co-ordination of the risk management activities of senior management;
reporting regularly to the Audit and Risk Management Committee on APA’s risk profile and the implementation and effectiveness of risk management plans;
contributing leadership and facilitation of the implementation of group-wide risk control solutions; and
working with senior management to design and develop risk education and communication forums.

The financial internal audit function audits the implementation of the risk management framework and policy in selected areas of APA’s business based on a plan agreed with management and the Audit and Risk Management Committee, and reports its findings to the committee.

APA’s management has reported to the Audit and Risk Management Committee as to its assessment of the effectiveness of management by APA of its material risks.

In the course of approving the financial statements for the financial year ended 30 June 2009, the board considered a written statement from the Chief Executive Officer and the Chief Financial Officer to the effect that, to the best of their knowledge and belief, their declaration pursuant to section 295A of the Corporations Act 2001 (broadly, that the financial statements give a true and fair view in all material respects of APA’s financial position and comply in all material respects with relevant accounting standards) is founded on a sound system of risk management and internal control and that system is operating effectively in all material respects in relation to financial reporting risks, based on the management framework adopted by APA.

Principle 8: Remunerate fairly and responsibly

The board has established a Remuneration Committee to consider and make recommendations to the board on, among other things, remuneration policies applicable to board members and senior management.

Australian Pipeline Trust and its Controlled Entities Corporate Governance Statement

The composition of the Remuneration Committee is determined in accordance with the following principles:

the committee will have at least three members;
all members of the committee will be non-executive directors and a majority of them will be independent directors; and
the committee Chairman will be an independent director.

The current members of the committee are John Fletcher (committee Chairman), Russell Higgins and Muri Muhammad. The Chairman of the board, although not a member of the committee, usually attends committee meetings.

The roles and responsibilities of the Remuneration Committee are set out in the committee’s charter which is published on APA’s web site.

The Managing Director attends meetings of the committee by invitation when required to report on and discuss senior management performance and other remuneration matters.

The minutes of each committee meeting are reviewed at the subsequent meeting of the board and the committee Chairman reports on the committee’s activities and recommendations to the board.

The committee is required by its charter to meet at least twice each year. The number of times it met during the financial year ended 30 June 2009, and the committee members’ attendance at those meetings, are set out in the directors’ report.

The committee can seek external professional advice on any matter within its terms of reference. Independent remuneration consultants were engaged to review non-executive director and executive compensation during the financial year.

The Corporations Act 2001 does not require registered investment schemes like Australian Pipeline Trust and APT Investment Trust to include a remuneration report as part of the annual directors’ report, but APA has chosen to do so.

APA’s remuneration report sets out details of APA’s policies with respect to remuneration of nonexecutive directors, the Managing Director and other key management personnel, together with details of the components of remuneration and total remuneration paid to each of those individuals over the financial year to which the report relates.

In 2003, the board terminated the non-executive directors’ retirement benefit plan so that the benefits to participating directors that had accrued up to termination were then quantified and preserved for payment on retirement of those directors. Under the plan, after three years service a director was entitled to the equivalent of the emoluments received over the most recent 12 months. After 10 years service, the entitlement increased to the equivalent of emoluments received during the most recent three years. No additional entitlement accrued after 10 years. For periods between three and 10 years, the entitlement was calculated on a pro-rata basis.

Robert Wright is the only current director entitled to benefit under the plan on his retirement from the board.

Australian Pipeline Trust and its Controlled Entities Corporate Governance Statement

Corporate Governance Principles and Recommendations issued by ASX Corporate Governance Council

		Comply
		Yes/No
Principle 1: Lay solid foundations for management and oversight
1.1	Companies should establish the functions reserved to the board and those	Yes
	delegated to senior executives and disclose those functions
1.2	Companies should disclose the process for evaluating the performance of	Yes
	senior executives
1.3	Companies should provide the information indicated in the Guide to	Yes
	reporting on Principle 1
Principle 2: Structure the board to add value
2.1	A majority of the board should be independent directors	Yes
2.2	The chair should be an independent director	Yes
2.3	The roles of chair and chief executive officer should not be exercised by the	Yes
	same individual
2.4	The board should establish a nomination committee	No (note 1)
2.5	Companies should disclose the process for evaluating the performance of	Yes
	the board, its committees and individual directors
2.6	Companies should provide the information indicated in the Guide to	Yes
	reporting on Principle 2
Principle 3: Promote ethical and responsible decision-making
3.1	Companies should establish a code of conduct and disclose the code or a	Yes
	summary of that code as to:
	� the practices necessary to maintain confidence in the company’s
	integrity
	� the practices necessary to take into account their legal obligations
	and the reasonable expectations of their stakeholders
	� the responsibility and accountability of individuals for reporting and
	investigating reports of unethical practices
3.2	Companies should establish a policy concerning trading in company	Yes
	securities by directors, senior executives and employees, and disclose the
	policy or a summary of that policy
3.3	Companies should provide the information indicated in the Guide to	Yes
	reporting on Principle 3
Principle 4: Safeguard integrity in financial reporting
4.1	The board should establish an audit committee	Yes
4.2	The audit committee should be structured so that it:	Yes
	� consists only of non-executive directors
	� consists of a majority of independent directors
	� is chaired by an independent chair, who is not chair of the board
	� has at least three members
4.3	The audit committee should have a formal charter	Yes
4.4	Companies should provide the information indicated in the Guide to	Yes
	reporting on Principle 4
Principle 5: Make timely and balanced disclosure
5.1	Companies should establish written policies designed to ensure compliance	Yes
	with ASX Listing Rule disclosure requirements and to ensure accountability
	at a senior executive level for that compliance and disclose those policies or
	a summary of those policies
5.2	Companies should provide the information indicated in the Guide to	Yes
	reporting on Principle 5
Principle 6: Respect the rights of shareholders
6.1	Companies should design a communications policy for promoting effective	Yes
	communication with shareholders and encouraging their participation at
	general meetings and disclose their policy or a summary of that policy

Australian Pipeline Trust and its Controlled Entities Corporate Governance Statement

	Australian Pipeline Trust and its Controlled Entities Corporate Governance Statement
6.2	Companies should provide the information indicated in the Guide to	Yes
	reporting on Principle 6
Principle 7: Recognise and manage risk
7.1	Companies should establish policies for the oversight and management of	Yes
	material business risks and disclose a summary of those policies
7.2	The board should require management to design and implement the risk	Yes
	management and internal control system to manage the company’s material
	business risks and report to it on whether those risks are being managed
	effectively. The board should disclose that management has reported to it
	as to the effectiveness of the company’s management of its material
	business risks
7.3	The board should disclose whether it has received assurance from the chief	Yes
	executive officer (or equivalent) and the chief financial officer (or equivalent)
	that the declaration provided in accordance with section 295A of the
	Corporations Act is founded on a sound system of risk management and
	internal control and that the system is operating effectively in all material
	respects in relation to financial reporting risks
7.4	Companies should provide the information indicated in the Guide to	Yes
	reporting on Principle 7
Principle 8: Remunerate fairly and responsibly
8.1	The board should establish a remuneration committee	Yes
8.2	Companies should clearly distinguish the structure of non-executive	Yes
	directors’ remuneration from that of executive directors and senior
	executives
8.3	Companies should provide the information indicated in the Guide to	Yes
	reporting on Principle 8
Note
1.	The board has chosen not to have a separate nomination committee, as explained in the
	section of this corporate governance statement entitled “Principle 2: Structure the	board to
	add value”.

Australian Pipeline Trust Income Statement

For the financial year ended 30 June 2009

		Consolidated	Consolidated		Trust
		2009	2008	2009	2008
	Note	$000	$000	$000	$000
Continuing operations
Revenue	5	943,636	878,094	88,462	65,927
Share of net profits of jointly controlled entities
accounted for using the equity method	5	6,143	3,635	-	-
		949,779	881,729	88,462	65,927
Asset operation and management expenses		(111,182)	(99,025)	-	-
Depreciation and amortisation expense	6	(95,640)	(94,459)	-	-
Other operating costs - pass-through	6	(271,387)	(282,874)	-	-
Finance costs	6	(245,078)	(237,434)	-	(30)
Employee benefit expense	6	(90,811)	(59,812)	-	-
Other expenses		(20,949)	(17,920)	1,905	(38)
Profit before tax		114,732	90,205	90,367	65,859
Income tax expense	8	(35,882)	(22,958)	(3,197)	(476)
Profit for theyear		78,850	67,247	87,170	65,383
Attributable to:
Equityholders of the parent		44,708	38,094	87,170	65,383
Minority interest - APT Investment Trust equityholders		34,064	29,098	-	-
APA stapled securityholders		78,772	67,192	87,170	65,383
Minority interest - other		78	55	-	-
		78,850	67,247	87,170	65,383
Earnings per security
Basic and diluted(centsper security)	35	16.2	14.9

Diluted earnings per security is exactly the same as basic earnings per security.

The above income statement should be read in conjunction with the accompanying notes.

Australian Pipeline Trust Balance Sheet

As at 30 June 2009

		Consolidated	Consolidated		Trust
		2009	2008	2009	2008
	Note	$000	$000	$000	$000
Current assets
Cash and cash equivalents		108,815	105,455	104	12
Trade and other receivables	10	142,498	130,202	7,785	-
Inventories	11	14,156	10,962	-	-
Other	12	4,182	2,883	-	-
		269,651	249,502	7,889	12
Non-current assets classified as held for sale	13	-	601,731	-	-
Total current assets		269,651	851,233	7,889	12
Non-current assets
Receivables	14	21,168	21,426	-	-
Other financial assets	15	14,259	153,144	1,547,758	927,316
Investments accounted for using the equity method	16	388,416	136,314	-	-
Property, plant and equipment	17	3,362,445	3,236,723	-	-
Goodwill	18	520,779	520,774	-	-
Other intangible assets	19	168,521	171,643	-	-
Deferred tax assets	8	-	-	150,401	135,676
Other	20	2,088	5,735	-	-
Total non-current assets		4,477,676	4,245,759	1,698,159	1,062,992
Total assets		4,747,327	5,096,992	1,706,048	1,063,004
Current liabilities
Trade and other payables	21	109,882	151,558	150,426	136,202
Borrowings	22	900,219	450,150	-	-
Other financial liabilities	23	7,648	5,187	-	-
Provisions	24	39,434	38,752	-	-
Other	25	13,042	12,109	-	-
		1,070,225	657,756	150,426	136,202
Liabilities directly associated with non-current
assets classified as held for sale	13	-	99,678	-	-
Total current liabilities		1,070,225	757,434	150,426	136,202
Non-current liabilities
Borrowings	26	2,057,875	2,660,973	-	-
Other financial liabilities	27	71,628	160,195	648,738	145,286
Deferred tax liabilities	8	242,485	246,995	-	-
Provisions	24	23,457	19,007	-	-
Other	25	3,202	2,180	-	-
Total non-current liabilities		2,398,647	3,089,350	648,738	145,286
Total liabilities		3,468,872	3,846,784	799,165	281,488
Net assets		1,278,455	1,250,208	906,883	781,516

The above balance sheet should be read in conjunction with the accompanying notes.

Australian Pipeline Trust Balance Sheet (continued)

As at 30 June 2009

		Consolidated	Consolidated		Trust
		2009	2008	2009	2008
	Note	$000	$000	$000	$000
Equity
Australian Pipeline Trust equity:
Issued capital	28	894,435	844,150	894,435	844,150
Reserves	29	19,675	(1,945)	(1,237)	(75,386)
Retained earnings	30	(4,998)	43,375	13,685	12,752
Equity attributable to securityholders of the parent		909,112	885,580	906,883	781,516
Minority interests:
APT Investment Trust	31	369,262	364,539	-	-
Other minority interest	31	81	89	-	-
Total minority interests		369,343	364,628	-	-
Total equity		1,278,455	1,250,208	906,883	781,516

The above balance sheet should be read in conjunction with the accompanying notes.

Australian Pipeline Trust Statement of Recognised Income and Expense

For the financial year ended 30 June 2009

	Consolidated	Consolidated		Trust
	2009	2008	2009	2008
	$000	$000	$000	$000
Loss on available-for-sale investments taken to equity	(2,497)	(75,435)	(1,101)	(75,386)
Gain on cash flow hedges taken to equity	48,526	17,880	-	-
Actuarial loss on defined benefit plans	(9,775)	(8,244)	-	-
Income tax on items taken directly to equity	(11,625)	(2,891)	-	-
Net income and expense recognised directly in equity	24,629	(68,690)	(1,101)	(75,386)
Profit for the year	78,850	67,247	87,170	65,383
Transfer of (loss)/gain on cash flow hedges to profit or loss
(net of related tax)	(80,919)	63,889	-	-
Total recognised income and expense for theyear	22,560	62,446	86,069	(10,003)
Attributable to:
Equityholders of the parent	(11,582)	33,343	86,069	(10,003)
Minority interest - APT Investment Trust equityholders	34,064	29,048	-	-
Minority interest - other	78	55	-	-
	22,560	62,446	86,069	(10,003)

The above statement of recognised income and expense should be read in conjunction with the accompanying notes.

Australian Pipeline Trust Cash Flow Statement

For the financial year ended 30 June 2009

		Consolidated	Consolidated		Trust
		2009	2008	2009	2008
	Note	$000	$000	$000	$000
Cash flows from operating activities
Receipts from customers		1,005,478	910,744	2,194	-
Payments to suppliers and employees		(593,821)	(557,669)	(7,296)	(33)
Dividends received		24,273	23,294	86,315	65,636
Proceeds from repayment of finance leases		3,964	5,256	-	-
Interest received		30,684	26,099	117	291
Interest and other costs of finance paid		(244,031)	(221,867)	-	(30)
Income tax(paid)/refunded		(178)	566	-	-
Net cashprovided by operating activities	36(c)	226,369	186,423	81,330	65,864
Cash flows from investing activities
Payments for property, plant and equipment		(301,729)	(193,808)	-	-
Proceeds from sale of property, plant and equipment		5	1	-	-
Payments for available-for-sale investments	36(b)	-	(196,880)	-	(173,913)
Payments for equity accounted investments	36(b)	(96,114)	(4,862)	(71,735)	-
Payments for controlled entities	36(b)	(22,616)	(453,869)	(473,287)	(60,637)
Payments for intangible assets		(2,000)	-	-	-
Payments for financial assets		(10,083)	-	-	-
Proceeds from sale of businesses	40	545,905	-	-	-
Net cashprovided by/(used in) investing activities		113,368	(849,418)	(545,022)	(234,550)
Cash flows from financing activities
Proceeds from borrowings		560,000	796,000	499,736	179,153
Repayments of borrowings		(831,000)	(114,326)	-	-
Proceeds from issue of securities		78,998	123,995	50,678	43,356
Payments of security issue costs		(555)	(586)	(393)	(261)
Distributions paid to:
Securityholders of APT		(86,237)	(53,552)	(86,237)	(53,552)
Securityholders of minority interests - APTIT		(57,492)	(43,127)	-	-
Other minority interest		(91)	(32)	-	-
Net cash (used in)/provided by financing activities		(336,377)	708,372	463,784	168,696
Net increase in cash and cash equivalents		3,360	45,377	92	10
Cash and cash equivalents at beginning of financial year		105,455	60,078	12	2
Cash and cash equivalents at end of financialyear	36(a)	108,815	105,455	104	12

The above cash flow statement should be read in conjunction with the accompanying notes.

For the financial year ended 30 June 2009

Australian Pipeline Trust Notes to the financial statements

1. General information

Australian Pipeline Trust ("APT") is one of two stapled entities of APA Group ("APA"). The other stapled entity is APT Investment Trust ("APTIT"). APA is listed on the Australian Stock Securities (trading under the symbol 'APA'), registered in Australia and operating in Australia.

The financial report represents the consolidated financial results of the two stapled entities Australian Pipeline Trust and APT Investment Trust, together "APA".

APT's registered office and principal place of business are as follows:

Registered office and principal place of business

Level 19 HSBC Building 580 George Street SYDNEY NSW 2000 Tel: (02) 9693 0000.

The principal activities of the Consolidated Entity during the course of the financial year were the ownership of gas transmission pipelines located throughout Australia, and gas distribution networks in south east Queensland and northern New South Wales. The Consolidated Entity has interests in over 12,000 km of natural gas pipeline infrastructure across the mainland and owns 2,800km of gas distribution networks in Queensland and New South Wales, transporting more than half of the natural gas used in Australia.

APA has direct management and operational control over its assets and also provides management and operation services to its investments, including gas distribution and transmission company Envestra Limited "Envestra".

For the financial year ended 30 June 2009

Australian Pipeline Trust Notes to the financial statements (continued)

2. Significant accounting policies

Statement of compliance

The financial report includes the separate financial statements of the Trust and the consolidated financial statements of the Group.

Accounting Standards include Australian equivalents to International Financial Reporting Standards ("A-IFRS"). Compliance with A-IFRS ensures that the financial statements and notes of the Trust and the Consolidated Entity comply with International Financial Reporting Standards ("IFRS").

The financial statements were authorised for issue by the Directors on 25 August 2009.

Basis of preparation

The financial report has been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars ($000) unless otherwise stated under the option available to APA under ASIC Class Order 98/100. APA is an entity to which the class order applies.

The following significant accounting policies have been adopted in the preparation and presentation of the financial report:

Critical accounting judgements and key sources of estimation uncertainty

In the application of the Consolidated Entity's accounting policies, management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Refer to Note 3 for a discussion of critical judgements in applying the entity's accounting policies, and key sources of estimation uncertainty.

Adoption of new and revised Accounting Standards

In the current year, the Consolidated Entity has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board ("AASB") that are relevant to its operations and effective for the current annual reporting period. Details of the impact of the adoption of these new accounting standards are set out in the individual accounting policy notes set out below.

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

2. Significant accounting policies (continued)

The following significant accounting policies have been adopted in the preparation and presentation of the financial report:

(a) Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Trust and entities (including special purpose entities) controlled by the Trust (its controlled entities) (referred to as the "Consolidated Entity", "Group" or "APA Group" in these financial statements). Control is achieved where the Trust has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of controlled entities acquired during the financial year are included in the consolidated income statement from the effective date of acquisition.

Where necessary, adjustments are made to the financial statements of controlled entities to bring their accounting policies into line with those used by other members of the Group.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. In the separate financial statements of the Trust, the intra-group transactions ("common control transactions") are generally accounted for by reference to the existing (consolidated) book value of the items. Where the transaction value of common control transactions differs from their consolidated book value, the difference is recognised as a contribution by or distribution to equity participants by the transaction entities.

Minority interests in the net assets (excluding goodwill) of consolidated controlled entities are identified separately from the Consolidated Entity's equity therein. Minority interests consist of the amount of those interests at the date of the original business combination and the minority's share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority's interest in the controlled entity's equity are allocated against the interests of the Consolidated Entity except to the extent that the minority has a binding obligation and is able to make an additional investment to cover the losses.

(b) Financial assets and liabilities

Available-for-sale financial assets

Certain shares and redeemable notes held by the Group are classified as being available-for-sale and are stated at fair value. Gains and losses arising from changes in fair value are recognised directly in the available-for-sale investment revaluation reserve with the exception of impairment losses, interest calculated using the effective interest method and foreign exchange gains and losses on monetary assets which are recognised directly in profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognised in the available-for-sale investment revaluation reserve is included in profit or loss for the period. Dividends on available-forsale equity instruments are recognised in profit or loss when the Group’s right to receive the dividends is established. The change in fair value attributable to translation differences that result from a change in amortised cost of the asset is recognised in profit or loss, and other changes are recognised in equity.

Loans and receivables

Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Trade and other receivables are stated at their amortised cost less impairment.

Trade and other payables

Trade and other payables are recognised when the Consolidated Entity becomes obliged to make future payments resulting from the purchase of goods and services. Trade and other payables are stated at amortised cost.

For the financial year ended 30 June 2009

Australian Pipeline Trust Notes to the financial statements (continued)

2. Significant accounting policies (continued)

(b) Financial assets (continued)

Impairment of financial assets

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that as a result of one or more events that occurred after the initial recognition of the financial asset the estimated future cash flows of the investment have been impacted.

For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of financial assets including uncollectible trade receivables is reduced by the impairment loss through the use of an allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of the investment at the date the impairment is reversed, does not exceed what the amortised cost would have been had the impairment not been recognised.

In respect of available-for-sale equity instruments, any subsequent increase in fair value after an impairment loss is recognised directly in equity.

(c) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash, which are subject to insignificant risk of changes in values.

(d) Acquisition of assets

Assets acquired are recorded at the cost of acquisition, being the purchase consideration determined as at the date of acquisition plus costs incidental to the acquisition.

In the event that settlement of all or part of the cash consideration given in the acquisition of an asset is deferred, the fair value of the purchase consideration is determined by discounting the amounts payable in the future to their present values as at the date of acquisition.

(e) Borrowings

Borrowings are recorded initially at fair value, net of transaction costs. Subsequent to initial recognition, borrowings are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in the income statement over the period of the borrowing using the effective interest method.

(f) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

For the financial year ended 30 June 2009

Australian Pipeline Trust Notes to the financial statements (continued)

2. Significant accounting policies (continued)

(g) Property, plant and equipment

Land and buildings held for use are carried in the balance sheet at cost, less any subsequent accumulated depreciation and impairment losses.

Leasehold improvements and plant and equipment are stated at cost less accumulated depreciation and impairment. Work in progress is stated at cost. Cost includes expenditure that is directly attributable to the acquisition or construction of the item.

(h) Depreciation

Depreciation is provided on property, plant and equipment, including freehold buildings but excluding land. Depreciation is calculated on either a straight-line or throughput basis depending on the nature of the asset so as to write off the net cost of each asset over its estimated useful life. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight-line method. The estimated useful lives and depreciation methods are reviewed at the end of eac reporting period, ithe the effect of any changes recognised on a prospective basis. The following estimated useful lives are used in the calculation of depreciation:

● buildings 30 - 50 years; ● compressors up to 50 years; ● gas transportation systems up to 80 years; ● meters 25 - 50 years; ● electricity transmission systems up to 50 years; and ● other plant and equipment 3 - 20 years.

(i) Business combinations

Acquisitions of controlled entities and businesses are accounted for using the purchase method. The cost of the business combination is measured as the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Consolidated Entity in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under AASB 3 'Business Combinations' are recognised at their fair values at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with AASB 5 'Non-current Assets Held for Sale and Discontinued Operations', which are recognised and measured at fair value less costs to sell.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Consolidated Entity's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. If, after reassessment, the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities or contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in profit or loss.

The interest of minority equityholders in the acquiree is initially measured at the minority's proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

(j) Employee benefits

Provision is made for benefits accruing to employees in respect of wages and salaries, incentives, annual leave and long service leave when it is probable that settlement will be required and they are capable of being measured reliably. Provisions made in respect of employee benefits expected to be settled within 12 months, are measured at their nominal values using the remuneration rates expected to apply at the time of settlement. Provisions made in respect of employee benefits which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the Consolidated Entity in respect of services provided by employees up to reporting date.

For the financial year ended 30 June 2009

Australian Pipeline Trust Notes to the financial statements (continued)

2. Significant accounting policies (continued)

(j) Employee benefits (continued)

Defined contribution plans

Contributions to defined contribution plans are expensed when incurred.

Defined benefit plans

For defined benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at each reporting date. Actuarial gains and losses are recognised directly to retained earnings in the period in which they occur.

Past service cost is recognised immediately to the extent that the benefits are already vested, and otherwise amortised on a straight-line basis over the average period until the benefits become vested.

The defined benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation, adjusted for unrecognised actuarial gains and losses and unrecognised past service costs, net of the fair value of the plan assets. Any asset resulting from this calculation is limited to unrecognised actuarial losses and past service cost, plus the present value of available refunds and reductions in future contributions to the plan.

(k) Derivative financial instruments

The Group enters into a variety of derivatives financial instruments to manage its exposure to interest rate and foreign exchange rate risk, including foreign exchange forward contracts and interest rate swaps. Further details of derivatives financial instruments are disclosed in Note 37.

Derivatives are initially recognised at fair value at the date a derivatives contract is entered into and subsequently remeasured to their fair value at each reporting period. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship. The Consolidated Entity designates certain derivatives as hedges of the fair value of recognised assets or liabilities or firm commitments (fair value hedges) or, hedges of highly probable forecast transactions or of foreign currency risk of firm commitments (cash flow hedges).

The fair value of hedging derivatives is classified as a non-current asset or a non-current liability if the remaining maturity of the hedge relationship is more than 12 months and as a current asset or a current liability if the remaining maturity of the hedge relationship is less than 12 months. Derivatives not designated into an effective hedge relationship

are classified as a current asset or a current liability.

Embedded derivatives

Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at fair value with changes in fair value recognised in profit or loss.

Hedge accounting

The Consolidated Entity designates certain hedging instruments, which include derivatives, embedded derivatives and non-derivatives in respect of foreign currency risk, as either fair value hedges or cash flow hedges.

Hedges of foreign exchange and interest rate risk on firm commitments are accounted for as cash flow hedges.

At the inception of the hedge relationship, the Consolidated Entity documents the relationship between the hedging instrument and hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Consolidated Entity documents whether the hedging instrument that is used in the hedging relationship is highly effective in offsetting changes in fair values or cash flows of the hedged item.

For the financial year ended 30 June 2009

Australian Pipeline Trust Notes to the financial statements (continued)

2. Significant accounting policies (continued)

(k) Derivative financial instruments (continued)

Hedge accounting (continued)

Note 37 contains details of the fair values of the derivative instruments used for hedging purposes. Movements in the hedging reserve in equity are also detailed in Note 29.

Fair value hedges

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in profit or loss immediately, together with any changes in the fair value of the hedged item that is attributable to the hedged risk. Hedge accounting is discontinued when the Consolidated Entity revokes the hedging relationship or the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. The adjustment to the carrying amount of the hedged item arising from the hedged risk is amortised to profit or loss from that date.

Cash flow hedges

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is deferred in equity. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss as part of other expenses or other income.

Amounts deferred in equity are recycled in profit or loss in the periods when the hedged item is recognised in profit or loss in the same line of the income statement as the recognised hedged item. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset or liability.

Hedge accounting is discontinued when the Consolidated Entity revokes the hedging relationship or the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. Any cumulative gain or loss deferred in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was deferred in equity is recognised immediately in profit or loss.

(l) Financial instruments issued by the Consolidated Entity

Debt and equity instruments

Debt and equity instruments are classified as either liabilities or equity in accordance with the substance of the contractual arrangement. An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Consolidated Entity are recorded at the proceeds received, net of direct issue costs.

Financial guarantee contract liabilities

Financial guarantee contract liabilities are measured initially at their fair values and subsequently at the higher of the amount recognised as a provision and the amount initially recognised less cumulative amortisation in accordance with the revenue recognition policies.

Transaction costs arising on the issue of equity instruments

Transaction costs arising on the issue of equity instruments are recognised directly in equity as a reduction of the proceeds of the equity instruments to which the costs relate. Transaction costs are the costs that are incurred directly in connection with the issue of those equity instruments and which would not have been incurred had those instruments not been issued.

Interest and distributions

Interest and distributions are classified as expenses or as distributions of profit consistent with the balance sheet classification of the related debt or equity instruments or component parts of compound instruments.

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

2. Significant accounting policies (continued)

(m) Foreign currency transactions

Both the functional and presentation currency of the Consolidated Entity and the Trust is Australian dollars (A$). All foreign currency transactions during the financial year are brought to account using the exchange rate in effect at the date of the transaction. Foreign currency monetary items at reporting date are translated at the exchange rate existing at that date and resulting exchange differences are recognised in profit or loss in the period in which they arise.

(n) Goods and services tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except:

where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or
for receivables and payables which are recognised inclusive of GST, except for accrued revenue and accrued expense at balance dates which exclude GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.

GST receivable or GST payable is only recognised once a tax invoice has been issued or received.

Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified within operating cash flows.

(o) Goodwill

Goodwill acquired in a business combination is initially measured at its cost, being the excess of the cost of the business combination over the acquirer's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. Goodwill is tested for impairment annually and whenever there is an indication that the goodwill may be impaired. Any impairment is recognised immediately in the profit or loss. For the purpose of impairment testing, goodwill is allocated to each of the Consolidated Entity's cash-generating units, or groups of cash-generating units, expected to benefit from the synergies of the business combination. Refer also Note 2(p).

(p) Impairment of assets

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell, and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting period.

(q) Distributions

A provision is recognised for distributions only when they have been declared, determined or publicly recommended by the Directors.

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

2. Significant accounting policies (continued)

(r) Income tax

Income tax on the profit or loss for the financial year comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the financial year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous financial years. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: initial recognition of goodwill, initial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating to investments in wholly-owned entities to the extent that they will probably not reverse in the foreseeable future.

The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using the tax rates enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Tax consolidation

The Trust and its wholly-owned Australian tax resident entities are part of a tax-consolidated group under Australian taxation law. The head entity within the tax-consolidated group is Australian Pipeline Trust.

Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax-consolidated group are recognised in the separate financial statements of the members of the tax-consolidated group using the 'separate taxpayer within group' approach, by reference to the carrying amounts in the separate financial statements of each entity and the tax values applying under tax consolidation.

Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the wholly-owned entities are assumed by the head entity in the tax-consolidated group and are recognised as amounts payable (receivable) to (from) other entities in the tax-consolidated group in conjunction with any tax funding arrangement amounts.

The head entity recognises deferred tax assets arising from unused tax losses of the tax-consolidated group to the extent that it is probable that future taxable profits of the tax-consolidated group will be available against which the assets can be utilised.

(s) Inventories

Inventories are stated at the lower of cost and net realisable value. Costs, including an appropriate portion of fixed and variable overhead expenses, are assigned to inventories by the method most appropriate to each particular class of inventory, with the majority being valued on a first-in, first-out basis. Net realisable value represents the estimated selling price for the inventories less all estimated costs of completion and costs necessary to make the sale.

(t) Investments in debt and equity securities

Financial instruments held for trading are classified as current assets and are stated at fair value, with any resultant gain or loss recognised in profit or loss.

Other financial instruments held by the Consolidated Entity are classified as being available-for-sale and are stated at fair value, with any resultant gain or loss being recognised directly in equity, except for impairment losses, and in the case of monetary items such as debt securities, foreign exchange gains and losses. When these investments are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in the income statement. Where these

For the financial year ended 30 June 2009

Australian Pipeline Trust Notes to the financial statements (continued)

2. Significant accounting policies (continued)

(t) Investments in debt and equity securities (continued)

investments are interest bearing, interest calculated using the effective interest method is recognised in the income statement.

The fair value of financial instruments classified as held for trading and available-for-sale is their quoted bid price at the balance sheet date.

(u) Joint venture arrangements

Jointly controlled operations

Interests in jointly controlled operations are reported in the financial statements by including the Consolidated Entity’s share of assets employed in the joint ventures, the share of liabilities incurred in relation to joint ventures and the share of any expenses incurred in relation to joint ventures in their respective classification categories.

Jointly controlled entities

Interests in jointly controlled entities are accounted for under the equity method in the consolidated financial statements and the cost method in APT’s financial statements.

(v) Investments in associates

An associate is an entity over which the Consolidated Entity has significant influence and that is neither a subsidiary nor a joint venture. The results and assets and liabilities of associates are accounted for using the equity method of accounting. Under the equity method, investments in associates are carried in the consolidated balance sheet at cost as adjusted for post-acquisition changes in the Consolidated Entity's share of the net assets of the associate, less any impairment in the value of individual investments.

Any excess of the cost of acquistion over the Consolidated Entity's share of the net fair value of identifiable assets, liabilities and contingent liabilities of the associate recognised at the date of acquistion is recognised as goodwill. This is included within the carrying amount of the investment and is assessed for impairment as part of that investment. Any excess of the Consolidated Entity's share of the net fair value of assets and liabilities over the cost of acquisition after reassessment is recognised immediately in profit or loss.

(w) Leased assets

Leases are classified as finance leases when the terms of the lease transfer substantially all the risks and rewards incidental to the ownership of the leased asset to the lessee. All other leases are classified as operating leases.

Group as lessor

Amounts due from a lessee under finance leases are recorded as receivables. Finance lease receivables are initially recognised at amounts equal to the present value of the minimum lease payments receivable plus the present value of any unguaranteed residual value expected to accrue at the end of the lease term. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the leases.

Group as lessee

Assets held under finance leases are initially recognised at their fair value or, if lower, at amounts equal to the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Lease payments are allocated between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability.

Finance lease assets are amortised on a straight-line basis over the estimated useful life of the asset.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

For the financial year ended 30 June 2009

Australian Pipeline Trust Notes to the financial statements (continued)

2. Significant accounting policies (continued)

(x) Provisions

A provision is recognised when there is a legal, equitable or constructive obligation as a result of a past event, it is probable that a future sacrifice of economic benefits will be required to settle the obligation and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the financial year, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is probable that recovery will be received and the amount of the receivable can be measured reliably.

(y) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Consolidated Entity and the revenue can be reliably measured. Amounts disclosed as revenue are net of duties and taxes paid. Revenue is recognised for the major business activities as follows:

Sales revenue

Sales revenue represents revenue earned for the transportation of gas, transmission of electricity and other related services and is recognised when the services are provided.

Pass-through revenue

Pass-through revenue is revenue on which no margin is earned and is offset by corresponding pass-through costs.

Interest revenue

Interest revenue is recognised as it accrues using the effective interest method.

Sale of non-current assets

The net gain or loss on sale of non-current assets is included as income at the date control of the assets passes to the buyer. This is usually when an unconditional contract of sale is signed. The gain or loss on disposal is calculated as the difference between the carrying amount of the asset at the time of disposal and the net proceeds on disposal (including incidental costs).

Dividend revenue

Dividend revenue is recognised when the right to receive a dividend has been established.

Finance lease income

Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group's net investment outstanding in respect of the leases.

Interest revenue - Envestra loan notes

Prior to obtaining significant influence, loan note interest revenue was recognised when the right to receive a distribution has been established.

(z) Non-current assets held for sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

For the financial year ended 30 June 2009

Australian Pipeline Trust Notes to the financial statements (continued)

2. Significant accounting policies (continued)

(z) Non-current assets held for sale (continued)

Non-current assets classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell.

(aa) Intangible assets

Intangible assets acquired in a business combination

Intangible assets acquired in a business combination are identified and recognised separately from goodwill where they satisfy the definition of an intangible asset and their fair values can be measured reliably. Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets acquired separately.

(ab) Share-based payments

The Group provides benefits to certain employees in the form of cash settled share-based payments. For cash settled share-based payments, a liability equal to the portion of services received is recognised at the current fair value determined at each reporting date.

(ac) Standards and Interpretations issued not yet effective

At the date of authorisation of the financial report, the Standards and Interpretations listed below were in issue but not yet effective.

Initial application of the following Standards will not affect any of the amounts recognised in the financial report, but will change the disclosures presently made in relation to the financial report of the Consolidated Entity and the Trust:

	Effective for annual	Expected to be
	reporting periods	initially applied in the
Standard	beginning on or after	financial year ending
●AASB 101 'Presentation of Financial Statements' - revised	1 January 2009	30 June 2010
standard (revised September 2007), AASB 2007-8 'Amendments
to Australian Accounting Standards arising from AASB 101',
AASB 2007-10 'Further Amendments to Australian Accounting
Standards arising from AASB 101'
●AASB 8 'Operating Segments'	1 January 2009	30 June 2010
●AASB 2009-2 'Amendments to Australian Accounting Standards -
Improving Disclosures about Financial Instruments'	1 January 2009	30 June 2010

Initial application of the following Standards and Interpretations which are potentially applicable to the Consolidated Entity and Trust's financial report is not expected to have any material impact on the financial report of the Consolidated Entity and the Trust:

Consolidated Entity and the Trust:
	Effective for annual	Expected to be
	reporting periods	initially applied in the
Standard/Interpretation	beginning on or after	financial year ending
●AASB 123 'Borrowing Costs' (revised), AASB 2007-6 'Amendments	1 January 2009	30 June 2010
to Australian Accounting Standards arising from AASB 123'

AASB 127 'Separate and Consolidated Financial Statements' (revised)
1 January 2009 30 June 2010

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

2. Significant accounting policies (continued)

(ac) Standards and Interpretations issued not yet effective (continued)

Standard/Interpretation

AASB 2008-1 'Amendments to Australian Accounting Standard - Share-based Payments: Vesting Conditions and Cancellations'
AASB 2008-2 'Amendments to Australian Accounting Standards - Puttable Financial Instruments and Obligations arising on Liquidation'
AASB 2008-5 'Amendments to Australian Accounting Standards arising from the Annual Improvements Project'
AASB 2008-6 'Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project'
AASB 2008-7 'Amendments to Australian Accounting Standards - Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate'
AASB 2008-8 'Amendments to Australian Accounting Standards – Eligible Hedged Items'
AASB Interpretation 17 'Distributions of Non-cash Assets to Owners', AASB 2008-13 'Amendments to Australian Accounting Standards arising from AASB Interpretation 17 – Distributions of Non-cash Assets to Owners'

Effective for annual Expected to be reporting periods initially applied in the beginning on or after financial year ending

1 January 2009

30 June 2010

1 January 2009 30 June 2010
1 January 2009 30 June 2010 1 July 2009 30 June 2010 1 January 2009 30 June 2010 1 July 2009 30 June 2010 1 July 2009 30 June 2010

The initial application of the expected issue of an Australian equivalent accounting Standard/Interpretation to the following Standard/Interpretation is not expected to have a material impact on the financial report of the Consolidated Entity and Trust:

Consolidated Entity and Trust:
	Effective for annual	Expected to be
	reporting periods	initially applied in the
Standard/Interpretation	beginning on or after	financial year ending
●Improvements to IFRSs (2008)	1 July 2009	30 June 2010
●AASB Interpretation 18 'Transfers of Assets from Customers'	1 July 2009	30 June 2010

The potential impact of the initial application of the following Standards has not yet been determined as it is dependent upon whether any significant business combinations occur after the effective date:

AASB 3 'Business Combinations' (revised), AASB 127 'Consolidated and Separate Financial Statements' (revised) and AASB 2008-3 'Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127'
Effective for annual periods beginning on or after 1 July 2009.

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

3. Critical accounting judgements and key sources of estimation uncertainty

Critical judgements in applying the entity's accounting policies

The following are the critical judgements (apart from those involving estimations, which are dealt with below) that management has made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in the financial statements:

Accounting for acquisitions

Assets acquired are recorded at the cost of acquisition, being the purchase consideration determined as at the date of acquisition plus costs incidental to the acquisition. Cost is allocated to individual identifiable assets and liabilities. Management makes a number of judgements in allocating cost, particularly in relation to the valuation of identifiable intangible assets such as contractual arrangements, including assumptions relating to potential contract renewals and associated useful life.

Key sources of estimation uncertainty

Impairment of assets

Determining whether property, plant and equipment, identifiable intangible assets and goodwill are impaired requires an estimation of the value-in-use or fair value of the cash-generating units. The calculations require the Consolidated Entity to estimate the future cash flows expected to arise from cash-generating units and suitable discount rates in order to calculate the present value of cash-generating units.

Estimates and assumptions used are reviewed on an ongoing basis.

Determining whether available-for-sale investments are impaired requires an assessment as to whether declines in value are significant or prolonged. Management has taken into account a number of qualitative and quantitative factors in making this assessment. Any assessment of whether a decline in value represents an impairment would result in the transfer of the decrement from reserves to the income statement.

Useful lives of non-current assets

The Consolidated Entity reviews the estimated useful lives of property, plant and equipment at the end of each annual reporting period. Any reassessment of useful lives in a particular year will affect the depreciation or amortisation expense.

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

4. Business and geographical segments

The Consolidated Entity operates in one geographical segment, being Australia.

(a) Description of business segments

The Consolidated Entity comprises the following main business segments:

gas transportation infrastructure (i.e. gas transmission & distribution);
asset management;
energy investments;
electricity transmission; and
complementary assets.

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

4. Business and geographical segments (continued)

(b) Primary reporting format - business segments

	Gas transmission	Asset	Energy	Electricity	Complementary
2009 (a)	& distribution $000	management $000	investments $000	transmission(e) $000	assets $000	Consolidated $000
Segment revenue
External sales revenue	541,403	69,723	573	13,120	7,407	632,226
Equity accounted net profits	-	-	6,143	-	-	6,143
Pass-through revenue	88,457	182,930	-	-	-	271,387
Finance lease and investment interest income	2,438	-	1,477	-	3,855	7,770
Distribution - other entities	-	-	3,536	-	-	3,536
Total segment revenue	632,298	252,653	11,729	13,120	11,262	921,062
Significant items						5,363
Other interest income						23,354
Consolidated revenue						949,779
Segment result
Earnings before interest, tax, depreciation and
amortisation ("EBITDA")	386,981	29,970	3,947	8,728	836	430,462
Share of net profits of jointly controlled entities for
using the equity method	-	-	6,143	-	-	6,143
Finance lease and investment interest income	2,438	-	1,477	-	3,855	7,770
Total EBITDA (excluding significant items)	389,419	29,970	11,567	8,728	4,691	444,375
Depreciation and amortisation	(82,856)	(8,497)	(57)	(4,230)	-	(95,640)
Earnings before interest and tax ("EBIT") (excluding
significant items)	306,563	21,473	11,510	4,498	4,691	348,735
Net finance costs(b)						(212,991)
Profit before tax (excluding significant items)						135,744
Income tax expense						(35,922)
Profit for the year (excluding significant items)						99,822
Significant items after tax						(20,972)
Profit for the year						78,850

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

4. Business and geographical segments (continued)

(b) Primary reporting format - business segments (continued)

	Gas transmission	Asset	Energy	Electricity	Complementary
2009 (a)	& distribution $000	management $000	investments $000	transmission(e) $000	assets $000	Consolidated $000
Segment assets and liabilities
Segment assets	3,945,592	246,753	21,919	-	21,571	4,235,835
Carrying value of investments accounted for using
the equity method	-	-	388,416	-	-	388,416
Unallocated assets(c)						123,076
Total assets						4,747,327
Acquisition of segment assets	24,763	-	-	-	-	24,763
Segment liabilities	121,291	56,001	499	-	11,225	189,016
Unallocated liabilities(d)						3,279,856
Total liabilities						3,468,872

(a) All equity accounted investments have been reclassified from Gas transmission & distribution to Energy investments. This new segment includes APA's investments which were previously in the Gas transmission & distribution segment, namely Envestra, SEAGas Pipeline and the Ethane Pipeline Income Fund. EII is also included in this segment from 12 December 2008.

(b) Excluding finance lease income and any gains or losses on revaluation of derivatives which have been included as part of EBIT for segment reporting purposes.

(d) Unallocated liabilities consist of current and non-current borrowings, deferred tax liabilities and fair value of interest rate swaps.

(e) Electricity transmission includes income and expenses up to the 12 December 2008, when the assets were sold to EII.

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

4. Business and geographical segments (continued)

(b) Primary reporting format - business segments (continued)

	Gas transmission	Asset	Energy	Electricity	Complementary
2008 (restated) (a)	& distribution $000	management $000	investments $000	transmission $000	assets $000	Consolidated $000
Segment revenue
External sales revenue	490,482	42,853	-	25,228	9,511	568,074
Equity accounted net profits	-	-	3,635	-	-	3,635
Pass-through revenue	95,939	186,935	-	-	-	282,874
Finance lease and investment interest income	4,245	-	-	-	8,167	12,412
Distribution - other entities	-	-	1,414	-	-	1,414
Total segment revenue	590,666	229,788	5,049	25,228	17,678	868,409
Other interest income						13,320
Consolidated revenue						881,729
Segment result
Earnings before interest, tax, depreciation and
amortisation ("EBITDA")	351,280	25,461	1,414	18,939	1,331	398,425
Share of net profits of jointly controlled entities for
using the equity method	-	-	3,635	-	-	3,635
Finance lease and investment interest income	4,245	-	-	-	8,167	12,412
Total EBITDA (excluding significant items)	355,525	25,461	5,049	18,939	9,498	414,472
Depreciation and amortisation	(76,983)	(7,910)	-	(9,471)	(95)	(94,459)
Earnings before interest and tax ("EBIT") (excluding
significant items)	278,542	17,551	5,049	9,468	9,403	320,013
Net finance costs(b)						(223,779)
Profit before tax (excluding significant items)						96,234
Income tax expense						(24,767)
Profit for the year (excluding significant items)						71,467
Significant items after tax						(4,220)
Profit for the year						67,247
Segment assets and liabilities
Segment assets	4,027,817	362,618	-	298,863	106,607	4,795,905
Carrying value of investments accounted for using
the equity method	-	4,635	131,679	-	-	136,314
Unallocated assets(c)						164,773
Total assets						5,096,992
Acquisition of segment assets	215,652	206,072	-	-	27,831	449,555
Segment liabilities	169,292	73,138	-	875	3,385	246,690
Unallocated liabilities(d)						3,600,094
Total liabilities						3,846,784

(a) All equity accounted investments have been reclassified from Gas transmission & distribution to Energy investments.

(b) Excluding finance lease income and any gains or losses on revaluation of derivatives which have been included as part of EBIT for segment reporting purposes

(d) Unallocated liabilities consist of current and non-current borrowings, deferred tax liabilities and fair value of interest rate swaps

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

5. Revenue

An analysis of the Consolidated Entity's revenue for the year is as follows:

Continuing operations

Continuing operations
	Consolidated			Trust
	2009	2008	2009	2008
	$000	$000	$000	$000
Operating revenue
Gas transmission and distribution revenue:
● gas transmission and distribution revenue	544,864	478,420	-	-
● pass-through revenue	88,457	95,939	-	-
	633,321	574,359	-	-
Asset management revenue:
● asset management revenue	69,129	42,853	-	-
● pass-through revenue	182,930	186,936	-	-
	252,059	229,789	-	-
Energy investments	2,124	-	-	-
Electricity transmission revenue	13,120	25,228	-	-
Complementary assets revenue	7,407	19,512	-	-
	908,031	848,888	-	-
Share of net profits of jointly controlled entities accounted for using
the equitymethod	6,143	3,635	-	-
Finance income
Interest	23,354	15,587	119	291
Redeemable ordinary shares (EII) interest income	676	-	-	-
Envestra loan note interest income	801	-	-	-
Finance lease income	6,293	10,145	-	-
	31,124	25,732	119	291
Dividends
Wholly-owned controlled entities	-	-	78,815	64,272
Other entities	3,536	1,414	7,500	1,364
	3,536	1,414	86,315	65,636
Other income
Gain on disposal of property, plant and equipment	-	60	-	-
Rental income	945	681	-	-
Other revenue	-	1,319	2,028	-
	945	2,060	2,028	-
	949,779	881,729	88,462	65,927

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

6. Expenses

Profit before tax includes the following expenses:

Profit before tax includes the following expenses:
	Consolidated			Trust
	2009	2008	2009		2008
	$000	$000	$000		$000
Depreciation and amortisation expense
Depreciation of non-current assets	90,518	89,874	-		-
Amortisation of non-current assets	5,122	4,585	-		-
	95,640	94,459	-		-
Other operating costs - pass-through
Operating lease rental expenses	18,240	18,782	-		-
Gas pipeline costs	70,217	77,157	-		-
	88,457	95,939	-		-
Management, operating and maintenance costs	182,930	186,935	-		-
	271,387	282,874	-		-
Finance costs
Interest on bank overdrafts and borrowings	235,305	240,408	-		30
Amortisation of deferred borrowing costs	2,453	2,522	-		-
Finance lease charges	49	42	-		-
Other finance costs	1,159	1,475	-		-
	238,966	244,447	-		30
Less: amounts included in the cost of qualifying assets	(2,791)	(6,547)	-		-
	236,175	237,900	-		30
Loss/(gain) on fair value of other derivatives	8,733	(636)	-		-
Unwinding of discount on non-current provisions	170	170	-		-
	245,078	237,434	-		30
The average capitalisation rate on funds borrowed generally is 6.81% p.a. (2008: 7.26% p.a.).
Employee benefit expense
Post-employment benefits:
Defined contribution plans	5,911	1,352	-		-
Defined benefit plans	2,115	1,245	-		-
	8,026	2,597	-		-
Termination benefits	1,812	1,515	-		-
Cash settled share-based payments	7,422	5,876	-		-
Other employee benefits	73,551	49,824	-		-
	90,811	59,812	-		-
Other expenses
Impairment of trade receivables	2,414	20	-		-
Loss on disposal ofproperty,plant and equipment	1,452	-	-		-

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

7. Significant items

Individually significant revenue/(expenses) included in profit after related income tax expense are as follows:

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
Significant (expense)/income items
Revaluation of interest rates swaps - deemed ineffective under
AASB 139 'Financial Instrumets: Recognition and Measurement'	(8,733)	(336)	-	-
Integration costs associated with acquisitions	-	(4,350)	-	-
Unsuccessful acquisition due diligence costs	-	(1,343)	-	-
Loss on sale of business	(16,167)	-	(1,955)	-
Telfer litigation	(1,475)	-	-	-
Envestra underwriting fee	1,551	-	1,509	-
DUOS revenue accrual on APA Gas Network Queensland	3,812	-	-	-
Loss from significant items before related income tax	(21,012)	(6,029)	(446)	-
Income tax related to significant items above	(5,948)	1,809	134	-
Overprovision prior year income tax	5,988	-	-	-
Loss from significant items after related income tax	(20,972)	(4,220)	(312)	-

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

8. Income tax

Income tax recognised in profit or loss

Income tax recognised in profit or loss
	Consolidated			Trust
	2009	2008	2009	2008
	$000	$000	$000	$000
Tax expense/(income) comprises:
Current tax expense/(income) in respect of the current year	8,900	(1,702)	-	-
Adjustments recognised in the current year in relation to current
tax of prior years	(9,723)	-	411	-
	(823)	(1,702)	411	-
Deferred tax expense relating to the origination and reversal
of temporarydifferences	36,705	24,660	2,786	476
Total tax expense	35,882	22,958	3,197	476
Attributable to:
Profit from continuingoperations	35,882	22,958	3,197	476
The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the			income tax expense in
the financial statements as follows:
Profit before tax	114,732	90,205	90,367	65,859
Income tax expense calculated at 30%	34,420	27,062	27,110	19,758
Effect of interest expense not deductible in determining
taxable profit	2,548	2,447	-	-
Effect of non-assessable trust distribution	(10,219)	(8,729)	-	-
Effect of transactions within the tax-consolidated group that are
exempt from taxation	-	-	(23,645)	(19,282)
Effect of expenses that are not deductible in determining
taxable profit	18,551	2,298	-	-
Effect of expenses that are not deductible in determining
accounting profit	(519)	(63)	-	-
Effect of income that is not assessable in determining
taxable profit	-	-	(679)	-
Effect of income that is not assessable in determining
accounting profit	824	-	-	-
Effect of income that is exempt from taxation	-	(57)	-	-
	45,605	22,958	2,786	476
Adjustment recognised in the current year in relation to the
current tax of prior years	(9,723)	-	411	-
	35,882	22,958	3,197	476

The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits under the Australian tax law. There has been no change in the corporate tax rate when compared with the previous reporting period.

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

8. Income tax (continued)

Income tax recognised directly in equity

The following deferred amounts were charged/(credited) directly to equity during the period:

	Consolidated	Consolidated		Trust
	2009	2008	2009	2008
	$000	$000	$000	$000
Deferred income tax
Revaluation of financial instruments treated as cash flow hedges	(23,180)	32,482	-	-
Actuarial movements on defined benefit plans	(2,933)	(2,473)	-	-
Income tax(benefit)/expense reported in equity	(26,113)	30,009	-	-
Deferred tax balances
Deferred tax liabilities
Temporary differences	(416,854)	(391,485)	(156)	2
	(416,854)	(391,485)	(156)	2
Deferred tax assets
Temporary differences	23,812	21,703	-	-
Tax losses(a)	150,557	135,674	150,557	135,674
	174,369	157,377	150,557	135,674
	(242,485)	(234,108)	150,401	135,676

Trust

(a) Movement is the transfer of tax losses from the controlled entities to the head entity of the tax-consolidated group.

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

8. Income tax (continued)

Deferred tax balances

Deferred tax (liabilities)/assets arise from the following:

			Consolidated	Consolidated
				Finalisation of
	Opening	Charged to	Charged to	purchase price	Acquisitions/	Closing
	balance	income	equity	accounting	disposals	balance
2009	$000	$000	$000	$000	$000	$000
Gross deferred tax liabilities
Intangible assets	(736)	210	-	-	-	(526)
Property, plant and equipment	(355,388)	(39,993)	-	-	2,749	(392,632)
Deferred expenses	(8,704)	(11,520)	-	-	82	(20,142)
Cash flow hedges	(26,657)	989	23,180	-	(1,017)	(3,505)
Other	-	(49)	-	-	-	(49)
	(391,485)	(50,363)	23,180	-	1,814	(416,854)
Gross deferred tax assets
Provisions	14,039	317	-	-	137	14,493
Deferred revenue	5,139	(682)	-	-	264	4,721
Defined benefit obligation	2,044	(580)	2,933	-	-	4,397
Investments equity accounted	-	201	-	-	-	201
Other	481	(481)	-	-	-	-
Tax losses	135,674	14,883	-	-	-	150,557
	157,377	13,658	2,933	-	401	174,369
	(234,108)	(36,705)	26,113	-	2,215	(242,485)
					Consolidated
					2009	2008
					$000	$000
Presented in the balance sheet as follows:
Deferred tax liabilities attributable to:
Continuing operations					(242,485)	(246,996)
Directly associated with assets held for	sale(Note 13)				-	12,888
					(242,485)	(234,108)
Deferred tax assets attributable to:
Continuing operations					-	-
					-	-
					(242,485)	(234,108)

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

8. Income tax (continued)

Deferred tax balances (continued)

Deferred tax (liabilities)/assets arise from the following:

			Consolidated	Consolidated
				Finalisation of
	Opening	Charged to	Charged to	purchase price	Acquisitions/	Closing
	balance	income	equity	accounting	disposals	balance
2008	$000	$000	$000	$000	$000	$000
Gross deferred tax liabilities
Intangible assets	(947)	211	-	-	-	(736)
Property, plant and equipment	(336,852)	(23,431)	-	4,895	-	(355,388)
Deferred expenses	2,850	(11,554)	-	-	-	(8,704)
Cash flow hedges	3,213	2,612	(32,482)	-	-	(26,657)
	(331,736)	(32,162)	(32,482)	4,895	-	(391,485)
Gross deferred tax assets
Provisions	7,763	(811)	-	1,207	5,880	14,039
Property, plant and equipment	4,035	-	-	(4,035)	-	-
Deferred revenue	4,896	243	-	-	-	5,139
Defined benefit obligation	(983)	(306)	2,473	-	860	2,044
Other	4,709	(4,521)	-	-	293	481
Tax losses	119,209	12,897	-	3,568	-	135,674
	139,629	7,502	2,473	740	7,033	157,377
	(192,107)	(24,660)	(30,009)	5,635	7,033	(234,108)

			Trust
	Opening	Charged to	Charged to		Acquisitions/	Closing
	balance	income	equity	Transfers	disposals	balance
2009	$000	$000	$000	$000	$000	$000
Gross deferred tax liabilities
Other	2	(158)	-	-	-	(156)
	2	(158)	-	-	-	(156)
Gross deferred tax assets
Investments equity accounted	-	-	-	-	-	-
Tax losses	135,674	(2,628)	-	17,511	-	150,557
	135,674	(2,628)	-	17,511	-	150,557
	135,676	(2,786)	-	17,511	-	150,401
2008
Gross deferred tax liabilities
Other	(46)	48	-	-	-	2
	(46)	48	-	-	-	2
Gross deferred tax assets
Tax losses	119,209	(524)	-	16,989	-	135,674
	119,209	(524)	-	16,989	-	135,674
	119,163	(476)	-	16,989	-	135,676

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

8. Income tax (continued)

Unrecognised deferred tax assets

Unrecognised deferred tax assets
	Consolidated			Trust
	2009	2008	2009		2008
	$000	$000	$000		$000
The following deferred tax assets have not been brought to
account as assets:
Tax losses - capital	6,527	6,527	6,527		6,527

Tax consolidation

Relevance of tax consolidation to the Group

The Trust and its wholly-owned Australian resident entities have formed a tax-consolidated group with effect from 1 July 2003 and are therefore taxed as a single entity from that date. The head entity within the tax-consolidated group is Australian Pipeline Trust. The members of the tax-consolidated group are identified at Note 39.

Nature of tax funding arrangement and tax sharing agreement

Entities within the tax-consolidated group have entered into a tax funding arrangement and a tax sharing agreement with the head entity. Under the terms of the tax funding arrangement, Australian Pipeline Trust and each of the entities in the tax-consolidated group have agreed to pay a tax equivalent payment to or from the head entity, based on the current tax liability or current tax asset of the entity. Such amounts are reflected in amounts receivable from or payable to other entities in the tax-consolidated group.

The tax sharing agreement entered into between members of the tax-consolidated group provides for the determination of the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations or if an entity should leave the tax-consolidated group. The effect of the tax sharing agreement is that each member's liability for the tax payable by the tax-consolidated group is limited to the amount payable to the head entity under the tax funding arrangement.

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

9. Distributions

(a) Recognised amounts

(a) Recognised amounts
		Trust
	2009	2009	2008	2008
	cents per	Total	cents per	Total
	security	$000	security	$000
Final distribution paid on 10 September 2008
(2008: 28 September 2007)(a)
Profit distribution(b)	9.0	42,142	2.0	8,634
Semi-annual distribution paid on 27 March 2009
(2008: 28 March 2008)
Profit distribution(b)	9.0	44,095	9.8	44,918
	18.0	86,237	11.8	53,552
Unrecognised amounts
Final distribution payable on 15 September 2009
(2008: 10 September 2008)
Profit distribution(b)	2.7	13,684	9.0	42,142
	2.7	13,684	9.0	42,142

(a) As previously advised, APA Group changed the frequency of distributions from quarterly to semi-annually, commencing December 2007.

(b) Profit distributions were unfranked (2008: unfranked).

The final distribution in respect of the financial year has not been recognised in this financial report because the final distribution was not declared, determined or publicly recommended prior to the end of the financial year.

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

9. Distributions (continued)

(b) Recognised amounts

(b) Recognised amounts
		APT and	APTIT
	2009	2009	2008	2008
	cents per	Total	cents per	Total
	security	$000	security	$000
Final distribution paid on 10 September 2008
(2008: 28 September 2007)(a)
Profit distribution - APT(b)	9.0	42,142	2.0	8,634
Profit distribution - APTIT(b)(Note 31)	3.4	16,014	3.0	12,951
Capital distribution - APTIT (Note 31) 5	2.6	12,081	2.0	8,634
Semi-annual distribution paid on 27 March 2009
(2008: 28 March 2008)
Profit distribution - APT(b)	9.0	44,095	9.8	44,918
Profit distribution - APTIT(b)(Note 31)	2.9	14,221	2.0	9,167
Capital distribution - APTIT (Note 31)	3.1	15,176	2.7	12,375
	30.0	143,729	21.5	96,680
Unrecognised amounts
Final distribution payable on 15 September 2009
(2008: 10 September 2008)
Profit distribution - APT(b)	2.7	13,684	9.0	42,142
Profit distribution - APTIT(b)	2.2	10,809	3.4	16,014
Capital distribution - APTIT	11.1	55,293	2.6	12,081
	16.0	79,786	15.0	70,237

(a) As previously advised, APA Group changed the frequency of distributions from quarterly to semi-annually, commencing December 2007.

(b) Profit distributions were unfranked (2008: unfranked).

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
Adjusted frankingaccount balance(taxpaid basis)	193	(192)	193	(192)

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

10. Trade and other receivables

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
Trade receivables	104,033	123,569	37	-
Allowance for doubtful debts	(2,414)	(20)	-	-
	101,619	123,549	37	-
Receivables from associates	37,991	-	482	-
Finance lease receivables (Note 32)	2,737	5,697	-	-
Interest receivable	123	78	1	-
Other debtors	28	878	7,265	-
	142,498	130,202	7,785	-
Trade receivables are non-interest bearing and are generally	on 30 day terms.
Ageing of past due but not impaired
30 - 60 days	2,856	3,052	-	-
60 - 90 days	284	454	-	-
90 - 120 days	3,076	2,781	-	-
Total	6,216	6,287	-	-
Movement in the allowance for doubtful debts
Balance at beginning of year	20	-	-	-
Charged to income statement	2,394	20	-	-
Balance at end ofyear	2,414	20	-	-

In determining the recoverability of a trade receivable, the Consolidated Entity considers any change in the credit quality of the trade receivable from the date the credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large and unrelated.

Included in the allowance for doubtful debts is an individual trade receivable with a balance of $2.390 million (2008: $nil) which has been placed into receivership. The Consolidated Entity does not expect to receive any liquidation proceeds.

Ageing of impaired receivables
90 - 120 days	2,394	20	-	-
Total	2,394	20	-	-

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

11. Inventories

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
Spare parts - at cost	10,371	7,747	-	-
Gas stock	3,785	3,215	-	-
	14,156	10,962	-	-

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

12. Other current assets

	Consolidated	Consolidated
	2009	2,008	2009	2,008
	$000	$000	$000	$000
Prepayments	4,182	2,883	-	-

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

13. Non-current assets classified as held for sale

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
Non-current assets classified as held for sale
Property, plant and equipment	-	478,608	-	-
Trade and other receivables	-	104,300	-	-
Other financial assets	-	5,455	-	-
Other	-	320	-	-
Other financial liabilities	-	160	-	-
Deferred tax assets	-	12,888	-	-
	-	601,731	-	-
Liabilities directly associated with non-current assets classified
as held for sale
Trade and other payables	-	22,940	-	-
Borrowings	-	76,594	-	-
Other	-	144	-	-
	-	99,678	-	-

In the prior year, the Consolidated Entity announced its intentions to establish an unlisted vehicle to hold a number of its existing assets in which APA would retain a minority interest investment. Completion of the transaction was finalised by 12 December 2008.

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

14. Non-current receivables

		Consolidated	Consolidated
		2009	2008	2009	2008
		$000	$000	$000	$000
Finance lease receivables(Note	32)	21,168	21,426	-	-

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

15. Other non-current financial assets

	Consolidated	Consolidated		Trust
	2009	2008	2009	2008
	$000	$000	$000	$000
Investments carried at cost:
Investments in controlled entities	-	-	1,303,316	828,758
Envestra	-	-	242,807	-
Energy Infrastructure Investment	-	-	329	-
Available-for-sale investments carried at fair value:
Envestra	-	104,192	-	96,151
Ethane Pipeline Income Fund (formerly Mariner Pipeline
Income Fund)	3,497	6,446	1,306	2,407
Other	4	5	-	-
Financial assets carried at amortised cost:
Redeemable ordinary shares	10,758	-	-	-
Derivatives - at fair value:
Interest rate swaps - cash flow hedges	-	42,501	-	-
	14,259	153,144	1,547,758	927,316

Available-for-sale investments consist of investments in ordinary securities, and therefore have no fixed maturity date or coupon rate. The fair value of listed available-for-sale investments has been determined directly by reference to published price quotations in an active market.

Financial assets carried at amortised cost relate to APA Group's 19.9% investment in Energy Infrastructure Investments Pty Ltd where APL, as responsible entity for APTIT, acquired the redeemable ordinary shares, which include a debt component.

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

16. Investment accounted for using the equity method

		Consolidated	Consolidated		Trust
		2009	2008	2009	2008
		$000	$000	$000	$000
Investments injointlycontrolled entities		388,416	136,314	-	-
Reconciliation of movements in investments accounted for using the
equity method
Balance at 1 July		136,314	135,578	-	-
Transfer at fair value from available-for-sale investments		207,996	-	-	-
Acquisitions during the year		67,561	4,862	-	-
Share of net profit for the year		6,143	3,635	-	-
Movement in reserves		(6,409)	3,539	-	-
		411,605	147,614	-	-
Dividends		(23,189)	(11,300)	-	-
Balance at 30 June		388,416	136,314	-	-
				Ownership	interest %
Name of entity	Principal activity	Country of incorporation		2009	2008
SEA Gas	Gas transmission	Australia		33.33	33.33
CAMS	Water management	Australia		50.00	50.00
Envestra Limited(a)	Gas transmission	Australia		30.36	-
Energy Infrastructure Investments(b)	Unlisted energyvehicle	Australia		19.90	-

Summarised financial information in respect of the jointly controlled entities is set out below:

	Consolidated	Consolidated
	2009	2008
	$000	$000
Financial position
Total assets	4,148,903	827,220
Total liabilities	3,218,022	422,914
Net assets	930,881	404,306
Consolidated Entity's share of jointly controlled entities net assets	284,421	136,314
Financial performance
Total revenue	493,519	89,476
Total profit for the year	47,560	22,386
Consolidated Entity's share ofjointlycontrolled entitiesprofit	6,143	3,635

(a) In February 2009, APA Group increased its interest in Envestra Limited by 11.5% from 19.1% to 30.4% through participation in and partly underwriting Envestra’s rights issue, for a total cost of $64.4 million. Following this increase in interest the investment changed from an available-for-sale investment to an investment accounted for using the equity method.

(b) In December 2008, APA established an unlisted investment vehicle Energy Infrastructure Investments Pty Limited (EII). APA retains a minority interest of 19.9% in EII, with equity partners Marubeni Corporation and Osaka Gas of Japan holding interests of 49.9% and 30.2% respectively. APA manages and operates the assets under a long term agreement. APA has joint control of EII given that key strategic and operational decisions of EII require the unanimous consent of all securityholders. APA therefore accounts for the investment using the equity method.

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

16. Investment accounted for using the equity method (continued)

Contingent liabilities and capital commitments

The Consolidated Entity's share of the contingent liabilities, capital commitments and other expenditure commitments of joint venture entities is disclosed in Notes 46 and 42 respectively.

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

17. Property, plant and equipment

			Consolidated
	Freehold land	Leasehold	Plant and	Work in
	and buildings	improvements	equipment	progress
	- at cost	- at cost	- at cost	- at cost	Total
	$000	$000	$000	$000	$000
Gross carrying amount
Balance at 1 July 2007	112,034	5	3,556,735	125,349	3,794,123
Additions	1,104	987	9,971	222,541	234,603
Disposals - finance leases	-	-	-	(33,321)	(33,321)
Disposals - other	(6)	-	(490)	-	(496)
Acquisitions through business combinations	-	-	36,010	-	36,010
Transfer to assets classified as held for sale	-	-	(447,550)	(78,666)	(526,216)
Finalisation of provisional purchase price accounting	-	-	(1,881)	-	(1,881)
Transfers	(1,150)	673	169,508	(169,514)	(483)
Balance at 1 July 2008	111,982	1,665	3,322,303	66,389	3,502,339
Additions	-	649	3,105	297,264	301,018
Disposals - other	(3,854)	(179)	(5,344)	(105,686)	(115,063)
Acquisitions through business combinations	-	86	22,822	-	22,908
Transfer to assets classified as finance leases	-	-	-	(2,635)	(2,635)
Transfers	153	(8)	100,889	(101,034)	-
Balance at 30 June 2009	108,281	2,213	3,443,775	154,298	3,708,567
Accumulated depreciation
Balance at 1 July 2007	(6,646)	(4)	(217,250)	-	(223,900)
Disposals	1	-	392	-	393
Depreciation expense	(2,385)	(663)	(86,826)	-	(89,874)
Transfer to assets classified as held for sale	-	-	47,608	-	47,608
Transfers	-	-	157	-	157
Balance at 1 July 2008	(9,030)	(667)	(255,919)	-	(265,616)
Disposals	571	122	9,319	-	10,012
Depreciation expense	(2,243)	(657)	(87,618)	-	(90,518)
Transfers	-	100	(100)	-	-
Balance at 30 June 2009	(10,702)	(1,102)	(334,318)	-	(346,122)
Net book value
As at 30 June 2008	102,952	998	3,066,384	66,389	3,236,723
As at 30 June 2009	97,579	1,111	3,109,457	154,298	3,362,445

The Trust has no property, plant and equipment.

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

18. Goodwill

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
Gross carrying amount
Balance at beginning of financial year	520,774	297,745	-	-
Additional amounts recognised from business combinations
occurring during the year (Note 41)	-	227,917	-	-
Finalisation of provisional purchase price accounting	5	(4,888)	-	-
Balance at end of financialyear	520,779	520,774	-	-

Allocation of goodwill to cash-generating units

Goodwill has been allocated for impairment testing purposes to the following individual cash-generating units:

Individual cash-generating units

asset management business;
gas transmission pipelines in New South Wales, Queensland and Western Australia;
victorian transmission system; and
APA Gas Networks.

The carrying amount of goodwill allocated to cash-generating units that are significant individually or in aggregate is as follows:

is as follows:
	Consolidated
	2009	2008
	$000	$000
asset management business	37,828	37,823
gas transmission pipelines in New South Wales, Queensland and Western Australia;	272,692	272,692
victorian transmission system	105,061	105,061
APA Gas Networks	104,263	104,263
Other	935	935
	520,779	520,774

The recoverable amounts of cash-generating units are determined based on value-in-use calculations. These calculations use cash flow projections based on a five year financial business plan and thereafter a further 15 year financial model, being the basis of the Group's forecasting and planning processes.

For fully regulated assets, cash flows have been extrapolated on the basis of existing transportation contracts and government policy settings, and expected contract renewals with resulting average annual growth rates of between 1.0% and 3.6% p.a. These expected cash flows are factored into the regulated asset base and do not exceed management's expectations of the long-term average growth rate for the market in which the CGU operates.

For non-regulated assets, APA has assumed no capacity expansion beyond installed and committed levels; utilisation of capacity is based on existing contracts, government policy settings and expected market outcomes.

Asset management cash flow projections reflect long term agreements with assumptions of renewal on similar terms and conditions based on management expectations.

Cash flow projections are estimated for a period of up to 20 years, with a terminal value, recognising the long term nature of the assets. The pre-tax discount rates used are 9.0% p.a. (2008: 8.5% p.a.) for gas transmission assets and 9.0% p.a. (2008: 9.5% p.a.) for asset management.

These assumptions have been determined with reference to historic information, current performance and expected changes taking into account external information.

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

19. Other intangible assets

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
Right to receive pipeline tariff	1,753	2,453	-	-
Contract intangibles	166,768	169,190	-	-
	168,521	171,643	-	-
Right to receive pipeline tariff
Gross carrying amount
Balance at 1 July 2008	15,677	15,677	-	-
Balance at 30 June 2009	15,677	15,677	-	-
Accumulated amortisation and impairment
Balance at 1 July 2008	(13,224)	(12,524)	-	-
Amortisation expense	(700)	(700)	-	-
Balance at 30 June 2009	(13,924)	(13,224)	-	-
Net book value	1,753	2,453	-	-
Contract intangibles
Gross carrying amount
Balance at 1 July 2008	173,075	-	-	-
Acquisitions	2,000	173,075	-	-
Balance at 30 June 2009	175,075	173,075	-	-
Accumulated amortisation and impairment
Balance at 1 July 2008	(3,885)	-	-	-
Amortisation expense	(4,422)	(3,885)	-	-
Balance at 30 June 2009	(8,307)	(3,885)	-	-
Net book value	166,768	169,190	-	-

The Consolidated Entity holds various third party operating and maintenance contracts. The combined gross carrying amount of $175.075 million amortises over terms ranging from one to 60 years. Useful life is amortised based on the underlying contractual terms plus estimations of renewal of up to two terms where considered probable by management. Amortisation expense is included in the line item of depreciation and amortisation expense in the income statement.

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

20. Other non-current assets

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
Line pack gas	1,160	1,129	-	-
Other project costs	-	4,448	-	-
Other assets	928	158	-	-
	2,088	5,735	-	-

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

21. Trade and other payables

	Consolidated	Consolidated		Trust
	2009	2008	2009	2008
	$000	$000	$000	$000
Trade payables (a)	19,481	54,599	-	-
Other payables(b)	90,394	96,959	25	6
Payables from associates	7	-	-	-
Non-trade payables to:
Wholly-owned controlled entities(c)	-	-	150,401	136,196
	109,882	151,558	150,426	136,202

(a) Trade creditors are non-interest bearing and are normally settled on 15 - 30 day terms.

(b) Predominantly consists of creditor capital expenditure accruals and external interest payable accruals.

(c) Includes amounts arising from APA's tax sharing agreement between APA and each of the entities in the tax-consolidated group (Note 8).

For the financial year ended 30 June 2009

Australian Pipeline Trust Notes to the financial statements (continued)

22. Current borrowings

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
Unsecured - at amortised cost
Bank borrowings(a)	900,000	434	-	-
Secured - at amortised cost
Medium Term Notes(b)	-	450,000	-	-
Less: amortised borrowing costs	-	(434)	-	-
Finance lease liabilities(c)(Note 32)	219	150	-	-
	219	449,716	-	-
	900,219	450,150	-	-

(a) The $900m syndicated bank facility matures on 8 June 2010. APA is currently undertaking the refinance of Tranche A of its 2007 syndicated debt facility amounting to $900 million. To date, a long term raising of US Private Placement notes of A$185 million with 7-year and 10-year tenures has been completed, a $150 million 5 year bi-lateral facility has been executed and APA has obtained more than $1 billion of commitments from a bank syndication process to refinance its 2010 debt maturity obligations. Documentation is expected to be executed near the end of August 2009.

(b) Medium Term Notes of $150 million with interest at a fixed rate matured on 15 August 2008, $100 million with interest at a fixed rate matured on 20 March 2009 and $200 million with interest at floating rates matured on 20 March 2009. The notes were secured over the assets of GasNet Australia Trust and its controlled entities. (Refer to Note 37 for details of interest rates).

(c) Secured by the assets leased; the current weighted average effective interest rate on the finance lease liabilities is 7.96% p.a. (2008: 7.67% p.a.).

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

23. Other current financial liabilities

Derivatives

Derivatives that are designated and effective as hedging instruments carried at fair value:

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
Interest rate swaps	7,648	5,187	-	-

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

24. Provisions

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
Current
Employee benefits(a)	38,477	27,415	-	-
Other(Note 33)	957	11,337	-	-
	39,434	38,752	-	-
Non-current
Employee benefits(a)	20,627	16,347	-	-
Other(Note 33)	2,830	2,660	-	-
	23,457	19,007	-	-
(a)The aggregate employee benefit liability recognised and included in the financial		statements is	as follows:
Current
Incentives	6,902	6,121	-	-
Cash settled share-based payments	452	286	-	-
Retention award	632	-	-	-
Restructuring costs	1,093	-	-	-
Leave balances	29,398	21,008	-	-
	38,477	27,415	-	-
Non-current
Cash settled share-based payments	3,479	1,856	-	-
Retention award	-	415	-	-
Retirement benefit obligation (Note 34)	14,656	6,815	-	-
Leave balances	2,492	7,261	-	-
	20,627	16,347	-	-

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

25. Other liabilities

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
Current
Unearned revenue - interest	8,870	8,496	-	-
Unearned revenue - other	4,172	3,613	-	-
	13,042	12,109	-	-
Non-current
Unearned revenue - other	3,202	2,180	-	-
	3,202	2,180	-	-

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

26. Non-current borrowings

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
Unsecured - at amortised cost
Bank borrowings(a)	850,000	1,566,000	-	-
Guaranteed Senior Notes(b)	1,214,258	1,100,866	-	-
Less: amortised borrowing costs	(8,529)	(7,978)	-	-
	2,055,729	2,658,888	-	-
Secured - at amortised cost
Bank borrowings(c)	1,645	1,645	-	-
Finance lease liabilities(d)(Note 32)	501	440	-	-
	2,146	2,085	-	-
	2,057,875	2,660,973	-	-

(a) Relates to the non-current portion of long-term borrowings. (Refer to Note 37 for details of interest rates).

(b) Represents notes of US$659 million (2008: US$659 million) measured at the exchange rate at reporting date, and A$416.9 million (2008: A$416.9 million).

(d) Secured by the assets leased, the current weighted average effective interest rate on the finance lease liabilities is

7.96% p.a. (2008: 7.67% p.a.).

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

27. Other non-current financial liabilities

	Consolidated	Consolidated		Trust
	2009	2008	2009	2008
	$000	$000	$000	$000
Derivatives - at fair value:
Interest rate swaps - cash flow hedges	49,414	-	-	-
Foreign exchange hedges - cash flow hedges	22,214	160,195	-	-
Loans carried at amortised cost:
Loans from controlled entities	-	-	648,738	145,286
	71,628	160,195	648,738	145,286

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

28. Issued capital

	Consolidated	Consolidated		Trust
	2009	2008	2009	2008
	$000	$000	$000	$000
Securities
498,663,596 securities, fully paid (2008: 468,241,154 securities,
fully paid)(a)	894,435	844,150	894,435	844,150
		Consolidated	and Trust
	2009	2009	2008	2008
	No. of		No. of
	securities		securities
	000	$000	000	$000
Movements
Balance at beginning of financial year	468,241	844,150	431,701	801,055
Issue of securities under Distribution Reinvestment Plan	18,718	29,185	12,881	22,099
Issue of securities under Security Purchase Plan	11,705	21,493	23,659	21,257
Issue cost of securities	-	(393)	-	(261)
Balance at end of financialyear	498,664	894,435	468,241	844,150

Changes to the then Corporations Law abolished the authorised capital and par value concept in relation to issued capital from 1 July 1998. Therefore, the Trust does not have a limited amount of authorised capital and issued securities do not have a par value.

(a) Fully paid securities carry one vote per security and carry the right to distributions.

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

29. Reserves

	Consolidated	Consolidated		Trust
	2009	2008	2009	2008
	$000	$000	$000	$000
Hedging	13,688	64,821	-	-
Asset revaluation	8,669	8,669	-	-
Available-for-sale investment revaluation	(2,682)	(75,435)	(1,237)	(75,386)
	19,675	(1,945)	(1,237)	(75,386)
Hedging reserve
Balance at beginning of financial year	64,821	(11,879)	-	-
Gain/(loss) recognised:
Interest rate swaps/currency swaps	48,526	17,880	-	-
Transferred to profit or loss:
Interest rate swaps/currency swaps	(115,599)	91,270	-	-
Deferred tax arising on hedges	23,180	(32,482)	-	-
Share of hedge reserve of associate	(6,409)	-	-	-
Other	(831)	32	-	-
Balance at end of financialyear	13,688	64,821	-	-

The hedging reserve represents hedging gains and losses recognised on the effective portion of cash flow hedges. The cumulative deferred gain or loss on the hedge is recognised in profit or loss when the hedged transaction impacts profit or loss, or is included as a basis adjustment to the non-financial hedge item, consistent with the applicable accounting policy.

Asset revaluation reserve

Asset revaluation reserve
Balance at beginning of financial year	8,669	8,669	-	-
Balance at end of financialyear	8,669	8,669	-	-

The asset revaluation reserve arose on the revaluation of the existing interest in a pipeline as a result of a business combination. Where revalued pipelines are sold, that portion of the asset revaluation reserve which relates to that asset and is effectively realised, is transferred directly to retained earnings. The reserve can be used to pay distributions only in limited circumstances.

Available-for-sale investment revaluation reserve

Balance at beginning of financial year	(75,435)	-	(75,386)	-
Reversed on acquisition of significant interest	75,250	-	75,250	-
Revaluation gain/(loss)recognised	(2,497)	(75,435)	(1,101)	(75,386)
Balance at end of financialyear	(2,682)	(75,435)	(1,237)	(75,386)

The available-for-sale investment revaluation reserve arises on the revaluation of available-for-sale financial assets. Where a revalued financial asset is sold, that portion of the reserve which relates to that financial asset and is effectively realised, is recognised in profit or loss. Where a revalued financial asset is impaired, that portion of the reserve which relates to that financial asset is recognised in profit or loss.

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

30. Retained earnings

	Consolidated	Consolidated		Trust
	2009	2008	2009	2008
	$000	$000	$000	$000
Balance at beginning of financial year	43,375	64,604	12,752	921
Net profit attributable to securityholders	44,708	38,094	87,170	65,383
Distributions paid (Note 9(a))	(86,237)	(53,552)	(86,237)	(53,552)
Actuarial gain/(loss) on defined benefit plans recognised directly
to retained earnings after tax(Note 34)	(6,844)	(5,771)	-	-
Balance at end of financialyear	(4,998)	43,375	13,685	12,752

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

31. Minority interests

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
APT Investment Trust	369,262	364,539	-	-
Other minority interest	81	89	-	-
	369,343	364,628	-	-
APT Investment Trust
Issued capital:
Balance at beginning of financial year	357,559	298,253	-	-
Issue of securities under Distribution Reinvestment Plan	19,458	16,869	-	-
Issue of securities under Security Purchase Plan	8,864	63,770	-	-
Distribution - capital return (Note 9(b))	(27,257)	(21,009)	-	-
Issue cost of securities	(171)	(324)	-	-
Balance at end of financial year	358,453	357,559	-	-
Retained earnings:
Balance at beginning of financial year	6,980	-	-	-
Net profit attributable to APTIT equityholders	34,064	29,098	-	-
Distributions paid(Note 9(b))	(30,235)	(22,118)	-	-
Balance at end of financial year	10,809	6,980	-	-
Other minority interest
Issued capital	4	4	-	-
Reserves	1	1	-	-
Retained earnings	76	84	-	-
	81	89	-	-

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

32. Leases

(i) Leasing arrangements - receivables

Finance lease receivables relate to the lease of a power station and two coal seam gas processing facilities. There are no contingent rental payments due. During the year, the majority of these leases were sold/novated to the unlisted vehicle Energy Infrastructure Investments (EII), refer to Note 40.

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
Finance lease receivables
Not longer than 1 year	4,937	16,450	-	-
Longer than 1 year and not longer than 5 years	18,341	64,931	-	-
Longer than 5 years	10,349	119,607	-	-
Minimum future lease payments receivable~~(a)~~	33,627	200,988	-	-
Gross finance lease receivables	33,627	200,988	-	-
Less: unearned finance lease receivables	(9,722)	(85,005)	-	-
Less: guaranteed residual value	-	7,560	-	-
Present value of lease receivables	23,905	123,543	-	-
Included in the financial statements as part of:
Current trade and other receivables (Note 10)	2,737	5,697	-	-
Non-current receivables (Note 14)	21,168	21,426	-	-
Non-current assets classified as held for sale	-	96,420	-	-
	23,905	123,543	-	-

(a) Minimum future lease payments receivable include the aggregate of all lease payments receivable and any guaranteed residual.

(ii) Leasing arrangements - liabilities

Finance lease liabilities relate to leases of general property, plant and equipment. There are no contingent rental payments due or payable. There are no renewal or purchase options and escalation clauses or restrictions imposed by the lease arrangements concerning distributions, additional debt and further leasing.

Finance lease liabilities

Finance lease liabilities
Not longer than 1 year	265	193	-	-
Longer than 1 year and not longer than 5 years	556	486	-	-
Minimum future finance lease payments(b)	821	679	-	-
Less: future finance charges	(101)	(89)	-	-
Present value of minimum leasepayments	720	590	-	-
Included in the financial statements as part of:
Current borrowings (Note 22)	219	150	-	-
Non-current borrowings(Note 26)	501	440	-	-
	720	590	-	-

(b) Minimum future lease payments include the aggregate of all lease payments and any guaranteed residual.

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

32. Leases (continued)

(ii) Leasing arrangements - liabilities (continued)

Operating leases relate to leases of office space, certain motor vehicles, office equipment and property and transmission pipelines in the Northern Territory. There are no renewal or purchase options and escalation clauses or restrictions imposed by the lease arrangements concerning distributions, additional debt and further leasing. Various operating leases have standard lease renewal options. The office space lease is subject to annual increases based on the Consumer Price Index ("CPI").

In respect of the transmission pipelines, the Northern Territory Government has guaranteed a minimum income to the Consolidated Entity to meet the operating lease commitments as detailed below:

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
Non-cancellable operating leases –
transmission pipelines
Not longer than 1 year	18,311	18,860	-	-
Longer than 1 year and not longer than 5 years	97,237	121,241	-	-
Longer than 5 years	-	-	-	-
	115,548	140,101	-	-
Non-cancellable operating leases – other
Not longer than 1 year	6,721	2,330	-	-
Longer than 1 year and not longer than 5 years	10,392	5,968	-	-
Longer than 5 years	1,010	594	-	-
	18,123	8,892	-	-

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

33. Provisions

33. Provisions
			Consolidated
	Abandonment(a)		SCC repair(b)	Other	Total
		$000	$000	$000	$000
Balance at 30 June 2008		2,660	431	10,906	13,997
Acquired through business combinations		-	-	-	-
Additional provisions recognised		-	-	457	457
Unwinding of discount		170	-	-	170
Reductions arising from payments/other sacrifices
of future economic benefits		-	(431)	(10,406)	(10,837)
Balance at 30 June 2009		2,830	-	957	3,787
Current (Note 24)		-	-	957	957
Non-current(Note 24)		2,830	-	-	2,830
		2,830	-	957	3,787
			Consolidated
	Force majeure
	claims(c)	Abandonment	SCC repair	Other	Total
	$000	$000	$000	$000	$000
Balance at 30 June 2007	353	2,490	8,070	7,342	18,255
Acquired through business combinations	-	-	-	1,478	1,478
Additional provisions recognised	-	-	-	4,964	4,964
Unwinding of discount	-	170	-	-	170
Reductions arising from payments/other sacrifices
of future economic benefits	(353)	-	(7,639)	(2,878)	(10,870)
Balance at 30 June 2008	-	2,660	431	10,906	13,997
Current (Note 24)	-	-	431	10,906	11,337
Non-current(Note 24)	-	2,660	-	-	2,660
	-	2,660	431	10,906	13,997

(a) Costs of dismantling pipelines and restoring the sites on which the pipelines are located is to be included in the cost of the asset at inception and required to be accounted for in accordance with AASB 137 "Provisions, Contingent Liabilities and Contingent Assets".

(b) Provision for repair and investigative work on the Moomba Sydney Pipeline due to stress corrosion cracking ("SCC").

(c) The force majeure claims provision represents claims made by certain customers on the Consolidated Entity for disruption to their business by

extraneous events. The Directors have provided for these claims in full.

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

34. Employee superannuation plans

All employees of the Consolidated Entity are entitled to benefits on retirement, disability or death from an industry sponsored fund, or an alternative fund of their choice. The Consolidated Entity has three plans with defined benefit sections (due to the acquisition of businesses) and plans with defined contribution sections. The defined benefit sections provide lump sum benefits upon retirement based on years of service. The defined contribution sections receive fixed contributions from the Consolidated Entity and the Consolidated Entity's legal and constructive obligations are limited to these amounts.

The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out at 30 June 2009 by Mercer (Australia) Pty Ltd and Russell Investments (2008: Mercer (Australia) Pty Ltd and Russell Investments). The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

The following sets out details in respect of the defined benefit plans only:

	Consolidated	Consolidated
	2009	2008
	$000	$000
Amounts recognised in the income statement
Current service cost	2,804	2,912
Interest cost on benefit obligation	5,326	4,892
Expected return on plan assets	(6,015)	(6,559)
Total included in superannuation costs which form part of employee benefit expense	2,115	1,245
Actual return on plan assets	(6,531)	(6,168)
Actuarial losses incurred during the year and recognised in the statement of
recognised income and expense	(9,775)	(8,244)
Amounts recognised in the balance sheet
Fair value of plan assets	84,023	90,227
Present value of benefit obligation	(98,679)	(97,042)
Net liability - non-current	(14,656)	(6,815)
Movements in (liability)/asset during the year
Balance at beginning of year	(6,815)	3,274
Acquisitions through business combinations	-	(2,869)
Expense recognised in income statement	(2,115)	(1,245)
Amount recognised in retained earnings	(9,775)	(8,244)
Contributions	4,049	2,269
Balance at end of year~~(a)~~	(14,656)	(6,815)

(a) The above balances are recorded within the provisions section of the balance sheet; refer to Note 24.

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

34. Employee superannuation plans (continued)

Movements in the present value of the defined benefit obligations in the current period were as follows:

	Consolidated	Consolidated
	2009	2008
	$000	$000
Opening defined benefit obligation	97,042	99,542
Current service cost	2,804	2,912
Interest cost	5,332	4,892
Contributions from plan participants	1,612	1,315
Actuarial (gains)/losses	(2,777)	(4,484)
Benefits paid	(4,535)	(6,738)
Taxes and premiums paid	(799)	(397)
Closing defined benefit obligation	98,679	97,042
Movements in the present value of the plan assets in the current period were as follows:
Opening fair value of plan assets	90,227	99,947
Expected return on plan assets	6,015	6,559
Actuarial gains/(losses)	(12,552)	(12,727)
Contributions from employer	4,049	2,268
Contributions from plan participants	1,618	1,315
Benefits paid	(4,535)	(6,738)
Taxes and premiums paid	(799)	(397)
Closing fair value of plan assets	84,023	90,227

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

34. Employee superannuation plans (continued)

The average principal actuarial assumptions used in determining post-employment obligations for the Consolidated Entity's plans are shown below (expressed as weighted averages):

Entity's plans are shown below (expressed as weighted averages):
	Consolidated
	2009	2008
	%	%
Discount rate (p.a.)	5.0	5.9
Expected return on plan assets (p.a.)	7.0	7.1
Expected salaryrate increase(p.a.)	4.5	4.5
The invested defined benefit assets were held in the following classes:
Australian equities	35.5	34.7
International equity	25.7	24.8
Fixed income	12.4	12.3
Property	10.5	13.2
Alternatives	10.4	8.6
Cash	5.5	6.4
The history of experience adjustments is as follows:
	2009	2008
	$000	$000
Fair value of plan assets	84,023	90,227
Present value of defined benefit obligation	98,679	97,042
Deficit/surplus	(14,656)	(6,815)
Experience adjustments on plan liabilities	(6,753)	(1,515)
Experience adjustments onplan assets	8,450	8,533

The Consolidated Entity expects $6,295,000 in contributions to be paid to the defined benefit plans during the year ending 30 June 2010.

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

35. Earnings per security

35. Earnings per security
	Consolidated
	2009	2008
	Cents per	Cents per
	security	security
Basic and diluted earningsper security	16.2	14.9

The earnings and weighted average number of ordinary securities used in the calculation of basic and diluted earnings per security are as follows:

security are as follows:
	$000	$000
Net profit attributable to securityholders for calculating basic and diluted
earningsper security	78,772	67,192
	No. of securities
Adjusted weighted average number of ordinary securities used in the
calculation of basic and diluted earningsper security (000)	485,077	450,262

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

36. Notes to the cash flow statement

(a) Reconciliation of cash and cash equivalents

For the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the financial year as shown in the cash flow statement is reconciled to the related items in the balance sheet as follows:

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
Cash at bank and on hand(a)	107,861	100,343	104	12
Short-term deposits	954	5,112	-	-
	108,815	105,455	104	12

Restricted cash

(a) As at 30 June 2009, Australian Pipeline Limited held $5.0 million (2008: $5.0 million) on deposit to meet its financial requirements as the holder of an Australian Financial Services Licence.

(b) Businesses acquired and disposed of

Consolidated

During the financial year, the Consolidated Entity acquired the Central Ranges Pipeline. The net cash outflow on acquisition was $22,616,000 for controlled entities. Refer to Note 41 for further details of this acquisition. In addition $7,326,000 has been reinvested in Envestra through the Dividend Reinvestment Plan, $21,227,000 through participation in the rights issue and a further $44,749,000 from underwriting Envestra's rights issue. $22,812,000 has been invested in the redeemable ordinary shares of Energy Infrastructure Investments Pty Ltd.

Trust

During the financial year, the Trust has reinvested $7,212,000 in Envestra through the Dividend Reinvestment Plan, $20,654,000 through participation in the rights issue and a further $43,541,000 from underwriting Envestra's rights issue. $329,000 has been invested in the redeemable ordinary shares of Energy Infrastructure Investments Pty Ltd. The Trust contributed funds by way of equity to facilitate the repayment of the Medium Term Notes within the GasNet Group.

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

36. Notes to the cash flow statement (continued)

(c) Reconciliation of profit for the year to the net cash provided by operating activities

	Consolidated	Consolidated		Trust
	2009	2008	2009	2008
	$000	$000	$000	$000
Profit for the year	78,850	67,247	87,170	65,383
Loss/(gain) on disposal of investments	16,167	-	(1,955)	-
Loss/(gain) from the disposal of property, plant and equipment	1,452	(60)	-	-
Share of net profits of jointly controlled entities accounted for using
the equity method	(6,143)	(3,635)	-	-
Dividends/distributions received	23,746	21,929	14,069	-
Depreciation and amortisation expense	95,640	94,459	-	-
Finance costs	11,077	1,774	-	-
Changes in assets and liabilities:				-
Trade and other receivables	89	(39,723)	(7,785)	-
Inventories	(2,996)	(1,556)	-	-
Other assets	(682)	7,385		-
Trade and other payables	(27,265)	24,057	(13,365)	5
Provisions	1,564	(42)	-	-
Other liabilities	255	(8,936)	-	-
Income tax balances	34,615	23,524	3,197	476
Net cashprovided byoperatingactivities	226,369	186,423	81,330	65,864

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

36. Notes to the cash flow statement (continued)

(d) Financing facilities

(d) Financing facilities
	Consolidated			Trust
	2009	2008	2009		2008
	$000	$000	$000		$000
Unsecured facilities
Bank borrowings(a)
Amounts used	1,750,000	1,566,000	-		-
Amounts unused	250,000	434,000	-		-
	2,000,000	2,000,000	-		-
Guaranteed Senior Notes(b)
Amounts used	1,214,258	1,100,866	-		-
Amounts unused	-	-	-		-
	1,214,258	1,100,866	-		-
Secured facilities
Bank borrowings
Amounts used	1,645	1,645	-		-
Amounts unused	-	-	-		-
	1,645	1,645	-		-
Medium Term Notes(c)
Amounts used	-	450,000	-		-
Amounts unused	-	-	-		-
	-	450,000	-		-

(a) APT Pipelines Limited entered into a syndicated facility for $1.8 billion on 8 June 2007. On completion in July 2007, the facility was increased to $2 billion to reflect oversubscription.

(b) APT Pipelines Limited issued notes in the US Private Placement market in September 2003 and May 2007. The issue was in dual currencies involving the Australian dollar and the US dollar. The disclosed amount represents the Australian dollar equivalent of notes issued as measured at the reporting date. The maturity date and interest rates payable are disclosed in Note 37.

(c) Medium Term Notes of $150 million with interest at a fixed rate matured on 15 August 2008, $100 million with interest at a fixed rate matured on 20 March 2009 and $200 million with interest at floating rates matured on 20 March 2009. The notes were secured over the assets of GasNet Australia Trust and its controlled entities. On 16 July 2008, APA announced that it had executed new debt facility agreements totalling $165 million to refinance the first tranche of APA GasNet Medium Term Notes of $150 million which matured in August 2008, and the remainder to supplement APA’s existing debt facilities. The terms of those facilities are for three years, through to July 2011. The facilities were agreed on a bilateral basis with three banks and are on terms and conditions largely the same as the syndicated facility executed in June 2007.

For the financial year ended 30 June 2009

Australian Pipeline Trust Notes to the Financial Statements (continued)

37. Financial instruments

(a) Capital risk management

The Consolidated Entity manages its capital structure to ensure that entities in the Group will be able to continue as a going concern while maximising the return to securityholders through the optimisation of the debt to equity structure.

The Consolidated Entity's overall strategy remains unchanged from 2008.

The capital structure of the Consolidated Entity consists of debt, which includes borrowings disclosed in Notes 22 and 26, cash and cash equivalents, and equity attributable to equityholders of the parent, comprising issued capital, reserves and retained earnings as disclosed in Notes 28, 29 and 30 respectively.

The Consolidated Entity's operations are conducted primarily through its subsidiaries.

Operating cash flows are used to maintain and expand the Consolidated Entity's assets, as well as to make routine outflows of distributions and to repay maturing debt.

The Consolidated Entity's policy is to borrow from overseas and locally, using a variety of capital markets and bank loan facilities, to meet anticipated funding requirements.

Controlled entities are subject to externally imposed capital requirements. These relate to the Australian Financial Service Licence held by Australian Pipeline Limited, the Responsible Entity of the Consolidated Entity and were adhered to for the entirety of the 2008 and 2009 periods.

Gearing ratio

The Consolidated Entity's Board of Directors reviews the capital structure on a monthly basis. As part of the review, the Board considers the cost of capital and the state of the markets. The Consolidated Entity has a target gearing ratio of approximately 70% or less, in line with peers, that is determined as the proportion of net debt to net debt plus equity. Based on recommendations of the Board, the Consolidated Entity balances its overall capital structure through new equity issues, through the issue of new debt or the redemption of existing debt, and through a disciplined distribution payment policy.

(b) Financial risk management objectives

APA's Corporate Treasury function provides services to the business, co-ordinates access to domestic and international financial markets, and monitors and manages the financial risks relating to the operations of the Consolidated Entity. These risks include market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk.

The Consolidated Entity seeks to minimise the effects of these risks through natural hedges and by using derivative instruments to directly hedge the exposures. The use of financial derivatives is governed by the Consolidated Entity's policy approved by the Board, which provides written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. The Consolidated Entity does not enter into or trade financial instruments, including derivative financial instruments for speculative purposes.

The Corporate Treasury function reports monthly to the Consolidated Entity's Board of Directors, which monitors risks and policies implemented to mitigate risk exposures.

100

Australian Pipeline Trust Notes to the financial statement (continued) For the financial year ended 30 June 2009

37. Financial instruments (continued)

(c) Market risk management

The Consolidated Entity's activities exposure is primarily to the financial risk of changes in interest rates and foreign currency exchange rates. The Consolidated Entity enters in to a variety of derivative financial instruments to manage its exposure to interest rate and foreign currency risk, including:

foreign exchange forward contracts to hedge the exchange rate risk arising on the importation of equipment from the United States and other international suppliers;
currency swaps to manage the foreign currency risk associated with foreign currency denominated borrowings;
interest rate forward contracts to manage interest rate risk; and
interest rate swaps to mitigate the risk of rising interest rates.

There has been no change to the Consolidated Entity's exposure to market risks or the manner to which it manages and measures the risk from the previous period.

The Consolidated Entity is also exposed to price risk from its investments in listed equities. The majority of the shareholdings are in two companies that are publicly traded in the major financial markets.

(d) Foreign currency risk management

The Consolidated Entity undertakes certain transactions denominated in foreign currencies and hence exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising foreign exchange contracts, including forward contracts and cross currency contracts. There was nil exposure in APA in either 2008 or 2009.

The fair value amount of the Consolidated Entity's foreign currency denominated monetary assets and monetary liabilities at the reporting date is as follows:

		Consolidated	Consolidated
		Liabilities		Assets
	2009	2008	2009	2008
	$000	$000	$000	$000
US dollar borrowings	810,080	684,000	-	-
Cross currency swaps	(810,080)	(684,000)	-	-
	-	-	-	-
Foreign exchange contracts	10,768	6,662	-	-
	10,768	6,662	-	-

The above table excludes US dollar borrowings which were entered into on 1 July 2009 and corresponding cross currency swaps entered into in May 2009 with a forward starting date of 1 July 2009 associated with those borrowings.

The Consolidated Entity is mainly exposed to US dollars (US$).

101

Australian Pipeline Trust Notes to the financial statement (continued) For the financial year ended 30 June 2009

37. Financial instruments (continued)

(d) Foreign currency risk management (continued)

Forward foreign exchange contracts

It is the policy of the Consolidated Entity to enter into various foreign exchange contracts to cover 100% of all foreign currency exposures in excess of US$1million that are certain. These exposures exist usually for a period of less than 12 months. Basis adjustments are made to the carrying amounts of non-financial hedged items when the anticipated purchase takes place.

The following table details the forward foreign currency contracts outstanding at reporting date:

		Consolidated	Consolidated
	Average	Foreign	Contract
	exchange rate	currency	value	Fair value
		2009	2009	2009
Outstanding contracts		US$000	$000	$000
Buy US dollars
Less than 3 months	0.6253	6,464	10,336	(2,362)
3 to 6 months	0.6239	269	432	(97)
		6,733	10,768	(2,460)
		Consolidated
	Average	Foreign	Contract
	exchange rate	currency	value	Fair value
		2008	2008	2008
Outstanding contracts		US$000	$000	$000
Buy US dollars
Less than 3 months	0.9204	5,315	5,775	(221)
3 to 6 months	0.8943	568	635	(32)
		5,883	6,410	(253)

The Consolidated Entity has entered into contracts to purchase equipment from suppliers in the United States. The Consolidated Entity has entered into forward foreign exchange contracts (for terms not exceeding 12 months) to hedge the exchange rate risk arising from these anticipated future transactions, which are designated as cash flow hedges.

As at reporting date, the aggregate amount of unrealised losses under forward foreign exchange contracts deferred in the hedging reserve relating to these anticipated future transactions is $2,460,000 (2008: $253,000). It is anticipated that the capital purchases will take place within the first six months of the subsequent financial year at which stage the amount deferred in equity will be included in the carrying amount of the asset being purchased.

Cross currency swap contracts

Under cross currency swap contracts, the Consolidated Entity agrees to exchange specified principal and interest foreign currency amounts at agreed future dates at a specified exchange rate. Such contracts enable the Consolidated Entity to mitigate the risk of adverse movements in foreign exchange rates in relation to principal and interest payments arising under the 2003, 2007 and 2009 note issues - see at note 37(d).

102

Australian Pipeline Trust Notes to the financial statement (continued) For the financial year ended 30 June 2009

37. Financial instruments (continued)

(d) Foreign currency risk management (continued)

The Consolidated Entity receives fixed amounts in US$ and pays both variable interest rates (based on BBSW) and fixed interest rates based on agreed interest rate swap rates.

The following table details the swap contracts principal balances over various durations as at the reporting date:

	Exchange Rate	Exchange Rate	Principal Amount	Principal Amount
	2009	2008	2009	2008
2003 Note Issue	$	$	$000	$000
Buy US dollars - interest
Less than 1 year	0.6573	0.6573	(22,863)	(22,863)
1 year to 2 years	0.6573	0.6573	(22,863)	(22,863)
2 years to 5 years	0.6573	0.6573	(65,397)	(68,589)
5 years and more	0.6573	0.6573	(42,029)	(61,700)
			(153,152)	(176,015)
Buy US dollars - principal
2 years to 5 years	0.6573	0.6573	(112,582)	-
5years and more	0.6573	0.6573	(281,454)	(394,036)
	Exchange Rate		Principal Amount
	2009	2008	2009	2008
2007 Note Issue	$	$	$000	$000
Buy US dollars - interest
Less than 1 year	0.8068	0.8068	(29,737)	(29,737)
1 year to 2 years	0.8068	0.8068	(29,737)	(29,737)
2 years to 5 years	0.8068	0.8068	(89,212)	(89,211)
5 years and more	0.8068	0.8068	(154,511)	(184,614)
			(303,197)	(333,299)
Buy US dollars - principal
5years and more	0.8068	0.8068	(495,786)	(495,786)
	Exchange Rate		Principal Amount
	2009	2008	2009	2008
2009 Note Issue(a)	$	$	$000	$000
Buy US dollars - interest
Less than 1 year	0.7576	-	(7,967)	-
1 year to 2 years	0.7576	-	(15,934)	-
2 years to 5 years	0.7576	-	(47,803)	-
5 years and more	0.7576	-	(66,148)	-
			(137,852)	-
Buy US dollars - principal
5years and more	0.7576	-	(184,784)	-

(a) This Note issue was drawndown on 1 July 2009 however swap contracts were entered into in advance of the issue.

103

Australian Pipeline Trust Notes to the financial statement (continued) For the financial year ended 30 June 2009

37. Financial instruments (continued)

(d) Foreign currency risk management (continued)

Foreign currency sensitivity analysis

The Consolidated Entity is mostly exposed to movements in the US$ through its fully hedged borrowings via the US Private Placement market and its current obligations to future purchases of capital equipment. The entire US$ cash flows arising from the 2003, 2007 and 2009[(a)] Note issues have been swapped; as such, the Consolidated Entity has no currency risk associated with those Note issues. Therefore, the sensitivity analysis has only been performed on the forward foreign exchange contracts. The following table details the Consolidated Entity's sensitivity to a 10% decrease and increase in the Australian dollar against the relevant foreign currencies. The sensitivity rate used is 10% and represents management's assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates.

	Consolidated	Consolidated
	2009	2008
	$000	$000
A$ depreciating by 10%
Profit	-	-
Other equity(b)	(919)	(676)
A$ appreciating by 10%
Profit	-	-
Other equity(b)	752	553

(a) This Note issue was drawndown on 1 July 2009 however swap contracts were entered into in advance of the issue.

(b) This is as a result of the changes to the fair value of forward foreign exchange contracts designated as cash flow hedges. Negative amounts denote a credit to equity.

104

For the financial year ended 30 June 2009

Australian Pipeline Trust Notes to the Financial Statements (continued)

37. Financial instruments (continued)

(e) Interest rate risk management

The Consolidated Entity is exposed to interest rate risk as it borrows funds at both fixed and floating interest rates. This risk is managed by the Consolidated Entity by maintaining an appropriate mix between fixed and floating rate borrowings, through the use of interest rate swap contracts and forward interest rate contracts. Hedging activities are evaluated regularly to align with interest rate views and defined policy ensuring appropriate hedging strategies are applied. Hedging activity is complemented by "natural hedges" from regulatory resets and CPI adjusted revenues.

The Trust and the Consolidated Entity's exposures to interest rate risk on financial liabilities is detailed in the liquidity risk management section of this note. Exposure to financial asets is limited to cash and cash equivalents amounting to $108.8 million as at 30 June 2009 (2008: $105.5 million).

Interest rate swap contracts

Under interest rate swap contracts, the Consolidated Entity agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the Consolidated Entity to mitigate the risk of changing interest rates on the fair value of issued fixed rate debt held and cash flow exposures on the issued variable rate debt held. The fair value of interest rate swaps at the reporting date is determined by discounting the future cash flows using the yield curves at reporting date. The average interest rate is based on the outstanding balances at the end of the financial year.

The following table details the notional principal amounts and remaining terms of the cross currency and interest rate swap contracts outstanding as at the end of the financial year:

	Weighted average	Weighted average		Notional
	interest rate		principal amount			Fair value
	2009	2008	2009	2008	2009	2008
	% p.a.	% p.a.	$000	$000	$000	$000
Cash flow hedges
Pay fixed interest/receive floating interest
Consolidated
Less than 1 year	5.89	-	300,000	-	(6,579)	-
1 year to 2 years	6.03	6.36	250,000	200,000	(9,479)	6,128
2 years to 5 years	6.75	7.36	500,164	150,000	(35,977)	1,980
5 years and more	8.08	7.18	1,368,479	1,164,398	(24,783)	(125,427)
			2,418,643	1,514,398	(76,817)	(117,319)
Trust	-	-	-	-	-	-

The Consolidated Entity had no fair value hedges in 2009 or 2008.

105

Australian Pipeline Trust Notes to the Financial Statements (continued)

For the financial year ended 30 June 2009

37. Financial instruments (continued)

(e) Interest rate risk management (continued)

The interest rate swaps settle on a quarterly basis or semi-annual basis. The floating rate benchmark on the interest rate swaps is Australian BBSW. The Consolidated Entity will settle the difference between the fixed and floating interest rate on a net basis.

All interest rate swap contracts exchanging floating rate interest amounts for fixed rate interest amounts are designated as cash flow hedges in order to reduce the Consolidated Entity's cash flow exposure resulting from variable interest rates on borrowings.

Interest rate sensitivity analysis

The sensitivity analysis below has been determined based on the exposure to interest rates for both derivative and non-derivative instruments held. A 100 basis point increase or decrease is used and represents management's assessment of the possible change in interest rates. At reporting date, if interest rates had been 100 basis points higher or lower and all other variables were held constant, the Consolidated Entity's:

net profit would decrease by $8,000,000 or increase by $8,000,000 (2008: decrease by $12,160,000 or increase by $12,160,000). This is mainly attributable to the Consolidated Entity's exposure to interest rates on its variable rate borrowings; and
equity reserves would increase by $93,086,000 or decrease by $100,403,000 (2007: increase by $70,517,000 or decrease by $76,516,000). This is due to the changes in the fair value of derivative interest instruments.

The Consolidated Entity's sensitivity to interest rates has decreased during the current period due to the overall decrease in the amount of the Consolidated Entity's floating rate borrowings. The valuation of the increase/decrease in equity reserves is based on 1.00% p.a. increase/decrease in the yield curve at the reporting date and has increased during the current period mainly due to the increase in the amount of derivative instruments held. The additional derivatives relate to new US Private Placement Notes which were issued on 1 July 2009 and also additional interest rate swaps associated with bank borrowings.

(f) Price risk management

The Consolidated Entity is exposed to equity price risks arising from equity investments. Equity investments are held for strategic rather than trading purposes. The Consolidated Entity does not actively trade these investments.

Equity price sensitivity

The sensitivity analysis below has been determined based on the exposure to equity price risks at the reporting date. At the reporting date, if the prices of the Consolidated Entity's equity investments had been 5% p.a. higher or lower:

net profit would have been unaffected as the equity investments are classified as available-for-sale and no investments were disposed of or impaired (2008: $nil); and
equity reserves would decrease/increase by $115,395 (2008: $3,091,000), due to the changes in the fair value of available-for-sale shares.

106

Australian Pipeline Trust Notes to the Financial Statements (continued) For the financial year ended 30 June 2009

37. Financial instruments (continued)

(g) Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Consolidated Entity. The Consolidated Entity has adopted the policy of only dealing with creditworthy counterparties and obtaining sufficient collateral or bank guarantees where appropriate as a means of mitigating any risk of loss. For financial investments or market risk hedging, the Consolidated Entity's policy is to deal with highly rated counterparties. As at the reporting date, all counterparties of this type were AA- (Standard & Poor's)/AA3 (Moody's) or higher. The Consolidated Entity's exposure to financial instrument and deposit credit risk is closely monitored against counterparty credit limits imposed by the Treasury Policy approved by the Board. These limits are regularly reviewed by the Board.

Trade receivables consist of mainly corporate customers which are diverse and geographically spread. Most significant customers have an investment grade rating from either Standard & Poor's or Moody's. Ongoing credit monitoring of the financial position of customers is maintained.

The carrying amount of financial assets recorded in the financial statements, net of any allowances, represents the Consolidated Entity’s maximum exposure to credit risk in relation to those assets.

Cross guarantee

In accordance with a deed of cross guarantee, APT Pipelines Limited, a subsidiary of APA Group, has agreed to provide financial support, when and as required, to all wholly-owned controlled entities with either a deficit in shareholders’ funds or an excess of current liabilities over current assets. The fair value of the financial guarantee as at 30 June 2009 has been determined to be immaterial and no liability has been recorded (2008: $nil).

(h) Liquidity risk management

The Consolidated Entity has a policy dealing with liquidity risk which requires an appropriate liquidity risk management framework for the management of the Consolidated Entity's short, medium and long-term funding and liquidity management requirements. Liquidity risk is managed by maintaining adequate cash reserves and banking facilities, by monitoring and forecasting cash flow and where possible arranging liabilities with longer maturities to more closely match the underlying assets of the Consolidated Entity. Included in Note 36 are details of undrawn facilities available to the Consolidated Entity.

Post balance date, the Consolidated Entity entered into two US Private Placement issues (7 and 10 years) raising approximately $185million equivalent and also an additional bilateral bank facility totalling $150million has been executed. In addition, APA has obtained more than $1 billion of commitments from a bank syndication process to refinance its 2010 debt maturity obligations. Documentation is expected to be executed near the end of August 2009.

Liquidity and interest risk tables

Detailed below are the Consolidated Entity's remaining contractual maturities for its non-derivative financial liabilities. The table has been drawn up based on the undiscounted cash flows of financial liabilities taking account of the earliest date on which the Consolidated Entity can be required to pay. The table includes both interest and principal cash flows.

All US$ note exposures (both principal and interest) have been fully hedged back into Australian dollars at fixed interest rates for the entire duration of the note exposure. The "Associated Derivative" in the table below represents the undiscounted cash flows associated with the cross currency interest rate swaps and fixed interest rate swaps on those US$ notes.

All other interest rate swaps have been excluded from the table below as they are settled on a net basis and are currently in-the-money, or are deemed to be an "other financial asset."

107

Australian Pipeline Trust Notes to the Financial Statements (continued) For the financial year ended 30 June 2009

37. Financial instruments (continued)

(h) Liquidity risk management (continued)

			Consolidated	Consolidated
		Average	Less than		More than
		interest rate	1 year	1 - 5 years	5 years
		% p.a.	$000	$000	$000
2009
Financial liabilities
Trade and other payables		-	109,882	-	-
Unsecured bank borrowings(a)		3.75	1,143,666	720,451	-
Secured bank borrowings(b)		-	-	1,645	-
Guaranteed Senior Notes:
Denominated in A$
2003 Series A(c)		6.66	6,793	105,397	-
2007 Series A(d)		7.33	367	1,466	6,100
2007 Series C(d)		7.38	7,318	29,271	121,111
2007 Series E(e)		7.40	5,045	20,178	93,394
2007 Series G(f)		7.45	6,002	24,008	128,582
2007 Series H(f)		7.45	4,617	18,468	98,909
Denominated in US$
2003 Series B(g)	Payment	5.67	13,643	251,297	-
	Associated derivative	-	(5,158)	(109,017)	-
2003 Series C(h)	Payment	5.77	22,867	91,468	369,877
	Associated derivative	-	(8,653)	(34,613)	(162,949)
2003 Series D(i)	Payment	6.02	11,592	46,369	225,455
	Associated derivative	-	(4,662)	(18,648)	(98,422)
2007 Series B(d)	Payment	5.89	25,137	100,546	455,593
	Associated derivative	-	(11,150)	(44,600)	(222,756)
2007 Series D(e)	Payment	5.99	20,094	80,375	401,653
	Associated derivative	-	(8,983)	(35,933)	(194,885)
2007 Series F(f)	Payment	6.14	20,713	82,853	471,827
	Associated derivative	-	(9,359)	(37,436)	(227,300)
2009 Series A(j)	Payment	11.37	8,212	65,695	206,748
	Associated derivative	-	(3,336)	(26,687)	(96,581)
2009 Series B(k)	Payment	11.88	9,965	79,717	300,802
	Associated derivative	-	(4,084)	(32,674)	(137,120)
Financial lease liabilities		7.96	265	556	-
Other:
Unearned revenue - interest		-	8,870	-	-
Unearned revenue - other		-	4,172	3,202	-
			1,373,835	1,383,354	1,740,038

(a) Matures on 8 June 2010 ($900million limit) and 8 June 2012 ($900million limit).

(b) Residual payment due to financiers on expiration of lease of property.

(d) Matures on 15 May 2017.

(e) Matures on 15 May 2019.

(f) Matures on 15 May 2022.

(g) Matures on 9 September 2013.

(h) Matures on 9 September 2015.

(i) Matures on 9 September 2018.

(j) Matures on 1 July 2016.

(k) Matures on 1 July 2019.

108

Australian Pipeline Trust Notes to the Financial Statements (continued) For the financial year ended 30 June 2009

37. Financial instruments (continued)

(h) Liquidity risk management (continued)

			Consolidated	Consolidated
		Average	Less than		More than
		interest rate	1 year	1 - 5 years	5 years
		% p.a.	$000	$000	$000
2008
Financial liabilities
Trade and other payables		-	151,558	-	-
Unsecured bank borrowings(a)		8.39	142,278	1,784,537	-
Secured bank borrowings(b)		-	-	1,645	-
Guaranteed Senior Notes:
Denominated in A$
2003 Series A(c)		6.66	6,793	112,190	-
2007 Series A(d)		7.33	367	1,466	6,466
2007 Series C(d)		7.38	7,318	29,271	128,428
2007 Series E(e)		7.40	5,045	20,178	98,438
2007 Series G(f)		7.45	6,002	24,008	134,584
2007 Series H(f)		7.45	4,617	18,468	103,526
Denominated in US$
2003 Series B(g)	Payment	5.67	12,840	51,361	197,074
	Associated derivative	-	(4,355)	(17,420)	(78,985)
2003 Series C(h)	Payment	5.77	21,520	86,081	368,121
	Associated derivative	-	(7,306)	(29,226)	(144,894)
2003 Series D(i)	Payment	6.02	10,867	43,467	222,080
	Associated derivative	-	(3,936)	(15,746)	(87,041)
2007 Series B(d)	Payment	5.89	23,401	93,605	444,325
	Associated derivative	-	(9,415)	(37,659)	(197,501)
2007 Series D(e)	Payment	5.99	18,714	74,857	390,128
	Associated derivative	-	(7,585)	(30,340)	(172,138)
2007 Series F(f)	Payment	6.14	19,257	77,026	455,707
	Associated derivative	-	(7,902)	(31,610)	(199,826)
Financial lease liabilities		7.67	193	486	-
Other:
Unearned revenue - interest		-	8,496	-	-
Unearned revenue - other		-	3,613	2,180	-
Medium Term Notes		7.33	474,508	-	-
Project Finance Facilities		9.24	12,524	88,662	-
			889,412	2,347,487	1,668,492

(a) Matures on 8 June 2010 ($900million limit) and 8 June 2012 ($900million limit).

(b) Residual payment due to financiers on expiration of lease of property.

(d) Matures on 15 May 2017.

(e) Matures on 15 May 2019.

(f) Matures on 15 May 2022.

(g) Matures on 9 September 2013.

(h) Matures on 9 September 2015.

(i) Matures on 9 September 2018.

109

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

37. Financial instruments (continued)

(i) Fair value of financial instruments

The fair values of financial assets and financial liabilities are determined as follows:

the fair values of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices;
the fair values of other financial assets and financial liabilities (excluding derivative instruments) are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current markets;
the fair values of derivative instruments, included in hedging assets and liabilities, are calculated using quoted prices. Where such prices are not available, use is made of discounted cash flow analysis using the applicable yield curve for the duration of the instruments; and
the fair value of financial guarantee contracts is determined using option pricing models where the main assumptions are the probability of default by the specified counterparty extrapolated from market-based credit information and the amount of loss, given the default.

Derivatives

Foreign currency forward contracts are measured using quoted forward exchange rates and yield curves derived from quoted interest rates matching maturities of the contracts.

Interest rate swaps are measured at the present value of future cash flows estimated and discounted based on the applicable yield curves derived from quoted interest rates.

The carrying value of financial assets and liabilities recorded at amortised cost in the financial statements approximate their fair value having regard to the specific terms of the agreements underlying those assets and liabilities.

110

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

38. Jointly controlled operations and assets

The Consolidated Entity is a venturer in the following jointly controlled operations and assets:

		Output	interest
		2009	2008
Name of venture	Principal activity	%	%
Goldfields Gas Transmission	Gas pipeline operation - Western Australia	88.2(a)	88.2(a)
Mid West Pipeline	Gaspipeline operation - Western Australia	50.0(b)	50.0(b)

(a) On 17 August 2004, APA acquired a direct interest in the Goldfields Gas Transmission jointly controlled operations as part of the SCP Gas

Business acquisition.

(b) Pursuant to the joint venture agreement, the Consolidated Entity receives a 70.8% share of operating income and expenses.

The Consolidated Entity’s interest, as a venturer, in assets employed in the above jointly controlled operations and assets is detailed below. The amounts are included in the consolidated financial statements under their respective asset categories:

asset categories:
	Consolidated
	2009	2008
	$000	$000
Current assets
Cash and cash equivalents	185	102
Trade and other receivables	7,907	6,087
Inventories	1,579	1,507
Other	942	900
Total current assets	10,613	8,596
Non-current assets
Property, plant and equipment	521,928	472,717
Other	794	-
Total non-current assets	522,722	472,717
Total assets	533,335	481,313

Contingent liabilities and capital commitments

Contingent liabilities and capital commitments arising from the Consolidated Entity's interest in jointly controlled operations are disclosed in Notes 46 and 42 respectively.

111

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

39. Subsidiaries

	Country of
	registration/	Ownership interest
Name of entity	incorporation	2009 (%)	2008 (%)
Parent entity
Australian Pipeline Trust(a)
Subsidiaries
APT Pipelines Limited(b),(c)	Australia	100	100
Agex Pty Ltd(b),(c)	Australia	100	100
Amadeus Gas Trust	Australia	96	96
APT Goldfields Pty Ltd(b),(c)	Australia	100	100
APT Management Services Pty Limited(b),(c)	Australia	100	100
APT Parmelia Gas Pty Ltd(b),(c)	Australia	100	100
APT Parmelia Holdings Pty Ltd(b),(c)	Australia	100	100
APT Parmelia Pty Ltd(b),(c)	Australia	100	100
APT Parmelia Trust(b)	Cayman Islands	100	100
APT Petroleum Pipelines Holdings Pty Limited(b),(c)	Australia	100	100
APT Petroleum Pipelines Pty Limited(b),(c)	Australia	100	100
APT Pipelines (NSW) Pty Limited(b),(c)	Australia	100	100
APT Pipelines (NT) Pty Limited(b),(c)	Australia	100	100
APT Pipelines (Qld) Pty Limited(b),(c)	Australia	100	100
APT Pipelines (WA) Pty Limited(b),(c)	Australia	100	100
APT Pipelines Investments (NSW) Pty Ltd(b),(c)	Australia	100	100
APT Pipelines Investments (WA) Pty Ltd(b),(c)	Australia	100	100
East Australian Pipeline Pty Limited(b),(c)	Australia	100	100
Gasinvest Australia Pty Limited(b),(c)	Australia	100	100
Goldfields Gas Transmission Pty Ltd(b)	Australia	100	100
NT Gas Distribution Pty Limited	Australia	96	96
NT Gas Easements Pty Limited(b),(c)	Australia	100	100
NT Gas Pty Limited	Australia	96	96
Roverton Pty Ltd(b),(c)	Australia	100	100
SCP Investments (No 1) Pty Limited(b),(c)	Australia	100	100
SCP Investments (No 2) Pty Limited(b),(c)	Australia	100	100
SCP Investments (No 3) Pty Limited(b),(c)	Australia	100	100
Sopic Pty Ltd(b),(c)	Australia	100	100
Southern Cross Pipelines (NPL) Australia Pty Ltd(b),(c)	Australia	100	100
Southern Cross Pipelines Australia Pty Limited(b),(c)	Australia	100	100
Trans Australia Pipeline Pty Limited(b),(c)	Australia	100	100
Western Australia Gas Transmission Company 1(b),(c)	Australia	100	100
GasNet Australia Trust(b)	Australia	100	100
APA GasNet Australia (Holdings) Pty Ltd(b)	Australia	100	100
APA GasNet Australia (Operations) Pty Ltd(b)	Australia	100	100
APA GasNet A Pty Ltd(b)	Australia	100	100
GasNet A Trust(b)	Australia	100	100
APA GasNet Australia(NSW)PtyLtd(b)	Australia	100	100

112

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

39. Subsidiaries (continued)

	Country of
	registration/	Ownership interest
Name of entity	incorporation	2009 (%)	2008 (%)
APA GasNet B Pty Ltd(b)	Australia	100	100
APA GasNet Australia Pty Limited(b)	Australia	100	100
GasNet B Trust(b)	Australia	100	100
GasNet Australia Investments Trust(b)	Australia	100	100
APT Allgas Energy Pty Limited(b),(c)	Australia	100	100
APT Allgas Pipelines Operations Pty Limited(b),(c)	Australia	100	100
APT Allgas Toowoomba Pty Limited(b),(c)	Australia	100	100
APT Operations Pty Limited(b),(c)	Australia	100	100
APT AM Holdings Pty Limited(b),(c)	Australia	100	100
APT O&M Holdings Pty Ltd(b),(c)	Australia	100	100
APT O&M Services Pty Ltd(b),(c)	Australia	100	100
APT O&M Services (QLD) Pty Ltd(b),(c)	Australia	100	100
APT Water Management Pty Ltd(b),(c)	Australia	100	100
APT Water Management Holdings Pty Ltd(b),(c)	Australia	100	100
APT AM Stratus Pty Ltd(b),(c)	Australia	100	100
APT Facility Management Pty Ltd(b),(c)	Australia	100	100
APT AM Employment Pty Ltd(b),(c)	Australia	100	100
APT SEAGas (Holdings) Pty Limited(b),(c)	Australia	100	100
APT SPV2 Pty Ltd(b),(c)	Australia	100	100
APT SPV3 Pty Ltd(b),(c)	Australia	100	100
APT Pipelines (SA) Pty Ltd(b),(c)	Australia	100	100
APT (MIT) Services Pty Limited(b)	Australia	100	100
APA Operations (EII) Pty Limited(b),(c)	Australia	100	-
APA Pipelines (QNSW) Pty Limited(b),(c)	Australia	100	-
Central Ranges Pipeline Pty Ltd(b),(c)	Australia	100	-
Country Pipelines Pty Ltd(b),(c)	Australia	100	-
North Western Natural Gas Company Pty Limited(b),(c)	Australia	100	-
Murraylink (No.1) Pty Limited(b),(c),(d)	Australia	-	100
Murraylink (No.2) Pty Limited(b),(c),(d)	Australia	-	100
Murraylink Transmission Company Pty Ltd(b),(c),(d)	Australia	-	100
APT Bonaparte Pty Limited(b),(c),(d)	Australia	-	100
APT Energy Pty Ltd(b),(c),(d)	Australia	-	100
BGP Asset Pty Ltd(b),(c),(d)	Australia	-	100
APT Directlink Holdings Pty Limited(b),(c),(d)	Australia	-	100
Directlink (No 1) Pty Limited(b),(c),(d)	Australia	-	100
Directlink (No 2) Pty Limited(b),(c),(d)	Australia	-	100
Directlink (No 3) Pty Limited(b),(c),(d)	Australia	-	100
APA Gas Transmission Services WA (Holdings) Pty Limited(b),(d)	Australia	-	100
APA Gas Investments Australia (Holdings) Pty Limited(b),(d)	Australia	-	100
APA Gas Transmission Services WA (Operations) Pty Limited(b),(d)	Australia	-	100
APA Pipelines (WPP) Pty Limited(b),(c),(d)	Australia	-	100

113

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

39. Subsidiaries (continued)

	Country of
	registration/	Ownership interest
Name of entity	incorporation	2009 (%)	2008 (%)
BGP Hold Co Pty Ltd(e)	Australia	-	-
BGP SPV 1 Pty Limited(e)	Australia	-	-
BGP SPV 2 Pty Limited(e)	Australia	-	-
BGP SPV 3 Pty Limited(e)	Australia	-	-
BGP SPV 4 Pty Limited(e)	Australia	-	-
BGP SPV 5 Pty Limited(e)	Australia	-	-
BGP SPV 6 Pty Limited(e)	Australia	-	-
Daandine Asset Pty Limited(e)	Australia	-	-
Kogan North Asset Pty Limited(e)	Australia	-	-
Tipton West Asset Pty Limited(e)	Australia	-	-
X41 Asset PtyLimited(e)	Australia	-	-

(a) Australian Pipeline Trust is the head entity within the tax-consolidated group.

(b) These entities are members of the tax-consolidated group.

(c) These wholly-owned subsidiaries have entered into a deed of cross guarantee with APT Pipelines Limited pursuant to ASIC Class Order 98/1418 and are relieved from the requirement to prepare and lodge an audited financial report.

(d) Subsidiaries sold to EII in December 2008.

(e) Subsidiaries formed during the current financial year and sold to EII in December 2008.

114

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

40. Disposal of businesses

APA disposed of a number of annuity-style income assets into the unlisted vehicle Energy Infrastructure Investments (EII). APA established EII in December 2008, selling its electricity transmission assets, gas-fired power generators, gas processing facilities and two pipelines - the Telfer/Nifty Gas Pipeline and the Bonaparte Gas Pipeline (including the Wickham Point Pipeline). APA retained a 19.9% interest in EII and remains operator of the assets.

	12 December 2008
	Total
	$000
Net assets disposed
Current assets
Trade and other receivables	11,116
Other	40
Non-current assets
Receivables	94,823
Property, plant and equipment	575,972
Total assets	681,951
Current liabilities
Trade and other payables	28,637
Borrowings	5,053
Other financial liabilities	4,113
Other	998
Non-current liabilities
Borrowings	69,294
Total liabilities	108,095
Net assets	573,856
Less: loss on sale of business	(16,167)
Working capital	(7,883)
Receivables - sale of business	(3,901)
Net cash inflow on disposal	545,905

115

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

41. Acquisition of businesses

			Proportion	Cost of
			acquired	acquisition(a)
Names of business acquired	Principal activity	Date of acquisition	%	$000
During the financial year ended 30 June 2009
Central Ranges Pipeline	Gas transmission	22 August 2008	100	23,472

During the financial year ended 30 June 2008
Origin Energy Networks (Asset management	Gas transmission	2 July 2007	100	421,385
business and investment in Envestra Limited)
Alinta Contract Termination and Contract	Operating maintenance	2 October 2007	100	206,226
Novation (of Pipeline Management Agreement)	services
APT (MIT) Services Limited Pty (formerly Mariner	Management services	6 April 2008	100	3,000
Infrastructure Management Services Limited)
				630,611

(a) Includes transaction costs.	Central Ranges Pipelines
	Book Value Fair value Fair value adjustment on acquistion $000 $000 $000
Net assets acquired Current assets Trade and other receivables Inventories Prepayments Non-current assets Property, plant and equipment Deferred tax assets Intangible assets Current liabilities Trade and other payables Non-current liabilities Borrowings Provisions	328 - 328 197 - 197 254 - 254 24,049 (1,141) 22,908 605 471 1,076 - - - (630) - (630) (204) - (204) (28) (429) (457)
	24,571 (1,099) 23,472
Goodwill on acquisition	-
Cost of acquisitions	23,472
Prior year transaction costs paid Net cash outflow on acquisition	(856) 22,616

116

For the financial year ended 30 June 2009

Australian Pipeline Trust Notes to the financial statements (continued)

41. Acquisition of businesses (continued)

In August 2008, APA Group acquired the Central Ranges Pipeline for $23.5 million. This 294 km pipeline connects to APA Group's Central West Pipeline at Dubbo, provides additional storage capacity in the Moomba Sydney Pipeline system and delivers gas to the Central Ranges region. The accounting for the acquistion of the Central Ranges Pipeline acquired during the year has been fully determined at reporting date.

The Central Ranges Pipeline entities became wholly owned on acquisition and have joined the Trust's tax-consolidated group.

The initial cost of the acquisition comprises cash for all the acquisition.

Included in the consolidated net profit for the year (excluding significant items) is revenue of $2,752,000 and earnings before interest, tax and depreciation of $645,000 attributable to the Central Ranges Pipeline.

Had this business combination been effected at 1 July 2008, the revenue of the Consolidated Entity would have been $3,145,000 and earnings before interest, tax and depreciation of $737,000. The directors of the Consolidated Entity consider these 'pro-forma' numbers to represent an approximate measure of the performance of the combined Consolidated Entity on an annualised basis as to provide a reference point for comparison in future periods.

117

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

42. Commitments for expenditure

Capital expenditure commitments

Capital expenditure commitments
	Consolidated			Trust
	2009	2008	2009		2008
	$000	$000	$000		$000
Plant and equipment
Not longer than 1 year	7,968	211,038	-		-
Longer than 1 year and not longer than 5 years	-	62,735	-		-
Longer than 5 years	-	-	-		-
	7,968	273,773	-		-
Consolidated Entity's share of jointly controlled
operation's commitments
Not longer than 1 year	17,785	18,939	-		-
Longer than 1 year and not longer than 5 years	-	-	-		-
Longer than 5 years	-	-	-		-
	17,785	18,939	-		-

118

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

43. Remuneration of external auditor

	Consolidated	Consolidated
	2009	2008	2009	2008
	$	$	$	$
Amounts received or due and receivable by Deloitte
Touche Tohmatsu for:
Auditing the financial report	706,247	741,631	5,000	5,000
Compliance plan audit	19,735	18,795	-	-
Tax compliance and advice(a)	22,250	77,563	-	-
Other accounting and assurance services(a)	46,460	43,625	-	-
Other advisory services(a)	105,000	160,500	-	-
	899,692	1,042,114	5,000	5,000

(a) Services provided were in accordance with the external auditor independence policy.

119

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

44. Key management personnel compensation

(a) Details of key management personnel

The Directors and other members of key management personnel of the APA group of entities during the financial year were:

L F Bleasel AM (Independent, Non-Executive Chairman)

J A Fletche r (Independent Non-Executive Director, appointed 27 February 2008)

R A Higgins AO (Independent Non-Executive Director)

M Muhammad (Non-Executive Director)

M Ratila l (Non-Executive Director)

R J Wright (Independent Non-Executive Director)

M J McCormack (Managing Director)

W S Saidi (Alternate Non-Executive Director, retired as of 14 August 2009)

W Z W Ariffin (Alternate Non-Executive Director, retired as of 19 August 2009)

R M Gersbach (Group Manager Commercial, appointed 1 February 2008, Acting Chief Financial Officer,

1 January 2009 to 31 May 2009)

P J Fredricson (Chief Financial Officer, appointed 1 June 2009)

S P Ohl (Group Manager Operations)

M T Knapman (Company Secretary, appointed 16 July 2008)

R A Smith (General Manager Human Resources & HSE)

R F Francis (Chief Financial Officer, resigned as of 31 December 2008).

120

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

44. Key management personnel compensation (continued)

(b) Key management personnel compensation

The aggregate compensation made to key management personnel of the Consolidated Entity and the Trust is set out below:

	Consolidated and Trust	Consolidated and Trust
	2009	2008
	$	$
Short-term employment benefits	4,566,664	4,593,870
Post-employment benefits	343,587	308,948
Cash settled share-based payments	654,114	404,109
Retention award	216,667	216,667
Termination payments	487,237	1,062,899
	6,268,269	6,586,493

The compensation of each member of the key management personnel of the Consolidated Entity is set out below.

						Post-	Long-term
		Short-term employment benefits				employment	incentive plans
				Short-term
	Salary/fees	Due Diligence Committee fees		incentive scheme	Non-monetary	Super- annuation	Share-based payments(a)	Other(b)	Total
	$		$	$	$	$	$	$	$
Non-Executive Directors
L F Bleasel(c)
2009	236,477		-	-	-	54,108	-	-	290,585
2008	125,315		-	-	-	10,605	-	-	135,920
J A Fletcher
2009	49,000		-	-	-	79,620	-	-	128,620
2008	20,724		-	-	-	20,014	-	-	40,738
R A Higgins
2009	101,200		-	-	-	41,808	-	-	143,008
2008	106,678		5,200	-	2,753	11,219	-	-	125,850
M Muhammad
2009	108,000		-	-	-	-	-	-	108,000
2008	97,000		-	-	-	-	-	-	97,000
M Ratilal
2009	89,167		-	-	-	-	-	-	89,167
2008	78,333		-	-	-	-	-	-	78,333
R J Wright
2009	128,200		-	-	-	11,538	-	-	139,738
2008	108,817		5,200	-	-	11,158	-	-	125,175
W S Saidi(d)
2009	-		-	-	-	-	-	-	-
2008	-		-	-	-	-	-	-	-
W Z W Ariffin	(e)
2009	-		-	-	-	-	-	-	-
2008	-		-	-	-	-	-	-	-

121

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

44. Key management personnel compensation (continued)

(b) Key management personnel compensation (continued)

	Short-term employment benefits	Other(b) Total $ $ $ $ Post- employment Long-term incentive plans Super- annuation Share-based payments(a)
	Salary/fees $ $ $ $ Due Diligence Committee fees Short-term incentive scheme Non-monetary
G H Bennett - - - - 55,394 2,600 - - 2009 2008		- - - - 4,754 - 98,100 160,848
R M Gersbach - - - - 52,500 5,200 - - 2009 2008		- - - - 4,725 - - 62,425
Executive Director
M J McCormack 711,928 - 523,125 13,072 659,205 - 430,000 40,795 2009 2008		50,000 285,663 216,667 1,800,455 50,000 151,894 216,667 1,548,561
Total remuneration: Directors
1,423,972 - 523,125 13,072 1,303,966 18,200 430,000 43,548 2009 2008		237,074 285,663 216,667 2,699,573 112,475 151,894 314,767 2,374,850

(a) Cash settled share-based payments.

(b) Includes retention payment and director's retiring allowance.

(d) Retired as of 14 August 2009.

(e) Retired as of 19 August 2009.

122

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

44. Key management personnel compensation (continued)

(b) Key management personnel compensation (continued)

	Short-term employment benefits	Total $ $ $ $ Termination payments Long-term incentiveplans Super- annuation Share-based payments(a) Post- employment
	Salary/fees $ $ $ Non-monetary Short-term incentive scheme
Executives
R M Gersbach(b) 2009 2008	524,333 320,000 11,922 227,683 108,000 4,968	13,745 105,857 - 975,857 6,734 28,250 - 375,635
P Fredricson(c) 2009 2008	38,226 - - - - -	3,440 - - 41,666 - - - -
S P Ohl 2009 2008	336,523 184,000 28,732 300,559 167,000 36,311	34,745 92,095 - 676,095 13,130 45,075 - 562,075
M T Knapman(d) 2009 2008	294,950 119,600 - - - -	33,964 37,504 - 486,018 - - - -
S M Dureau(e) 2009 2008	- - - 274,948 135,000 11,922	- - - - 13,130 39,291 - 474,291
R A Smith 2009 2008	245,480 115,700 775 179,699 85,000 -	13,745 49,438 - 425,138 9,847 12,625 - 287,171
R F Francis(f) 2009 2008	180,293 200,000 5,961 334,948 167,000 11,922	6,874 83,557 487,237 963,922 13,130 48,438 - 575,438
A J V James(g) 2009 2008	- - - 214,526 157,500 11,177	- - - - 29,272 41,986 743,900 1,198,361
P D Fox(h) 2009 2008	- - - 206,618 150,000 13,376	- - - - 13,130 36,550 318,999 738,673
Total Remuneration: Executives
1,619,805 939,300 47,390 1,738,981 969,500 89,676 2009 2008		106,513 368,451 487,237 3,568,696 98,373 252,215 1,062,899 4,211,644

(a) Cash settled share-based payments.

(b) Includes one-off ex-gratia component for undertaking Chief Financial Officer position from 1 January 2009 to 31 May 2009.

(d) Company Secretary, appointed 16 July 2009.

(e) General Counsel and General Manager Regulatory ceased as a key management personnel 1 July 2008.

(f) Chief Financial Officer, resigned as of 31 December 2008.

(g) Company Secretary, resigned as of 29 April 2008.

(h) General Manager Corporate Development, resigned as of 30 June 2008.

123

For the financial year ended 30 June 2009

Australian Pipeline Trust Notes to the financial statements (continued)

45. Related party transactions

(a) Equity interest in related parties

Details of the percentage of ordinary securities held in subsidiaries are disclosed in Note 39 and the details of the percentage held in jointly controlled operations are disclosed in Note 38. Details of interests in jointly controlled entities are disclosed in Note 16 to the financial statements.

(b) Responsible Entity – Australian Pipeline Limited

The Responsible Entity is wholly owned by APT Pipelines Limited.

(c) Transactions with key management personnel

Details of key management personnel compensation are disclosed in Note 44.

(i) Loans to key management personnel

No loans have been made to key management personnel.

(ii) Key management personnel equity holdings

		Securities	Securities
	Fully paid	acquired during	disposed during	Fully paid
	securities	the financial	the financial	securities
	opening balance	year	year	closing balance
2009
L F Bleasel	311,589	23,564	-	335,153
J A Fletcher	35,477	9,440	-	44,917
R A Higgins	36,581	15,440	-	52,021
M Muhammad	26,804	16,014	-	42,818
M Ratilal	-	-	-	-
R J Wright	19,858	4,405	-	24,263
M J McCormack	100,005	14,995	-	115,000
W S Saidi (retired as of 14 August 2009)	-	-	-	-
W Z W Ariffin (retired as of 19 August 2009)	-	-	-	-
R M Gersbach	18,043	4,189	-	22,232
P Fredricson (appointed 1 June 2009)	-	-	-	-
S P Ohl	10,000	1,928	-	11,928
M T Knapman (appointed 16 July 2008)	-	3,000	-	3,000
R A Smith	8,000	8,028	-	16,028

124

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

45. Related party transactions (continued)

(ii) Key management personnel equity holdings (continued)

		Securities	Securities
	Fully paid	acquired during	disposed during	Fully paid
	securities	the financial	the financial	securities
	opening balance	year	year	closing balance
2008
L F Bleasel (appointed 28 August 2007)	154,285	157,304	-	311,589
J A Fletcher (appointed 27 February 2008)	27,977	7,500	-	35,477
R A Higgins	17,919	18,662	-	36,581
M Muhammad	15,412	11,392	-	26,804
M Ratilal (appointed 31 July 2007)	-	-	-	-
R J Wright	17,171	2,687	-	19,858
M J McCormack	57,513	42,492	-	100,005
W S Saidi	-	-	-	-
W Z W Ariffin (appointed 31 July 2007)	-	-	-	-
R M Gersbach (appointed 1 February 2008)	5,665	12,378	-	18,043
G H Bennett (retired as of 30 October 2007)	25,009	481	-	25,490
S P Ohl	4,000	6,000	-	10,000
M T Knapman (appointed 16 July 2008)	-	-	-	-
S M Dureau	6,671	4,689	-	11,360
R A Smith (appointed 2 October 2007)	-	8,000	-	8,000
R F Francis (resigned as of 31 December 2008)	2,885	3,382	-	6,267
A J V James (resigned as of 29 April 2008)	5,654	5,626	-	11,280
P D Fox(resigned as of 30 June 2008)	7,154	11,159	-	18,313

(iii) Other transactions with key management personnel of the Group and the Responsible Entity

Other than key management personnel compensation (Note 44) and equity holdings (Note 45(ii)), there are no other transactions with key management personnel of the Group and of the Responsible Entity.

(d) Transactions with related parties within APA Group

Transactions between the entities that comprise APA Group during the financial year consisted of:

dividends;
system lease rentals;
loans advanced and payments received on long-term inter-entity loans;
management fees;
operational services provided between entities;
payments of distributions;
payments of capital distributions (returns of capital); and
equity issues.

The above transactions were made on normal commercial terms and conditions. The Group charges interest on inter-entity loans from time to time.

All transactions between the entities that comprise APA Group have been eliminated on consolidation. Refer to Note 39 for details of the entities that comprise APA Group.

125

Australian Pipeline Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

45. Related party transactions (continued)

(d) Transactions with related parties within APA Group (continued)

Australian Pipeline Limited

Management fees of $2,796,000 (2008: $2,801,000) were paid to the Responsible Entity as reimbursement of costs incurred on behalf of APA. No amounts were paid directly by APA to the Directors of the Responsible Entity, except as disclosed at Note 45(e).

Australian Pipeline Limited, in its capacity as trustee and Responsible Entity of the Trust, has guaranteed the payment of principal, interest and other amounts as provided in the Note and Guarantee Agreement relating to the issue of Guaranteed Senior Notes.

(e) Transactions with other related parties

Transactions with associates

The following transactions occurred with the APA Group's associates on normal market terms and conditions:

			Amount owed	Amount owed
	Sales to related	Purchases from	by related	to related
	parties	related parties	parties	parties
2009	$'000	$'000	$'000	$'000
SEA Gas	87	-	3,000	-
Energy Infrastructure Investments Pty Limited	13,093	-	14,592	6
Envestra Limited	201,279	-	20,399	1
	214,459	-	37,991	7

Transactions with all related parties have taken place at arm's length and in the ordinary course of business.

Transactions between the Trust and its related parties

During the financial year ended 30 June 2009, the following transactions occurred between the Trust and its other related parties:

The Trust received dividends from its whollly-owned controlled entities (see Note 5).

The following balances arising from transactions between the Trust and its other related parties are outstanding at reporting date:

Net receivables of $481,974 (2008: $nil) are owing from associates.
Total payables of $150,401,000 are repayable to subsidiaries (2008: $135,676,000) for deferred tax losses transferred up to the Trust, as head of the tax consolidated group.

No guarantees have been given or received. No expense has been recognised in the period for bad or doubtful debts in respect of the amounts owed by related parties.

Transactions and balances between the Trust and its subsidiaries were eliminated in the preparation of consolidated financial statements of the APA Group.

126

Australian Pipeline Trust Notes to the financial statements (continued)

For the financial year ended 30 June 2009

46. Contingencies

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
Contingent liabilities
Bankguarantees	6,259	10,619	-	-
Contingent assets	-	-	-	-

127

For the financial year ended 30 June 2009

Australian Pipeline Trust Notes to the financial statements (continued)

47. Events occurring after reporting date

APA is currently undertaking the refinance of Tranche A of its 2007 syndicated debt facility amounting to $900 million. To date, a long term raising of US Private Placement notes of A$185 million with 7-year and 10-year tenures has been completed, a $150 million 5 year bi-lateral facility has been executed and APA has obtained more than $1 billion of commitments from a bank syndication process to refinance its 2010 debt maturity obligations. Documentation is expected to be executed near the end of August 2009.

On 25 August 2009, the Directors declared a final distribution of 16.0 cents per security ($79,786,000) for the APA Group (comprising a distribution of 2.7 cents per security from APT and a distribution of 13.3 cents per security from APTIT), made up of 2.2 cents per security income distribution (unfranked) and 11.1 cents per security tax deferred distribution. The distribution will be paid on 15 September 2009.

128

Australian Pipeline Trust Declaration by the Directors of Australian Pipeline Limited For the financial year ended 30 June 2009

The Directors declare that:

(a) in the Directors’ opinion, there are reasonable grounds to believe that Australian Pipeline Trust will be able to pay its debts as and when they become due and payable;
(b) in the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with Accounting Standards and giving a true and fair view of the financial position and performance of Australian Pipeline Trust and the Consolidated Entity; and
(c) the Directors have been given the declarations by the Managing Director and Chief Financial Officer required by section 295A of the Corporations Act 2001.

Signed in accordance with a resolution of the Directors of the Responsible Entity made pursuant to section 295(5) of the Corporations Act 2001.

On behalf of the Directors

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L F Bleasel AM

Chairman

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R J Wright Director

SYDNEY, 25 August 2009

129

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Deloitte Touche Tohmatsu A.B.N. 74 490 121 060

Grosvenor Place 225 George Street Sydney NSW 2000 PO Box N250 Grosvenor Place Sydney NSW 1220 Australia

The Directors Australian Pipeline Limited as responsible entity for Australian Pipeline Trust HSBC Building Level 19, 580 George Street Sydney NSW 2000

DX 10307SSE Tel: +61 (0) 2 9322 7000 Fax: +61 (0) 2 9322 7001 www.deloitte.com.au

25 August 2009

Dear Directors

Auditors Independence Declaration to Australian Pipeline Limited as responsible entity for Australian Pipeline Trust

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Australian Pipeline Limited as responsible entity for Australian Pipeline Trust.

As lead audit partner for the audit of the financial statements of Australian Pipeline Limited as responsible entity for Australian Pipeline Trust for the financial year ended 30 June 2009, I declare that to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.

Yours faithfully

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DELOITTE TOUCHE TOHMATSU

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Samantha Lewis Partner

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130

Liability limited by a scheme approved under Professional Standards Legislation.

Deloitte Touche Tohmatsu ABN 74 490 121 060 Grosvenor Place 225 George Street Sydney NSW 2000 PO Box N250 Grosvenor Place Sydney NSW 1219 Australia

DX 10307SSE Tel: +61 (0) 2 9322 7000 Fax: +61 (0) 2 9322 7001 www.deloitte.com.au

Independent Auditor’s Report to the Unitholders of Australian Pipeline Trust

We have audited the accompanying financial report of Australian Pipeline Trust, which comprises the balance sheet as at 30 June 2009, and the income statement, cash flow statement and statement of recognised income and expense for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration of the consolidated entity comprising the Trust and the entities it controlled at the year’s end or from time to time during the financial year as set out on pages 34 to 129.

Directors’ Responsibility for the Financial Report

The directors of Australian Pipeline Limited are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 . This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the consolidated financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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131

Liability limited by a scheme approved under Professional Standards Legislation.

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Auditor’s Independence Declaration

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Auditor’s Opinion on the Financial Report

In our opinion:

(a) the financial report of Australian Pipeline Trust is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Trust’s and consolidated entity’s financial position as at 30 June 2009 and of their performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and
(b) the consolidated financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 2.

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DELOITTE TOUCHE TOHMATSU

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Samantha Lewis Partner Chartered Accountants Sydney, 25 August 2009

132

APT Investment Trust ARSN 115 585 441

Annual Report For the Financial Year ended 30 June 2009

APT Investment Trust and its Controlled Entities Directors’ Report

The Directors of Australian Pipeline Limited (“Responsible Entity” or “APL”) submit the annual financial report of APT Investment Trust (“APTIT” or “Trust”) and its controlled entities (together “Consolidated Entity”) for the year ended 30 June 2009. This report and the financial statements attached refer to the consolidated results of APTIT, one of the two stapled entities of APA Group, with the other stapled entity being Australian Pipeline Trust (“APT”) (together “APA”).

Directors

The names of the directors of the Responsible Entity during and continuing since the year end are:

Leonard Bleasel AM Chairman

John Fletcher

Russell Higgins AO Muri Muhammad

Manharlal Ratilal Robert Wright

Michael McCormack Managing Director.

Details of the directors, their qualifications, experience, special responsibilities and directorships of other listed entities are set out on page 3.

Alternate directors who served during the period are as follows:

W S Saidi as alternate for Muri Muhammad, retired as of 14 August 2009. W Z W Ariffin as alternate for Manharlal Ratilal, retired as of 19 August 2009.

Company Secretary

M T Knapman

Details of the Company Secretary, his qualifications and experience are set out on page 13.

Principal activities

APTIT operates as an investment and financing entity within the Australian Pipeline Trust stapled group.

Significant changes in state of affairs

During the year, APA increased its interest in Envestra Limited (“Envestra”), from 18.3% at 30 June 2008, to 30.4% resulting from the participation in and part underwriting of Envestra’s rights issue. As part of this transaction, APL as Responsible Entity for APTIT, acquired an additional $1.8 million investment in Envestra loan notes. The loan notes were fully repaid in May 2009. APTIT also acquired a 19.9% interest in the Redeemable Ordinary Shares in Energy Infrastructure Investments Pty Limited (“EII”) following APA’s divestment of a number of assets with annuity-style income into EII. Marubeni Corporation and Osaka Gas hold 49.9% and 30.2% equity interests in EII respectively, while APA retains a 19.9% equity interest and continues to operate and maintain the assets.

Review and results of operations

APTIT reported net profit after tax of $34.1 million (2008: $29.1 million) for the year ended 30 June 2009 on total revenue of $34.1 million (2008: $29.1 million).

APT Investment Trust and its Controlled Entities Directors’ Report

Distributions

Distributions paid to securityholders during the financial year were:

	Final FY 2008 distribution paid 10 September 2008	Final FY 2008 distribution paid 10 September 2008	Interim FY 2009 distribution paid 27 March 2009	Interim FY 2009 distribution paid 27 March 2009
	Cents per security	Total distribution $000	Cents per security	Total distribution $000
APTIT tax deferred distribution	2.6	12,081	3.1	15,176
APTIT interest income	3.4	16,014	2.9	14,220
Total	6.0	28,095	6.0	29,396

On 25 August 2009, the Directors declared a final distribution for APTIT for the current financial year of 13.3 cents per security payable 15 September 2009, made up of:

	Final FY 2009 distribution payable 15 September 2009	Final FY 2009 distribution payable 15 September 2009
	Cents per security	Total distribution $000
APTIT tax deferred income	0.4553	2,271
APTIT capital distribution	11.0882	55,293
APTIT interest income	1.7122	8,538
Total	13.2557	66,102

As at 30 June 2009, 498,664,000 securities were on issue (2008: 468,241,000).

Subsequent events

Except as disclosed elsewhere in this report, the directors are unaware of any matter or circumstance occurring since the end of the financial year that has significantly affected or may significantly affect the operations of the Consolidated Entity, the results of those operations or the state of affairs of the Consolidated Entity in future financial years.

Future developments

Disclosure of information regarding likely developments in the operation of the Consolidated Entity in future financial years and the expected results of those operations, other than information disclosed elsewhere in this report, is likely to result in unreasonable prejudice to the Consolidated Entity. Accordingly, this information has not been disclosed in this report.

APT Investment Trust and its Controlled Entities Directors’ Report

Information on directors and Company Secretary

Information relating to the qualifications and experience of the directors and Company Secretary is set out below:

Leonard F Bleasel AM	Leonard (Len) Bleasel is a non-executive director of QBE Insurance Group
FAICD FAIM	Limited and O’Connell Street Associates Pty Limited. He is chairman of the
*Independent Chairman*	Taronga Conservation Society Australia and a member of the Advisory Council for RBS Group (Australia) Pty Limited (formerly ABN AMRO Australia Holdings
Appointed 28 August 2007	Pty Limited) and a member of Westmead Children’s Advisory Committee. Len is
Appointed Chairman 30	also involved as a member of several charitable institutions.
October 2007	Len had a long career in the energy industry before retiring from management in
	2001. He started his career in AGL in 1958 and worked in a variety of roles,
	culminating in the position of Managing Director and CEO from 1990 to 2001.
	Len’s past appointments have included chairman of Foodland Associated
	Limited, ABN AMRO Australia Holdings Pty Limited, Solaris Power, the
	Australian Gas Association, Natural Gas Corporation Holdings Ltd (New
	Zealand), Elgas Ltd, Auscom Holdings Pty Ltd, Industrial Pipe Systems Pty Ltd
	and East Australian Pipeline Ltd; a director of St George Bank Limited and Gas
	Valpo (Chile); and vice president of the Royal Blind Society.
	Len was awarded an AM in the General Division of the Order of Australia for
	services to the Australian gas and energy industries and the community.
John A Fletcher	John Fletcher has over 35 years experience in the energy industry, having held a
BSc MBA FAICD	number of executive positions in AGL prior to his retirement in 2003, including
*Independent Director*	Chief Financial Officer. John has previously been a director of Integral Energy, NGC Holdings Limited (New Zealand) and Foodland Associated Limited. He
Appointed 27 February	brings a wide commercial and financial practical knowledge to the board.
2008	John was previously an AGL appointed director of Australian Pipeline Limited
	from 2000 to 2005. He is also a director of Babcock & Brown Power and Sydney
	Water.
	John is the Chairman of the Remuneration Committee and a member of the
	Audit and Risk Management Committee.
Russell A Higgins AO	Russell Higgins has extensive experience both locally and internationally in the
BEc FAICD	energy sector and in economic and fiscal policy. He was Secretary and Chief
*Independent Director*	Executive Officer of the Department of Industry, Science and Resources from 1997 to 2002 and Chairman of the Australian Government’s Energy Task Force
Appointed 7 December	from 2003 to 2004.
2004	Russell has recently been appointed Chairman of the Global Carbon Capture
	and Storage Institute. He is also Chairman of the CSIRO Energy Transformed
	Flagship Advisory Committee and a director of Ricegrowers Limited (trading as
	SunRice). He is a former Chairman of the Snowy Mountains Council and the
	Australian Government’s Management Improvement Advisory Committee and a
	former director of Australian Biodiesel Group Limited, EFIC, CSIRO, Austrade,
	the Australian Industry and Development Corporation as well as a former
	member of the Australian Government’s Joint Economic Forecasting Group. In
	2006-07, he was a member of the Prime Ministerial Task Group on Emissions
	Trading.
	Russell is Chairman of the Health Safety and Environment Committee and a
	member of the Audit and Risk Management Committee and the Remuneration
	Committee.

APT Investment Trust and its Controlled Entities Directors’ Report

Muri Muhammad	Muri Muhammad retired from Petronas in August 2002 and was reappointed as
MSc	Petronas’ Adviser, Gas Business in the President’s Office until 30 March 2005.
*Director*	He brings 30 years experience in the chemicals and petroleum industry as well as expertise in the domestic and international gas transmission and distribution,
Appointed 8 March 2000	gas utilisation, cogeneration and conversion businesses where he has held
	various senior executive positions.
	Muri was Petronas’ Vice President for Gas Business from 1998 until his
	retirement and held several directorships, some as Chairman, of a number of
	Petronas’ subsidiaries and associate companies in Malaysia and abroad. He
	currently sits on the boards of gas transmission companies Transportadora de
	Gas Del Norte of Argentina, Petronas Gas Berhad of Malaysia, and Papua New
	Guinea’s national petroleum and minerals corporation, Petromin PNG Holdings
	Limited. He is also a member of the Malaysian Energy Commission, a Malaysian
	Government regulatory body.
	Muri is a member of the Remuneration Committee and the Health Safety and
	Environment Committee.
Manharlal Ratilal	Manharlal (George) Ratilal is Vice President (Finance) of Petronas. He is a
MBA	member of Petronas’ Management Committee and sits on the boards of several
*Director*	Petronas subsidiaries. Prior to joining Petronas in 2003, he was employed by a local Malaysian merchant bank for 18 years. During that time, George
Appointed 31 July 2007	specialised in corporate finance where he advised on mergers and acquisitions,
	and the capital markets.
	George holds an MBA from the University of Aston in Birmingham, United
	Kingdom.
Robert J Wright	Robert Wright has over 30 years financial management experience, having held
BComm FCPA	a number of Chief Financial Officer positions, including Finance Director of David
*Independent Director*	Jones Limited. He is currently the Chairman of Dexion Limited, SAI Global Limited and Babcock & Brown Residential Land Partners Group and a director of
Appointed 11 February	Super Cheap Auto Group Limited.
2000	Robert is the Chairman of the Audit and Risk Management Committee and a
	member of the Health Safety and Environment Committee.
Michael J McCormack	Michael (Mick) McCormack has been Chief Executive Officer of APA since 1 July
BSurv GradDipEng	2005 and Managing Director since 1 July 2006. Mick has had a long career,
MBA FAICD	including extensive senior management experience, in the energy transmission
*Managing Director*	sector in Australia, with particular focus on gas transmission pipelines, where he has worked on the development of new and existing pipelines across Australia.
Appointed Managing Director 1 July 2006	Mick is Chairman of NT Gas Pty Ltd and a director of Envestra Limited, the Australian Pipeline Industry Association and the Australian Brandenburg
	Orchestra.
Mark T Knapman	Mark Knapman was appointed Company Secretary on 16 July 2008.
BComm LLB FCIS	In addition to being responsible for the secretariat function, he oversees
*Company Secretary*	corporate governance and the risk management, internal audit and compliance
Appointed 16 July 2008	functions.
	Mark has extensive experience as a Company Secretary for both listed public
	and proprietary companies. He was Company Secretary and General Counsel
	of ASX-listed Keycorp Limited prior to joining APA and, before moving into that
	and other corporate roles, was a partner of Australian law firm Hunt & Hunt.
	Mark holds degrees in law and commerce and a Graduate Diploma in Applied
	Corporate Governance. He is a Fellow of the Chartered Institute of Company
	Secretaries and is admitted to practice as a solicitor.

APT Investment Trust and its Controlled Entities Directors’ Report

Directorships of other listed companies

Directorships of other listed companies held by directors at any time in the three years immediately before the end of the year are as follows:

Name	Company	Period of directorship
L F Bleasel AM	QBE Insurance GroupLimited	Since January2001
J A Fletcher	Babcock & Brown Power	Since October 2006
R A Higgins AO	Ricegrowers Limited	Since December 2005
	Australian Biodiesel Group Limited	May 2006 to November 2007
M Muhammad	-	-
M Ratilal	-	-
R J Wright	Dexion Limited	Since March 2005
	SAI Global Limited	Since October 2003
	Super Cheap Auto Group Limited	Since May 2004
	Babcock & Brown Residential Land	Since May 2006
	Partners Group
	APA Ethane Limited(1)	Since 10 July 2008
M J McCormack	Envestra Limited	Since July 2007

(1) APA Ethane Limited is the responsible entity of the registered investment schemes that comprise Ethane Pipeline Income Fund, the securities in which are quoted on the ASX.

Options granted

No options over unissued APA securities were granted during or since the end of the year.

No unissued APA securities were under option as at the date of this report.

No APA securities were issued during or since the end of the year as a result of the exercise of an option over unissued APA securities.

Responsible Entity’s holdings of securities

No securities in the Trust are held by the Responsible Entity.

Indemnification of officers and external auditor

APT Investment Trust and its Controlled Entities Directors’ Report

Directors’ meetings

Directors	Board	Board	REM(1)	REM(1)	ARMC(2)	ARMC(2)	HSE(3)	HSE(3)
	A	B	A	B	A	B	A	B
L F Bleasel AM(4) J A Fletcher R A Higgins AO M Muhammad M Ratilal R J Wright M J McCormack W S Saidi(5) W Z W Ariffin(6)	17 17 17 17 17 17 17 - -	17 17 17 15 12 17 17 1 -	- 4 4 4 - - - - -	- 4 4 4 - - - - -	- 5 5 - - 5 - - -	- 5 5 - - 5 - - -	- - 3 3 - 3 - - -	- - 3 3 - 2 - - -

A: Number of meetings held during the time the director held office or was a member of the committee during the year.

B: Number of meetings attended.

(1) Remuneration Committee.

(2) Audit and Risk Management Committee.

(3) Health Safety and Environment Committee.

(4) The Chairman is entitled to attend all committee meetings.

(5) W S Saidi as alternate director for M Muhammad. Retired as of 14 August 2009.

(6) W Z W Ariffin as alternate director for M Ratilal. Retired as of 19 August 2009.

Directors’ securityholdings

The aggregate number of APA securities held directly, indirectly or beneficially by directors or their director related entities at the 30 June 2009 is 614,172 (2008: 530,314).

The following table sets out directors’ relevant interests in APA securities as at 30 June 2009:

Directors	Fully paid securities as at 30 June 2008	Securities acquired during the year	Securities disposed of during the year	Fully paid securities as at 30 June 2009
L F Bleasel AM J A Fletcher R A Higgins AO M Muhammad M Ratilal R J Wright M J McCormack	311,589 35,477 36,581 26,804 - 19,858 100,005	23,564 9,440 15,440 16,014 - 4,405 14,995	- - - - - - -	335,153 44,917 52,021 42,818 - 24,263 115,000
	530,314	83,858	-	614,172

The Company Secretary holds 3,000 APA securities.

APT Investment Trust and its Controlled Entities Directors’ Report

Remuneration report

This report outlines the remuneration arrangements in place for directors of the Responsible Entity and executives of APA.

Section 1: Remuneration Committee

Governance and the oversight of executive remuneration are key focus areas for the Remuneration Committee.

The purpose of the Committee is to:

ensure the provision of a robust remuneration and reward system that provides for alignment of employee and securityholder interests;
facilitate effective attraction, retention and development of talented employees; and
ensure compliance with relevant legislation and corporate governance principles on remuneration practices and employment policies.

The Managing Director attends meetings of the Committee by invitation.

The Committee can seek external professional advice on any matter within its terms of reference.

Section 2: Remuneration of directors

We seek to attract and retain a high calibre of directors, who are equipped with diverse skills to oversee all functions of the company in an increasingly complex environment.

The directors of the Responsible Entity during the financial year were:

Leonard Bleasel AM Chairman

John Fletcher

Russell Higgins AO

Muri Muhammad

Manharlal Ratilal

Robert Wright

Michael McCormack Managing Director

Non-executive director remuneration comprises a base board fee, an additional fee for serving on a committee of the board and superannuation guarantee contributions, as follows:

Fees(1)	Chairman $000	Member $000
Board fees	245	90
Remuneration Committee fees	16	8
Audit and Risk Management Committee fees	27	12

APT Investment Trust and its Controlled Entities Directors’ Report

Health, Safety and Environment Committee fees 20 10

(1) Excludes Superannuation Guarantee Levy.

FY 2009 remuneration of directors

The table below sets out the remuneration of the directors for the financial year:

Directors	ShortTerm EmploymentBenefits	ShortTerm EmploymentBenefits	ShortTerm EmploymentBenefits	ShortTerm EmploymentBenefits	Post- employ- ment	Share- based payment (1) $	Other (2) $	Total $
	Salary/ fees $	Due Diligence C’ttee fees $	Short- term incentive scheme $	Non- monetary $	Super- annuation $
2009 Non-Executive Directors L F Bleasel AM (3) J A Fletcher R A Higgins AO M Muhammad W Ratilal R J Wright W S Saidi W Z W Ariffin Executive Director M J McCormack	236,477 49,000 101,200 108,000 89,167 128,200 - - 711,928	- - - - - - - - -	- - - - - - - - 523,125	- - - - - - - - 13,072	54,108 79,620 41,808 - - 11,538 - - 50,000	- - - - - - - - 285,663	- - - - - - - - 216,667	290,585 128,620 143,008 108,000 89,167 139,738 - - 1,800,455
Total	1,423,972	-	523,125	13,072	237,074	285,663	216,667	2,699,573
2008 Non-Executive Directors L F Bleasel AM J A Fletcher R A Higgins AO M Muhammad W Ratilal R J Wright W S Saidi W Z W Ariffin G H Bennett R M Gersbach Executive Director M J McCormack	125,315 20,724 106,678 97,000 78,333 108,817 - - 55,394 52,500 659,205	- - 5,200 - - 5,200 - - 2,600 5,200 -	- - - - - - - - - - 430,000	- - 2,753 - - - - - - - 40,795	10,605 20,014 11,219 - - 11,158 - - 4,754 4,725 50,000	- - - - - - - - - - 151,894	- - - - - - - - 98,100 - 216,667	135,920 40,738 125,850 97,000 78,333 125,175 - - 160,848 62,425 1,548,561
Total	1,303,966	18,200	430,000	43,548	112,475	151,894	314,767	2,374,850

(1) Cash settled security-based payments.

(2) Includes retention payment and director’s retirement benefit.

(3) Includes prior year remuneration adjustment of $48,727.

Non-executive directors do not receive incentive payments of any type.

APT Investment Trust and its Controlled Entities Directors’ Report

Section 3: Remuneration of key management personnel

The purpose of our remuneration strategy is to create long-term value for our shareholders and energise our executives to reach these goals.

Key management personnel during and since the end of the financial year were:

Ross Gersbach Group Manager Commercial Acting Chief Financial Officer from 1 January 2009 to 31 May 2009 Peter Fredricson Chief Financial Officer from 1 June 2009 Stephen Ohl Group Manager Operations Mark Knapman Company Secretary from 16 July 2008 Robyn Smith Group Manager Human Resources and HS&E Richard Francis Chief Financial Officer to 31 December 2008.

The board recognises that APA operates in a highly competitive national environment, and has policies and processes which:

enable APA to attract and retain key executives who will create long-term sustainable value for securityholders;
properly motivate and reward executives having regard to the overall performance of APA, the performance of the executive measured against pre-determined objectives and the external compensation environment;
appropriately align the interests of executives with those of securityholders; and
comply with applicable legal requirements and appropriate standards of governance.

All key management personnel receive a combination of fixed and variable (at-risk) remuneration, as described in the table below:

All key management personnel receive described in the table below:	a combination of fixed and variable (at-risk) remuneration, as	a combination of fixed and variable (at-risk) remuneration, as
Total Remuneration Opportunity (“TRO”)	TRO = TFR + STI + LTI
Total Fixed Remuneration (“TFR”)	The total of base salary (which includes cash, vehicles and parking) and other incidental benefits. TFR is determined by reference to appropriate remuneration benchmarking information, taking into account an individual’s responsibilities, performance, qualifications and experience.
Short-Term Incentive (“STI”)	Cash-based incentive based on a mix of financial and non-financial measures.	Maximum payable is 100% of STI target.
Long-Term Incentive (“LTI”)	Cash-settled incentive based on achievement of key financial measures.	Maximum payable is 120% of LTI target.

% of Total Remuneration Opportunity
Total Fixed “At risk” – performance-based

APT Investment Trust and its Controlled Entities Directors’ Report

	Remuneration	STI(1)	LTI(1)
Managing Director/CEO	40%	30%	30%
Other key management personnel	50%	25%	25%

(1) These amounts are based on 100% target performance levels being achieved.

The following sections provide further detail on the STI and LTI plans:

Short-term incentive plan

Our STI plan focuses our senior executives on the achievement of specific business objectives and rewards them for strong performance against these goals.

Key details of the STI plan

FY 2009 STI outcomes are shown in the table below for all key management personnel:

Executive	STI awarded (%)	STI forfeited (%)
M J McCormack	90%	10%
R M Gersbach	90%	10%
S P Ohl	92%	8%
M T Knapman	92%	8%
R A Smith	89%	11%

Long-term incentive plan

We believe that an LTI plan best aligns the long-term interests of employees with those of securityholders.

APT Investment Trust and its Controlled Entities Directors’ Report

On the basis that APA met its financial targets for the financial year, an LTI allocation was made to key management personnel. These allocations are set out on page 11.

Key details of the LTI plan

As the LTI is a cash-settled plan and does not allocate APA securities to participants at any stage, participants are not entitled to vote or participate in distributions.

No option or other equity instruments are issued to APA employees or directors.

Remuneration of key management personnel

The following table discloses the remuneration of other key management personnel of the Consolidated Entity for the financial year:

Key management personnel	Short term employment benefits	Short term employment benefits	Short term employment benefits	Post- employment	LTI scheme (1) $	Termination payments $	Total $
	Salary/ fees $	STI scheme $	Non- monetary $	Super- annuation $
2009 R M Gersbach (2) P J Fredricson (3) S P Ohl M T Knapman (4) R A Smith R F Francis (5)	524,333 38,226 336,523 294,950 245,480 180,293	320,000 - 184,000 119,600 115,700 200,000	11,922 - 28,732 - 775 5,961	13,745 3,440 34,745 33,964 13,745 6,874	105,857 - 92,095 37,504 49,438 83,557	- - - - - 487,237	975,857 41,666 676,095 486,018 425,138 963,922
Total	1,619,805	939,300	47,390	106,513	368,451	487,237	3,568,696
2008 R M Gersbach S P Ohl S M Dureau (6) R A Smith (7) R F Francis A J V James (8) P D Fox (9)	227,683 300,559 274,948 179,699 334,948 214,526 206,618	108,000 167,000 135,000 85,000 167,000 157,500 150,000	4,968 36,311 11,922 - 11,922 11,177 13,376	6,734 13,130 13,130 9,847 13,130 29,272 13,130	28,250 45,075 39,291 12,625 48,438 41,986 36,550	- - - - - 743,900 318,999	375,635 562,075 474,291 287,171 575,438 1,198,361 738,673
Total	1,738,981	969,500	89,676	98,373	252,215	1,062,899	4,211,644

(1) Cash settled security-based payments.

(2) Includes one-off ex-gratia component for undertaking Chief Financial Officer position from 1 January 2009 to 31 May 2009.

APT Investment Trust and its Controlled Entities Directors’ Report

(3) Chief Financial Officer from 1 June 2009.

(4) Company Secretary from 16 July 2008.
(5) Chief Financial Officer to 31 December 2008.
(6) General Counsel and General Manager Regulatory, ceased as key management personnel.
(7) General Manager Human Resources & HSE from 2 October 2007.
(8) Company Secretary to 29 April 2008.
(9) General Manager Corporate Development to 30 June 2008.

Section 4: Contractual terms of key management personnel

The terms of the contractual arrangements for each of the key management personnel are set out below:

below:
Name and title and commencement date	Term and termination provisions/benefits
M J McCormack Managing Director since 1 July 2006 Chief Executive Officer 1 July 2005 to 30 June 2006 Commenced 1 March 2000	No defined term. On termination with cause or following certain long-term illness, the Company will pay any TFR due and owing at the date of termination and any accrued leave entitlements. On termination without cause, the Company will pay 52 weeks TFR, any incentives earned but not paid on their due date and any accrued leave entitlement. The Company will also pay any TFR due and owing at the date of termination. Following, a review of his entitlements, the board approved in August 2006, a retention award of $650,000 if Mr McCormack continued to be employed in a full time capacity by the Company or another member of the APA Group of entities at 1 August 2009. This award was paid in August 2009.
R M Gersbach Group Manager Commercial Commenced 1 February 2008	No defined term. On termination with cause or following certain long-term illness, the Company will pay any TFR due and owing at the date of termination and any accrued leave entitlements. On termination without cause, the Company will pay 26 weeks TFR, any incentives earned but not paid on their due date and any accrued leave entitlement. The Company will also pay any TFR due and owing at the date of termination. If Mr Gersbach gives notice to terminate his employment, the Company may (after consulting with the board) at its discretion agree to make a termination payment of an amount up to 26 weeks TFR.
P J Fredricson Chief Financial Officer Commenced 1 June 2009	No defined term. On termination with cause or following certain long-term illness, the Company will pay any TFR due and owing at the date of termination and any accrued leave entitlements. On termination without cause, the Company will pay 26 weeks TFR, any incentives earned but not paid on their due date and any accrued leave entitlement. The Company will also pay any TFR due and owing at the date of termination.

APT Investment Trust and its Controlled Entities Directors’ Report

APT	Investment Trust and its Controlled Entities Directors’ Report
Name and title and commencement date	Term and termination provisions/benefits
S P Ohl Group Manager Operations Commenced 2 May 2005	No defined term. On termination with cause or following certain long-term illness, the Company will pay any TFR due and owing at the date of termination and any accrued leave entitlements. On termination without cause, the Company will pay 26 weeks TFR, any incentives earned but not paid on their due date and any accrued leave entitlement. The Company will also pay any TFR due and owing at the date of termination. If Mr Ohl gives notice to terminate his employment, the Company may (after consulting with the board) at its discretion agree to make a termination payment of an amount up to 26 weeks TFR.
M T Knapman Company Secretary Commenced 16 July 2008	No defined term. On termination with cause or following certain long-term illness, the Company will pay any TFR due and owing at the date of termination and any accrued leave entitlements. On termination without cause, the Company will pay 26 weeks TFR, any incentives earned but not paid on their due date and any accrued leave entitlement. The Company will also pay any TFR due and owing at the date of termination.
R A Smith General Manager Human Resources & HSE Commenced 2 October 2007	No defined term. On termination with cause or following certain long-term illness, the Company will pay any TFR due and owing at the date of termination and any accrued leave entitlements. On termination without cause, the Company will pay 26 weeks TFR, any incentives earned but not paid on their due date and any accrued leave entitlement. The Company will also pay any TFR due and owing at the date of termination. If Ms Smith gives notice to terminate her employment, the Company may (after consulting with the board) at its discretion agree to make a termination payment of an amount up to 26 weeks TFR.

Information required for registered schemes

Except as disclosed in this report, neither the Responsible Entity nor any of its associates holds any

APA securities.

The number of APA securities issued during the year, and the number of APA securities at the end of the year, are disclosed in Note 10 to the financial statements.

The value of APA’s assets as at the end of the year is disclosed in the balance sheet in total assets, and the basis of valuation is included in Note 2 to the financial statements.

APT Investment Trust and its Controlled Entities Directors’ Report

Auditor’s independence declaration

A copy of the Auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is included on page 50.

Rounding off of amounts

APA Group is an entity of the kind referred to in ASIC Class Order 98/0100 dated 10 July 1998, and in accordance with that Class Order, amounts in the Directors’ report and the financial report are rounded off to the nearest thousand dollars, unless otherwise indicated.

Signed in accordance with a resolution of the Directors of the Responsible Entity made pursuant to section 298(2) of the Corporations Act 2001.

On behalf of the Directors

==> picture [186 x 51] intentionally omitted <==

==> picture [172 x 64] intentionally omitted <==

L F Bleasel AM Chairman

R J Wright Director

SYDNEY, 25 August 2009

APT Investment Trust Income statement

For the financial year ended 30 June 2009

			Consolidated		Trust
		2009	2008	2009	2008
	Note	$000	$000	$000	$000
Continuing operations
Revenue	4	34,081	29,112	34,081	29,112
Expenses	4	(17)	(14)	(17)	(14)
Profit before tax		34,064	29,098	34,064	29,098
Income tax expense		-	-	-	-
Profit for the year		34,064	29,098	34,064	29,098
Attributable to:
Equityholders of theparent		34,064	29,098	34,064	29,098
		34,064	29,098	34,064	29,098
Earnings per security
Basic and diluted earningsper security (cents)	12	7.0	6.5

The above income statement should be read in conjunction with the accompanying notes.

APT Investment Trust Balance sheet As at 30 June 2009

		Consolidated	Consolidated		Trust
		2009	2008	2009	2008
	Note	$000	$000	$000	$000
Current assets
Receivables	6	633	705	633	705
Non-current assets
Receivables	7	13,528	14,030	13,528	14,030
Other financial assets	8	353,664	349,761	353,664	349,761
Total non-current assets		367,192	363,791	367,192	363,791
Total assets		367,825	364,496	367,825	364,496
Current liabilities
Trade and otherpayables	9	11	10	11	10
Total liabilities		11	10	11	10
Net assets		367,814	364,486	367,814	364,486
Equity
Issued capital	10	358,450	357,556	358,450	357,556
Reserves	11	(1,446)	(50)	(1,446)	(50)
Retained earnings		10,810	6,980	10,810	6,980
Total equity		367,814	364,486	367,814	364,486

The above balance sheet should be read in conjunction with the accompanying notes.

APT Investment Trust Statement of changes in equity For the financial year ended 30 June 2009

			Consolidated	and Trust
		Issued		Retained
		capital	Reserves	earnings	Total
	Note	$000	$000	$000	$000
2009
Balance at 1 July 2008		357,556	(50)	6,980	364,486
Profit for the year		-	-	34,064	34,064
Issue of capital	10	28,151	-	-	28,151
Valuation loss recognised	11	-	(1,396)	-	(1,396)
Distributions	5	(27,257)	-	(30,234)	(57,491)
Balance at 30 June 2009		358,450	(1,446)	10,810	367,814
Balance at 1 July 2007		298,251	-	-	298,251
Profit for the year		-	-	29,098	29,098
Issue of capital	10	80,314	-	-	80,314
Valuation loss recognised	11	-	(50)	-	(50)
Distributions	5	(21,009)	-	(22,118)	(43,127)
Balance at 30 June 2008		357,556	(50)	6,980	364,486

The above statement of changes in equity should be read in conjunction with the accompanying notes.

APT Investment Trust Cash flow statement For the financial year ended 30 June 2009

	Consolidated	Consolidated		Trust
	2009	2008	2009	2008
	$000	$000	$000	$000
Cash flows from operating activities
Trust distribution - related party	24,361	17,801	-	-
Trust distribution - subsidiary	-	-	24,361	17,801
Capital distribution received - related party	15,486	15,509	-	-
Capital distribution received - subsidiary	-	-	15,486	15,509
Capital distribution received - external	9,938	10,630	9,938	10,630
Dividends received	157	-	157	-
Interest received - related parties	9,064	10,550	9,064	10,550
Finance lease receivable repayments	1,167	1,167	1,167	1,167
Receipts from customers	92	-	92	-
Payments to suppliers	(16)	(4)	(16)	(4)
Interestpaid	(292)	(4)	(292)	(4)
Net cashprovided by operating activities	59,956	55,649	59,956	55,649
Cash flows from investing activities
Acquisition of finance lease receivable	-	(14,965)	-	(14,965)
Payments for available-for-sale investments	(1,338)	(22,937)	(1,338)	(22,937)
Payment for financial asset	(34,415)	-	(34,415)	-
Acquisition of subsidiary, net of cash acquired	-	271	-	271
Repayment received/(advances to)relatedparties	5,137	(55,205)	5,137	(55,205)
Net cash used in investing activities	(30,616)	(92,836)	(30,616)	(92,836)
Cash flows from financing activities
Proceeds from issue of securities	28,151	80,314	28,151	80,314
Distributions to securityholders	(57,491)	(43,127)	(57,491)	(43,127)
Net cash(used in)/provided by financing activities	(29,340)	37,187	(29,340)	37,187
Net increase in cash and cash equivalents	-	-	-	-
Cash and cash equivalents at beginningof financialyear	-	-	-	-
Cash and cash equivalents at end of financial year	-	-	-	-

The above cash flow statement should be read in conjunction with the accompanying notes.

APT Investment Trust Notes to the financial statements For the financial year ended 30 June 2009

1. General information

APT Investment Trust ("APTIT" or "Trust") is one of the two stapled entities of APA Group ("APA"), the other stapled entity being Australian Pipeline Trust ("APT"), listed on the Australian Securities Exchange (trading under the symbol 'APA'), registered in Australia and operating in Australia.

APTIT's registered office and its principal place of business are as follows:

Registered office and principal place of business

Level 19 HSBC Building 580 George Street SYDNEY NSW 2000 Tel: (02) 9693 0000.

APTIT operates as an investment and financing entity within the APA stapled group.

2. Significant accounting policies

Statement of compliance

The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and complies with other requirements of the law. The financial report includes the separate financial statements of the Trust and the consolidated financial statements of the Consolidated Entity. Accounting Standards include Australian equivalents to International Financial Reporting Standards ("A-IFRS"). Compliance with A-IFRS ensures that the financial statements and notes of the Trust and the Consolidated Entity comply with International Financial Reporting Standards ("IFRS").

The financial statements were authorised for issue by the directors on 25 August 2009.

Basis of preparation

The financial report has been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars ($000) unless otherwise stated under the option available to APTIT under ASIC Class Order 98/100. APTIT is an entity to which the class order applies.

Critical accounting judgements and key sources of estimation uncertainty

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

2. Significant accounting policies (continued)

Adoption of new and revised Accounting Standards

The following significant accounting policies have been adopted in the preparation and presentation of the financial report:

(a) Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Trust and entities controlled by the Trust (its subsidiaries) (referred to as the Consolidated Entity in these financial statements). Control is achieved where the Trust has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The results of subsidiaries acquired during the financial year are included in the consolidated income statement from the effective date of acquisition. Where necessary, adjustments are made to financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Consolidated Entity. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. In the separate financial statements of the Trust, the intra-group transactions ("common control transactions") are generally accounted for by reference to the existing (consolidated) book value of the items. Where the transaction value of common control transactions differs from their consolidated book value, the difference is recognised as a contribution by or distribution to equity participants by the transaction entities.

Minority interests in the net assets (excluding goodwill) of consolidated subsidiaries are identified separately from the Consolidated Entity's equity therein. Minority interests consist of the amount of those interests at the date of the original business combination and the minority's share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority's interest in the subsidiary's equity are allocated against the interests of the Consolidated Entity except to the extent that the minority has a binding obligation and is able to make an additional investment to cover the losses.

(b) Cash and cash equivalents

(c) Trade and other payables

(d) Acquisition of assets

Assets acquired are recorded at the cost of acquisition, being the purchase consideration determined as at the date of acquisition plus costs incidental to the acquisition.

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

2. Significant accounting policies (continued)

(e) Business combinations

Acquisitions of subsidiaries and businesses are accounted for using the purchase method. The cost of the business combination is measured as the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Consolidated Entity in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under AASB 3 'Business Combinations' are recognised at their fair values at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with AASB 5 'Non-current Assets Held for Sale and Discontinued Operations', which are recognised and measured at fair value less costs to sell.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Consolidated Entity's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Consolidated Entity's interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in profit or loss.

The interest of minority equityholders in the acquiree is initially measured at the minority's proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

(f) Financial instruments issued by the Consolidated Entity

Debt and equity instruments

Transaction costs arising on the issue of equity instruments

Interest and distributions

(g) Goods and services tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except:

where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or
for receivables and payables which are recognised inclusive of GST, except for accrued revenue and accrued expenses at balance dates which exclude GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.

GST receivable or GST payable is only recognised once a tax invoice has been issued or received.

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

2. Significant accounting policies (continued)

(h) Impairment of assets

Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell, and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting period.

(i) Income tax

Income tax expense is not brought to account in respect of APTIT, as pursuant to the Australian taxation laws APTIT is not liable for income tax provided that its realised taxable income (including any assessable realised capital gains) is fully distributed to its securityholders each year.

(j) Financial assets and liabilities

Investments in subsidiaries are measured at cost. Other financial assets are classified into the following specified categories: financial assets 'held-to-maturity investments', 'available-for-sale' financial assets, and 'loans and receivables'. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or where appropriate, a shorter period.

Fair value through profit or loss

Financial assets at fair value through profit or loss are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain of loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset.

Available-for-sale financial assets

Financial assets classified as being available-for-sale are stated at fair value. Gains and losses arising from changes in fair value are recognised directly in the available-for-sale investment revaluation reserve.

Receivables and loans

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that as a result of one or more events that occurred after initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted.

(k) Revenue recognition

Interest revenue

Interest is recognised by applying the effective interest method, agreed between the parties at the end of each month and is determined by reference to market rates.

Distribution revenue

Distribution revenue is recognised when the right to receive a distribution has been established.

Dividend revenue

Dividend revenue is recognised when the right to receive a dividend has been established.

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

2. Significant accounting policies (continued)

(k) Revenue recognition (continued)

Finance lease income

Finance lease income is recognised when receivable.

Interest revenue - Envestra Limited ("Envestra") loan notes

Loan note interest revenue is recognised when the right to receive a distribution has been established.

(l) Leased assets

Consolidated Entity as lessor

Amounts due from a lessee under a finance lease are recorded as receivables. Finance lease receivables are initially recognised at the amount equal to the present value of the minimum lease payments receivable plus the present value of an unguaranteed residual value expected to accrue at the end of the lease term. Finance lease receipts are allocated between interest revenue and reduction of the lease receivable over the term of the lease in order to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.

(m) Standards and Interpretations issued not yet effective

At the date of authorisation of the financial report, the Standards and Interpretations listed below were in issue but not yet effective.

		Effective for annual	Expected to be
		reporting periods	initially applied in the
	Standard	beginning on or after	financial year ending
●	AASB 101 'Presentation of Financial Statements' -
	revised standard (revised September 2007), AASB
	2007-8 ‘Amendments to Australian Accounting Standards arising from AASB 101’, AASB 2007-10	1 January 2009	30 June 2010
	‘Further Amendments to Australian Accounting
	Standards arising from AASB 101’
●AASB 8 'Operating Segments		1 January 2009	30 June 2010
●AASB 2009-2 'Amendments to Australian Accounting
	Standards - Improving Disclosures about Financial
	Instruments'	1 January 2009	30 June 2010

		Effective for annual	Expected to be
		reporting periods	initially applied in the
	Standard/Interpretation	beginning on or after	financial year ending
●	AASB 123 'Borrowing Costs' (revised), AASB 2007-6
	‘Amendments to Australian Accounting Standards	1 January 2009	30 June 2010
	arising from AASB 123’
●	AASB 127 'Separate and Consolidated Financial Statements' (revised)	1 January 2009	30 June 2010
●	AASB 2008-1 ‘Amendments to Australian Accounting
	Standard - Share-based Payments: Vesting	1 January 2009	30 June 2010
	Conditions and Cancellations’

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

2. Significant accounting policies (continued)

(m) Standards and interpretations issued not yet effective (continued)

		Effective for annual	Expected to be
		reporting periods	initially applied in the
	Standard/Interpretation	beginning on or after	financial year ending
●	AASB 2008-2 ‘Amendments to Australian Accounting
	Standards - Puttable Financial Instruments and	1 January 2009	30 June 2010
	Obligations arising on Liquidation’
●	AASB 2008-5 ‘Amendments to Australian Accounting
	Standards arising from the Annual Improvements	1 January 2009	30 June 2010
	Project’
●	AASB 2008-6 ‘Further Amendments to Australian
	Accounting Standards arising from the Annual	1 July 2009	30 June 2010
	Improvements Project’
●	AASB 2008-7 ‘Amendments to Australian Accounting
	Standards – Cost of an Investment in a Subsidiary,	1 January 2009	30 June 2010
	Jointly Controlled Entity or Associate'
●	AASB 2008-8 ‘Amendments to Australian Accounting Standards – Eligible Hedged Items’	1 July 2009	30 June 2010
●	AASB Interpretation 17 ‘Distributions of Non-cash
	Assets to Owners’, AASB 2008-13 ‘Amendments to
	Australian Accounting Standards arising from AASB	1 July 2009	30 June 2010
	Interpretation 17 – Distributions of Non-cash Assets
	to Owners’

		Effective for annual	Expected to be
		reporting periods	initially applied in the
	Standard/Interpretation	beginning on or after	financial year ending
●Improvements to IFRSs (2008)		1 July 2009	30 June 2010
●	AASB Interpretation 18 ‘Transfers of Assets from
	Customers’	1 July 2009	30 June 2010

AASB 3 ‘Business Combinations’ (revised), AASB 127 ‘Consolidated and Separate Financial Statements’ (revised) and AASB 2008-3 ‘Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127’

Effective for annual periods beginning on or after 1 July 2009.

(n) Segment information

APTIT operates in one geographical segment being Australia and one business segment.

APTIT is an investing and financing entity within the APA stapled group. As the Trust only operates in one segment, it has not disclosed segment information separately.

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

3. Critical accounting judgements and key sources of estimation uncertainty

Critical judgements in applying the entity's accounting policies

The following are the critical judgements (apart from those involving estimations, which are dealt with below) that management has made in the process of applying the Consolidated Entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements:

Accounting for acquisitions

Key sources of estimation uncertainty

Impairment of assets

Determining whether property, plant and equipment, identifiable intangible assets and goodwill is impaired requires an estimation of the value-in-use or fair value of the cash-generating units. The calculations require the Consolidated Entity to estimate the future cash flows expected to arise from cash-generating units and suitable discount rates in order to calculate the present value of cash-generating units.

Estimates and assumptions used are reviewed on an ongoing basis.

Useful lives of non-current assets

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

4. Profit from operations

Profit before income tax includes the following items of income and expense:

	Consolidated	Consolidated		Trust
	2009	2008	2009	2008
	$000	$000	$000	$000
Revenue
Distributions
Trust distribution - related party	24,361	17,801	-	-
Trust distribution - subsidiary	-	-	24,361	17,801
Other entities	167	50	167	50
	24,528	17,851	24,528	17,851
Finance income
Interest - related parties	6,923	10,550	6,923	10,550
Gain on financial asset held at fair value through profit and loss	1,849	-	1,849	-
Finance lease income - relatedparty	739	711	739	711
	9,511	11,261	9,511	11,261
Other revenue
Other	42	-	42	-
Total revenue	34,081	29,112	34,081	29,112
Expenses
Audit fees	11	11	11	11
Legal fees	6	-	6	-
Finance costs	-	3	-	3
Total expenses	17	14	17	14

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

5. Distributions

	Consolidated	Consolidated		Trust
	2009	2008	2009	2008
	$000	$000	$000	$000
Recognised amounts:
Final distribution paid on 10 September 2008
(2008: 28 September 2007)
Profit distribution(a)	16,014	12,951	16,014	12,951
Capital distribution	12,081	8,634	12,081	8,634
	28,095	21,585	28,095	21,585
Interim distribution paid on 27 March 2009
(2008: 28 March 2008)
Profit distribution (a)	14,220	9,167	14,220	9,167
Capital distribution	15,176	12,375	15,176	12,375
	29,396	21,542	29,396	21,542
Unrecognised amounts:
Final distribution payable on 15 September 2009(b)
(2008: 10 September 2008)
Profit distribution(a)	10,809	16,014	10,809	16,014
Capital distribution	55,293	12,081	55,293	12,081
	66,102	28,095	66,102	28,095

(a) Profit distributions unfranked (2008: unfranked).

(b) Record date 30 June 2009.

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

6. Current receivables

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
Other debtors	131	226	131	226
Finance lease receivable - relatedparty (Note 14)	502	479	502	479
	633	705	633	705

In determining the recoverability of a receivable, the Consolidated Entity considers any change in the credit quality of the receivable from the date the credit was initially granted up to the reporting date. The credit risk relates to two debtors. The directors believe that there is no credit provision required.

None of the above receivables is past due.

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

7. Non-current receivables

		Consolidated	Consolidated		Trust
		2009	2008	2009	2008
		$000	$000	$000	$000
Finance lease receivable - relatedparty (Note	14)	13,528	14,030	13,528	14,030

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

8. Other non-current financial assets

	Consolidated	Consolidated		Trust
	2009	2008	2009	2008
	$000	$000	$000	$000
Receivable from related party	-	41,808	79,453	46,166
Advance to related party	209,677	173,006	88,416	126,841
Investments carried at cost:
Investment in subsidiary	-	-	149,188	164,673
Investment in related party (a)	107,380	122,866	-	-
	317,057	337,680	317,057	337,680
Financial assets carried at fair value:
Redeemable ordinary shares(b)	34,415	-	34,415	-
Available-for-sale investments carried at fair value (c)	2,192	12,081	2,192	12,081
	353,664	349,761	353,664	349,761

(a) The investment in related party reflects GasNet Australia Investments Trust's ("GAIT") investment in 100% of the B Class units in GasNet A Trust. The B Class units give GAIT rights to the income and capital of GasNet A Trust, but hold no voting rights. As such, GAIT neither controls nor has a significant influence over GasNet A Trust. GasNet Australia Trust, a related party wholly owned by APA, owns 100% of the A Class units in GasNet A Trust and, accordingly, GasNet A Trust is included in the consolidation of the APA entities.

(b) Financial assets carried at fair value relate to APA Group's 19.9% investment in Energy Infrastructure Investments Pty Ltd where APL, as Responsible Entity for APTIT, acquired the redeemable ordinary shares.

(c) Available-for-sale investments reflect an investment in loan notes issued by Envestra and a 6% unitholding in Ethane Pipeline Income Fund (formerly Mariner Pipeline Income Fund). During the financial year, APTIT reinvested $114,000 into Envestra's loan notes under its Distribution Reinvestment Plan and $1,781,000 through participation in and partly underwriting Envestra's rights issue During the financial year, Envestra repaid $9,938,000 of the loan notes as part of its final 2008 and interim 2009 distributions. Ethane Pipeline Income Fund paid capital distributions of $381,000 and declared a $97,000 capital distribution as part of its June 2009 quarter distribution.

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

9. Trade and other payables

	Consolidated	Consolidated
	2009	2008	2009	2008
	$000	$000	$000	$000
Otherpayables	11	10	11	10

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

10. Issued capital

	Consolidated	Consolidated		Trust
	2009	2008	2009	2008
	$000	$000	$000	$000
498,663,596 securities, fully paid (2008: 468,241,154 securities,
fully paid)(a)	358,450	357,556	358,450	357,556
		Consolidated and Trust
	2009	2009	2008	2008
	No. of units		No. of units
	000	$000	000	$000
Movements
Balance at beginning of financial year	468,241	357,556	431,701	298,251
Issue of securities under Distribution Reinvestment Plan	18,718	19,458	12,881	16,869
Issue of securities under Security Purchase Plan	11,705	8,864	23,659	63,770
Issue cost of securities	-	(171)	-	(325)
Capital distributionspaid(Note 5)	-	(27,257)	-	(21,009)
Balance at end of financialyear	498,664	358,450	468,241	357,556

Changes to the then Corporations Law abolished the authorised capital and par value concept in relation to issued capital from 1

July 1998. Therefore, the Trust does not have a limited amount of authorised capital and issued securities do not have a par value. (a) Fully paid securities carry one vote per security and carry the right to distributions.

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

11. Reserves

	Consolidated		Trust
	2009	2008	2009	2008
	$000	$000	$000	$000
Available-for-sale investment revaluation reserve
Balance at beginning of financial year	(50)	-	(50)	-
Valuation loss recognised	(1,396)	(50)	(1,396)	(50)
Balance at end of financialyear	(1,446)	(50)	(1,446)	(50)

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

12. Earnings per security

	Consolidated	Consolidated
	2009	2008
Basic and diluted earningsper security (cents)	7.0	6.5
The earnings and weighted average number of ordinary securities used in the
calculation of basic and diluted earnings per security are as follows:
Net profit attributable to securityholders for calculating basic and diluted earnings per security ($000)	34,064	29,098
	No. of securities
	2009	2008
Weighted average number of ordinary securities on issue used in the calculation (000)	485,077	450,262

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

13. Remuneration of external auditor

	Consolidated	Consolidated		Trust
	2009	2008	2009	2008
	$	$	$	$
Amounts received or due and receivable by Deloitte Touche
Tohmatsu for:
Auditingthe financial report	11,025	10,495	11,025	10,495

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

14. Leases

	Consolidated	Consolidated		Trust
	2009	2008	2009	2008
	$000	$000	$000	$000
Finance leases
Leasing arrangements - receivables
Finance lease receivables relate to the lease of a pipeline lateral.
There are no contingent rental payments due.
Finance lease receivables
Not longer than 1 year	1,167	1,167	1,167	1,167
Longer than 1 year and not longer than 5 years	4,669	4,669	4,669	4,669
Longer than 5years	15,175	16,342	15,175	16,342
Minimum future lease payments receivable (a)	21,011	22,178	21,011	22,178
Gross finance lease receivables	21,011	22,178	21,011	22,178
Less: unearned finance lease receivables	(6,981)	(7,669)	(6,981)	(7,669)
Present value of lease receivables	14,030	14,509	14,030	14,509
Included in the financial statements as part of:
Current receivables (Note 6)	502	479	502	479
Non-current receivables(Note 7)	13,528	14,030	13,528	14,030
	14,030	14,509	14,030	14,509

(a) Minimum future lease payments receivable include the aggregate of all lease payments receivable and any guaranteed residual.

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

15. Financial instruments

(a) Financial risk management objectives

APA's Corporate Treasury function provides services to the business, co-ordinates access to domestic and international financial markets, and monitors and manages the financial risks relating to the operations of the Consolidated Entity. These risks include liquidity risk, credit risk and market risk (including currency risk, price risk and interest rate risk).

The Consolidated Entity seeks to minimise the effects of these risks through natural hedges and by using derivative instruments to directly hedge the exposures. The use of financial derivatives is governed by APA Group's policy approved by the board of directors, which provides written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. APTIT does not enter into or trade financial instruments, including derivative financial instruments for speculative purposes.

The Corporate Treasury function reports six monthly to APA Group's Audit and Risk Management Committee, an independent body that monitors risks and policies implemented to mitigate risk exposures.

(b) Liquidity risk management

(c) Credit risk management

(d) Market risk management

The Consolidated Entity's activities exposure is primarily to the financial risk of changes in interest rates. There has been no change to the Consolidated Entity's exposure to market risk or the manner to which it manages and measures the risk from the previous period. The Consolidated Entity is also exposed to price risk from its investments in listed equities. The majority of the shareholdings rest with two companies that were publicly traded in the major financial markets.

(e) Fair values of financial instruments

The fair values of financial assets and financial liabilities are determined as follows:

the fair values of financial assets and financial liabilities with standard terms and conditions and traded on active markets are determined with reference to quoted market prices; and
the fair values of other financial assets and financial liabilities (excluding derivative instruments) are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current markets.

Interest rate sensitivity analysis

The sensitivity analysis below has been determined based on the exposure to interest rates on loans with related parties. A 10% increase or decrease is used and represents management's assessment of the possible change in interest rates. At reporting date, if interest rates had been 10% higher or lower and all other variables were held constant the Consolidated Entity's net profit would decrease by $626,000 or increase by $626,000 (2008: $854,000). This is mainly attributable to the Consolidated Entity's exposure to interest rates on its variable rate inter-entity balances.

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

16. Subsidiaries

		Ownership	interest
	Country of	2009	2008
Name of entity	registration	%	%
Parent entity
APT Investment Trust
Controlled entity
GasNet Australia Investments Trust	Australia	100	100

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

17. Acquisition of assets/businesses

2009			Proportion acquired	Cost of acquisition
Assets acquired	Principal activity	Date of acquisition	%	$000
Envestra loan notes	Financing	10 February 2009	11.5	1,781
Fair value of assets acquired is equal to cost of acquisition.
2008			Proportion acquired	Cost of acquisition
Assets acquired	Principal activity	Date of acquisition	%	$000
Envestra loan notes	Financing	2 July 2007	17.2	17,605
Murrin Murrin Lateral finance lease	Gas transmission	2 July 2007	n/a	14,965
Mariner Pipeline Income Financing Trust	Financing	6 April 2008	6.0	4,265
				36,835

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

18. Key management personnel compensation

(a) Details of key management personnel

The Directors and other members of key management personnel of the APA group of entities during the financial year were:

L F Bleasel AM (Independent Non-Executive Chairman)

J A Fletche r (Independent Non-Executive Director, appointed 27 February 2008)

R A Higgins AO (Independent Non-Executive Director)

M Muhammad (Non-Executive Director)

M Ratila l (Non-Executive Director)

R J Wright (Independent Non-Executive Director)

M J McCormack (Managing Director)

W S Saidi (Alternate Non-Executive Director, retired as of 14 August 2009)

W Z W Ariffin (Alternate Non-Executive Director)

R M Gersbach (Group Manager Commercial, appointed 1 February 2008, Acting Chief Financial Officer, 1 January 2009 to 31 May 2009)

P J Fredricson (Chief Financial Officer, appointed 1 June 2009)

S P Ohl (Group Manager Operations)
M T Knapman (Company Secretary, appointed 16 July 2008)
R A Smith (General Manager Human Resources & HSE)

R F Francis (Chief Financial Officer, resigned as of 31 December 2008).

(b) Key management personnel compensation	Consolidated	and Trust
The aggregate compensation made to key management personnel of	2009	2008
the Trust and the Consolidated Entity is set out below:	$	$
Short-term employment benefits	4,566,664	4,593,870
Post-employment benefits	343,587	308,948
Cash settled share-based payments	654,114	404,109
Retention award	216,667	216,667
Termination payments	487,237	1,062,899
	6,268,269	6,586,493

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

18. Key management personnel compensation (continued)

The compensation of each member of the key management personnel of the Consolidated Entity is set out below.

	Non- Super- Share-based Salary/fees monetary annuation payments(a) Other(b) Total $ $ $ $ $ $ $ $ Post- employment Due Diligence Committee fees Short-term incentive scheme Short-term employment benefits Long-term incentive plans
Non-Executive Directors
L F Bleasel(c) 236,477 - - - 54,108 - - 290,585 125,315 - - - 10,605 - - 135,920 2009 2008
J A Fletcher 49,000 - - - 79,620 - - 128,620 20,724 - - - 20,014 - - 40,738 2009 2008
R A Higgins 101,200 - - - 41,808 - - 143,008 106,678 5,200 - 2,753 11,219 - - 125,850 2009 2008
M Muhammad 108,000 - - - - - - 108,000 97,000 - - - - - - 97,000 2009 2008
M Ratilal 89,167 - - - - - - 89,167 78,333 - - - - - - 78,333 2009 2008
R J Wright 128,200 - - - 11,538 - - 139,738 108,817 5,200 - - 11,158 - - 125,175 2009 2008
W S Saidi(d) - - - - - - - - - - - - - - - - 2008 2009
W Z W Ariffin(e) - - - - - - - - - - - - - - - - 2009 2008
G H Bennett - - - - - - - - 55,394 2,600 - - 4,754 - 98,100 160,848 2009 2008
R M Gersbach - - - - - - - - 52,500 5,200 - - 4,725 - - 62,425 2008 2009

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

18. Key management personnel compensation (continued)

(b) Key management personnel compensation (continued)

	Non- Super- Share-based Salary/fees monetary annuation payments(a) Other (b) Total $ $ $ $ $ $ $ $ Post- employment Short-term employment benefits Due Diligence Committee fees Short-term incentive scheme Long-term incentive plans
Executive Director
M J McCormack 711,928 - 523,125 13,072 50,000 285,663 216,667 1,800,455 659,205 - 430,000 40,795 50,000 151,894 216,667 1,548,561 2009 2008
Total remuneration: Directors
1,423,972 - 523,125 13,072 237,074 285,663 216,667 2,699,573 1,303,966 18,200 430,000 43,548 112,475 151,894 314,767 2,374,850 2009 2008

(a) Cash settled share-based payments.

(b) Includes retention payment and director's retiring allowance.

(d) Retired as of 14 August 2009.

(e) Retired as of 19 August 2009.

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

18. Key management personnel compensation (continued)

(b) Key management personnel compensation (continued)

	Non- Super- Share-based Salary/fees monetary annuation payments(a) Total $ $ $ $ $ $ $ Post- employment Long-term incentiveplans Short-term employment benefits Termination payments Short-term incentive scheme
Executives
R M Gersbach(b) 2009 2008	524,333 320,000 11,922 13,745 105,857 - 975,857 227,683 108,000 4,968 6,734 28,250 - 375,635
P J Fredricson(c) 2008 2009	38,226 - - 3,440 - - 41,666 - - - - - - -
S P Ohl 2009 2008	336,523 184,000 28,732 34,745 92,095 - 676,095 300,559 167,000 36,311 13,130 45,075 - 562,075
M T Knapman(d) 2009 2008	294,950 119,600 - 33,964 37,504 - 486,018 - - - - - - -
S M Dureau(e) 2008 2009	- - - - - - - 274,948 135,000 11,922 13,130 39,291 - 474,291
R A Smith 2009 2008	245,480 115,700 775 13,745 49,438 - 425,138 179,699 85,000 - 9,847 12,625 - 287,171
R F Francis ~~(f)~~ 2009 2008	180,293 200,000 5,961 6,874 83,557 487,237 963,922 334,948 167,000 11,922 13,130 48,438 - 575,438
A J V James(g) 2009 2008	- - - - - - - 214,526 157,500 11,177 29,272 41,986 743,900 1,198,361
P D Fox(h) 2009 2008	- - - - - - - 206,618 150,000 13,376 13,130 36,550 318,999 738,673
Total remuneration: Executives
1,619,805 939,300 47,390 106,513 368,451 487,237 3,568,696 1,738,981 969,500 89,676 98,373 252,215 1,062,899 4,211,644 2009 2008

(a) Cash settled share-based payments.

(b) Includes one-off ex-gratia component for undertaking Chief Financial Officer position from 1 January 2009 to 31 May 2009.

(d) Company Secretary, appointed 16 July 2008.

(e) General Counsel and General Manager Regulatory, ceased as key management personnel 1 July 2008.

(f) Chief Financial Officer, resigned as of 31 December 2008.

(g) Company Secretary, resigned as of 29 April 2008.

(h) General Manager Corporate Development, resigned as of 30 June 2008.

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

19. Related party transactions

(a) Responsible Entity – Australian Pipeline Limited

The Responsible Entity is wholly owned by APT Pipelines Limited (2008: 100% owned by APT Pipelines Limited).

(b) Equity interest in related parties

Details of the percentage of ordinary securities held in subsidiaries are disclosed in Note 16.

(c) Transactions with key management personnel

Details of key management personnel compensation are disclosed in Note 18.

(i) Loans to key management personnel

No loans have been made to key management personnel.

(ii) Key management personnel equity holdings in APTIT

		Securities	Securities
	Fully paid	acquired during	disposed of	Fully paid
	securities	the financial	during the	securities
	opening balance	year	financial year	closing balance
2009
L F Bleasel	311,589	23,564	-	335,153
J A Fletcher	35,477	9,440	-	44,917
R A Higgins	36,581	15,440	-	52,021
M Muhammad	26,804	16,014	-	42,818
M Ratilal	-	-	-	-
R J Wright	19,858	4,405	-	24,263
M J McCormack	100,005	14,995	-	115,000
W S Saidi (retired as of 14 August 2009)	-	-	-	-
W Z W Ariffin (retires as of 19 August 2009)	-	-	-	-
R M Gersbach	18,043	4,189	-	22,232
P J Fredricson (appointed 1 June 2009)	-	-	-	-
S P Ohl	10,000	1,928	-	11,928
M T Knapman (appointed 16 July 2008)	-	3,000	-	3,000
R A Smith	8,000	8,028	-	16,028

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

19. Related party transactions (continued)

(c) Transactions with key management personnel (continued)

(ii) Key management personnel equity holdings in APTIT (continued)

			Securities	Securities
	Fully paid		acquired during	disposed of	Fully paid
	securities		the financial	during the	securities
	opening balance		year	financial year	closing balance
2008
L F Bleasel (appointed 28 August 2007)	154,285	(1)	157,304	-	311,589
J A Fletcher (appointed 27 February 2008)	27,977	(1)	7,500	-	35,477
R A Higgins	17,919		18,662	-	36,581
M Muhammad	15,412		11,392	-	26,804
M Ratilal (appointed 31 July 2007)	-		-	-	-
R J Wright	17,171		2,687	-	19,858
M J McCormack	57,513		42,492	-	100,005
W S Saidi	-		-	-	-
W Z W Ariffin (appointed 31 July 2007)	-		-	-	-
G H Bennett (retired as of 30 October 2007)	25,009		481	-	25,490
R F Francis (resigned as of 31 December 2008)	2,885		3,382	-	6,267
S P Ohl	4,000		6,000	-	10,000
R M Gersbach (appointed 1 February 2008)	5,665		12,378	-	18,043
M T Knapman (appointed 16 July 2008)	-		-	-	-
S M Dureau	6,671		4,689	-	11,360
R A Smith (appointed 2 October 2007)	-		8,000	-	8,000
A J V James (resigned as of 29 April 2008)	5,654		5,626	-	11,280
P D Fox(resigned as of 30 June 2008)	7,154		11,159	-	18,313

(1) These securities were held by the directors at the date of their appointment during the financial year.

(d) Transaction with related parties within the Consolidated Entity

During the financial year, the following transactions occurred between the Trust and its other related parties:

loans advanced and payments received on long-term inter-entity loans;
payments of distributions;
payments of capital distributions (returns of capital); and
equity issues.

All transactions between the entities that comprise the Consolidated Entity have been eliminated on consolidation. Refer to Note 16 for details of the entities that comprise the Consolidated Entity.

(e) Transactions with other related parties

APTIT and its controlled entity have a number of loan receivable balances with other entities in APA. These loans have various terms; however, they can be repayable on agreement of the parties. Interest is recognised by applying the effective interest method, agreed between the parties at the end of each month and is determined by reference to market rates.

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

19. Related party transactions (continued)

(e) Transactions with other related parties (continued)

The following balances arising from transactions between the Trust and its other related parties are outstanding at reporting date:

current receivables totalling $502,130 are owing from a subsidiary of APT for amounts due under a finance lease arrangement (2008: $478,552); and
non-current receivables totalling $13,528,033 are owing from a subsidiary of APT for amounts due under a finance lease arrangement (2008: $14,030,163).

Australian Pipeline Limited

Management fees of $844,345 (2008: $890,615) were paid to the Responsible Entity as reimbursement of costs incurred on behalf of APTIT. No amounts were paid directly by APTIT to the Directors of the Responsible Entity.

Australian Pipeline Trust

Management fees of $844,345 (2008: $890,615) were reimbursed by APT.

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

20. Contingent liabilities and contingent assets

At 30 June 2009, there are no material contingent liabilities or contingent assets (2008: $nil).

APT Investment Trust Notes to the financial statements (continued) For the financial year ended 30 June 2009

21. Subsequent events

On 25 August 2009, the Directors declared a final distribution for the 2009 financial year, of 13.3 cents per security ($66.1 million). The distribution represents a 2.2 cents per security unfranked income distribution and 11.1 cents per security capital distribution. The distribution will be paid on 15 September 2009.

APT Investment Trust Declaration by the Directors of Australian Pipeline Limited For the financial year ended 30 June 2009

The Directors declare that:

(a) in the Directors’ opinion, there are reasonable grounds to believe that APT Investment Trust will be able to pay its debts as and when they become due and payable;
(b) in the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with Accounting Standards, and give a true and fair view of the financial position and performance of APT Investment Trust and the Consolidated Entity; and
(c) the Directors have been given the declarations by the Managing Director and Chief Financial Officer required by section 295A of the Corporations Act 2001.

Signed in accordance with a resolution of the Directors of the Responsible Entity made pursuant to section 295(5) of the Corporations Act 2001.

On behalf of the Directors

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L F Bleasel AM Chairman R J Wright Director

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SYDNEY, 25 August 2009

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Deloitte Touche Tohmatsu A.B.N. 74 490 121 060

Grosvenor Place 225 George Street Sydney NSW 2000 PO Box N250 Grosvenor Place Sydney NSW 1220 Australia

The Directors Australian Pipeline Limited as responsible entity for APT Investment Trust HSBC Building Level 19, 580 George Street Sydney NSW 2000

DX 10307SSE Tel: +61 (0) 2 9322 7000 Fax: +61 (0) 2 9322 7001 www.deloitte.com.au

25 August 2009

Dear Directors

Auditors Independence Declaration to Australian Pipeline Limited as responsible entity for APT Investment Trust

As lead audit partner for the audit of the financial statements of APT Investment Trust for the financial year ended 30 June 2009, I declare that to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.

Yours faithfully

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DELOITTE TOUCHE TOHMATSU

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Samantha Lewis Partner

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Liability limited by a scheme approved under Professional Standards Legislation.

Deloitte Touche Tohmatsu ABN 74 490 121 060 Grosvenor Place 225 George Street Sydney NSW 2000 PO Box N250 Grosvenor Place Sydney NSW 1219 Australia

DX 10307SSE Tel: +61 (0) 2 9322 7000 Fax: +61 (0) 2 9322 7001 www.deloitte.com.au

Independent Auditor’s Report to the Unitholders of APT Investment Trust

We have audited the accompanying financial report of APT Investment Trust, which comprises the balance sheet as at 30 June 2009, and the income statement, cash flow statement and statement of changes in equity for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration of the consolidated entity comprising the Trust and the entities it controlled at the year’s end or from time to time during the financial year as set out on pages 15 to 49.

Directors’ Responsibility for the Financial Report

Auditor’s Responsibility

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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Liability limited by a scheme approved under Professional Standards Legislation.

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Auditor’s Independence Declaration

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Auditor’s Opinion

In our opinion:

(a) the financial report of APT Investment Trust is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Trust’s and consolidated entity’s financial position as at 30 June 2009 and of their performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and
(b) the consolidated financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 2.

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DELOITTE TOUCHE TOHMATSU

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Samantha Lewis Partner Chartered Accountants Sydney, 25 August 2009

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ASX RELEASE

25 August 2009

For further information please contact:

Investor enquiries: Media enquiries: Chris Kotsaris Matthew Horan Investor Relations APA Group Cato Counsel Telephone: (02) 9693 0049 Telephone: (02) 9212 4666 Mob: 0402 060 508 Mob: 0403 934 958 Email: [email protected] Email: [email protected]

About APA Group (APA)

APA Group (ASX: APA) is Australia’s largest natural gas infrastructure business, owning and/or operating more than $8 billion of gas transmission and distribution assets. Its pipelines span every state and territory in mainland Australia, delivering more than 50% of the nation’s gas usage. Unique among its peers, APA has direct management and operational control over its assets and investments. APA also holds minority interests in energy infrastructure enterprises including Envestra, SEA Gas Pipeline and Energy Infrastructure Investments (EII). For more information visit APA’s website www.apa.com.au.

AI assistant

APA GROUP — Annual Report 2009

64398_rns_2009-08-24_e6dbe4be-1974-4797-ba0e-4a33120f847d.pdf

Electronic Lodgement

Company Announcement

Results For Announcement To The Market For the Year Ended 30 June 2009 Appendix 4E

Revenue and Net Profit/(Loss)

Results For Announcement To The Market For the Year Ended 30 June 2009 Appendix 4E

Dividends (Distributions)

Brief Explanation of Revenue, Net Profit/(Loss) and Dividends (Distributions)

Results For Announcement To The Market For the Year Ended 30 June 2009 Appendix 4E

Reporting Period

Distribution Reinvestment Plan

Details of Businesses Over Which Control Has Been Gained or Lost

Net Tangible Assets Per Security

Results For Announcement To The Market For the Year Ended 30 June 2009 Appendix 4E

Compliance Statement

Information on Audit or Review

Directors

Company Secretary

Principal activities

Significant changes in state of affairs

Australian Pipeline Trust and its Controlled Entities Directors’ Report

Distributions

Financial and operational review

Underlying results

Australian Pipeline Trust and its Controlled Entities Directors’ Report

Underlying profit

Revenue

Earnings per security

Operating cash flow

Distributions

Statutory results

Australian Pipeline Trust and its Controlled Entities Directors’ Report

Segment performance

Australian Pipeline Trust and its Controlled Entities Directors’ Report

Gas transmission and distribution

Electricity transmission

Asset management

Complementary assets

Energy investments

Operational highlights

Gas transmission and distribution

Queensland

Australian Pipeline Trust and its Controlled Entities Directors’ Report

New South Wales

Victoria and South Australia

Western Australia

Australian Pipeline Trust and its Controlled Entities Directors’ Report

Northern Territory

Asset management

Energy investments

Envestra

Energy Infrastructure Investments

Electricity transmission

Complementary assets

Business consolidation

Establishment of Energy Infrastructure Investments

Finance and other activities

Capital management

Australian Pipeline Trust and its Controlled Entities Directors’ Report

Borrowings and finance costs

Credit rating

Income tax

Capital expenditure

Securityholder base

Regulatory matters

National Gas Law

National Greenhouse and Energy Reporting Act 2007

The Australian Energy Market Operator and the short-term trading market in gas

Environmental regulations

Subsequent events

Future developments

Information on directors and Company Secretary

Australian Pipeline Trust and its Controlled Entities Directors’ Report

Directorships of other listed companies

Options granted

Indemnification of officers and external auditor

Directors’ meetings

Directors’ securityholdings

APA GROUP Annual Report 2009