Annual and Financial Report 2012-13
Annual and Financial Report 2012-13
Queensland Rail FY2012/13 Annual and Financial Report
Welcome to the Queensland Rail Annual and Financial Report for the financial year
(FY) 2012/13. This report is broken up into four sections beginning with general
company information, followed by a review based on Queensland Rail’s strategic pillars
of Safety, Customer, People, Commercial and Community. The organisation’s
Governance and Statement of Corporate Intent (SCI) is detailed in the third section
moving through to the Financial Report FY2012/13.
This report is also available, along with other useful resources, via the
Queensland Rail website: queenslandrail.com.au.
For further information on Queensland Rail:
Phone: 13 16 17
Mail: GPO Box 1429, Brisbane, Queensland, 4001
Registered Office Queensland Rail, Level 14
Rail Centre 1, 305 Edward Street
Brisbane, Queensland, 4000
Queensland Rail ABN 68 598 268 528
Queensland Rail Limited ABN 71 132 181 090
Queensland Rail FY2012/13 Annual and Financial Report
Copyright
© Queensland Rail Limited 2013.
Disclaimer While all care has been taken in preparing this publication, Queensland Rail accepts no responsibility for decisions or actions taken as a result of any data, information, statement or advice, expressed, implied or contained in this publication. Queensland Rail is committed to minimising our impact on the environment by printing a limited numbers of copies of this report. Electronic versions of this document are available from our website at queenslandrail.com.au. To request a copy of our report, please contact our Manager of External Communications.
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Queensland Rail FY2012/13 Annual and Financial Report
ABN 68 598 268 528 queenslandrail.com.au
Level 14, Rail Centre 1 305 Edward Street Brisbane Qld 4000 The Honourable Scott Emerson MP Minister for Transport and Main Roads Member for Indooroopilly Level 15, Capital Hill Building 85 George Street Brisbane Qld 4000 The Honourable Tim Nicholls MP Treasurer and Minister for Trade Member for Clayfield Level 9, Executive Building 100 George Street Brisbane Qld 4000 Dear Minister/Treasurer
FY2012/13 Annual and Financial Report for Queensland Rail
I am pleased to present the FY2012/13 Annual and Financial Report for Queensland Rail. I certify that this Annual Report complies with: • the prescribed requirements of the Financial Accountability Act 2009 and the Financial and Performance
Management Standard 2009 • the detailed requirements set out in the Annual report requirements for Queensland Government agencies • timing consistent with the extension granted by the responsible Ministers to allow the review of accounting
treatment to be concluded. A checklist outlining the annual reporting requirements can be found at pages 221-223 in the FY2012/13 Annual and Financial Report for Queensland Rail. Yours sincerely
Michael Klug Chairman
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Queensland Rail FY2012/13 Annual and Financial Report
Contents Queensland Rail Annual Report FY2012/13
About Us 6
Financial Summary 8
Summary of Non-Financial Measures 10
Chairman’s Outlook 12
Chief Executive Officer’s (CEO) Report 14
Delivering Value 17
Safety 21
Customer 26
People 32
Commercial 35
Community 40
Governance Structure 46
Board 47
Leadership Team 51
Corporate Governance 54
Summary of the FY2012/13 Statement of Corporate Intent 69
Corporate Entertainment and Hospitality 71
Financial Report for Queensland Rail 72
Financial Report for Queensland Rail Limited 141
Compliance Checklist 221
Glossary 224
Queensland Rail FY2012/13 Annual and Financial Report
About Us Queensland Rail has a proud history of contributing to Queensland’s economic, social
and regional development. Throughout our 148 year history, our organisation has
adapted to meet the changing needs of the growing State of Queensland.
On 3 May 2013, the organisation
evolved again when the Queensland
Government passed a bill
transferring it from one of
Queensland’s largest Government
Owned Corporations to a Statutory
Authority. This change of status has
sharpened Queensland Rail’s focus
to solely delivering passenger
services, train operations and
network management. As
Queensland Rail, we remain
committed to building a better
passenger business, improving
frontline services and contributing
to Queensland’s growth and
development, as we have done for
the last 148 years.
As an integrated rail operator,
Queensland Rail operates the rail
network along with a fleet of trains
that provide vital public passenger
transport in South East Queensland
Our long distance trains travel
between Brisbane and Cairns,
Rockhampton, Longreach and
Charleville and Townsville to Mount
Isa.
Queensland Rail’s network consists
of 6754 kilometres of track,
including the Mount Isa, North
Coast, Western, West Moreton,
South Western and Central Western
lines. This critical infrastructure
gives our freight customers from
the agricultural, mining,
manufacturing, retail and tourism
industries of Queensland access to
supplies and key markets.
The four core functions in
Queensland Rail - Network, Rail
Operations, Access and Business
Strategy and Customer Service - are
supported by the enabling functions
focused on specialist services,
governance and enterprise
frameworks and systems. We offer
services and products that support
Queensland’s four pillar economy
built on agriculture, tourism,
resources and construction.
What Queensland Rail does and how
we do it is underpinned by five key
areas - Safety, Customer, People,
Commercial and Community.
Through day-to-day business and
long-term strategic planning
activities, Queensland Rail is
focused on improving its three main
services:
• City network
• Regional Access
• Long Distance Commuter and Tourist.
City Network The City network is an integrated
passenger and rail access service
that extends from the centre of
Brisbane, south to Beenleigh and
Varsity Lakes on the Gold Coast,
north to Ferny Grove, Shorncliffe,
Doomben, Caboolture and Gympie,
east to Cleveland and west to
Richlands, Ipswich and Rosewood,
and soon to Springfield.
Passenger services are provided
through the City network and are
integral to the daily life of our
customers, whether students,
workers, tourists or residents,
moving between suburbs and cities.
Aside from the rapid expansion in
South East Queensland’s
population, commuter and long
distance passenger trains compete
with freight operators for access to
paths on the network. Queensland
Rail is working with the Queensland
Government to tackle the capacity
challenges through a long term rail
network strategy for growth.
We are continuing to implement
key initiatives to improve reliability
and frequency on the City network,
such as Active Platform
Management, improved terminating
train procedures and availability of
network response teams during
peak periods.
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Queensland Rail FY2012/13 Annual and Financial Report
A key challenge we are faced with
is improving patronage growth. We
are focused on initiatives to
enhance patronage growth such as
the provision of additional services
during peak periods and improving
the on-time running of our trains.
We have also made enhancements
to our station facilities, improved
the cleanliness and maintenance of
our trains and we are continuing to
improve the quality of service
information for our customers.
Regional Access Agreements Regional access agreements include
the design, delivery and
management of network paths and
rail assets across Queensland.
These agreements contributed $218
million in revenue to Queensland
Rail in FY2012/13. Approximately
28 million tonnes of freight is
transported on our network each
year.
With a focus on improving supply
chain solutions, developing
partnerships and creating new
business opportunities, we are
working with supply chain partners
to optimise revenue and contribute
to Queensland’s economic growth.
Our West Moreton supply chain is
being reinvented with a focus on
moving primary producers back to
rail.
We are also developing network
plans to meet customer growth and
build seamless infrastructure supply
chain outcomes along the Mount Isa
Corridor with the Port of
Townsville.
By fostering a disciplined safety
and compliance culture, we will
keep our people, customers and
property safe as we continue to
meet the needs of our customers as
well as freight, travel and tourist
rail operators.
Long Distance Commuter and Tourist Services
The long distance commuter and
tourist service integrates travel and
regional accessibility for
commuters and tourists, with a
comfortable rail experience across
the state. This includes services
along the north coast, services
connecting the western
communities, along with the
Kuranda Scenic Railway and
Gulflander services.
Customers of the Queensland Rail
Travel network are provided with a
unique rail travel experience in
comfort with world-class customer
service. Improvements to the
Queensland Rail Travel network
support growth in Queensland
tourism as well as commerce and
regional development.
We also own and operate specialist
travel centres in key regional hubs
offering complete holiday packages
to complement our customers’ rail
journey. One key strategy for
Queensland Rail Travel is to open
new market segments. The new
Cairns Tilt Train will help deliver on
this strategy by providing a new
level of train travel in Queensland.
The business is also working to
deliver online reservation system
improvements across the product
range and a revised timetable, in
order to best meet our customers’
needs.
Queensland Rail Travel provides
long distance services throughout
regional Queensland. In FY2012/13,
more than 750,000 passengers
travelled with Queensland Rail
along the Queensland coast, west
to Charleville, Longreach and
Mount Isa, as well as along the
Kuranda Scenic Railway.
These services continue to provide
a safe and reliable transport option
for both travelling Queenslanders
and tourists visiting regions
throughout the state. We are also
working closely with regional areas
throughout Queensland to promote
tourism growth.
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Queensland Rail FY2012/13 Annual and Financial Report
Financial summary
FY2012/13
($M)
FY2011/12
($M)
Consolidated income statement for the year ended 30 June 2013
The Queensland Rail group’s EBITDA increased by $17.2 million to $708.5 million. This increase was primarily due to a
reduction in consumable spend across the group. This reduction was due to the group’s focus on cost control through
efficiency measures that resulted in a 2.6% decrease in operating expenses.
A dividend of $115.8 million was declared in respect of the year ended 30 June 2013. This dividend will be paid during
FY2013/14.
FY2012/13
Actual
FY2012/13
Target
Financial performance measures compared to the Statement of Corporate Intent
Revenue 1,916.4 1,931.9
Operating Expenses (1,207.9) (1,240.6)
Earnings Before Interest, Tax, Depreciation and Amortisation 708.5 691.3
Depreciation and Amortisation Expense (298.2) (296.5)
Earnings Before Interest and Tax 410.3 394.8
Net Finance Costs (209.5) (208.8)
Income Tax Expense (56.0) (57.7)
Net Profit 144.8 128.3
Earnings Before Interest and Tax ($M) 410.3 453.0
Net Profit After Tax ($M) 144.8 168.5
Return on Operating Assets (%) 6.4 7.2
Return on Equity (%) 5.3 6.1
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Queensland Rail FY2012/13 Annual and Financial Report
FY2012/13
($M)
2011/12
($M)
Consolidated balance sheet as at 30 June 2013
The group’s non-current assets increased by $143 million to $6,419.7 million as a result of Queensland Rail’s significant
capital expenditure program.
Total equity for the group increased by 1.1% to $2,768.0 million as a result of the $144.8 million profit for the year. This was
offset by the declared dividend of $115.8 million.
FY2012/13 ($M)
2011/12
($M)
Consolidated cash flows for the year ended 30 June 2013
Cash flow from operating activities decreased significantly in FY2012/13 due to the previous year being extraordinarily high
in terms of customer payments, with approximately $50 million in outstanding debt paid in full. When comparing FY2012/13
with FY2011/12, there has been an increase in $20 million in customer payments.
During FY2012/13, the group invested $491.7 million in capital expenditure across Queensland Rail operations. The most
significant investments were made in passenger network infrastructure and rollingstock as part of the South East Queensland
Infrastructure Plan and Program.
Borrowings increased by $99.8 million during FY2012/13. The group’s net position increased by $181.7 million resulting in an
increase in the gearing ratio from 52.2% to 53.4%.
Current Assets 527.1 569.9
Non-current Assets 6,419.7 6,276.7
Total Assets 6,946.8 6,846.6
Current Liabilities 685.0 626.5
Non-current Liabilities 3,493.8 3,482.4
Total Liabilities 4,178.8 4,108.9
Net Assets 2768.0 2,737.7
Contributed Equity 2,602.7 2,602.6
Retained Earnings 165.0 136.1
Reserves 0.3 (1.0)
Total Equity 2768.0 2,737.7
Net cash inflow from operating activities 422.2 556.1
Net cash outflow from investing activities (482.2) (558.8)
Net cash outflow from financing activities (2.8) (161.6)
Net increase in cash and cash equivalents (62.8) 158.9
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Queensland Rail FY2012/13 Annual and Financial Report
Summary of non-financial measures
FY2012/13
Actual
FY2012/13 SCI
Target
Efficiency
Growth
On-time running, customer satisfaction, reliability and frequency of service
Safety improvement, employee engagement and environmental management
1 Although the SPAD rate is unfavourable against target, results are positive when benchmarked against other Australian rail operators. Analysis is being undertaken to determine SPAD causal factors, with several initiatives under implementation. 2 YTD statistics were unfavourable due to the unusually high number of incidents at Logan stations during December 2012. 3 Although results were above target, the number of injuries steadily declined during FY2012/13. Slips, trips and falls account for the majority of incidents. Strategies are in place to focus on mitigation of this injury type.
On-time running – City network (combined peaks) % 96.30 94.53
On-time running – City network (24/7) % 95.04 94.17
On-time running – Travel network on-time departure % 92.88 70.00
On-time running – Travel network on-time arrival % 64.54 60.00
Below Rail Delays per 100 train kilometres – SEQ network 0.93 0.77
Below Rail Delays per 100 train kilometres – Regional network 3.52 3.88
City network rollingstock utilisation % 87.34 90.00
24/7 reliability – City network % 99.86 99.87
Network Gross Tonne Kilometres (billions) 23.91 24.37
Customer satisfaction – City network 72 71
Customer satisfaction – Travel network 82 81
Signals passed at danger (per million train kilometres)1 2.80 1.95
Derailments (per million train kilometres) 0.13 0.11
Lost time injury frequency rate (LTIFR) 6.09 4.25
Medical treatment injury frequency rate 7.61 8.15
Customer assaults per million passenger journeys – City network2 6.05 5.57
Customer injuries per million passenger journeys – Queensland Rail3 17.22 15.88
Environmental Protection Act 1994 enforceable breaches 0 0
Patronage Growth % - City network -4.49 -0.52
Consumable cost reduction ($ million) 66.27 42.60
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Queensland Rail FY2012/13 Annual and Financial Report
1team values and behaviours Queensland Rail’s Values and Behaviours define how we
collaborate and work together. We define values in
Queensland Rail as the core benefits that lie at the heart
of our organisation and direct the way in which our
people behave. Behaviours are the way we see values in
action. They are tangible, observable and something to
which everyone can relate.
These values are at the heart of everything we do and
they:
• form the framework that guides all of our decisions
• define our culture and are visible through our
behaviour
• are central to effective leadership and good
management
• enable our team to work together positively and
towards shared goals
• underpin our future success.
Queensland Rail
Be one, proud, focused.
We work together to achieve our objectives and do
what we say we are going to do.
reat each other with respect
Be open, honest, supportive.
We all have a voice and a part to play by sharing
information, respecting, supporting and trusting
each other.
njoy what we do
Be positive, involved, enthusiastic.
We work together to bring humour and fun to each
day and enjoy what we do.
ct safely
Be aware, prepared, accountable.
We look out for each other, our customers and
ourselves so that nobody gets hurt.
ake a difference
Be innovative, adaptable, resourceful.
We encourage new ideas and fresh ways of
thinking. We make it simple and we treat every
situation as a learning opportunity.
team
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Queensland Rail FY2012/13 Annual and Financial Report
Chairman and Deputy Chairman’s Outlook
The Chairman, Michael Klug, is
pleased to jointly provide this
Outlook with Deputy Chairman,
Geoff Harley. The Board welcomed
the appointment of Michael Klug as
Chairman on 1 October 2013.
The last 12 months have been
punctuated by important changes
in our external environment and
significant internal reforms.
While changes of this magnitude
can create challenges for the
organisation and its people, they
also present an opportunity for
Queensland Rail to reinvent itself
and deliver improved performance
across all aspects of the business.
During FY2012/13, Queensland Rail
continued its reform journey and
focused on getting “back to
basics”. In doing so, we
demonstrated an ability to
consistently perform well in many
different areas. We have the best
Australian city on-time running
results for our services in South-
East Queensland. On-time arrivals
and departures on our long distance
travel services have improved. We
have enhanced rollingstock
availability and our network is
more reliable than ever. Our
customer satisfaction remains at all
time high levels and we continue to
focus on safety and security
initiatives to reduce injuries to our
people and customers. We have
done this while progressing the
ongoing organisational reform that
has resulted in a significant
reduction of the non-operational
workforce and we have saved more
than $66 million in consumable
expenditure.
Despite these solid results, there is
still room for improvement in many
areas of the business. Importantly,
the Queensland Commission of
Audit Report made
recommendations that affect
Queensland Rail. In particular, the
report positions Queensland Rail to
operate under contestable service
delivery arrangements in the
future.
Another change announced was the
institutional restructure
transferring Queensland Rail from a
Government Owned Corporation to
a Statutory Authority. While this
does not affect our business
operations or key priorities, it does
represent an important step in our
reform journey.
Based on strategic decisions made
during the last two years,
Queensland Rail continued
throughout FY2012/13 to transform
the business into a truly efficient,
effective and integrated railway
service. This has placed us in a
strong position to respond to the
Queensland Commission of Audit
Report.
The year ahead will be a year of
continuing transformation for
Queensland Rail as we move to a
more competitive business model
focused on maximising value for
money, embracing competition and
benchmarking our performance
against best practice. As we
prepare for contestability,
Queensland Rail must focus on
providing smarter, more tailored
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Queensland Rail FY2012/13 Annual and Financial Report
services to our customers while
maintaining improvements in safety
and value for money.
In FY2013/14, our focus will be on
our commitment to:
• driving organisational
performance (specifically
operational, financial and
customer)
• ensuring value for money and
affordability
• facilitating patronage and
network tonnage growth
• ensuring safety and security
• enhancing service delivery.
Central to our reform and
movement to a contestable
business model is our Efficiency
Improvement Program, which aims
to identify and realise significant
savings in labour and non-labour
costs throughout our business. This
program will enter stage two during
FY2013/14 and will focus on
delivering further labour reform,
cost reductions and progressing
industry partnering opportunities.
I would like to take this opportunity
to congratulate and welcome the
new members of the Queensland
Rail Board appointed in October
2013, the Hon. John Mickel and
Glenn Poole.
During FY2012/13, we also
welcomed new directors, David
George and Wendy McMillan. These
appointments allow a wealth of
experience and skills to guide
Queensland Rail through this
transformation.
Along with fellow directors, Dawson
Petie, Merren McArthur and Julie-
Anne Schafer, the Board has been
committed to driving performance
improvements and cultural change
across our business during
FY2012/13.
I also wish to recognise my
predecessor, Glen Dawe, for his
valuable operational, business and
strategic contribution to
Queensland Rail during this period
of change and would also like to
pay tribute to outgoing directors
Maureen Hayes, Denise McMillan-
Hall, Dawson Petie, Merren
McArthur, Julie-Anne Schafer and
Dr Leo Keliher, who made
significant contributions to the
organisation during their time on
the Queensland Rail Board.
On behalf of the fellow directors, I
would also like to acknowledge
Queensland Rail’s management
team, led by former Acting Chief
Executive Officer Jim Benstead.
Jim and his team have
demonstrated leadership in taking
the organisation forward during a
period of transition. The leadership
team has my full confidence as it
continues to drive the reform
agenda.
This is an exciting time for our
organisation, but with it comes the
challenge of reform. We are
committed to delivering reliable
and affordable rail services and
positioning rail as the centrepiece
of public transport in Queensland. I
am confident we have the right
people to deliver our ambitious
program and achieve our potential
as a world-class railway operator.
In becoming a performance based
premier rail operator, we need to
shine in all aspects of our business
and deliver on our business
objectives. This will ensure
superior service for our customers
and contribute to Queensland’s
economic growth and development.
That’s the challenge and our
opportunity for the years ahead.
Finally, I would like to sincerely
thank Queensland Rail employees
for their dedication, hard work and
enthusiasm. It has been a
challenging year for our staff, but I
am proud of their unwavering
commitment to the organisation
and its customers. Our people are
our greatest asset and the key to
our success in the future.
The Queensland Rail Board
understands the future is now and
will ensure our performance counts.
Michael Klug Chairman
Geoff Harley Deputy Chairman
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Queensland Rail FY2012/13 Annual and Financial Report
CEO’s Report
The past financial year was truly a
year of challenges, opportunities
and achievements for Queensland
Rail. It was also a year that
provided clarity for the
organisation, confirming that our
strategic direction is aligned with
the Government’s vision for
Queensland.
We have been driving performance,
efficiency and productivity
improvements throughout
Queensland Rail for the past two
years. During FY2012/13, we
stepped up the reforms and
produced vastly improved
performance, along with a leaner
workforce, a significant reduction
in spending and efficiency programs
that have reshaped the business.
The recommendations of the
Queensland Commission of Audit
Report and the Government’s
response confirmed the direction
we have been taking and have
given us greater impetus to reach
and exceed our operational and
financial performance goals. We
have implemented all Network SEQ
Audit recommendations.
The Government has now set out its
vision for an effective, efficient
and affordable rail solution for all
Queenslanders. Queensland Rail
shares that vision and is preparing
to demonstrate its expertise and
capability to deliver quality
services as efficiently as any
provider in the market.
During FY2012/13, we were focused
on our commitment to:
• organisational performance (specifically operational, financial and customer)
• affordability
• patronage growth
• safety and security.
The FY2012/13 Queensland Rail
Statement of Corporate Intent
outlined the following business
objectives:
• improving operational efficiency
and reducing our cost base to
relieve funding burdens and
make rail travel more
affordable for our passengers
• getting “back to basics” to improve the safety and reliability of our services, remedy causes of disruptions, improve confidence in rail travel and increase patronage growth
• partnering with stakeholders to improve project delivery and capital performance
• improving safety, engaging our employees and managing the environment in which we operate.
In addition to these objectives, we
reported against five strategic
pillars – safety performance,
customer service, commercial
capability, people development and
the relationship with the
community in which we operate.
Our key performance indicators for
FY2012/13 place us at the forefront
of rail passenger transport in
Australia.
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Queensland Rail FY2012/13 Annual and Financial Report
Contestability is the inevitable and
ultimate test of efficiency and
operational performance and we
will continue to drive improvement
and accelerate our reforms to
ensure we can compete with the
best rail operators in the world.
Safety
Safety is the cornerstone of
everything we do. Our focus on
safety, looking out for our people,
our customers and the community,
has ensured we are tracking well in
terms of our lead safety indicators
(medically treated injuries).
However, the harsh reality is that
too many of our people are still
being injured.
We will continue to devote all of
our energy to achieving Zero Harm
across the organisation through
implementation of employee safety
initiatives such as “Work to Live”.
We have seen positive results in
reducing crime across our network
and we acknowledge our strong
partnership with the Queensland
Police Service for enhancing
security on our services and within
the rail corridor.
We continue to invest heavily in
information and education
campaigns to raise safety
awareness around our rail network.
In FY2012/13, there was a 35 per
cent reduction in near misses at
level crossings state-wide
coinciding with an extensive,
multimedia campaign on level
crossing safety called “What Would
You Miss?”. In January 2013, we
launched our “Coffins” campaign in
response to the more than 4,000
reported incidents of trespass on
our rail corridor during the previous
year. The campaign provides a
dramatic reminder of the
potentially deadly consequences of
trespassing on the rail corridor.
Customer In FY2012/13, we continued to
deliver high levels of customer
service by focusing on reliability,
efficiency, on-time running and
customer comfort. The measure of
our success is the fact that
customer satisfaction levels for
both our City and Travel networks
are at record highs.
One of the most pleasing and
significant improvements
throughout the year was our
network reliability. We finished the
year achieving an on-time running
result of 96.30 per cent for our 240
City network morning and
afternoon peak services. Given that
we have the most stringent on-time
running targets of any rail operator
in Australia, I am extremely proud
of this result.
We also improved frequency of
services on a number of lines, with
new peak services for Gold Coast
and Beenleigh Line customers and
the trial of 15-minute off-peak
services for customers on the Ferny
Grove Line. In 2013/14, we will
introduce further improvements to
services.
Our Travel network also reached
milestones with The Sunlander
celebrating 60 years of carrying
Queensland families and tourists
along the coast. More than three
million people have travelled on
the iconic train service since it was
launched in June 1953. After six
decades in operation, The
Sunlander is due to be retired from
service next year and will be
replaced by new and refurbished
high speed tilt trains currently
under construction in Maryborough.
A farewell tour for the Sunlander
has been announced, designed to
drive patronage onto this service
throughout its final year.
People
In order to improve efficiency and
reduce costs, Queensland Rail
reshaped the organisation through
a Voluntary Redundancy scheme
and a significant organisational
restructure that delivered cost
savings, with a reduction in full
time equivalents (FTEs) and
contractors.
I want to acknowledge the staff
members who left the organisation
through the Voluntary Redundancy
program. Some of these employees
had been with us for many years
and I thank each and every one of
them for their important
contributions during their time with
Queensland Rail.
15
Queensland Rail FY2012/13 Annual and Financial Report
Commercial In July 2012, Queensland Rail
commenced its Efficiency
Improvement Program to identify
and realise significant savings
throughout the business. This
program will ultimately improve
our financial and operating
performance and ensure we deliver
value for money services for
Queenslanders. This year alone, we
have achieved savings of $83
million in non-labour expenses.
This program will continue during
FY2013/14 and will focus on further
labour reform, cost reductions and
industry partnering opportunities.
The efficiencies we achieve are
assisting to reduce the government
funding required to deliver our
Transport Service Contracts and
decrease borrowings, which will
ultimately deliver greater returns
to Queenslanders and provide
investment and growth
opportunities.
Community Queensland Rail provides
Queensland communities with vital
public transport and essential
transport infrastructure -
infrastructure that not only
supports the State’s manufacturing,
travel and other export industries,
but also generates wages,
investment and purchasing of goods
and services in regional
communities.
We acknowledge and embrace our
responsibilities to the communities
in which we operate and are
committed to being a good
neighbour. During FY2012/13, we
worked with industry to implement
strategies and undertook steps to
minimise the impact of both noise
and coal dust from the rail
corridor.
Challenges
Queensland Rail operates in a
changing and challenging business
environment and we will continue
to work closely with our partners in
Government to respond to the task
ahead. The challenges are great:
Queensland Rail needs to be ready
to play an even more significant
role in the growth of the State’s
four pillar economy.
We will work with Government to
increase capacity, upgrade our
rollingstock and invest in
maintenance that improves
reliability of trains and tracks,
ensuring customers have access to
a safe and reliable rail network
that meets their current and future
requirements. We will continue to
reduce our cost base to realise
savings in non-business-critical
activities.
I would like to acknowledge
Queensland Rail’s Responsible
Ministers and thank the Deputy
Chairman and Queensland Rail
Board for their steadfast
commitment to the organisation
throughout its journey of significant
reform. I also wish to thank
Queensland Rail employees for
their continued hard work and for
remaining dedicated during this
challenging time.
While the demands in the past
financial year have been
considerable, there is a renewed
vigour across Queensland Rail in
terms of transformation of the
organisation. As we move
confidently towards contestability,
we will maintain momentum. We
will further improve our reliability
and continue to pursue better and
more affordable ways to deliver rail
services. More than ever, we have a
clear picture of our future as a
world-class rail operator.
Glen Dawe Chief Executive Officer
16
Queensland Rail FY2012/13 Annual and Financial Report
Delivering Value In 2011, Queensland Rail commenced a journey of continuous improvement to
transform the business and better position it to deliver safe, reliable and value for
money rail transport solutions to its shareholders and customers. The change of
government in March 2012 and subsequent Queensland Commission of Audit Report
provided greater impetus to drive efficiency and reform across the business.
The program of reform has been
designed to be delivered in two
phases, with the first phase
completed at the end of
FY2012/13.
The focus this past financial year
has been to improve efficiency and
effectiveness and ensure
Queensland Rail is appropriately
sized to deliver the best possible
service at the lowest, sustainable
price to customers and the people
of Queensland.
As a result, key initiatives were
introduced based on the four
objectives: affordability, customer
outcome, growth and value.
Affordability Queensland Rail is committed to
reducing the cost of rail to
government and delivering a
contestability framework that
demonstrates value. Initiatives
built around smart, effective and
safe use of resources that delivers
value for money have achieved the
below results.
Consumable and Non-Labour Cost Reduction
A concentrated effort has been made to reduce consumable costs across the organisation. Consumable costs include professional services, advertising, accommodation and travel expenses and these costs are a sub-set of the organisation’s overall non-labour costs.
The consumable cost reduction target of $42.6 million was exceeded two months prior to the end of the financial year, with a total reduction of $66.27 million. This contributed to a reduction of $83 million in total non-labour costs for FY2012/13.
Consumable Cost Reduction
Organisational Restructure
A significant organisational
restructure across the business
commenced in July 2012 to enable
efficiencies and cost savings and to
refocus Queensland Rail’s core
business and enable functions to
concentrate resources in areas that
impact directly on operational
performance.
New Work Practices
Queensland Rail has introduced new work practices, including the use of flexible start and finish work locations within Station Operations. In addition, the business has implemented rostered ordinary hours on weekends and the use of 12-hour rostered ordinary hour shifts within Network SEQ and Regional, where possible.
Customer Outcome We are delivering customer
outcome initiatives focused on
optimising operational
performance to provide safe,
reliable and customer-centric rail
services, which has achieved
positive results.
66.27
0
20
40
60
80
Jul
Aug
Sep Oct
Nov
Dec Jan
Feb
Mar Apr
May Jun
$ M
illion
Actual 12/13 Plan 12/13
17
Queensland Rail FY2012/13 Annual and Financial Report
On-Time Running (OTR) Improvement
An OTR Taskforce was created in August 2012 to drive the development and implementation of initiatives to achieve OTR targets for the City and Travel networks.
The OTR Taskforce is operating
across all areas of Queensland Rail
and is analysing performance as
well as causes of delays,
identifying new initiatives,
implementing them and ensuring
they become business as usual
practices. The taskforce has helped
deliver improved reliability with
Queensland Rail exceeding the City
network OTR target of 94.53 per
cent every month since September
2012.
The overall result of 96.30 per cent
for FY2012/13 was the best result
in 10 years.
OTR City network (Combined Peaks)
Independent Audit – South East Queensland
In April 2012, the Government
commissioned an audit of the
South-East Queensland network,
following a dewirement incident in
February 2012 and a signalling
disruption that occurred in March
2012.
The audit report entitled
Independent Audit into the
reliability of Queensland Rail’s
South-East Queensland network
found no immediate safety issues
that required the attention of the
Rail Safety Regulator or
Queensland Rail. All
recommendations have been
implemented, with a focus on
improving the management of the
network.
Growth Queensland Rail has been working
with stakeholders, rail operators,
end customers (mining companies),
supply chain partners and industry
stakeholders to:
• address capacity issues
• facilitate continued economic
growth
• improve cycle times and on-
time performance
This work includes the following
key initiatives.
Patronage Growth
Queensland Rail is partnering with
TransLink to develop a tactical fare
strategy to drive patronage growth
in the CBD. Patronage numbers
have been impacted by the easing
in economic activities and
subsequent reduction in workforce
numbers as well as the public
transport fare increase that
occurred in January 2013.
96.30
91%92%93%94%95%96%97%98%99%
Jul
Aug
Sep Oct
Nov
Dec Jan
Feb
Mar Apr
May Jun
Actual 12/13 Plan 12/13
18
Queensland Rail FY2012/13 Annual and Financial Report
Regional Freight Growth Strategy
Queensland Rail is working with the
Department of Transport and Main
Roads (DTMR) to develop a
Regional Freight Growth Strategy
aimed at attracting further
agricultural product railings,
particularly cotton and grain, from
South-West Queensland. This
partnership has resulted in an
announcement by the Queensland
Government on 16 May 2013 for a
$50 million upgrade for the
Toowoomba Range rail
infrastructure, which will remove
25,000 trucks, transporting grain
and cotton, from South-East
Queensland roads each year.
The project scope is proposed to
include the construction of two
one-kilometre rail passing loops at
Harlaxton and Ballard. This project
is expected to take two years to
complete.
South-East Queensland Network Upgrades
In FY2012/13, Queensland Rail
successfully completed the $12
million Keperra to Ferny Grove
Upgrade, which has enabled
increased off-peak services on the
Ferny Grove Line and progressed
the $475 million Richlands to
Springfield Project (Stage Two)
ahead of schedule.
Value
With a proud history of supporting
rural communities, Queensland Rail
remains committed to driving
economic growth by supporting
resources, agriculture, tourism and
construction industries. To achieve
this, Queensland Rail actively
participates in supply chain forums
and works collaboratively with
stakeholders across the network on
a regular basis.
Supply Chain Forums (Mount Isa, West Moreton and North Coast lines)
This year, Queensland Rail has
continued to actively facilitate
regular supply chain forums to
engage with stakeholders, supply
chain partners and customers of
planning activities and
maintenance updates.
Queensland Rail is keen for its
supply chain partners to
understand its business by
providing information on capacity
analysis, train control and planning
to better inform customers on key
business drivers. This improved
understanding and open
communication is creating better
comprehension, improved cohesion
and aligned planning, resulting in
greater efficiencies.
The net outcome is increased
supply chain optimisation and
delivery of ongoing economic
growth for the state.
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Queensland Rail FY2012/13 Annual and Financial Report
Priorities for the Year Ahead
The second phase of our change
journey will deliver further
performance improvement across
the business. Central to this reform
is the Efficiency Improvement
Program, which will drive
reductions in the cost base and
improvement in productivity. This
program will identify and drive
significant savings through
initiatives such as:
• ongoing workforce reform
• consumable cost reductions
• industry partnering program
• operational improvement program.
A program of capital works will
ensure Queensland Rail is able to
meet the growing need for public
transport in South East and
regional Queensland, as well as the
demands of a growing freight
network. This program includes the
following key capital projects:
• Coomera to Helensvale duplication program
• Sunlander 14 rollingstock upgrade
• Lawnton to Petrie Third track project
• Electric Multiple Unit life extension program
• stabling requirements for the New Generation Rollingstock
• project signalling and other critical infrastructure enhancement.
20
Queensland Rail FY2012/13 Annual and Financial Report
Safety The safety of our people and customers is the number one priority of Queensland Rail.
We are focused on becoming a world-class safety organisation with zero injuries.
The number one priority for
Queensland Rail is ensuring that its
customers, employees and the
broader community who use and
access its network and
infrastructure are able to do so in a
safe way.
This is achieved by eliminating or
minimising safety risks and by
maintaining effective management
and control of the rail
infrastructure, operations and
rollingstock.
The greatest potential safety risks
are train-to-train collisions,
trespass incidents. In these
scenarios, the difference between
a near miss and a fatality can be a
fraction of a second.
In FY2012/13, Queensland Rail
continued to dedicate significant
resources to eliminating these risks
from its operations.
SPAD Management
SPADs are a lead indicator for some
of our highest safety risks including
collision and derailment. SPAD
performance is a key safety metric
for Queensland Rail and a positive
long term trend is paramount in
terms of risk management and
public perception. Queensland Rail
implemented a number of SPAD
mitigation strategies during
FY2012/13, including:
• Implementation of the new
SPAD Risk Management
Standard that provides a
framework for improved
selection, training and
management of rail traffic
drivers.
• Quarterly regional SPAD forums
in Townsville and Brisbane
involving third-party operators
on the Queensland Rail
network.
• Hosting of the Rail Co-
Operative Research Centre
“SPAD Future Inquiry” workshop
involving cross industry
representatives.
• Introduction of a new method
of measuring SPAD collision risk
to better understand the
context of each SPAD.
• Improvement to training,
including communicating safety
critical SPAD information,
human error and avoidance
techniques, along with
programs incorporating
simulated SPAD scenarios and
Professional Route
Management.
Travelling Customer Safety Strategy
In FY2012/13, Queensland Rail
embarked on various initiatives to
reduce the injuries sustained by
customers. The Travelling
Customer Safety Strategy was
developed to target customer
behaviour in and around stations
and onboard trains. This initiative
is expected to contribute to a
reduction in slip, trip and fall
related injuries, which are the
most common form of incidents
resulting in customer injury on
Queensland Rail property.
Security Program
Queensland Rail has an extensive
program to manage a diverse range
of security risks, from anti-social
behaviour to acts of terrorism.
Working closely with the
Department of Transport and Main
Roads (DTMR), the Queensland
Police Service (QPS), Crime
Stoppers and a number of local
councils is integral to the
program’s success.
21
Queensland Rail FY2012/13 Annual and Financial Report
Response to the Cleveland Collision
Queensland Rail suspended services
on the Cleveland Line on 31
January 2013, after a train failed
to stop at the Cleveland Station
platform and collided with the
end-of-line buffer stop, the
platform and the station building.
A number of people on the train
were treated for minor injuries and
transported to hospital for further
examination.
The Australian Transport Safety
Bureau (ATSB) conducted an
independent investigation into the
collision and concluded that
contamination of the rail surface
most likely contributed to wheel
slide, which caused the collision.
Following the release of the
interim ATSB report, Queensland
Rail immediately formed a working
group to investigate a range of
potential wheel/rail interface
issues, focusing on track
conditions, train crew capabilities
and rollingstock, particularly the
160 and 260 class units. These units
make up a third of the Queensland
Rail fleet.
The primary finding of the working
group required Queensland Rail to
adopt an holistic approach to
minimising the risk of wheel slide,
which includes identifying and
removing contaminants from
affected sections of rail and
engineering solutions for
rollingstock.
The working group recommended a
range of controls and safety
measures, such as retrofitting the
160 and 260 Class fleets with
sanding systems to increase
adhesion at the wheel/rail
interface.
Automatic Train Protection (ATP)
Queensland Rail continued to work
with Government stakeholders
throughout FY2012/13 on the
development of ATP, an advanced
train protection system, for the
South East Queensland
Metropolitan System.
In FY2012/13, the key
achievements were:
• Installing Wi-Fi Internet
technology on 64 trains to allow
security monitoring officers to
watch live streaming of closed-
circuit television (CCTV)
footage. It is anticipated that
remote monitoring capability of
these trains will be achieved in
FY2013/14.
• Working in partnership with
Crime Stoppers to visit 81
stations and educate more than
13,000 customers on how to
report security incidents on the
rail network.
• Enhancing network security by
displaying Crime Stoppers
intelligence notices on
Passenger Information Display
Screens (PIDS). This has led to a
number of railway offenders
being arrested and prosecuted.
• Signing a new Memorandum of
Understanding (MOU) with QPS.
As part of this MOU, QPS
Railway Squad numbers are
expected to increase to 70 by
the end of FY2014/15. The
Robina Police Outpost opened
in April 2012.
22
Queensland Rail FY2012/13 Annual and Financial Report
• Completing a $3.3 million CCTV
camera upgrade across 47
stations, which involved
replacing old video records with
digital technology to increase
recording capacity.
Queensland Rail also implemented
and/or continued the following
security initiatives in FY2012/13:
• Train and station patrols by 61
Transit Officers and
approximately 200 private
security guards.
• Mobile security dog patrol
teams, each team incorporating
a handler and security dog,
patrolling train stations, car
parks and other Queensland
Rail property.
• Guardian Train services
(carrying private security
guards) on 40 per cent of
timetabled services after 7pm
from Sunday to Thursday and
100 per cent of timetabled
services after 7pm on Friday
and Saturday.
• Police outposts at Petrie,
Manly, Beenleigh, Redbank,
Robina and Roma Street
stations.
• Police trains, which involve an
out-of-service unit with police
and Transit Officers onboard
trains responding to issues
across the network.
• An “after dark” security
program at 34 stations involving
a night time staff presence
until the last train on selected
days.
• Regular patrols by mounted
police targeting corridor
security issues.
• Regular joint operations
between Queensland Rail, QPS
and Transit Officers targeting
various offences and locations,
based on intelligence analysis
and operational planning.
• Core zones on most train
platforms (indicated by blue
and white stripes and featuring
enhanced lighting, CCTV
cameras and an emergency help
phone).
• Multiple emergency phones on
all City network services.
• An Electronic Recording
Forensic Unit that undertakes
collection, analysis and
preparation of CCTV footage for
QPS and Queensland Rail to
support investigations.
Level Crossing and Trespass Campaigns
In 2012, Queensland Rail launched
the confronting, state-wide
“Crosses” campaign with the
message: “Don’t gamble with your
life at level crossings”. This
campaign urged pedestrians and
motorists to act safely near trains
and tracks.
In January 2013, the state-wide
“Coffin” campaign was introduced.
This was in response to the more
than 4,000 reported incidents of
trespass on the rail network during
2012. The campaign “Not everyone
makes it across the tracks” has
provided a dramatic reminder of
the potentially fatal consequences
of trespassing on the rail corridor.
Trespassing in the rail corridor and
in stabling yards is the most
frequent type of security incident
on the rail network across the
state.
Level Crossing Innovation
Queensland Rail and DTMR are
working together on a Level
Crossing Innovation Project aimed
at investigating new technology to
make level crossings safer.
The Queensland Government has
provided $2.1 million to fund three
separate trials of technology to
improve level crossing safety.
23
Queensland Rail FY2012/13 Annual and Financial Report
A solar-powered system
incorporating active and passive
sign technology will be trialled in
FY2013/14 near Forest Hill and
Rosewood stations to warn
motorists of approaching trains.
Two different radio break-in
systems will also be trialled. One
system is set to be trialled at Malu
on the Western Line and the other
between Townsville and Charters
Towers on the Mount Isa Line. The
technology has the ability to alert
motorists to the presence of
oncoming trains at level crossings
and reduce risk of level crossing
collision.
Railnet Safety Systems, La Trobe
University and NFA Innovations
were awarded the contracts for
these projects. The contract period
for the trials, including
installation, trial, decommissioning
and reporting is expected to run
until closer to the end of 2014.
The Valet innovation, a wirelessly
controlled rail level crossing
warning system, has also been
trialled at Bemerside near Ingham
on the North Coast Line. The
initiative improves visibility and
provides advanced warning to
prevent a road user actively or
unknowingly circumventing level
crossing control measures. The
trial at Halifax-Bemerside Road at
Bemerside in North Queensland has
recently concluded, with a report
being undertaken on the findings.
Bridge Strike Prevention
Queensland Rail has implemented a
variety of warning systems to alert
drivers to vehicle height
restrictions as they approach a low
level rail bridge.
These systems include:
• advance warning signs as
drivers approach a bridge
• sacrificial beams and
overhanging chimes along
roadways coming up to bridges
• large and highly visible rubber
flap signs over roadways
• hazard stripes and warning
signs on bridges
• laser-activated electronic
warning signs with flashing
lights mounted on bridges.
The location and frequency of
bridge strikes is constantly
monitored by Queensland Rail. Low
level bridges over roadways in
South East Queensland are
currently being prioritised for the
installation of various measures,
taking into consideration such
aspects as the number of bridge
strikes, the potential bridge
damage and the impacts on the
organisation.
Safety Motivated Action Resource Teams (SMARTs)
The SMARTs program encourages
employees to take an active role in
improving safety in their local
workplace. It draws on employees’
knowledge, empowering each
individual to contribute to the
implementation of safety
improvements.
The SMARTs project was
successfully transitioned to
business as usual. At the end of
FY2012/13, there were 81 active
SMARTs in Queensland Rail and 57
SMARTs initiatives approved, which
were directly linked to controlling
risk at worksite level.
24
Queensland Rail FY2012/13 Annual and Financial Report
Centre of Safety Excellence
The Centre of Safety Excellence
addresses key safety and
environmental issues facing the
organisation, its people and
customers. Benefits include the
enhancement of safety culture and
sharing of innovative safety ideas
across the organisation.
The Centre of Safety Excellence
continues to grow in Queensland
Rail, with 9% of employees involved
in Communities of Practice forums.
These forums are used to share and
build knowledge and proactively
solve safety issues.
Rail Rover Prototype
The Rail Rover prototype is an
unmanned inspection vehicle used
when it is not safe for manned
vehicles to complete track
inspections. This includes areas
susceptible to extreme weather
conditions and high risk
environments, such as a bomb
threat situation. An unmanned on-
track inspection vehicle will have a
significant impact in terms of
eliminating the risk of injury.
The first trial of the Rail Rover
prototype was successfully
conducted in June 2013, with two
further trials planned for
FY2013/14.
25
Queensland Rail FY2012/13 Annual and Financial Report
Customer Queensland Rail aims to exceed customer expectations by embedding customer needs
into how we do business and integrating a service culture into all areas of the
organisation.
In FY2012/13, Queensland Rail
continued to place a strong focus
on customer service by delivering
initiatives on frequency, reliability,
efficiency, on-time running,
customer comfort, customer
engagement and supply chain
improvements.
One of the greatest challenges
faced in delivering on these
priorities has been to meet the
demand for more passenger
services while also delivering
adequate trains for our freight
customers. Queensland Rail is
currently working with the
Queensland Government to
investigate future options to
expand the network so that
projected growth demands in the
passenger and freight markets can
be met.
City Network Customers
On the City network, Queensland
Rail’s objective is to be South East
Queensland’s first choice in public
transport by providing a reliable,
timely and cost effective transport
solution.
Our City network customers:
• exceed 65,000 passengers on
services arriving at Central
Station between 6am and 6pm
each weekday
• took more than 48.5 million
customer journeys during
FY2012/13
• are more likely to drive or be
driven to the station, compared
to bus passengers who would
generally walk to bus stops
• most frequently use the Gold
Coast, Ipswich and Caboolture
lines, with the Gold Coast Line
having the highest patronage
results during morning peak
services.
Travel Network Customers
On the Travel network, Queensland
Rail is committed to operating
efficient and effective travel and
commuter services in regional
Queensland.
Our Travel network customers:
• prefer travel by train over
other modes because of the
price, convenience and
enjoyment of the rail journey
• visit friends and relatives, take
long break/short break
holidays, travel for business and
commute between regional
centres for appointments,
shopping and education
• originate from Australia, mostly
in Queensland, with the most
frequent international
customers being visitors from
the United Kingdom, other
parts of Europe and New
Zealand
• are typically aged between 35
and 74 years of age, with the
majority of travellers being
over the age of 55 years.
In FY 2012/13, more than 353,000
customers travelled on the Kuranda
Scenic Railway, which is an 11 per
cent improvement on results for
the same period last year.
26
Queensland Rail FY2012/13 Annual and Financial Report
Below Rail (Access) Customers
Customers of Queensland Rail’s
below rail business can generally
be categorised into the following
four main groups:
• Above rail operators – including
Aurizon, Pacific National, Rail
Corp and Cairns Kuranda Steam.
• End users – including Xstrata,
Yancoal, Palmer Nickel
Corporation and BHP Billiton.
• Infrastructure customers –
Queensland Rail works with
infrastructure customers, not
only on access and supply chain
solutions, but also in the
design, development and
installation of adjoining
infrastructure, such as the
current Cloncurry Multi-User
Depot.
• Other stakeholders –
Queensland Rail works to build
close relationships with all
stakeholders in various supply
chains, including ports, industry
bodies, regional councils and
government agencies. This is an
important aspect in reducing
system variability, improving
planning and communication
and increasing supply chain
system reliability.
International Customer Service Standard (ICSS)
Queensland Rail once again
received certification against ICSS
through the annual assessment
process.
The results of an assessment in
November 2012 showed an increase
in our score from 6.08 to 6.68,
which is ranked at the integration
(highest) level of the International
Customer Service Standard. ICSS is
a continuous improvement
framework for benchmarking
standards of customer service
excellence.
The assessment team noted the
following themes:
• the culture of customer service
is well and truly embedded in
the psyche of Queensland Rail
• a focus at all levels of the
business on improving OTR
performance
• a strong focus on process
management
• moves to integrate social media
into the established
communications environment
• a clear focus on the future,
driven by the updated Customer
Charter and the strategic and
operational plans.
On-Time Running (OTR) Taskforce
An OTR Taskforce was created in
August 2012 to drive the
development and implementation
of initiatives to achieve OTR
targets for the City and Travel
networks.
The OTR Taskforce achieved the
following significant results during
FY2012/13:
• ten months’ continuous OTR
results exceeding the
contractual City network target
of 94.53%
• improved positioning of crews
for changeovers, alleviating
congestion at Bowen Hills and
Roma Street stations in peak
periods
• an increased number of on-time
services departing Mayne depot
• improved infrastructure, such
as signalling, to reduce
headway and increase capacity
across the network
• targeted investigations and
programs of works for specific
lines (Caboolture) and events
(February and March 2013
where students are returning to
school and university)
27
Queensland Rail FY2012/13 Annual and Financial Report
• improved platform management
across the City network with
station employees actively
assisting customers on
platforms and working with
Traincrew to ensure services
depart on-time
• implementation of daily Travel
network reviews, which provide
a synopsis of the previous day’s
delays.
New Timetables
One of the key strategies to
manage passenger capacity is the
timetable design process. By
providing a consistent and
customer focused approach to
managing the City network service
timetable, Queensland Rail
commits to improving frequency
and responding to load monitoring
and feedback.
In the past year, the following
timetable changes were
implemented:
• In October 2012, a two-year
trial of 15-minute service
intervals during the off-peak
period was introduced on the
Ferny Grove Line.
• On 29 January 2013, an
additional morning peak service
and an additional evening peak
service were introduced on the
Gold Coast Line. There are now
at least four services each hour
during the majority of the
morning and afternoon peak
period. Beenleigh customers
are also benefiting from an
additional morning and evening
express service.
Station Upgrade Program
More than $45 million was
allocated in the FY2012/13 budget
to upgrade the following stations
on the City network:
In addition, the following minor
improvements at more than 50
stations across the City network
were delivered:
• $1.8 million for new fixed
signage and way-finding
information at five stations
• $7.9 million for new digital
CCTV security equipment at 47
stations
• $2.8 million for new TransLink
station fare gates at four
stations
• $6.9 million for refurbishment
of toilets at Central and Roma
Street stations, as well as
platform resurfacing at Oxley
Station.
Station
Actual Budget ($M)
Completion Date
Narangba 28.8 July 2013
Sandgate 19.93 September 2013
South Brisbane 11.97 October 2013
Eagle Junction 7.68 May 2013
28
Queensland Rail FY2012/13 Annual and Financial Report
Keperra to Ferny Grove Rail Upgrade Project
The Keperra to Ferny Grove Rail
Upgrade Project was completed,
marking the final stage of track
duplication between Bowen Hills
and Ferny Grove.
The $85 million project included
duplicating 2.6 kilometres of new
track between Keperra and Ferny
Grove stations, an upgrade of the
Ferny Grove station, expansion of
the car park, improved road traffic
flow and better interchange
between trains, buses, bicycles and
vehicles.
The project was completed on-
time and on-budget by Queensland
Rail.
Richlands to Springfield Project (Stage 2)
The Richlands to Springfield
Project (Stage 2) commenced in
September 2012 and has delivered
a 9.5 kilometre dual track rail line
from Richlands to Springfield. In
addition to the dual track, the
project delivers:
• two new stations – one at
Springfield near Woodcrest
College and the other at
Springfield Central, near Orion
Shopping Centre, to serve a
rapidly growing community
• two new road underpasses
under the Centenary Highway
from Springfield Station to the
Orion Shopping Centre
• facilities for cyclists
• upgrades to the Centenary
Highway between Springfield
Parkway and Johnson Road
(budgeted separately by DTMR).
The project is also delivering 200
Park’n Ride spaces at Springfield
Station and 500 Park ‘n Ride spaces
at Springfield Central Station, with
construction works due for
completion in March 2014.
This new rail line will help reduce
congestion on the Centenary
Highway, with up to 2,500 cars
taken off roads during morning
peak periods.
More than 3,200 jobs will also be
created throughout the life of this
project.
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Queensland Rail FY2012/13 Annual and Financial Report
Traveltrain Renewal Program
Queensland Rail is undertaking a
project to deliver a new and
upgraded long distance fleet, with
the impending retirement of
existing rollingstock, which is more
than 40 years old.
The Traveltrain Renewal Program
plans to fulfil future requirements
by providing comfortable, modern
and reliable services for customers.
Approximately $92 million was
allocated in the FY2012/13 budget
to fund part of the Sunlander 14
project, which has already
delivered a new tilt train and will
allow for the refurbishment of the
existing pair of Cairns Tilt Trains.
The new tilt train The Spirit of
Queensland entered service in
October 2013 and includes
premium economy seating with
innovative railbeds and personal in-
seat electronic entertainment
systems to provide a high level of
comfort for customers.
Queensland Rail Supported Projects and Program of Works
Queensland Rail also supports and
contributes to a number of
government-led projects and
program of works, which
incorporates the following
projects.
Moreton Bay Rail Link (MBRL) Project
The MBRL Project involves
constructing a 12.6 kilometre dual
track rail line between Petrie and
Kippa-Ring with new stations at
Kallangur, Murrumba Downs, Mango
Hill, Mango Hill East (near Kinsellas
Road East), Rothwell and Kippa-
Ring. Rail Corridor works will
commence in early 2014, with an
expected completion in late 2016.
Lawnton to Petrie Third Track
The Lawnton to Petrie Third Track
project is part of the broader MBRL
project and delivers a grade
separated interface between the
North Coast main line and the new
MBRL spur line.
New Generation Rollingstock (NGR) Project
The Queensland Government’s NGR
project involves procuring new
trains to replace ageing
rollingstock and add to the existing
City network fleet.
Brisbane Inner Rail Solution
The Queensland Government has
announced the Brisbane Inner rail
Solution, a major program of works
and initiatives to address inner city
network capacity.
The program includes an early
network capacity works program to
deliver value for money, short to
medium term solutions and the
core Cross River Rail project
between Yeerongpilly and Victoria
Park.
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Queensland Rail FY2012/13 Annual and Financial Report
Improving the Onboard Customer Experience
We are committed to delivering
customer service excellence
through working innovatively to
positively influence the overall
Queensland Rail customer
experience. This includes
implementation of the following
initiatives.
Wi-Fi Internet on Rollingstock
In June 2012, Queensland Rail was
the first operator in Australia to
offer customers free Wi-Fi access
to the Internet while travelling by
installing Wi-Fi on 64 City network
trains.
Quiet Carriages
Queensland Rail was also the first
rail operator to introduce quiet
carriages on every City network
service. Customers travelling in
these carriages are requested to
refrain from loud conversations,
talking on mobile phones and
listening to noisy musical devices.
Almost three in four customers who
are aware of these carriages use
them on some of their journeys.
Etiquette Campaign
This campaign continues to address
the top 15 issues identified by
customers as anti-social behaviour
on the City network. It tackles
onboard issues, such as feet on
seats, priority seating, littering,
noisy behaviour and bags on seats.
Meeting Customers’ Information Needs
Social Media
Queensland Rail has a strong focus
on social media and recognises that
it is a key channel for
communicating a variety of
messages in a timely manner to
engage customers and community
members.
Queensland Rail’s social media
profile, which includes sites such
as YouTube, Facebook, Flickr and
Twitter, allows for a wide range of
information on service disruptions,
promotion of safety measures,
campaigns and initiatives to be
shared with customers.
Queensland Rail has grown its
social media presence and now has
over 11,000 followers on Twitter
and more than 9,800 “likes” on
Facebook.
Increasingly, customers are using
social media to provide feedback,
compliments and ideas for
improvement of our services.
Another key benefit of using social
media is communication with
customers during disruptions and,
by working with TransLink,
Queensland Rail aims to ensure
customers receive up-to-date and
timely notice of any delays or
service changes.
Smart Phone Applications
Queensland Rail is actively
developing Smart Phone
applications for customers to use
for “real-time” train information,
station facilities and information
on accessibility, as well as service
updates. Queensland Rail Travel is
launching a multi-lingual
application for the Kuranda Scenic
Rail service that will provide both
written and audio information
highlighting significant points of
interest along the customer’s
journey.
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Queensland Rail FY2012/13 Annual and Financial Report
People We want all Queensland Rail employees to be accountable, proud and committed to
delivering high performance outcomes. Our challenge is to ensure that during our
organisational reform journey, we retain and attract the right capability to be well
placed in achieving objectives in line with our owner’s expectations.
Queensland Rail employs a
workforce from a range of
occupations situated across the
state. As at 30 June 2013, there
were 6488.1 full time equivalents,
of which:
• 90 per cent were employed in
core functions (Rail Operations,
Network, Customer, Access and
Business Strategy)
• 68 per cent were employed in
operational areas (train driving,
network control, station and
onboard operations and a
variety of trades)
• 23 per cent were employed in
regional areas
• 19 percent were women (49
percent in the Enabling
functions and 17 per cent in
core functions)
• two per cent were apprentices,
graduates or trainees
• 95 per cent were employed on
a permanent basis.
New Service Delivery Model
A new Human Resources (HR)
service delivery model was
implemented during FY2012/13 to
allow for better management and
consistency in responding to
workplace issues. This delivery
model also enables HR to work with
leaders to better leverage their
human capital to deliver business
outcomes. The new model has
incorporated several initiatives,
such as the creation of:
• a HR Central Call Centre – a
centralised service that
provides support for all
employee and manager
enquiries and workplace issues
• Centres of Excellence – these
teams support organisational
success through the design and
governance of HR program s
and initiatives.
The business model represents
contemporary HR theory and
practice and has already proven its
effectiveness during the significant
organisational restructuring
process. HR will continue to embed
the new service delivery model in
FY2013/14 and will continue to
sharpen its focus on providing
services that effectively impact
operational performance.
Workforce Reform
The transformation of Queensland
Rail requires the workforce to
adapt to new ways of working. Our
workforce needs to be agile and
flexible in responding to
competitive challenges, as well as
displaying competence in
delivering on stakeholder and
customer demands.
In October 2012, a Voluntary
Redundancy Scheme was
introduced. Following the
introduction of this scheme,
significant organisational reform
occurred in February 2013 to renew
the organisation’s focus on its core
business and to enable functions to
concentrate resources in areas that
directly contribute to operational
performance.
Along with improving efficiency,
effective performance has been a
key theme throughout FY2012/13,
with leaders being accountable for
driving organisational performance
and continuing to engage with staff
through the changes.
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Queensland Rail FY2012/13 Annual and Financial Report
Enterprise Agreements
Following implementation of seven
new Enterprise Agreements in May
2012 that covered all employees,
with the exception of Traincrew,
considerable progress was made
during FY2012/13 in terms of the
productivity measures negotiated
in these agreements. Some of the
successfully realised benefits
include:
• achievement of 106.7 per cent
of the productivity initiative in
the Administration Services/
Professional/Technical (ASPT)
Agreement
• enabling the use of flexible
start and finish work locations
within Station Operations
• full implementation of rostered
ordinary hours on weekends and
use of 12 hour rostered ordinary
hour shifts within Network SEQ
and Regional, where possible.
Preparation also commenced for
the renegotiation of the Traincrew
Agreement, which expired in July
2013. Queensland Rail’s
negotiating framework was
approved by the Cabinet Budget
Review Committee in April 2013
and bargaining commenced with
the relevant unions.
Early preparations have also
commenced with respect to the
renegotiation of the remainder of
the collective agreements, which
cover the majority of the
workforce. These agreements
expired in FY2013/14.
Talent Management and Development
With the average age of
Queensland Rail employees being
43 years and holding a tenure
averaging 14 years, strategies must
be identified to address the
impending exodus of skills and
knowledge from the organisation.
Approximately 50 per cent of the
Queensland Rail workforce is aged
between 40 and 59 years, which is
posing a specific challenge in terms
of replacing skills and knowledge.
As part of the process of managing
a significant number of staff
leaving the organisation, a formal
knowledge transfer process has
been developed and is being used
to capture valuable information
and knowledge from exiting staff,
many of whom are long term
employees.
Talent and successful management
and knowledge transfer are key
priorities to ensure long term
success and business continuity. As
Queensland Rail undergoes
significant change, the Executive
Leadership Team has identified the
top talent within the organisation
and these individuals have
participated in a structured
interview to determine their career
and development aspirations.
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Queensland Rail FY2012/13 Annual and Financial Report
Leadership Development and Accountability
Leaders have played a key role in
the transformation of Queensland
Rail during the last year and will
continue to drive the organisation
to improve its performance.
To ensure all leaders in Queensland
Rail possess a sound understanding
of their required key attributes and
expectations, specific
responsibilities have been
developed and communicated.
These responsibilities will be
incorporated into each leader’s
performance plan to enable
accountability in terms of
achieving expected outcomes.
In addition, all managers will have
their performance moderated at
the end of the financial year,
which will enable a more accurate
and balanced view of the
performance of leaders across the
organisation. This will drive
consistent standards and
performance expectations and will
ensure leaders are focused on
achieving the vision of Queensland
Rail.
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Queensland Rail FY2012/13 Annual and Financial Report
Commercial By focusing on continuous improvement, cost management, increased revenue,
improved asset management and optimisation of operations, Queensland Rail
continues to build a sustainable railway. Our commercial strategy is to efficiently
deliver core business and expand areas to support Government objectives for
economic growth.
The Regulatory Framework
The Queensland Rail network is an
open access railway, which means
that third party operators may seek
to operate train services on
Queensland Rail tracks.
Third party access to the network
is legislated under the Queensland
Competition Authority Act 1997
administered by the Queensland
Competition Authority (QCA).
Queensland Rail operates under a
QCA-approved Access Undertaking
that provides a framework under
which parties are to seek access to
the Queensland Rail network. This
includes outlining:
• negotiation process and
timeframes
• pricing principles
• utilisation of the network’s
capacity
• network performance reporting
requirements.
The current Access Undertaking
was assigned to Queensland Rail via
a transfer notice on 1 July 2010 as
part of the separation of QR
Limited into QR National (now
Aurizon) and Queensland Rail,
expiring 31 December 2013.
Draft Access Undertaking
Queensland Rail is currently
developing its own Access
Undertaking and has submitted
drafts to the QCA for its
consideration during FY2012/13.
The Draft Access Undertaking is
better suited to Queensland Rail’s
business activities than the current
undertaking and is based on a light
handed “negotiate arbitrate
model”. Queensland rail has
worked closely with industry in
developing this draft Access
Undertaking, which has also
received several rounds of QCA
public consultation. It is expected
that the draft will be approved by
the QCA in late 2013.
West Moreton Reference Tariff Reset
The draft Access Undertaking
includes a reference tariff (price)
for coal carrying train services on
the West Moreton System. On 28
June 2013, as part of the approval
process for the draft Access
Undertaking, Queensland Rail
submitted a reference tariff reset
for FY2013/14 to FY2016/17 to the
QCA for its consideration.
Queensland Rail’s proposed
reference tariff is based on
transparent and repeatable
methodology that can be rolled
forward to future regulatory
periods. Queensland Rail is
currently awaiting feedback from
the QCA and industry on its
submission.
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Queensland Rail FY2012/13 Annual and Financial Report
Revenue and Funding
Transport Service Contracts (TSCs)
Queensland Rail derives
approximately 80 per cent of its
revenue through the following
three TSCs with the State. These
contracts each provide funding for
the provision of infrastructure and
passenger services that would
otherwise fail to be commercially
viable. These contracts include:
• TSC (City network) – funds the
efficient delivery of above rail
passenger services across the
Brisbane suburban network.
• TSC (Travel network) – funds
the delivery of regional above
rail services along the east
coast (Brisbane to Cairns),
Charleville, Longreach and
Mount Isa corridors.
• TSC (Rail Infrastructure) – funds
approximately 70 per cent of
the below rail network. The
Mount Isa Line is the only
system not currently funded.
Government funding for these
services is supplemented by fare
earnings and access revenue
earned by Queensland Rail.
Queensland Rail has recently
negotiated renewal of the TSCs
with DTMR. These contracts came
into effect 1 July 2013 for an initial
term of 12 months, with options to
renew for a further three 12-month
terms.
Access Revenue
Queensland Rail derives
approximately 11 per cent of its
revenue from third party access
charges to the below rail network.
In January 2013, ex-tropical
Cyclone Oswald affected the
network, flooding parts of the
North Coast Line and closing the
Toowoomba Range for two and a
half weeks, with a major land slide
occurring between Spring Bluff and
Ballard. Despite these significant
events and the challenging
economic conditions, access
revenue totalled $218.8 million in
FY2012/13, which was up from
$217.5 million for FY2011/12.
Regional Freight Growth Strategy
Queensland Rail is working with
DTMR to develop a Regional Freight
Growth Strategy with the key
objective to increase Rail’s share
of agricultural products such as
grain and cotton.
This partnership has resulted in an
announcement by the Queensland
Government on 16 May 2013 for a
$50 million upgrade of the
Toowoomba Range rail
infrastructure, which will remove
25,000 trucks transporting grain
and cotton from South East
Queensland roads each year. The
project’s scope is proposed to
include the construction of two
one-kilometre rail passing loops at
Harlaxton and Ballard. This project
is expected to take two years to
complete.
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Queensland Rail FY2012/13 Annual and Financial Report
Supply Chain Forums
Queensland Rail has continued to
actively facilitate regular supply
chain forums for the Mount Isa
Line, North Coast Line and West
Moreton System. These open
forums are aimed at:
• informing supply chain partners
and stakeholders of planning
activities and maintenance
updates
• providing any other relevant
information.
At these forums, Queensland Rail
provides information on capacity
analysis, train control and planning
to better inform customers of key
business drivers. This open
communication is creating
improved understanding and
cohesion, aligned planning that
leads to greater efficiencies along
these critical supply chains.
Master Plan 2012
Queensland Rail developed and
released to industry its Mount Isa
Line Rail Infrastructure Master Plan
2012 in September 2012. The Plan
provided clarity on the strategic
planning needs for specific growth
scenarios to assist customers,
regional and local planning bodies
and other stakeholders in preparing
and developing their own
strategies. The Plan further
presents options to enhance system
capacity to cater for base, medium
and high tonnage growth scenarios.
The projects identified within the
Plan are able to be progressed at a
time and pace that supports
customer tonnage growth
requirements whilst generating
sufficient revenue from access
charges to provide a sustainable
commercial outcome for
Queensland Rail. The plans have
been targeted at providing a cost
effective and reliable rail-based
supply chain solution in support of
our customers’ business.
Capacity and Reliability Enhancements
Mount Isa Line Asset Replacement
In February 2013, sections of the
Mount Isa Line were upgraded to
60kg on concrete sleepers to
increase overall system reliability.
The heavier track has improved
system resilience and delivers a
robust structure that is best suited
to the extreme conditions on the
line, such as the harsh climate and
the black soil formation that
rapidly deteriorates during the wet
season.
System tonnages have also
progressively increased well
beyond the design performance of
the original track structure.
Upgrades have carried out at the
following locations:
• Hughenden to Julia Creek
• Mumu to Barabon
• Barabon to Marathon
• Richmond to Moselle
• Julia Creek to Quarrells.
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Queensland Rail FY2012/13 Annual and Financial Report
Mount Isa Line Capacity
Bulk minerals are currently the key
product transported on the Mount
Isa Line and sizeable deposits have
been identified that will
potentially add considerable
tonnage to the Mount Isa Line.
These products include phosphate
rock, copper, lead, zinc and
sulphur.
Existing opportunities in the
Northern Galilee Basin are also
emerging with interest developing
in terms of significant coal
deposits. Coal haulage by rail may
fundamentally transform
operations on the Mount Isa Line
from a base metals supply chain to
a coal supply chain.
Network capacity enhancements
will continue to be delivered for
future projects provided there are
sufficient contracted tonnages that
justify the necessary capital
investment on commercial terms.
Additional works to increase
capacity may include:
• a new passing loop at Kimburra
• two holding roads at Hughenden
• re-arrangement of port
infrastructure at Townsville to
improve access to unloading
facilities and traffic
management.
City Network Capacity – Non-Passenger Traffic
Queensland Rail is working to
address network capacity issues
through a better understanding of
unused capacity for coal freight
through the City network and
identifying potential enhancements
to the rail network. This involves
working collaboratively with
stakeholders and supply chain
partners to:
• identify options to grow the
coal business in an efficient
manner
• ensure the long term viability
of West Moreton coal producers
• ensure that the solution
identified meets environmental
standards
• improve the cycle times and on-
time performance of each
system.
North Coast Line Capacity
Queensland Rail is working with
industry groups and supply chain
partners to identify immediate and
long-term strategies to continually
improve reliability and freight
delivery on the North Coast Line.
Whilst there are complex
intersections of the North Coast
Line, sufficient capacity exists to
accommodate the anticipated
traffic requirements into the
future.
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Queensland Rail FY2012/13 Annual and Financial Report
Enterprise Asset Management System (EAMS)
Over the past 12 months,
Queensland Rail has been preparing
for the implementation of EAMS,
which will provide enhanced asset
information, enable better business
decisions and build a safer
workplace.
The move to implement EAMS was
endorsed by DTMR in a July 2012
report into the reliability of the
South East Queensland rail
network, with independent
auditors stating that such systems
“have greatly assisted decision-
making” in other infrastructure
organisations.
EAMS is being designed to enable
everyone in the asset management
chain to “see” an asset and “know”
its condition. EAMS will:
• provide a single source of asset
truth for information currently
held in more than 260 separate
asset management systems and
databases
• support whole-of-life asset
management across Queensland
Rail
• promote process efficiencies
• enable improved capabilities to
support the achievement of
good asset management
practice.
Design of the system is in its final
stages, with implementation to
commence during the second
quarter of FY2013/14.
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Queensland Rail FY2012/13 Annual and Financial Report
Community Through community activities, Queensland Rail recognises and embraces
responsibilities to the communities in which we operate. Queensland Rail strives to
maintain a strong social responsibility ethos by engaging with local communities,
customers, employees and the general public.
Queensland Rail delivers
sustainable public transport to
hundreds of thousands of
commuters and tourists each year.
Our community contributions span
throughout the organisation and
across the State of Queensland. We
are committed to using resources
efficiently with business strategies
and objectives focused on
efficiency improvement,
operational reliability and sound
environmental management.
Noise and Coal Dust
Queensland Rail is committed to
working with industry to manage
the environmental impacts
associated with operations. We
seek to be a good neighbour in the
communities in which we operate.
In FY2012/13, the focus was on
addressing noise and coal dust
issues across the network.
Queensland Rail has been working
closely with government and third
party operators on noise
management issues and, where
reasonable and practicable, we
implement strategies and
undertake steps to minimise noise
from the rail corridor. Queensland
Rail is currently working with DTMR
to review noise management
strategies to align with government
expectations.
In December 2012, the Premier of
Queensland established a taskforce
to investigate and address
community concerns around
potential coal dust emissions
associated with rail transport of
coal in South East Queensland. The
taskforce comprises of Queensland
Rail and government
representatives, as well as industry
members from the South West
System Users Group, consisting of
representatives of coal producers
and rail freight operators.
The South West System Users
Group, of which Queensland Rail is
a member, has committed to the
development of a collaborative and
holistic Coal Dust Management Plan
for the rail corridor within which
coal is transported in South East
Queensland. This plan is currently
being finalised, with ongoing
implementation.
The Group engaged the
Department of Science,
Information Technology, Innovation
and the Arts (DSITIA) to design and
implement an air quality
monitoring program for the rail
corridor. Monitoring commenced in
March 2013 analysis of results is
underway.
Veneering of coal wagons by the
main coal supplier on the system
commenced in May 2013, with all
remaining coal suppliers to
commence veneering by December
2013.
Ballast Recycling Program
Queensland Rail has reviewed
opportunities associated with
ballast spoil and is implementing a
ballast spoil recycling program,
which is focused on the screening
and characterisation of ballast
spoil to separate valuable ballast
stone for beneficial re-use.
This recycling program is set to
reduce costs associated with
sampling, analysing and landfilling.
Key outcomes expected to be
achieved through this program
include:
• the diversion of recovered
ballast stone away from
landfill, resulting in projected
savings of around $8.8 million
over the next five years
• re-use of ballast spoil internally
for road or rail construction to
reduce the organisation’s
natural resources
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Queensland Rail FY2012/13 Annual and Financial Report
• reduced operational costs,
which would otherwise be
associated with the purchase of
high quality aggregate material.
The ballast recycling project will
improve operational management
of the rail corridor, conserve
valuable natural resources and
positively contribute to the
organisation’s overall
environmental performance.
Railsmart and Community
Queensland Rail proactively
promotes community safety across
the rail network. The Railsmart
Community Education Program is a
dedicated school and community
engagement initiative that has
been implemented to improve
safety at level crossings and on the
rail corridor.
Throughout FY2012/13, Community
Education officers actively engaged
123,534 students by giving rail
safety presentations to 391 schools
and early learning centres across
Queensland.
The team took part in various other
community engagement activities
throughout the year, actively
participating in events extending
from South East Queensland to
regional areas.
Community Reference Groups
Our Community Reference Groups
provide the opportunity to engage
with customers and the
community, share information
about services and plans and
gather important information
about their perspectives and
preferences.
Meetings are held for each City
network line on a bi-monthly basis.
Topics for regular discussion
include customer service,
operations, facilities, upcoming
projects, accessibility and
communication.
Accessibility and Community Engagement
Queensland Rail actively engages
with organisations in the disability
sector to ensure access to services
is equitable, dignified and
comfortable.
Since 2003, Queensland Rail has
continued to maintain and co-
ordinate an Accessibility Reference
Group, which is comprised of
representatives from various
disability groups and organisations,
such as Vision Australia, Blind
Citizens Australia, Guide Dogs
Queensland, Better Hearing
Australia, Deaf Services
Queensland, Endeavour
Foundation, Arthritis Queensland,
Queenslanders with Disabilities
Network and The Multiple Sclerosis
(MS) Society.
The reference group ensures that
requirements of customers with
disabilities are considered across a
variety of projects and initiatives.
The group has recently provided
advice on the Narangba and
Sandgate station upgrades,
accessible internal layouts for
trains and station information
points for customers with
disabilities. This engagement
facilitates two-way
communication, information
sharing and education.
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Queensland Rail FY2012/13 Annual and Financial Report
Furthermore, Queensland Rail has
been working with customers with
disabilities to:
• provide tailored information for
specific travelling requirements
• release a suite of information
on easy access to services for
customers using mobility aids
• update the popular Station
Access Guide for the City
network.
The Queensland Rail website
information for customers with
disabilities utilising Travel network
services is under review.
Queensland Rail understands how
vital information is to the success
of each customer’s journey.
Disability Discrimination Act 1992
The Disability Discrimination Act
1992 (DDA) seeks to eliminate
discrimination, as far as reasonably
possible, against people with
disabilities. Under the legislation,
as a public transport operator,
Queensland Rail is required to
comply with design specifications
for all premises, conveyances and
infrastructure.
Queensland Rail is drafting an
accessibility action plan for
FY2013/14. This plan will provide a
single point of reference detailing
a managed response to issues
associated with DDA obligations.
Based on the experience of the
organisation over the past five
years, the plan mandates that
Queensland Rail:
• will ensure that persons with
special needs have equivalent
levels of access to services as
those without special needs
• will provide a safe, accessible
and affordable transport
logistic solution for all
customers
• utilises a customer driven
approach to deliver
accessibility at stations and
maintain a health and
constructive relationship with
community groups
• works closely with transport
partners and the State
Government to address
technical challenges unique to
rail and to ensure the use of an
efficient, consistent and co-
ordinated approach
• commits to ongoing community
and stakeholder engagement
• emphasises excellent customer
service.
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Queensland Rail FY2012/13 Annual and Financial Report
Community Partnerships
Queensland Rail has maintained its
commitment to community
contribution through a Corporate
Social Responsibility (CSR) program
to ensure that its responsibilities to
the community are met.
Under the CSR program, high-level
partnerships with non-profit
organisations have been
established and supported through
activities such as fundraising,
partnerships, volunteering and
payroll giving programs.
Queensland Rail forms positive
community partnerships that assist
to address local area issues,
ensuring Queensland Rail maintains
a positive reputation as a good
corporate citizen within the
community.
The current top five partners
chosen by Queensland Rail
employees are:
• Cancer Council Queensland
• beyondblue
• Guide Dogs Queensland
• Prince Charles Hospital
Foundation
• Starlight Children’s Foundation.
Through the Community Partnering
Program, Queensland Rail also
supports small local initiatives
(through contributions up to
$5000).
Graffiti Management and Prevention
Every year, more than $5.5 million
is spent on preventing and
removing graffiti from Queensland
Rail assets and private properties
adjoining the rail corridor.
Graffiti not only costs millions of
dollars each year to remove, but it
also damages Queensland Rail’s
reputation, which affects our
customers’ perception on safety
and security. Research indicates
that rail customers can experience
increased fear of crime in areas
where graffiti is a regular
occurrence. This research is based
on analysis of the annual
Queensland Rail Customer Security
Survey (Colmar Brunton, 2012)
results where correlations have
been drawn between customer
perception of safety and security
at locations where graffiti crime is
present. Queensland Rail employs a
best practice graffiti management
program, which combines
intelligence collection and
enforcement, along with state-of-
the-art technology and
infrastructure design to reduce
graffiti and enhance community
engagement.
In FY 2012/13, Queensland Rail
partnered with the community,
QPS and local councils to prevent
and remove graffiti. Initiatives and
activities included:
• joint operations with the Police
Railway Squad targeting graffiti
vandals across the network
• a new partnership with
Brisbane City Council to combat
graffiti crime through a joint
corridor graffiti removal
program
• a new MOU with Logan City
Council in 2013, with a joint
corridor enhancement program
underway
• launch of a joint marketing
campaign with Crime Stoppers
and Brisbane City Council
targeting graffiti vandals
through the “Tag them Back”
initiative.
As part of the Community
Education program, Queensland
Rail employees also visit schools
and community groups across
Queensland with a focus on
improving student behaviour and
trespass prevention, all of which
contribute to a wider graffiti
prevention education program.
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Queensland Rail FY2012/13 Annual and Financial Report
The program is supported through
syllabus-based graffiti prevention
modules developed by Queensland
Rail and Griffith University for use
by teachers throughout
Queensland.
The award winning Positive
pARTnerships program also helps
reduce graffiti by producing high
quality public artwork in locations
attractive to vandals. The program
works with community groups,
schools and stakeholders.
National Trust of Queensland Awards for Heritage Conservation
There are 71 sites on the
Queensland Heritage Register
comprising of approximately 208
operational and non-operational
assets. A further 268 assets are
listed on the Queensland Rail
Heritage Register, which
Queensland Rail self-manages.
These assets include stations,
goods sheds, bridges and culverts.
Queensland Rail Engages with local
communities to identify any re-use
options for heritage properties that
are surplus to operational
requirements. These uses may
include tourist information offices,
local museums, retail outlets,
cafes and community meeting
centres.
Queensland Rail is investing $3
million in FY2013/14 to maintain
and conserve a number of sites on
the Queensland Heritage Register.
The Queensland Rail Heritage
Committee has recently endorsed a
Heritage Property Strategy to
address the future management of
the Heritage Portfolio.
In recognition of recent heritage
conservation achievements,
Queensland Rail was the recipient
of the following National Trust of
Queensland Awards for Heritage
Conservation in October 2012:
• a gold award for the South
Brisbane Station Upgrade
project
• a silver award for the Bremer
River Bridge repainting
• a silver award in The
Governor’s Heritage Award
Category for use of interpretive
signage and storyboards that
depict the history of rail in
local areas.
Heritage Rollingstock
Queensland Rail helps preserve
Queensland’s rail heritage by
maintaining a fleet of heritage
rollingstock. The fleet consists of a
variety of operational and display
rollingstock including steam
locomotives from different eras,
diesel locomotives, rail motors,
wooden and steel carriages, water
wagons and coal wagons.
The fleet is used to operator tours
and charter services and a schedule
of maintenance has been planned
to ensure maximum usage during
the celebrations for 150 years of
rail in Queensland in 2015. The
versatile rail motors are also used
for training employees in essential
operational roles.
In consultation with The Workshops
Rail Museum, items of historical
significance have been identified
for preservation as part of the
State collection. Items that are not
required for the State collection or
by Queensland Rail are offered, in
custodian arrangements, to tourist
and heritage rail organisations.
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Queensland Rail FY2012/13 Annual and Financial Report
Environmental Management
Queensland Rail continues to apply
innovative environmental
initiatives across its operations to
achieve cost savings,
environmental improvements and
operational efficiencies.
The design and construction of the
new Train Driver Training Facility
at Bowen Hills has delivered a
facility of high comfort and
amenity whilst integrating
environmental efficiencies and
minimising environmental impacts.
Green Fleet
In April 2013, Queensland Rail’s
Executive Leadership Team
endorsed a recommendation to
progressively replace all
Queensland Rail road vehicles with
standardised commercial models.
This decision virtually eliminates
any purchase of petrol driven
vehicles and ensures that only
small volume diesel vehicles will be
purchased as the fleet requires
replacement.
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Queensland Rail FY2012/13 Annual and Financial Report
Governance Structure as at 30 June 2013
State of Queensland – Responsible Ministers
Treasurer and Minister for Trade The Hon. Tim Nicholls MP
Minister for Transport and Main Roads
The Hon. Scott Emerson MP
Queensland Rail
Board Members Geoff Harley – Deputy Chair
David George Wendy McMillan
Dawson Petie Julie-Anne Schafer Merren McArthur
*Chief Executive Officer
Glen Dawe
Audit and Risk Committee
Dawson Petie – Chair
Wendy McMillan Julie-Anne Schafer
Organisational Performance and
Strategy Committee
Julie-Ann Schafer - Chair David George Geoff Harley
People and Safety Committee
Merren McArthur - Chair
David George Geoff Harley
Wendy McMillan
Queensland Rail Limited
On Track Insurance Pty Ltd
* Mr Glen Dawe was appointed Chief Executive Officer on 2 August 2013.
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Queensland Rail FY2012/13 Annual and Financial Report
Board
Michael Klug (Chairman)
LLB, FAICD
Michael is a well-respected solicitor with more than 40 years’ experience. He recently concluded his third
term as Partner in Charge of the Brisbane office of Clayton Utz.
He is a leader in the area of Alternative Dispute resolution and he is one of the original founders of LEADR
(Lawyers Engaged in Alternative Dispute Resolution). He was also an original Director of the Australasian
Disputes Centre and has served on ADR committees nationwide.
Michael is a nationally recognised practitioner, public speaker and lecturer in negotiation, having taught
in Australia and overseas to university students, the business and public sector communities. Michael has
extensive Board experience across a diverse range of fields including education, health care and
transport. He was recently appointed Chairman of Autism Queensland.
Michael is also a Fellow of the Australian Institute of Company Directors and Vice-President of the
Brisbane Club.
Geoff Harley (Deputy Chairman)
LLB, FAICD, MAHRI
Geoff is a consultant to and former Managing Partner of the Brisbane Office of Clayton Utz.
He was for a number of years an Adjunct Professor at the University of Queensland Law School and a
member of the Advisory Council of the Queensland Conservatorium of Music.
Geoff served in the Australian Army Reserve for several decades (Infantry and Legal Corps) and retired
with the rank of Major. Geoff also holds the Reserve Force Decoration.
Geoff has previously served as Chair of TransLink Transit Authority and CS Energy and is currently Chair of
Queensland Urban Utilities. His board experience covers fields as diverse as electricity generation,
communications, information technology, investment attraction, tourism and agribusiness.
Geoff has practised law for more than 40 years, the last 20 specialising in industrial and employment
law. His role as a company director and as Chief Executive of Clayton Utz in Queensland for almost ten
years has given him invaluable experience in strategy, operational management and governance. He is a
Fellow of the Australian Institute of Company Directors and a member of the Australian Human Resources
Institute.
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Queensland Rail FY2012/13 Annual and Financial Report
Wendy McMillan
BBus, BA, MAICD, AIM, AMI
Wendy has more than 18 years of commercial experience in transport, infrastructure, resources, trade,
property, marketing and investment attraction.
Her previous positions include Director of Infrastructure for QC Resources Investments Pty Ltd, Manager
Strategic Projects and Ports O&M, Transport Services, and Strategic Development with the John Holland
Group, General Manager, Australia TradeCoast and senior management roles with the Port of Brisbane
Corporation, Carter and Spencer International and Gambaro’s Seafood and Exports.
Wendy holds a Bachelor of Business and a Bachelor of Arts. She is the Chairman of the judging panel for
the Premier of Queensland’s Export Awards, a Director of St. Aidan’s School Council and a Member of the
Australian Institute of Company Directors, Fellow of the Australian Institute of Management and an
Associate Fellow and CPM of the Australian Marketing Institute.
David George
MA (Hons), FAICD, FCILT
David has more than 35 years’ experience in the rail industry. This includes being Chief Executive of
ONTRACK (New Zealand rail network) between 2004 and 2007 and responsibility for Queensland Rail’s coal
and freight businesses between 1998 and 2004. Prior to this, he was Director of European Business for
British Rail (freight) in the run-up to the opening of the Channel Tunnel.
David is currently Chief Executive Officer of the Co-Operative Research Centre (CRC) for Rail Innovation,
a position held since 2007. He is Vice Chair of the International Railway Research Board and Chair of the
organising committee of the World Congress on Railway Research (WCRR) being jointly hosted by the CRC
and Australasian Rail Association in Sydney in late 2013. David is a Director of TasRail and also a Fellow of
both the Australian Institute of Company Directors and the Chartered Institute of Logistics and Transport
Australia.
Hon. John Mickel
M. Lit St, BA, B Ed. St, Dip T
The Honourable John Mickel entered Queensland Parliament in June 1998 as the Member for Logan and
was appointed Minister for State Development, Employment and Industrial Relations from September 2006
to September 2007 and then Minister for Transport, Trade, Employment and Industrial Relations from
September 2007 to March 2009. John was the 36th Speaker of the Legislative Assembly of the Queensland
Parliament. He was first elevated to the Cabinet as Minister for Environment in February 2004 and
appointed Minister for Energy in August 2004 and gained the additional portfolio of Aboriginal and Torres
Strait Islander Policy in March 2005. He has represented Australia on the Executive of the Commonwealth
Parliamentary Association and represented Queensland businesses on trade missions to Asia, India and the
Middle East. He oversaw major reforms to the Queensland energy sector as Minister for Energy, continued
the Smart State initiative as Minister for State Development, implemented new technology reforms to the
public transport sector as Minister for Transport and is recognised for his diplomatic protocols and public
speaking in domestic and international forums.
Before entering the Queensland Parliament, John held a number of senior Government roles including
Chief of Staff to the Queensland Premier. He is also a former university lecturer in politics and public
policy. Currently John serves on the Queensland Catholic Education Commission Political Advisory
Committee, is a Board Member of the Sisters of St Paul de Chartres Aged Care Facility, and undertakes
lecturing and public speaking engagements at Griffith University, the QUT and for community
organisations. John has established the Vietnamese Orphans and Disability Trust with his wife, is an
honorary member of Rotary and has been awarded Honorary Citizenship of Boystown.
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Queensland Rail FY2012/13 Annual and Financial Report
Glenn Poole
BEc, GradDip Bus Admin, FCPA, FCA, FAICD
Glenn is a professional senior executive and Board member with over thirty years' experience in strategic
leadership, governance and management across the public and not-for-profit sectors.
He has significant practical experience in corporate governance and financial management through
appointments as a director of boards and audit committees in the government and not-for-profit sectors.
He is currently a member of the Local Government Association of Queensland Audit and Compliance
Committee, the Public Trustee of Queensland Audit and Risk Management Committee, the Board of
Governors of the Queensland Community Foundation and the Governance, Nomination and Remuneration
Committee of the Queensland Synod of the Uniting Church in Australia. Glenn is also the Chair of the
Advisory Board for the Australian Centre for Philanthropy and Nonprofit Studies, QUT.
Glenn has successfully undertaken senior executive positions in the Queensland Treasury Department
providing influential policy advice on economic, financial management and corporate governance issues
impacting on the public sector and the community and most recently was the Auditor-General of
Queensland from 2004 to 2011.
Glenn holds a Bachelor of Economics and is a member of CPA Australia, the Institute of Chartered
Accountants of Australia and the Australian Institute of Company Directors.
Merren McArthur
BA, LLB, Dip AppFin
Cessation Date: 4 August 2013
Merren was recently appointed Chief Executive Officer of Virgin Australia Regional Airlines following
Virgin Australia’s acquisition of Skywest Airlines in Western Australia. Merren joined Virgin Australia (then
Virgin Blue) five years ago as General Counsel and Company Secretary and has held various Senior
Executive roles, including Group Executive-Alliances, Network and Yield and Group Executive – Corporate
Advisory.
Prior to joining Virgin, Merren was Chief Advisor at Rio Tinto Iron Ore, based in Perth. Her previous
positions include Deputy State Solicitor for Western Australia and Executive Partner at national law firm
Allens Arthur Robinson, based in Melbourne.
Dawson Petie FAICD, FASFA
Cessation Date: 2 August 2013
Dawson has more than 30 years’ experience as a company director, including serving on the QR Limited
Board for nearly 11 years where he was chair of the Audit and Risk Committee, prior to his appointment
to the Queensland Rail Limited Board.
Prior to his retirement from full-time employment, Dawson was a General Manager for QIC Limited.
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Queensland Rail FY2012/13 Annual and Financial Report
Julie-Anne Schafer LLB (Hons), GAICD, ANZIIF
Cessation Date: 30 September 2013
Julie-Anne brought to Queensland Rail strong legal credentials and corporate experience, as well as
transport experience in Queensland and at national level. She has been chair of the Royal Automobile
Club of Queensland (RACQ) and is a National Transport Commissioner. She is a director of several
companies and is a former Queensland Telstra Business Women’s award winner, President of the
Queensland Law Society, Chair of the Solicitors’ Board of Queensland, Deputy Chancellor of the
Queensland University of Technology and Adjunct Professor at the University of Queensland. Julie-Anne
was previously a partner in two Queensland legal professional services firms. She holds a Bachelor of Laws
(Honours) degree from the University of Queensland and an AICD Company Directors Diploma. Julie-Anne
is a member of the Australian Institute of Company Directors and of the Australian and New Zealand
Institute of Insurance and Finance.
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Queensland Rail FY2012/13 Annual and Financial Report
Leadership team
Glen Dawe – Chief Executive Officer
Glen’s father was a Station Master and he is the third generation of his family to work in Queensland
Rail. Glen joined Queensland Rail as a Porter and his career progressed from planning and
development roles to commercial, business and operations management; including Group General
Manager Citytrain, which became Australia’s best performing urban rail passenger business.
He then took on the broader role of Group General Manager Metropolitan and Regional Services which
involved managing Queensland Rail’s community service obligation businesses such as Citytrain,
Traveltrain and Regional Freight. He then led Queensland Rail’s commercial businesses as Group
General Manager Coal and Mainline Freight before moving to NSW to become General Manager Access
at the Rail Infrastructure Corporation with responsibility for Access, Freight and Country
Infrastructure.
Finally he moved to the Manildra Group, which is one of this country’s largest private rail users, as
National Manager Rail Transport before retiring in 2011.
Mark Hope - Chief Financial Officer
As Chief Financial Officer, Mark brings over 20 years of financial management experience and
expertise to Queensland Rail. In this role Mark directs all financial aspects of the business including
accounting practices, budgeting, financial planning, financial analysis and is responsible for
monitoring all financial performance.
Mark commenced with Queensland Rail in March 2013, joining the Change Management Office in the
role of GM Special Projects (Industry Partner Team Lead). He has a proven track record in delivering
outstanding results and organisational change across numerous organisations.
In his previous roles, with the Department of Transport and Main Roads and TransLink, as both
General Manager Technology and Commercial and Chief Financial Officer, he successfully liaised with
Boards, Government, media, operating partners and suppliers, which played a key component in
delivering TransLink’s ticketing reform project and the Gold Coast rapid transit project. Prior to
these transport and infrastructure roles, Mark worked for APN News and Media as a Chief Financial
Officer in Australia and New Zealand and PwC as an Audit Manager in Australia and England.
Mark has experience working in both chartered and commercial financial roles with significant
organisational accomplishments achieved through innovation, skilled commercial acumen and a
demonstrated partner-focused approach.
Tim Ripper - Executive General Manager Access and Business Strategy
Tim has been in the rail industry for more than 25 years, working with organisations in Australia and
Hong Kong. During this time he has performed a variety of roles in design, construction,
maintenance, asset management and, more recently, in business leadership.
In his current role as Executive General Manager Access and Business Strategy, Tim is responsible for
the strategic management of the commercial relationship with Government, facilitating third party
access to the rail network, organisational reporting and the efficient use of property.
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Queensland Rail FY2012/13 Annual and Financial Report
Martin Ryan - Executive General Manager Customer Service
Martin is responsible for developing and implementing Queensland Rail’s customer strategy. This
means ensuring all aspects of customers’ pre-trip, during trip and post-trip expectations are
satisfied.
Martin has more than 25 years’ experience working in communications, marketing events, travel and
tourism roles and has extensive knowledge and understanding of the importance of high quality
customer service and positive relationships.
Rob Green - Executive General Manager Network
With over 25 years in the rail industry, Rob draws on his years of experience in signalling,
telecommunications, overhead traction, track renewals, construction and project delivery of railway
infrastructure and stations when managing Queensland Rail’s network. With responsibility for the
operational and strategic readiness of the rail network and associated facilities, Rob must deliver fit-
for-purpose, safe and reliable business outcomes for Queensland Rail.
His team also provides network services to rail operators on freight systems, including negotiating
access to the network, consultation to provide alignment with freight market requirements and
regional network control.
Kevin Wright - Executive General Manager Rail Operations
As a veteran of rail operations, safety and customer services, Kevin is responsible for ensuring the
quality, movement and delivery of train services. This includes overseeing the areas of rollingstock
engineering and maintenance, South East Queensland and Far North Queensland operations, Travel
network operations, train service delivery, operations facilities and program co-ordination.
Kevin has twice received recognition for his service to the rail industry, winning the New South Wales
Public Service Medal in 2003 and the Australian Public Service Medal in 2008.
Jim Benstead - A/Executive General Manager Commercial and Corporate Services
Jim is responsible for optimising commercial outcomes for Queensland Rail as well as the provision of
enterprise services including property, procurement, ICT, Road Fleet and Project Delivery Services.
Jim joined QR Limited in July 2008 to focus on transformational leadership and change management
leading to the separation of the company and formation of Queensland Rail. He was the Chief
Financial Officer from the commencement of the new Queensland Rail in 2010 and was the Acting
CEO from December 2011 to August 2013.
Before joining QR Limited, Jim held senior management positions in TNT, Carpentaria Transport and
Toll Australia where he held lead roles in finance, shared services, credit management, customer
service, business integration, commercial management and procurement. Jim has more than 30
years’ experience in the transport industry specialising in driving business improvement, delivering
transformational change and leading outcome focused commercial teams.
Greg Ford - Executive General Manager Safety and Environment
Greg leads the overall safety journey in Queensland Rail in areas such as workplace health and
safety, environment, investigation, assurance and emergency management.
Greg has more than 35 years’ experience in safety, performing in quality roles across both the
defence and transport industries. Before Queensland Rail, Greg held the position of the Rail Safety
Regulator for Queensland Transport for 10 years.
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Queensland Rail FY2012/13 Annual and Financial Report
Nicholle Duce - General Manager Human Resources
Nicholle is responsible for establishing the vision for human resource management, including the
development of a strategic framework, supporting governance and programs that facilitate cultural
change and foster a high performing culture.
Nicholle has more than 15 years’ human resources experience in various roles, including strategic and
operational positions in major organisations such as Suncorp and Rio Tinto.
Nick Le Mare - General Counsel
Nick leads the legal team at Queensland Rail.
Nick is an experienced lawyer with over 15 years’ experience in the transport and mining industries.
Prior to working at Queensland Rail, Nick held a General Manager’s role at Virgin Australia and before
that a Senior Legal Counsel role that saw him play an integral part in the start-up of a long haul
international airline. Before that, Nick was in private practice. He acted almost exclusively for
clients in the mining industry.
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Queensland Rail FY2012/13 Annual and Financial Report
Corporate Governance Queensland Rail is committed to ensuring that its systems, procedures and practices
reflect the highest standards of corporate governance. Processes have been
established to ensure that Queensland Rail’s corporate governance practices are
reviewed regularly and are continually refined in accordance with its enterprise
governance framework.
Statutory Authority Conversion
On 3 May 2013, Queensland Rail
was established as a Statutory
Authority in accordance with the
Queensland Rail Transit Authority
Act 2013 (QRTA Act). Queensland
Rail Limited ceased being a
Government Owned Corporation
from this date and became a
wholly-owned subsidiary of the
Statutory Authority. The Directors
of Queensland Rail Limited were
also appointed as Board Members
(Members ) of the Statutory
Authority.
Guidelines
The responsible Ministers have
requested that while Queensland
Rail is no longer a Government
Owned Corporation, Queensland
Rail will continue to apply the
Corporate Governance Guidelines
for Government Owned
Corporations (Guidelines).
The Guidelines reference the
Australian Securities Exchange
(ASX) Corporate Governance
Principles and Recommendations
and they provide the framework for
Government Owned Corporations to
develop, implement, review and
report on their corporate
governance arrangements.
An overview of existing corporate
governance practices in line with
the above Guidelines is set out
below.
Principle 1 – Foundations for management and oversight
The roles and responsibilities of the
Board and individual Members are
defined in a Board Charter. These
roles and responsibilities are
reviewed by the Board annually and
a copy of the Charter is available
on our website.
The Board’s specific functions
include:
• developing the strategies and
the operational, administrative
and financial policies of
Queensland Rail
• ensuring Queensland Rail
performs its functions and
exercises its powers in a proper,
effective and efficient way
• ensuring that, so far as is
practicable, Queensland Rail
acts under, and achieves the
objects in, the strategic and
operational plans
• accounting to the responsible
Ministers, as required under the
QRTA Act, for Queensland Rail’s
performance
• annually reviewing the
performance of the Chief
Executive Officer (CEO).
In exercising its functions and
powers, the Board’s key
responsibilities include:
• business strategy and planning
• delegation of authority to senior
management
• relations with responsible
Ministers
• major capital projects and
expenditure
• financial reporting and risk
management
• governance and policy
• senior management
appointments.
The Board has delegated
responsible for the day-to-day
operation of Queensland Rail to the
CEO including the implementation
and delivery of the Board’s
strategic direction. The CEO is
supported by the senior executive
team with management
responsibilities clearly defined and
documented through formal
position descriptions, performance
plans and Board approved
Authorities, Approvals and
Accountabilities Policy.
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Queensland Rail FY2012/13 Annual and Financial Report
Newly appointed Members are
taken through a formal induction
process to provide them with an
overview of our business
operations, strategies and
information in relation to the Board
and Committee functions. The
induction process assists the
Members to understand their roles
and responsibilities within
Queensland Rail and includes an
overview of key corporate
expectations, existing governance
arrangements and the culture and
values of the organisation.
The induction process is also
relevant to new senior executives
to allow them to participate fully
and actively in management
decision making at the earliest
opportunity.
Members are issued with a
comprehensive Board handbook
that details Queensland Rail and
Board operational information,
governance requirements and
policies. The Board handbook
assists with the induction process
and also supports existing Members
with their ongoing governance
responsibilities. The handbook is
reviewed and updated annually.
Performance evaluations for the
CEO and senior executives are
carried out each financial year in
accordance with Queensland Rail’s
remuneration framework and the
Board approved Performance
Payment Policy: Chief and Senior
Executives. The performance
evaluation for the CEO is conducted
by the Board and is based on the
achievement of agreed Key
Performance Indicators (KPIs),
which are set annually by the Board
and link to the strategic and
operational objectives of
Queensland Rail. The performance
evaluation for senior executives is
carried out in accordance with the
same process based on the
achievement of agreed KPIs. The
evaluation is conducted by the CEO
and the Board.
Principle 2 – Structure the Board to add value
All Members of the board, including
the Chairman, are non-executive
members. Queensland Rail
Members are appointed by the
responsible Ministers in accordance
with the QRTA Act. As such, the
size and composition of the Board
is determined by the responsible
Ministers.
The Board considers that all Board
Members who held office during the
year are independent as defined
under the ASX Corporate
Governance Principles and
Recommendations. In assessing the
ongoing independence of each
Member, the Board considers the
assessment criteria outlined in the
ASX recommendations. Materiality
in relation to independence is
considered on a case-by-case basis
with reference to each Member’s
individual circumstances.
Board Members are required to
keep the Board advised, on an
ongoing basis, of any business
interests and other directorship and
employment roles that could
potentially conflict with those of
Queensland Rail. In circumstances
where a conflict is believed to
exist, the Member concerned does
not take part in any decision or
consideration of the issue. In
addition, the Member will not
receive copies of the relevant
Board papers. Members must notify
the Board via the Company
Secretary of changes to business
interests and appointments.
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Queensland Rail FY2012/13 Annual and Financial Report
Details of the current Board
Member’s experience and expertise
are disclosed in the Annual Report
as is information on attendance at
Board and Committee meetings.
Information in relation to
composition of the Board and terms
of appointment for all Members
who held office during the financial
year is set out in the FY2012/13
Financial Report.
A process is in place whereby
Members, either collectively or
individually, may seek independent
professional advice where it is
considered necessary to fulfil their
duties and responsibilities. This is
done at Queensland Rail’s expense.
A Member wishing to seek such
advice must first obtain the
approval of the Chairman.
Members are encouraged to further
their knowledge through
participation in industry,
governance and government forums
and attend seminars hosted by the
Australian Institute of Company
Directors, Chartered Secretaries
Australia and other peak
professional bodies. In addition to
peer review, interaction and
networking with other Directors
and industry leaders, Queensland
Rail Members participate in
Queensland Rail leadership forums
and actively engage with
Queensland Rail employees and
visit Queensland Rail operations to
gain an understanding of
operational employee
requirements, challenges and
issues.
The ongoing provision of timely and
relevant information to the Board is
of critical importance in enabling
the Board to effectively discharge
their obligations in accordance with
the requirements of the QRTA Act.
The structure, format and content
of Board agendas presented to
Members for consideration and
decision, along with Board Paper
format, quality and timeliness is
reviewed on an ongoing basis with a
formal review annually.
The Board reviews its own
performance and that of the
Committees of the Board on a
regular basis to ensure they are
working effectively. The Board
participates in regular in-camera
sessions that provide an
opportunity for the Members to
review and analyse their current
performance as a Board and discuss
any issues that may exist.
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Queensland Rail FY2012/13 Annual and Financial Report
A formal Board performance
evaluation is conducted on an
annual basis to achieve and
maintain corporate governance
best practice and continual
improvement. An independent
consultant is engaged to assist with
the evaluation every second year,
with the latest independent review
completed during FY2011/12.
The performance evaluation
process generally includes the
evaluation of the Board as a whole,
the Chair and the effectiveness of
the Board Committees. The process
is undertaken through a formal
questionnaire completed by each
Member and members of the senior
executive team. The review
considers a range of issues
including Board role, strategy,
monitoring performance, risk and
compliance oversight, stakeholder
communication, Board structure
and processes. Due to changes to
Board composition and the
establishment of the Statutory
Authority during the year, the
formal Board evaluation for
FY2012/13 has been deferred until
June 2014.
A written advice of the outcome of
the evaluation will be provided to
responsible Ministers on completion
of the review.
Principle 3 – Promote ethical and responsible decision making
Queensland Rail has well
established policies, procedures
and practices that seek to promote
ethical standards of behaviour and
a culture of compliance that is risk
aware and embraces good
governance practices in accordance
with our corporate, legal and
community obligations.
These expected standards of
integrity, honesty and
accountability are reflected in our
formal Code of Conduct which
applies to all Members and
employees and is aligned with the
organisations five key strategic
pillars of safety, customer, people,
commercial and community. The
Code of Conduct is supported by
other policy related documents in
relation to ethics, privacy, dealing
with conflicts of interest, trading in
securities and official misconduct.
While, as a Statutory Authority, no
Member or employee holds or
trades securities in Queensland
Rail, the organisation has
established standards and
procedures that set out the legal
duties that apply to Members and
employees in relation to the
potential misuse of information
including the insider trading
prohibition under the Corporations
Act.
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Queensland Rail FY2012/13 Annual and Financial Report
Ongoing training in relation to
ethical business practices is
provided by the organisation and
the Queensland Rail Code of
Conduct also forms part of the
induction process for new
employees, consultants and
contractors. A copy of the Code of
Conduct is available on our
website.
Queensland Rail also has in place
related processes and policy
documents setting out the
requirements of the Public Interest
Disclosure Act 2010, which
facilitates disclosure of public
interest information and provides
protection for those who make
public disclosures.
Principle 4 – Safeguard integrity in financial reporting
The Board has established an Audit
and Risk Committee that reviews
the integrity of Queensland Rail’s
financial reporting systems. The
Committee is governed by its own
Charter, which is approved by the
Board and reviewed annually. A
copy of the Audit and Risk
Committee Charter is available on
the website. The Committee assists
the Board by reviewing and
monitoring assurance activities
over business operations, the
effectiveness of internal controls,
regulatory reporting, financial
risks, compliance issues and
enterprise risk management
frameworks. The Committee
monitors both internal and external
audit functions.
The role of the Chair of the
Committee is not held by the
Chairman of the Board and all
Committee members are
independent non-executive
Members. Membership of the
Committee and details of
attendance at meetings is disclosed
below in the Board Committees
section.
The CEO and Chief Financial Officer
(CFO) certify in writing that the
Queensland Rail Financial Report
represents a true and fair view of
Queensland Rail’s financial position
and that it has been prepared in
accordance with all relevant
accounting standards and
legislation.
Queensland Rail has a detailed
internal audit plan that is approved
by the Audit and Risk Committee
and managed by the Senior
Manager Risk, Internal Audit and
Governance, who provides regular
reports to the Audit and Risk
Committee.
In accordance with the Auditor-
General Act 2009, the external
audit function of Queensland Rail is
performed by the Queensland Audit
Office. The Audit and Risk
Committee monitors the
performance of the external
auditors on an annual basis.
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Queensland Rail FY2012/13 Annual and Financial Report
Principle 5 – Make timely and balanced disclosure
Queensland Rail has established
communication protocols and
standards in relation to the
disclosure of public information and
regularly assesses the information
needs of all stakeholders to ensure
that they continue to be informed
about our activities in a timely and
accurate manner.
In addition, the company has
established a dedicated
Government and Stakeholder
Relationships team to assist with
management of government and
regulatory relationships and the co-
ordination of information and
reporting requests.
Regular communications are
initiated with key stakeholders
including responsible Ministers and
government representatives. The
Chairman and CEO meet with
responsible Ministers and/or their
representatives on a regular basis.
Queensland Rail management also
meets with representatives of the
responsible Ministers after each
Board meeting to update them on
relevant issues. Information needs
of these stakeholders are also
discussed at these meetings.
As required by the QRTA Act,
detailed quarterly reports are
provided to responsible Ministers
and their representatives, as well
as individual Ministerial briefings on
specific issues. These reports
include information regarding
financial performance, updates on
major capital programs, key
operational matters, risk
management and governance issues
as well as information required to
be given in accordance with
Queensland Rail’s Operational and
Strategic Plans.
Principle 6 – Respect the rights of shareholders
Queensland Rail respects the rights
of responsible Ministers as the
ultimate owners of the business.
The Board and senior executives of
Queensland Rail engage with our
responsible Ministers and their
representatives on a regular basis.
As at 30 June 2013, Queensland
Rail’s responsible Ministers were
the Honourable Scott Emerson MP,
Minister for Transport and Main
Roads and the Honourable Tim
Nicholls MP, Treasurer and Minister
for Trade.
We are committed to ensuring that
our responsible Ministers and their
representatives are provided with
the information they need to make
informed assessments of the
operations, financial and
performance and financial position
of Queensland Rail and its
subsidiaries.
59
Queensland Rail FY2012/13 Annual and Financial Report
Queensland Rail prepares an
Operational Plan and Strategic Plan
for our responsible Ministers’
approval. The Operational Plan and
Strategic Plan are formal
performance contracts between
Queensland Rail and its responsible
Ministers detailing proposed
undertakings and target
performance for the year ahead.
In line with the requirements of the
QRTA Act, responsible Ministers are
advised in a timely manner of all
issues likely to have a significant
financial, operating, employee,
community or environmental
impact including those matters that
may prevent or significantly affect
achievement of the performance
objectives outlined in the
Operational Plan.
Approval of responsible Ministers is
sought for major investments and
expenditure outlays, as well as
Queensland Rail’s entry into
significant supply or customer
contracts.
Principle 7 – Recognise and manage risk
Queensland Rail recognises that
effective risk management and
compliance frameworks are a key
element of an organisation’s
corporate governance process. The
Board has approved a Risk
Management Policy and associated
framework for identifying,
assessing and managing Queensland
Rail’s strategic, operational,
financial and reputation risks.
The objectives of the policy are to:
• provide an enterprise-wide
approach to risk management to
ensure it is managed in an
integrated, systematic and
practical manner
• facilitate the achievement of
Queensland Rail’s corporate
objectives and strategies
• define the mechanisms by which
the company determines its risk
appetite and the process for
identification and management
of risk
• articulate roles, responsibilities
and accountabilities for the
management, oversight and
governance of risk.
The approach defined within this
policy is consistent with the
Australian and New Zealand
standard on change to risk
management (ISO 31000:2009).
Supporting the policy is a
framework prepared to guide the
various business functions in
addressing their particular risks
through a structured risk
management approach. The
framework is designed to ensure
risks are regularly identified,
assessed, monitored and reported
to the Board on a periodic basis,
along with appropriate risk
mitigation and management plans.
The Board evaluates reported risks
reaching a defined enterprise risk
tolerance level and actively
monitors these risks and associated
controls, including any additional
risk mitigation treatments that are
proposed. Assurance activities are
undertaken to ensure that the
controls are operating effectively.
60
Queensland Rail FY2012/13 Annual and Financial Report
The Board has charged
management with the responsibility
for managing risk within the
organisation and the
implementation of mitigation
measures, under the direction of
the CEO supported by senior
executives. The group risk
management function, led by the
Senior Manager Risk, International
Audit and Governance, has been
established to facilitate the process
by providing a centralised role in
advising the various business
functions on executing risk
management and mitigation
strategies, as well as consolidating
risk reporting to senior executives
and the Board.
The CEO and CFO have declared in
writing to the Board that
Queensland Rail’s risk management
and control system is operating
effectively in all material respects
based on representations by
management.
Queensland Rail has established an
appropriate fraud control
framework for the ongoing
monitoring and co-ordination of
fraud control activities. The
framework is supported by the
Code of Conduct and associated
governance principles, standards
and procedures that outline
employee obligations in relation to
ethical behaviour and the process
for reporting, recording and
investigating allegations of fraud.
A dedicated Ethics Hotline has been
established to enable employees to
report any concerns regarding
unethical conduct, breaches of the
law and suspected fraud or official
misconduct. A dedicated Crime and
Misconduct Commission (CMC)
Liaison Officer manages the
obligations under the Crime and
Misconduct Act 2001 in relation to
notification of suspected official
misconduct to the CMC.
Principle 8 – Remunerate fairly and responsibly
The Board has established a People
and Safety Committee that, among
other things, reviews Queensland
Rail’s remuneration framework.
The Committee is governed by its
own Charter, which is approved by
the Board and reviewed annually. A
copy of the People and Safety
Committee Charter is available on
the website. The Committee assists
the Board by reviewing and
providing recommendations on the
recruitment, retention,
remuneration and performance
measurements of the CEO and
senior executives.
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Queensland Rail FY2012/13 Annual and Financial Report
Membership of the Committee and
details of attendance at meetings is
disclosed below in the Board
Committees section. Queensland
Rail recognises that the
achievement of its corporate
objectives is dependent on the
efforts of its people and has
established remuneration policies,
procedures and framework
designed to attract and retain high
calibre employees and to align
individual and team efforts to
agreed KPIs linked to the
Operational and Strategic Plans of
the organisation.
Our senior executive remuneration
arrangements are subject to
approval or endorsement by the
Board in accordance with the
Governance Remuneration
arrangements for Chiefs and Senior
Executives. Remuneration for
Member is established by the
responsible Ministers in accordance
with the QRTA Act.
Details of the nature and amount of
payments to each Member of
Queensland Rail and specified
Queensland Rail senior executives
are set out in the FY2012/13
Financial Report.
Board Meetings
The Board held 13 meetings during
the financial year, including an
offsite meeting at the Townsville
office.
Typically, at Board meetings, the
agenda will include the following:
• disclosure of Member interests
• minutes of the previous meeting
and any outstanding issues
raised by Members at previous
meetings
• CEO’s report
• reports on major projects and
current business issues
• transactions requiring Board
approval in accordance with the
Delegations Framework
• updates from Committee Chairs
on matters considered at
Committee meetings
• the minutes of previous
Committee meetings.
A private session involving only
non-executive Members is held at
the beginning of each Board
meeting and chaired by the
Chairman. The CEO, General
Counsel and Company Secretary are
also present at all Board meetings.
Members of senior management
attend Board meetings when an
issue under their area of
responsibility is being considered or
as otherwise requested by the
Board.
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Queensland Rail FY2012/13 Annual and Financial Report
Member attendance at meetings of
the Board* in FY2012/13 are
detailed below:
1 Appointed to the Board 20/12/12, appointed Deputy Chair 21/06/13
2 Appointed Chair 12/07/12, ceased as Member 18/6/13
3 Appointed to the Board 20/12/12
4 Ceased as Board Member 12/12/12
5 Ceased as Board Member 20/12/12
6 Ceased as Board Member 30/09/12
7 Ceased as Board Member 30/09/12, re-appointed to the Board 20/12/12
Board Committees
The Board has established
Committees to assist with meeting
its responsibilities. The Audit and
Risk Committee, People and Safety
Committee and the Organisational
Performance and Strategy
Committee are governed by their
own Charters.
The membership of each Board
Committee is made up of a
minimum of three Members from
the Board.
The CEO and Senior Executives
attend meetings at the discretion
of the Committee.
An annual evaluation of Committee
performance forms part of the
Board’s overall performance
review.
Audit and Risk Committee
The Audit and Risk Committee is a
committee of the Board created to
assist the Board in the effective
discharge of its governance and
oversight responsibilities relating to
the financial reporting and risk
management of Queensland Rail.
The Committee oversees and
monitors the preparation of
financial statements, internal
control structures, compliance and
risk management frameworks and
the internal and external audit
functions of Queensland Rail.
The Committee’s key
responsibilities include:
• the integrity of Queensland
Rail’s financial reporting and
disclosure processes
• review of significant accounting
policies and alternative
treatments available
• the effectiveness of Queensland
Rail’s systems of accounting and
internal controls
• the scope of Queensland Rail’s
internal audit and external
audit programs and any
material issues arising from
these audits
Committee Member
Attended
Eligible to Attend
Geoff Harley 1 (Deputy Chair) 6 6
Glen Dawe 2
(Chair) 11 11
David George3 6 6
Stephen Gregg4
(Chair) 1 1
Maureen Hayes5 4 7
Leo Keliher6 3 4
Merren McArthur 11 13
Wendy McMillan3 6 6
Denise McMillan-Hall6 4 4
Dawson Petie7 9 10
Julie-Anne Schafer 11 13
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Queensland Rail FY2012/13 Annual and Financial Report
• the effectiveness of the
processes and assurance
activities used by management
to monitor and ensure
Queensland Rail’s compliance
with laws, regulations, ethical
guidelines and obligations for
external reporting of financial
information
• review of risk policies and
associated risk documentation
adopted by Queensland Rail
• the effectiveness of risk
management processes and
frameworks used to support
Queensland Rail’s risk
management policies,
procedures and documentation
• review and monitor key risk
exposures, control mitigations
and residual risks of Queensland
Rail
• the effectiveness of the risk
management and control
structures in place to identify
and monitor Queensland Rail’s
compliance with applicable
laws, regulations and
governance obligations.
Mr Dawson Petie chaired the
Committee. The Committee
members and attendance at
meetings in FY2012/13 are detailed
below:
1 Appointed Chair to the Committee 30/01/13
2 Appointed to the Committee 31/07/12, ceased as Committee Member 18/06/2013
3 Ceased as Committee member 30/09/12
4 Appointed to the Committee 30/01/13
People and Safety Committee
The People and Safety Committee
is a committee of the Board
created to assist the Board in the
effective discharge of its
governance and oversight
responsibilities relating to the
human resource and safety
practices of Queensland Rail.
The Committee oversees and
monitors the remuneration and
performance framework for
Queensland Rail’s senior executives
and employees. The Committee
also provides direction and
oversight for safety policies,
frameworks and practices.
The Committee’s key
responsibilities include:
• the appointment and
termination of the CEO and
senior executives (direct reports
to CEO)
• the annual remuneration and
performance review for the CEO
and senior executives including
the establishment of
appropriate performance
measures and incentive targets
Committee Member
Attended
Eligible to Attend
Dawson Petie 1 (Chair) 3 3
Glen Dawe 2 3 5
Leo Keliher3 1 1
Wendy McMillan4 3 3
Denise McMillan-Hall3 1 1
Julie-Anne Schafer 4 5
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Queensland Rail FY2012/13 Annual and Financial Report
• the development and review of
human resource policies and
practices including
remuneration, learning and
development, people
performance framework, code
of conduct, ethics and expected
values and behaviours
• the adequacy and effectiveness
of Queensland Rail’s
employment, remuneration and
industrial relations strategies
and plans
• external stakeholder
engagement (including
responsible Ministers,
government and community)
and external corporate
communications strategies and
plans
• development and review of
policies, frameworks and
practices relating to the
security and safety of
Queensland Rail’s network and
trains
• review and monitor frameworks
and practices dealing with the
health, safety and welfare of
Queensland Rail’s customers,
employees and the public
• the adequacy and effectiveness
of Queensland Rail’s compliance
with relevant safety legislation,
regulations, engineering
• standards and accreditation
requirements
• provide direction and oversight
of safety related risks, controls
and assurance processes.
Ms Merren McArthur chaired the
Committee. The Committee
members and attendance at
meetings in FY2012/13 are detailed
below:
1 Appointed Chair to the Committee 30/01/13 2 Appointed to the Committee 31/07/12,
ceased as Committee member 18/06/13 3 Appointed to the Committee 30/01/13 4 Ceased to be a member 10/07/12
5 Ceased to be a member 20/12/12 6 Ceased to be a member 30/09/12
Organisational Performance and Strategy Committee
Established 1 January 2013, the
Organisational Performance and
Strategy Committee is a committee
of the Board created to assist the
Board in the effective discharge of
its governance and oversight
responsibilities for ensuring
Queensland Rail operates in an
efficient and cost effective manner
while meeting its performance and
strategic expectations.
The Committee’s key
responsibilities include:
• the development of Queensland
Rail’s Operational and Strategic
plans (including principal
assumptions and scenarios)
• identify objectives, outcomes
and KPIs against which the
performance of the organisation
will be measured
• review and monitor the
operational and financial
performance outcomes to
ensure alignment with
Queensland Rail’s strategic
objectives relating to service
quality, efficiency, profitability
and growth
Committee Member
Attended
Eligible to Attend
Merren McArthur1 (Chair) 4 4
Glen Dawe2 2 3
David George3 2 2
Stephen Gregg4 1 1
Geoff Harley3 1 2
Maureen Hayes5 2 2
Wendy McMillan3 2 2
Dawson Petie6 1 1
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Queensland Rail FY2012/13 Annual and Financial Report
• monitor and review delivery of
capital projects and funding to
ensure alignment with
Queensland Rail’s approved
organisational plans and
strategies
• review and monitor
development of strategic
business initiatives to ensure
policies, procedures and
frameworks are consistent with
the strategic planning and
performance objectives of
Queensland Rail
• review and monitor
organisational performance
assessment and operational
planning processes to identify
improvement opportunities for
the future
• monitor changes in the external
environment, which may affect
efficiencies and improvements
criteria
• monitor and oversee compliance
with any requests from
responsible Ministers in relation
to performance related
matters.
Ms Julie-Anne Schafer chaired the
Committee. The Committee
members and attendance at
meetings from 1 January 2013 are
detailed below.
1 All Committee members were appointed on safety 2 Ceased as Committee member on 18/06/13
Notifications by Shareholding Ministers
By letter dated 30 January 2013,
pursuant to section 114 of the
Government Owned Corporations
Act 1993 and section 24AA of the
Acts Interpretation Act 1954, the
Shareholding Ministers revoked the
public sector policies entitled
Purchasing Carbon offsets for
Queensland Government Air Travel,
the QFleet Climate Smart Policy
and the Sport and Recreation
Sponsorship Policy. Consequently,
the Shareholding Ministers advised
that these policies will no longer
apply to Queensland Rail, its
subsidiaries and controlled entities.
Committee Member1
Attended
Eligible to Attend
Julie-Anne Schafer (Chair) 3 3
Glen Dawe2 1 2
David George 3 3
Geoff Harley 2 3
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Queensland Rail FY2012/13 Annual and Financial Report
Notifications by Responsible Ministers
In accordance with a restructure
direction given by responsible
Ministers on 3 May 2013 pursuant to
section 79 of the QRTA Act, the
responsible Ministers directed:
(a) Queensland Rail Limited:
i. To do all things necessary,
incidental or ancillary to
give legal affect to the
transfer of the shares in
Queensland Rail Limited to
Queensland Rail, as
provided for under Section
67 of the Act.
ii. To enter into the Managed
Services Agreement.
iii. As the sole member of On
Track Insurance Pty Ltd, to
pass a special resolution to
repeal the current
Constitution of On Track
Insurance Pty Ltd and
replace it with the New On
Track Constitution.
iv. To continue in force all
Existing Queensland Rail
Limited Policies, subject
to appropriateness and any
modifications necessary,
as the context requires.
v. To amend the Existing
Queensland Rail Limited
Delegations:
(A) so that all references
to a position in
Queensland Rail Limited
are taken to be references
to the same or similar
positions in Queensland
Rail that will now be
occupied by Queensland
Rail staff; and
(B) by making all other
necessary amendments as
the context requires to:
reflect the transfer of
Queensland Rail Limited’s
employees to Queensland
Rail under the Queensland
Rail Transit Authority Act
2013 and to facilitate the
operation of the Managed
Services Agreement.
(b) The Board of Queensland Rail
Limited to do all things necessary
to ensure that Queensland Rail
Limited complies with this
Restructure Direction; and
(c) Queensland Rail Limited and the
Board that where there is
ambiguity or doubt about the
meeting or intent of this
Restructure Direction to follow the
interpretation of the Under
Treasurer or Chief Executive of
DTMR about the matter as advised
to it in a clarifying statement.
By letter dated 3 May 2013, the
responsible Ministers have
requested that while Queensland
Rail is no longer a Government
Owned Corporation, Queensland
Rail and its subsidiaries continue to
apply, to the greatest extent
possible, the following governance
policies and guidelines:
• Code of Practice for GOCs’
Financial Arrangements (2009)
• Corporate Entertainment and
Hospitality Guidelines (2008).
• Investment Guidelines for GOCs
(2009).
• Corporate Governance
Guidelines for GOCs (2009)
• Cost of Capital Principles – GOCs
(2006).
• GOCs Bargaining Guidelines
(2010).
• GOCs Governance Arrangements
for Chief and Senior Executives
(2009)
• GOCs Release of Information
Arrangements (2009)
• Local Industry Policy: A Fair Go
for Local Industry (2008)
• Minimum Disclosure
Requirements for Directors and
Chief and Senior Executives of
GOCs (2009)
• Queensland Code of Practice for
the Building and Construction
Industry (2009)
• State Procurement Policy
(2008).
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Queensland Rail FY2012/13 Annual and Financial Report
By letter dated 28 May 2013, the
Treasurer and Minister for Trade
has advised that pursuant to
section 62 of the QRTA Act,
Queensland Rail and its subsidiaries
are to be listed as National Tax
Equivalents entities of the National
Tax Equivalent Regime (NTER) and
are required to follow the Manual
for the NTER and thereby comply
with the relevant taxation laws.
In accordance with a ministerial
direction given by the responsible
Ministers on 1 August 2013 pursuant
to section 12 of the QRTA Act, the
responsible Ministers directed the
Board of Queensland Rail to appoint
as from 2 August 2013, Mr Glen
Dawe to the position of Chief
Executive Officer of Queensland
Rail for a term of three years.
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Queensland Rail FY2012/13 Annual and Financial Report
Statement of Corporate Intent The Statement of Corporate Intent is the formal statement of Queensland Rail’s
strategic direction, including objectives, strategies and performance outcomes for
FY2012/13. It represents the performance agreement between the Board of
Queensland Rail and its responsible Ministers. The SCI is consistent with Queensland
Rail’s five-year Corporate Plan and reflects the strategy activity in year one of this
planning horizon.
The Annual Report provides a
summary of Queensland Rail’s SCI
performance outcomes relating to
the delivery of strategic and
operational objectives. Queensland
Rail’s SCI is prepared each financial
year in accordance with the
requirements year in accordance
with the requirements of Part 8 of
the Government Owned
Corporations Act 1993 (GOC Act).
The SCI is tabled in the Queensland
Parliament with Queensland Rail’s
Annual Report.
Queensland Rail measures
performance against objectives to
focus efforts achieving strategy.
Key performance indicator
measures and related targets were
identified within the SCI to track
the success of strategies during
FY2012/13.
Other key components of the SCI
are summarised as follows.
Performance Monitoring
The SCI contains a framework for
performance monitoring that
ensures the Queensland Rail Board
is accountable to our shareholding
Ministers for Queensland Rail’s
performance. This framework
enables Queensland Rail to report
on a number of mandatory financial
and non-financial performance
indicators to present a balanced
perspective on Queensland Rail’s
overall performance. Queensland
Rail reports to its shareholding
Ministers against these indicators
on a quarterly basis via quarterly
reports and yearly via the Annual
Report.
Examples of financial indicators
included in the FY2012/13 SCI are:
• earnings before interest and tax
• net profit after tax
• return on operating assets
• return on equity.
Examples of non-financial
indicators included in the
FY2012/13 SCI are:
• City network OTR
• rollingstock utilisation
• customer satisfaction
• Signals Passed at Danger per
million train kilometres
• LTIFR
• Queensland Rail operator
derailments
• Greenhouse Gas Emissions.
Government Revenues and Funding
The SCI outlines the funding of the
following services, which are
purchased by Government through
TSCs with Queensland Rail:
• City network
• Travel network, with the
exception of Kuranda Scenic
Rail
• Network Infrastructure (for
agreed rail infrastructure
network standards and
capacity).
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Queensland Rail FY2012/13 Annual and Financial Report
Employment and Industrial Relations Plan
The SCI includes an Employment
and Industrial Relations Plan, which
guides Queensland Rail in
developing and maintaining
conditions of employment for
employees, including labour market
based remuneration.
Modifications to Statement of Corporate Intent
It is required under Section 120 (1)
(d) of the GOC Act that each annual
report of a GOC includes particulars
of any modifications made to the
SCI during the financial year.
Queensland Rail did not modify its
SCI during FY2012/13.
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Queensland Rail FY2012/13 Annual and Financial Report
Corporate Entertainment and Hospitality
Queensland Rail did not undertake any corporate
entertainment and hospitality activities throughout
FY2012/13 that involved costs greater than $5,000.
71
Queensland Rail68 598 268 528ABN
Financial report30 June 2013for the period 3 May to
72Queensland Rail Financial Report FY2012/13
68 598 268 528ABNQueensland Rail30 June 2013-Financial report
ContentsPage
Financial statementsIncome statement 1Statement of comprehensive income 2Balance sheet 3Statement of changes in equity 4Statement of cash flows 5Notes to the financial statements 6
Management certificate 65INDEPENDENT AUDITOR'S REPORT 66
and its controlled entities.Queensland Railcoverfinancial statementsThese
Queensland Rail Transit Authority Actis an unincorporated statutory body established under theQueensland Rail2013.
The statutory body is controlled by the State of Queensland which is the ultimate parent.
The head office and principal place of business of the statutory body is:
Level 14, Rail Centre 1, 305 Edward Street4000QldBrisbane
A description of the nature of the statutory body's operations and its principal activities is included in the notes tostatements.financialthe
73Queensland Rail Financial Report FY2012/13
Queensland RailIncome statement
For the period 3 May to 30 June 2013
Consolidated Parent
Notes2013$'000
2013$'000
Revenue from continuing operations 5 328,653 259,096
Other income 6 487 -Consumables (75,602) -Employee benefits expense (113,403) (120,486)Depreciation and amortisation expense 7 (51,419) -Other expenses 7 (2,126) -Finance costs 7 (38,371) -Profit before income tax 48,219 138,610
Income tax expense 8 (10,504) -
periodProfit for the 37,715 138,610
should be read in conjunction with the accompanying notes.income statementThe above
74Queensland Rail Financial Report FY2012/13
Queensland RailStatement of comprehensive incomeFor the period 3 May to 30 June 2013
Consolidated Parent
Notes2013$'000
2013$'000
periodProfit for the 37,715 138,610
Other comprehensive income*Changes in the fair value of cash flow hedges 28 497 -Income tax relating to components of other comprehensive income 288, (149) -
net of taxperiod,Other comprehensive income for the 348 -
periodTotal comprehensive income for the 38,063 138,610
* Other comprehensive income comprises amounts that are expected to be reclassified to profit or loss insubsequent periods when specific conditions are met.
should be read in conjunction with the accompanying notes.statement of comprehensive incomeThe above
75Queensland Rail Financial Report FY2012/13
Queensland RailBalance sheet
As at 30 June 2013
Consolidated Parent
Notes2013$'000
2013$'000
ASSETSCurrent assetsCash and cash equivalents 9 276,468 -Trade and other receivables 10 182,025 675,625Inventories 11 61,237 -Derivative financial instruments 12 475 -Other current assets 13 6,862 -
Total current assets 527,067 675,625
Non-current assetsReceivables 14 3,843 31,375Inventories 15 22,533 -Property, plant and equipment 16 6,239,870 -Intangible assets 17 46,988 -Deferred tax assets 18 101,659 73,419Other financial assets 19 - 2,845,324Other non-current assets 20 4,834 -
Total non-current assets 6,419,727 2,950,118
Total assets 6,946,794 3,625,743
LIABILITIESCurrent liabilitiesBank overdraft 9 13,908 -Trade and other payables 21 309,829 501,552Provisions 22 236,728 217,071Borrowings 24 99,817 -Current tax liabilities - 1,154Other current liabilities 23 24,758 67
Total current liabilities 685,040 719,844
Non-current liabilitiesProvisions 22 52,024 37,808Borrowings 24 3,000,000 -Deferred tax liabilities 25 411,894 -Other non-current liabilities 26 29,845 -
Total non-current liabilities 3,493,763 37,808
Total liabilities 4,178,803 757,652
Net assets 2,767,991 2,868,091
EQUITYContributed equity 27 2,602,628 2,845,324Reserves 28 314 -Retained earnings 28 165,049 22,767
Total equity 2,767,991 2,868,091
should be read in conjunction with the accompanying notes.balance sheetThe above
76Queensland Rail Financial Report FY2012/13
Queensland RailStatement of changes in equity
For the period 3 May to 30 June 2013
Consolidated Notes
Contributedequity$'000
Reserves$'000
Retainedearnings
$'000
Totalequity$'000
Balance at 3 May 2013 - - - -
Profit for the period - - 37,715 37,715Other comprehensive income - 348 - 348Total comprehensive income for the period - 348 37,715 38,063
Transactions with owners in their capacityas owners:Acquisition of subsidiaries 2827, 2,602,628 (34) 243,177 2,845,771Dividends provided 29 - - (115,843) (115,843)
2,602,628 (34) 127,334 2,729,928
30 June 2013Balance at 2,602,628 314 165,049 2,767,991
Parent Notes
Contributedequity$'000
Reserves$'000
Retainedearnings
$'000
Totalequity$'000
Balance at 3 May 2013 - - - -
Profit for the period - - 138,610 138,610Other comprehensive income - - - -Total comprehensive income for the period - - 138,610 138,610
Transactions with owners in their capacityas owners:Acquisition of subsidiaries 2827, 2,845,324 - - 2,845,324Dividends provided 29 - - (115,843) (115,843)
2,845,324 - (115,843) 2,729,481
30 June 2013Balance at 2,845,324 - 22,767 2,868,091
should be read in conjunction with the accompanying notes.statement of changes in equityThe above
77Queensland Rail Financial Report FY2012/13
Queensland RailStatement of cash flows
For the period 3 May to 30 June 2013
Consolidated Parent
Notes2013$'000
2013$'000
Cash flows from operating activitiesReceipts from customers* 86,106 132,536Receipts from Government* 254,272 -Interest received 1,705 -Payments to suppliers and employees* (239,548) (113,079)Interest and other costs of finance paid (31,421) -Net GST paid (19,562) (6,453)Other (31) 1
from operating activitiesinflowNet cash 36 51,521 13,005
Cash flows from investing activitiesLoans to related parties - (13,005)Proceeds from the disposal of assets 1,075 -Payments for fixed assets (93,990) -
from investing activities(outflow)Net cash (92,915) (13,005)
Cash flows from financing activitiesProceeds from borrowings 28,240 -
from financing activitiesinflowNet cash 28,240 -
in cash and cash equivalents(decrease)Net (13,154) -Cash and cash equivalents acquired from subsidiaries 275,716 -
period**Cash and cash equivalents at end of 9 262,562 -
* Inclusive of goods and services tax (GST).** Net of bank overdraft and monies held in trust.
should be read in conjunction with the accompanying notes.statement of cash flowsThe above
78Queensland Rail Financial Report FY2012/13
Queensland RailNotes to the financial statements
30 June 2013
Contents of the notes to the financial statements
Page
1 Summary of significant accounting policies 72 Financial risk management 213 Critical accounting estimates and judgements 284 Correction of error and revision of estimates 295 Revenue from continuing operations 306 Other income 307 Expenses 318 Income tax expense 329 Current assets - Cash and cash equivalents 3310 Current assets - Trade and other receivables 3311 Current assets - Inventories 3512 Derivative financial instruments 3613 Current assets - Other current assets 3614 Non-current assets - Receivables 3715 Non-current assets - Inventories 3716 Non-current assets - Property, plant and equipment 3817 Non-current assets - Intangible assets 4018 Non-current assets - Deferred tax assets 4219 Non-current assets - Other financial assets 4320 Non-current assets - Other non-current assets 4321 Current liabilities - Trade and other payables 4322 Liabilities - Provisions 4423 Current liabilities - Other current liabilities 4724 Liabilities - Borrowings 4725 Non-current liabilities - Deferred tax liabilities 4926 Non-current liabilities - Other non-current liabilities 5027 Contributed equity 5028 Reserves and retained earnings 5129 Dividends 5230 Key management personnel disclosures 5331 Contingencies 6032 Commitments 6033 Related party transactions 6134 Subsidiaries 6335 Remuneration of auditors 6436 Reconciliation of profit after income tax to net cash inflow from operating activities 6437 Events occurring after the reporting period 64
79Queensland Rail Financial Report FY2012/13
Queensland RailNotes to the financial statements
30 June 2013(continued)
1 Summary of significant accounting policies
are setfinancial statementsconsolidatedtheseThe principal accounting policies adopted in the preparation ofpresented, unless otherwise stated.periodsout below. These policies have been consistently applied to all the
and its subsidiaries,Queensland Railconsisting ofentityconsolidatedare for thefinancial statementsTheLtd.On Track Insurance PtyandQueensland Rail Limited
were transferred to the Queensland Rail Transit Authority.Queensland Rail LimitedOn 3 May 2013, the shares inQueensland Rail Transit Authority Act 2013The Queensland Rail Transit Authority was established under the
(QRTA Act). In accordance with the QRTA Act, the name of the Queensland Rail Transit Authority was changedon 2 June 2013.Queensland Railto
previously approved by the Board on 28 August 2013, have beenRail,Queenslandforfinancial statementsTheamended subsequent to receiving an unqualified audit opinion from the Auditor-General of Queensland on 30
resolved to transfer costs from capital work in progress toQueensland RailofBoardAugust 2013. Theconsumables expense as those costs no longer represent future economic value. This decision was madesubsequent to considering the accounting implication of a significant de-scope in its Sunlander 14 capitalprogram.
The recognition of the transfer of costs from capital work in progress to consumables expense relates to an eventTransit Authority. This transaction is not reflectedQueensland Railthat occurred prior to the establishment of the
in the financial statements for the reporting period 3 May 2013 to 30 June 2013. The consolidated balance sheetdoes, however, reflect the impact of this event at 30 June 2013.
is an unincorporated statutory body domiciled in Australia and owned by the Queensland StateQueensland Railare denominated in Australianfinancial statementsis a for-profit entity. TheseQueensland RailGovernment.
dollars.
togetherQueensland Railis referred to in this financial report as the "company" or the "parent".Queensland Railare collectively referred to as theLtd,On Track Insurance PtyandQueensland Rail Limitedwith its subsidiaries,
"group".
comprises:financial periodobjectives for thegroup’sThe(a) Efficiency improvement and revenue creation;(b) On time running, reliability, frequency of service and patronage growth;(c) Capital performance and project delivery; and(d) Safety improvement, employee engagement and environment management.
consists of:groupThe principal activities of the(a) Passenger services throughout Queensland;(b) Network access services throughout Queensland;(c) Design and construction of rail infrastructure; and(d) Associated maintenance of both the above and below rail operations.
In accordance with the QRTA Act, all employees and their associated leave entitlements belonging toon 3 May 2013. All expenses incurred byQueensland Railwere transferred toQueensland Rail Limited
in accordanceQueensland Rail Limitedrelating to these employees have been recharged toQueensland Railwith a Managed Services Agreement.
2013.16 DecemberonmembersThese financial statements were approved for issue by the
80Queensland Rail Financial Report FY2012/13
Queensland RailNotes to the financial statements
30 June 2013(continued)
1 (continued)Summary of significant accounting policies
(a) Basis of preparation
(i) Statement of compliance
which have been prepared in accordancefinancial statementsare general purposefinancial statementsThesewith:
• applicable Australian Accounting Standards (AASBs) (including Australian Interpretations) adopted bythe Australian Accounting Standards Board (AASB);
• 2009;Financial and Performance Management Standardthe• Financial Reporting Requirements for Queensland GovernmentQueensland Treasury and Trade’s
to the extent relevant; andAgencies• other authoritative pronouncements.
(ii) groupNew and amended standards adopted by the
None of the new standards and amendments to standards that are mandatory for the first time for the financialwere early adopted. Their adoption has not affected any of the amounts recognised in1 July 2012year beginning
the current period or any prior period and is not likely to affect future periods. However, amendments made tonow require the statement of2012,1 JulyeffectiveStatements,Presentation of FinancialAASB 101
comprehensive income to show the items of comprehensive income grouped into those that are not permitted tobe reclassified to profit or loss in a future period and those that may have to be reclassified if certain conditionsare met.
(iii) Early adoption of standards
The following standards and amendments to standards are available for early adoption for the financial year2012:1 Julybeginning
Financial InstrumentsAASB 9Amendments to Australian Accounting Standards arising from AASB 9 FinancialAASB 2009-11
InstrumentsAmendments to Australian Accounting Standards arising from AASB 9 FinancialAASB 2010-7
InstrumentsAmendments to Australian Accounting Standards - Mandatory Effective Date of AASB 9 andAASB 2012-6
Transition DisclosuresConsolidated Financial StatementsAASB 10Joint ArrangementsAASB 11Disclosure of Interests in Other EntitiesAASB 12
(2011)Separate Financial StatementsAASB 127(2011)Investments in Associates and Joint VenturesAASB 128
Amendments to Australian Accounting Standards arising from the Consolidation and JointAASB 2011-7Arrangements Standards
Amendments to Australian Accounting Standards - Transition Guidance and otherAASB 2012-10amendments
Fair Value MeasurementAASB 113Amendments to Australian Accounting Standards arising from AASB 113 Fair ValueAASB 2011-8
Measurement(September 2011)Employee BenefitsAASB 119
Amendments to Australian Accounting Standards arising from AASB 119 Employee BenefitsAASB 2012-5(September 2011)
Amendments to Australian Accounting Standards - Disclosures - Offsetting Financial Assets andAASB 2012-2(June 2012)Liabilities
Amendments to Australian Accounting Standards - Offsetting Financial Assets and LiabilitiesAASB 2012-3Amendments to Australian Accounting Standards arising from the Annual ImprovementsAASB 2012-5
2009-2011 CycleApplication of Tiers of Australian Accounting StandardsAASB 1053
Amendments to Australian Accounting Standards arising from Reduced DisclosureAASB 2010-2Requirements
Queensland Rail Financial Report FY2012/13 81
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1 (continued)Summary of significant accounting policies
The application of these standards and amendments in future periods is not expected to have a material impacton the accounts of the group. The group has not elected to early adopt any pronouncements for the currentannual reporting period.
There are no other standards that are not yet effective and that are expected to have a material impact on thegroup in the current or future reporting periods and on foreseeable future transactions.
(iv) Historical cost convention
been prepared under the historical cost convention, except for certain assetshavefinancial statementsThesewhich, as stated, are at fair value.
(v) Critical accounting estimates
requires the use of certain critical accounting estimates. It also requiresfinancial statementsThe preparation ofThe areas involving amanagement to exercise its judgement in the process of applying the accounting policies.
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the3.are disclosed in notestatements,financial
(vi) Going Concern
is prepared on a going concern basis despite current liabilities exceedinggroupThe financial report for thecurrent assets at reporting date. The shortfall is partly due to vested employee benefits being classified ascurrent. Funding through Transport Service Contracts, adequate interest coverage and a low gearing ratio
status as a going concern.group'sprovides adequate assurance of the
Queensland RailThe parent is a going concern as all costs incurred in providing employees to its subsidiary,AllLimited.Queensland Railis recharged by the parent under a Managed Services Agreement withLimited,
banking facilities.Queensland Rail Limitedfunding for operating activities of the parent are sourced from the
(b) Principles of consolidation
(i) Subsidiaries
Queensland Railthe assets and liabilities of the subsidiaries ofincorporatefinancial statementsconsolidatedThethen ended.periodas at reporting date and the results of the subsidiaries for the
has the power to govern thegroupA subsidiary is an entity (including a special purpose entity) over which thefinancial and operating policies so as to obtain benefits from their activities, generally accompanying ashareholding of more than one-half of the voting rights.
They aregroup.Subsidiaries are fully consolidated from the date on which control is transferred to thede-consolidated from the date that control ceases.
companies aregroupInter-company transactions, balances and unrealised gains on transactions betweeneliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment ofthe asset transferred.
Non-current inter-company loans may not be demanded by the other entity and do not become payable otherthan through settlement of obligations associated with the loans or one of the entities exits the wholly-ownedgroup.
group.Accounting policies have been adopted consistently across the
Investment in the subsidiary is accounted for at cost in the financial records of the parent entity.
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1 (continued)Summary of significant accounting policies
(c) Foreign currency translation
(i) Functional and presentation currency
entities are measured using the currency of thegroup'sof each of thefinancial statementsItems included in theconsolidatedprimary economic environment in which the entity operates (i.e. the functional currency). The
functional and presentationgroup'spresented in Australian dollars, which is thearefinancial statementscurrency.
(ii) Transactions and balances
Foreign currency transactions are initially translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of
end exchange rates of monetary assets and liabilitiesperiodsuch transactions and from the translation atdenominated in foreign currencies are recognised in profit or loss, except when they are deferred in equity asqualifying cash flow hedges and qualifying net investment hedges.
(d) Rounding of amounts / Comparative restatements
functional currency. Amountsgroup’sare presented in Australian dollars, which is thefinancial statementsThehave been rounded to the nearest thousand dollars unless disclosure of thefinancial statementsincluded in the
full amount is specifically required.
Comparative information has been restated where necessary to be consistent with disclosures in the currentreporting period.
(e) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, except where the amountof GST incurred is not recoverable from the Australian Taxation Office (ATO). In these circumstances, the GST isrecognised as part of the cost of acquisition of the asset or as part of the expense.
Trade receivables and trade payables in the balance sheet are shown inclusive of GST. The net amount of GSTrecoverable from, or payable to, the ATO is included with other receivables or payables in the balance sheet.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component ofinvesting or financing activities, which are disclosed as operating cash flow.
are individualOn Track Insurance Pty LtdandQueensland Rail LimitedRail,QueenslandFrom 3 May 2013entities recognised as separate taxpayers for the purposes of GST. Transactions between these entities andexternally to third parties are subject to GST.
(f) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable after taking into account anyrecognises revenue whengroupdiscounts allowed. Amounts disclosed as revenue are net of indirect taxes. The
the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entityactivities as described below. Exchanges of goodsgroup'sand specific criteria have been met for each of the
and services of the same nature and value without any cash consideration are not recognised as revenues.Revenue is recognised for the major business activities as follows:
(i) Services revenue
Services revenue comprises revenue earned from Transport Service Contracts, the provision of passengertransport and track access.
In addition to revenue receivable from non-related parties, the company receives revenue from Transport ServiceContracts with the Department of Transport and Main Roads as well as amounts from various State Governmentdepartments as direct reimbursement for concessions provided to senior citizens, pensioners and students.
Queensland Rail Financial Report FY2012/13 83
Queensland RailNotes to the financial statements
30 June 2013(continued)
1 (continued)Summary of significant accounting policies
Transport Service Contracts
Transport Service Contract revenue is accounted for as follows:
• Transport Service Contract (Rail Infrastructure) (TSC(RI))
with funding to cover capital andcompanyThis contract is a multi-tiered arrangement which provides theoperating costs for the Regional and South East Queensland networks.
Under the contract, a stream of annuity-based funding is provided for operating and capital costs whichhave been previously incurred as well as the capital costs for enhancements to these existing systems.This annuity (which is paid in monthly instalments) is calculated on a seven year forecast of capital andoperating costs for the respective systems under the TSC(RI). Capital costs are based on depreciatingassets over a 30 year period.
• Transport Service Contract - South East Queensland Infrastructure Plan and Program (TSC - SEQIPP)
is contracted tocompanyUnder the South East Queensland Infrastructure Plan and Program, theconstruct infrastructure at various locations throughout the South East Queensland network. The
property, plant and equipment which will generategroup'sinfrastructure constructed forms part of therevenue through the TSC (RI) contract. TSC - SEQIPP revenue is recognised on a systematic basis inaccordance with the agreed rate of return of the SEQIPP assets.
• SEQIPP - Third party work
Revenue is recognised based on the actual costs incurred for the work performed. The revenue isrecognised when the work is complete and the costs incurred are taken to the income statement in thesame financial period.
• Citytrain and Traveltrain Transport Service Contracts
receives payments under the Transport Service Contract which defines passengercompanyTheRevenue is recognised on a straight-line basis based on thegroup.services to be provided by the
annual Transport Service Contract amount or periodic adjustments thereto.
Passenger Transport
Other train passenger service revenue comprises ticket and travel related sales and is recognised as revenueonce the service has been rendered.
Government concession revenue is recognised in the period in which the service is provided based on apredetermined formula as agreed with the local authority.
Track Access
Revenue generated from rail network access is recognised as the services are provided and is calculated basedon a number of operating parameters (such as tonnage hauled) applied to either regulator approved tariffs ornegotiated access agreements.
(ii) Other revenue
Other revenue comprises revenue earned from the sale of goods and services. Revenue for sale of goods isrecognised when the significant risks and rewards are passed to the buyer and the costs incurred, or to beincurred in respect of the transaction can be measured reliably. Risks and rewards are considered passed to thebuyer at the time of delivery.
(iii) Interest income
Interest income is recognised using the effective interest method.
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1 (continued)Summary of significant accounting policies
(g) Other Income
(i) Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that thewill comply with all attached conditions.groupgrant will be received and the
Government grants relating to costs are deferred and recognised in income statement over the period necessaryto match them with the costs that they are intended to compensate.
Government grants relating to the purchase of property, plant and equipment are included in the cost base ofthose assets and amortised to the income statement on a straight-line basis over the expected lives of theassets.
(ii) Disposal of assets
The gain or loss on disposal of an asset is recognised at the date when the significant risks and rewards ofownership of the asset pass to the buyer, usually when the purchaser takes delivery of the asset. The gain orloss on disposal is calculated as the difference between the carrying amount of the asset at the time of disposaland the net proceeds on disposal and is recognised as other income or expenses in the income statement.
(h) Defined benefit superannuation obligations
The group makes contributions to the State Public Sector Superannuation Scheme (QSuper) on behalf of itsemployees concerning superannuation. QSuper is an employer-sponsored fund, with the major employer beingthe State of Queensland. There are a number of membership categories in QSuper, which are eitheraccumulation or defined benefits in nature.
The Treasurer has ultimate responsibility for funding payments to defined benefit members. The State has inplace funding arrangements designed to meet the defined benefit obligations for its members. The Treasurer hasthe ability to require employers to pay any amounts needed to meet these benefits. Generally, this is handledthrough the regular standard fortnightly contribution paid by every employer, which has been determined on theadvice of the State Actuary. No directions varying this contribution have been received by the group to reportingdate.
The State Actuary makes a recommendation to the Treasurer on the standard employer contribution raterequired to fund the normal range of benefits at the conclusion of each triennial actuarial investigation. The mostrecent actuarial investigation was completed in 2010 and the actuary’s recommendation to leave the employercontribution rate unchanged was approved by the Treasurer. This investigation is undertaken on QSuper as awhole and is not segregated into different employers or occupations.
(i) Income tax
The income tax expense or benefit for the period is the tax payable / receivable on the current period's taxableincome based on the national income tax rate adjusted by changes in deferred tax assets and liabilitiesattributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts inthe financial statements and by unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to applywhen the assets are recovered or liabilities are settled, based on those tax rates that are enacted. The relevanttax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure thedeferred tax asset or liability.
Deferred tax assets are recognised for deductible temporary differences, unused tax losses and tax credits, onlyif it is probable that future taxable amounts will be available to utilise those temporary differences, losses andcredits.
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1 (continued)Summary of significant accounting policies
Deferred tax liabilities and assets are not recognised for the temporary differences between the carrying amountand tax bases of investments in controlled entities where the parent entity is able to control the timing of thereversal of the temporary differences and it is probable that the differences will not reverse in the foreseeablefuture.
Current and deferred tax is recognised as an expense or income in the income statement, except when it relatesto items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity.
(i) Tax consolidation legislation
measures current and deferred taxgrouphas not elected to form a tax consolidated group. ThegroupTheOn Track Insurance PtyandQueensland Rail Limitedand its controlled entities,Queensland Railamounts for
as individual stand-alone taxpayers and aggregates the balances for disclosure.Ltd,
(ii) Income tax equivalents
is required to make income tax equivalent payments to the Queensland Government, based upon thegroupThevalue of benefits derived and rulings set out in the National Tax Equivalent Regime (NTER) which is administeredby Australian Taxation Office (ATO).
and instruction from theQueensland Rail Transit Authority Act 2013These payments are made pursuant to theTreasurer. The NTER gives rise to obligations which reflect in all material respects those obligations for taxation
andIncome Tax Assessment Act 1997the1936,Income Tax Assessment Actwhich would be imposed by theassociated legislation, as well as Rulings and other pronouncements by the ATO to determine the tax payable by
group.the
(j) Cash and cash equivalents
For statement of cash flows and balance sheet presentation purposes, cash and cash equivalents include cashon hand, deposits held at call with financial institutions and other short-term highly liquid investments that arereadily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(k) Trade receivables
Trade receivables
Trade receivables are initially recorded at fair value less any allowance for uncollectible amounts. Tradereceivables generally have credit terms ranging from 7 to 31 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible arewritten off. An allowance for impairment of trade receivables is established when there is objective evidence that
will not be able to collect all amounts due according to the original terms of the receivables.groupthe
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financialreorganisation and default or delinquency in payments (more than 90 days overdue) are considered indicatorsthat the trade receivable is impaired.
The amount of the impairment loss is recognised in the income statement within other expenses. When a tradereceivable for which an impairment allowance had been recognised becomes uncollectible in a subsequentperiod, it is written off against the allowance account. Subsequent recoveries of amounts previously written offare credited against other expenses in the income statement.
Other receivables
Other receivables include accruals, contractual receivables and GST receivable. Collectability is reviewed on anongoing basis.
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30 June 2013(continued)
1 (continued)Summary of significant accounting policies
(l) Inventories
The value of inventories reported includes items held in centralised stores, workshops and infrastructure androllingstock depots. Cost comprises cost of purchase, cost of conversion and other costs incurred in bringing theinventory to its present location and condition.
Inventories are valued at the lower of cost or net realisable value. Cost is determined predominantly on anaverage cost basis.
Items expected to be consumed after more than one year are classified as non-current.
The allowance for inventory obsolescence is based on assessments by management of particular inventoryclasses and relates specifically to infrastructure and rollingstock maintenance items. The amount of theallowance is based on a proportion of the value of damaged stock, slow moving stock and stock that has becomeobsolete during the reporting period.
has an agreement in place with Aurizon Operations Limited (formerly QR Limited) regarding inventorygroupTheheld in the Aurizon Operations Limited workshops on behalf of the group. The agreement includes both "calloption" and "put option" clauses and expires on 30 June 2015. The group may exercise a call option upon expiryor termination of the agreement to acquire all or part of the dedicated inventory held by Aurizon OperationsLimited at the expiry or termination date. Aurizon Operations Limited, may in turn, exercise a put option to require
to acquire all or any part of the dedicated inventory held on behalf of the company at the expiry orgroupthetermination date.
(m) Investments and other financial assets
classifies its non-derivative financial assets based on the purpose for which the investments weregroupTheacquired. Management determines the classification of its investments at initial recognition. At reporting date, the
has only one type of non-derivative financial asset: loans and receivables.group
(i) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are notquoted in an active market. They are included in current assets, except for those with maturities greater than 12months after the reporting date which are classified as non-current assets. Loans and receivables are included in
in the balance sheet.14)(noteand non-current receivables10)(notecurrent trade and other receivables
(ii) Recognition and derecognition
Regular purchases and sales of financial assets are recognised on trade-date which is the date on which thecommits to purchase or sell the asset. Investments are initially recognised at fair value plus transactiongroup
costs. Financial assets are derecognised when the rights to receive cash flows from the financial assets havehas transferred substantially all the risks and rewards ofgroupexpired or have been transferred and the
ownership.
(iii) Subsequent measurement
Loans and receivables are carried at amortised cost using the effective interest method.
2.noteDetails on the determination of the fair value of financial instruments are disclosed in
(iv) Impairment
assesses at each reporting date whether there is objective evidence that a financial asset or group ofgroupThefinancial assets carried atgroup’sfinancial assets are impaired. If there is evidence of impairment for any of the
amortised cost, the loss is measured as the difference between the asset’s carrying amount and the presentvalue of estimated future cash flows, excluding future credit losses that have not been incurred. The cash flowsare discounted at the financial asset’s original effective interest rate. The loss is recognised in the incomestatement.
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1 (continued)Summary of significant accounting policies
(n) Derivatives and hedging activities
enters into derivative contracts to hedge exposures to foreign exchange rates and commodity pricesgroupThe12.noteDerivative balances are disclosed in2.noteas described in
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and aresubsequently remeasured to their fair value. The method of recognising the resulting gain or loss depends onwhether the derivative is designated as a hedging instrument and, if so, the nature of the item being hedged.
designates certain derivatives as hedges of the cash flows of recognised assets and liabilities andgroupThehighly probable forecast transactions (cash flow hedges).
documents the relationship between hedging instruments and hedged items, as well as itsgroupAt inception, thealso documentsgrouprisk management objective and strategy for undertaking various hedge transactions. The
its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used inhedging transactions have been and will continue to be, highly effective in offsetting future cash flows of hedgeditems.
The full fair value of a hedging derivative is classified as a non-current asset or liability when the remainingmaturity of the hedged item is more than 12 months; it is classified as a current asset or liability when theremaining maturity of the hedged item is less than 12 months.
(i) Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flowhedges is recognised in other comprehensive income. The gain or loss relating to the ineffective portion isrecognised immediately in the income statement.
Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item willaffect profit or loss. However, when the forecast transaction that is hedged results in the recognition of anon-financial asset, the gains and losses previously deferred in equity are transferred from equity and included inthe measurement of the initial cost or carrying amount of the asset.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria forhedge accounting, any cumulative gain or loss existing in equity at that time is recognised when the forecasttransaction is ultimately recognised in the income statement. When a forecast transaction is no longer expectedto occur, the cumulative gain or loss that was reported in equity is immediately transferred to the incomestatement.
(ii) Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in fair value of any derivativeinstrument that does not qualify for hedge accounting are recognised immediately in the income statement.
(iii) Embedded derivatives
purchase and sale contracts, it is possible that embedded derivatives have been enteredgroup'sThrough theinto. An embedded derivative will cause some or all of the cash flows of the purchase or sale contract (i.e. thehost contract) to be modified by reference to a variable such as a foreign exchange rate or a commodity price ifthat variable is not closely related to the host contract.
Embedded derivatives are separated from the host contract and accounted for as a stand alone derivative if theeconomic characteristics and risks of the embedded derivatives are not closely related to those of the hostcontract.
At reporting date, there were no embedded derivatives not closely related to the host contract.
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1 (continued)Summary of significant accounting policies
(o) Property, plant and equipment
Methodology for valuation of fixed assets
Property, plant and equipment is measured at cost less accumulated depreciation. Cost is the amount of cash orcash equivalents paid or the fair value of the other consideration given to acquire an asset at the time of itsacquisition or construction. Cost may also include transfers from other comprehensive income of any gain or losson qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.
The cost of fixed assets constructed by the group includes the cost of all materials used in construction, directlabour, site preparation, interest and foreign currency gains and losses incurred where applicable and anappropriate proportion of variable and fixed overheads.
Gifted and Donated Assets
Assets acquired from government at no cost are measured at fair value as government grants. Fair value meansthe amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing partiesin an arm’s length transaction.
Assets acquired from customers at no cost are recorded at fair value.
Land
only retains ownership ofgroupstipulates that theTransport Infrastructure Act 1994Land is carried at cost. Theits non-corridor land. As such, only non-corridor land is recorded in these accounts. Ownership of corridor landremains with the Department of Natural Resources and Mines on behalf of the State. This land is leased to the
for no cost. The sub-leasegroupDepartment of Transport and Main Roads and subsequently sub-leased to theterm is for an initial term of 100 years with a renewal option for an additional 100 years.
Owned building, plant and equipment and major plant and equipment
Owned building, plant and equipment and major plant and equipment are carried at cost less accumulateddepreciation. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset,as appropriate, only when it is probable that future economic benefits associated with the item will flow to the
and the cost of the item can be measured reliably.group
Owned infrastructure
Owned infrastructure assets are carried at cost and represent capitalised expenditures that are directly related tocapital projects and may include materials, labour and equipment, in addition to an allocable portion of indirectcosts that clearly relate to a particular project that will provide future economic benefits and remain within the
group.control of the
Subsequent and maintenance costs
Costs related to repairs and maintenance activities are expensed when such repairs are performed. Subsequentcosts are only capitalised when it is probable that future economic benefits associated with the item which flow to
and the cost of the item can be measured reliably. The carrying amount of any component accountedgroupthefor as a separate asset is derecognised when replaced.
Leased property, plant and equipment
Capitalised fit out of leased properties is disclosed under buildings.
does not have any finance leases.groupThe
Work in progress
includes the cost of all materials used in construction, directgroupThe cost of fixed assets constructed by thelabour, site preparation, interest and foreign currency gains and losses incurred where applicable and anappropriate proportion of variable and fixed overheads.
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1 (continued)Summary of significant accounting policies
Depreciation and Amortisation
Buildings, plant and equipment, major plant and equipment and infrastructure are depreciated on a straight-linebasis over the useful life net of the residual value. Motor vehicles are depreciated using the diminishing valuebasis (percentages range from 13.64% to 35.00%), with land and work in progress not depreciated.
Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or theestimated useful lives of the improvements.
Assets are depreciated or amortised from the date of acquisition, or, in respect of internally constructed ormanufactured assets, from the time an asset is completed and held ready for use. Major spares purchasedspecifically for particular assets are capitalised and depreciated in line with standard default asset class lives.
Where assets have separately identifiable components that are subject to regular replacement, thesecomponents are assigned useful lives distinct from the asset to which they relate. Any expenditure that increasesthe originally assessed capacity or service potential of an asset is capitalised and the new depreciable amount isdepreciated over the remaining life of the asset.
were based on the following range of useful lives:periodThe depreciation and amortisation rates used during the
- Buildings 10 - 50 years- Major plant and equipment 8 - 40 years- Plant and equipment 3 - 25 years- Infrastructure* 5 - 100 years
The depreciation and amortisation rates are reviewed annually and adjusted if appropriate.
An asset’s carrying amount is written down to its recoverable amount if the asset’s carrying amount is greater1(r)).(notethan its estimated recoverable amount
* Longer life infrastructure includes bridges, tunnels and other long lived civil works. Shorter life infrastructureincludes telecommunications and security and surveillance equipment.
(p) Intangible assets
(i) IT development and software
Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that willcontribute to future period financial benefits are capitalised to software and systems. Costs capitalised includeexternal direct costs of materials and service and direct payroll and payroll related costs of employees' time spenton the project. Amortisation is calculated using the straight-line method over their useful life which varies from 3to 7 years.
IT development costs include only those costs directly attributable to the development phase and are onlyhas an intention and ability to usecompanyrecognised following completion of technical feasibility and where the
the asset.
(q) Classification of expenditure
Items of expenditure in excess of $2,000 which are expected to provide future economic benefits are capitalised,with the exception of the purchase of office equipment and other items of a similar nature that provide limitedquantifiable benefits. The threshold applies to all asset classes except capital spares and intangibles.
Capital spares have a threshold of $20,000. If capital spares are under $20,000, the item is recorded in inventory.Expenditure not capitalised is treated as an operating expense in the period in which the expenditure is incurred.
Intangibles have a threshold of $50,000. If intangibles are under $50,000, expenditure is not capitalised and istreated as an operating expense in the period in which the expenditure is incurred.
Queensland Rail Financial Report FY2012/13 90
Queensland RailNotes to the financial statements
30 June 2013(continued)
1 (continued)Summary of significant accounting policies
(r) Impairment of assets
Assets are reviewed for impairment annually to determine if there are indications that the carrying amount maynot be recoverable.
An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverableamount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For thepurposes of assessing impairment, assets are grouped at the lowest levels for which there are separatelyidentifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets(cash generating units).
Non-financial assets that have suffered impairment are reviewed for possible reversal of the impairment at eachreporting date.
(s) Trade and other payables
financialprior to the end ofgroupThese amounts represent liabilities for goods and services provided to thewhich are unpaid. The amounts are unsecured and are usually paid within the terms set by the supplier.period
(t) Borrowings and borrowing costs
Debt is drawn from facilities with the Queensland Treasury Corporation (QTC) incorporating fixed and floatingdebt and is initially recognised at fair value, plus transaction costs incurred. Borrowings are subsequentlymeasured at amortised cost, using the effective interest rate method. Interest is accrued and paid monthly.
Interest costs are calculated and advised by QTC in accordance with an agreed book rate methodology, whichequates with amortised cost using the effective interest rate method. The effective interest rate is the rate thatexactly discounts estimated future cash payments or receipts through the expected life of the financialinstrument.
Borrowing costs, which includes interest calculated using the effective interest method and administration fees,are expensed in the period in which they arise.
Borrowing costs which are directly attributable to the construction of material qualifying assets are capitalised.Qualifying assets are assets not funded from other sources with a cost of more than $1.0 million and which take asubstantial period of time to prepare for intended use or sale. The rate used to determine the amount ofborrowing cost to be capitalised is the QTC interest rate applicable to the entity’s outstanding borrowings during
million were capitalised.$(0.6)interest costs ofperiod,During the7.48%.in this caseperiod,the
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement ofthe liability for at least 12 months after the reporting date.
(u) Provisions
has a present legal or constructive obligation as a result of pastgroupProvisions are recognised when theevents, it is probable that an outflow of resources will be required to settle the obligation and the amount hasbeen reliably estimated. Provisions are not recognised for future operating losses.
The amount recognised as a provision is the best estimate of the consideration required to settle the presentobligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where aprovision is measured using the cash flows estimated to settle the present obligation, its carrying amount is thepresent value of those cash flows. The discount rate used to determine the present value is a pre tax rate thatreflects current market assessments of the time value of money and the risks specific to the liability.
(v) Employee benefits
(i) Wages and salaries, annual leave and leave loading
Liabilities for wages and salaries, including non-monetary benefits, annual leave and leave loading arerecognised as current liabilities. These liabilities are in respect of employees' services up to the reporting dateand are measured at the amounts expected to be paid when the liabilities are settled plus related on-costs.
Queensland Rail Financial Report FY2012/13 91
Queensland RailNotes to the financial statements
30 June 2013(continued)
1 (continued)Summary of significant accounting policies
(ii) Other long-term employee benefit obligations
Liabilities for long service leave where employees have completed the required period of service, or are entitledto pro-rata payments are recognised as current liabilities at nominal values. The remaining unvested liabilities areincluded as non-current liabilities.
The liability for long service leave is measured using the expected future payments to be made in respect ofservices provided by employees up to the reporting date. Consideration is given to expected future wage andsalary levels, experience of employee departures and periods of service. Expected future non-current paymentsare discounted using market yields at the reporting date on Commonwealth government bonds with terms tomaturity that match, as closely as possible, the estimated future cash outflows.
(iii) Retirement allowance
Retirement allowance is payable to employees that retire or are paid according to Voluntary EmployeeRedundancy Scheme (VERS) or Medical Separation who:
• are not members of a QSuper contributory or defined benefit superannuation fund;• were employed prior to 1 February 1995;• have 10 or more years of continuous service; and• have reached the retirement attainment age of 55.
Liabilities for retirement allowance where employees fulfil all of the above requirements are recognised as currentliabilities at nominal values. The remaining unvested liabilities are included as non-current liabilities.
The liability for retirement allowance is measured using the expected future payments to be made in respect ofservices provided by employees up to the reporting date. Consideration is given to the history of employeedepartures, expected future wage and salary levels as well as expected age of retirement.
Expected future non-current payments are discounted using market yields at the reporting date onCommonwealth government bonds with terms to maturity that match, as closely as possible, the estimated futurecash outflows.
These conditions continue to apply to employees who have transferred, or will transfer, from Aurizon OperationsRail.QueenslandLimited and Aurizon Network Pty Ltd (formerly QR Network Pty Ltd) to
(iv) Sick leave
Sick leave is not provided for on the grounds that it is non-vesting and on average, no more than the annualentitlement is taken each year.
(v) Superannuation
Contributions are expensed as they are made.
The group pays an employer subsidy to the Government Superannuation Office in respect of employees who arecontributors to either the Public Sector Superannuation (QSuper) scheme or State Service Superannuation.
Employer contributions to the Super Defined Benefit Fund are determined by the State Actuary. No liability isrecognised for accruing superannuation benefits as this liability is held on a Whole-of-Government basis andreported in the Whole-of-Government financial statements. The group also makes superannuation guaranteepayments into the QSuper Accumulation Fund (RailSuper) and QSuper Accumulation Fund (Contributory)administered by the Government Superannuation Office.
No liability / asset is recognised for the group's share of any potential deficit of the Super Defined Benefit Fund offor further information on defined benefit liabilities.1(h)noteQSuper. Refer to
Queensland Rail Financial Report FY2012/13 92
Queensland RailNotes to the financial statements
30 June 2013(continued)
1 (continued)Summary of significant accounting policies
(w) Contributed equity
Ordinary shares are classified as equity.
Equity injections are treated as an increase in the value of issued shares.
(x) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at thebut not distributed at reporting date.financial periodon or before the end of thegroup,discretion of the
(y) Leases
(i) Leases on property, plant and equipment
asgroupLeases in which a significant portion of the risks and rewards of ownership are not transferred to theOperating lease rental (net any incentive received from the32).(notelessee are classified as operating leases
lessor) is expensed on a straight-line basis over the lease term and is charged to the income statement.
as lessee, assumes substantially all the risks andgroup,Leases of property, plant and equipment where thedid not have any finance leases at reportinggroupbenefits of ownership are classified as finance leases. The
date.
is a lessor is recognised as income on agroupExpected rental revenue from operating leases where the32).(notestraight-line basis over the lease term
(z) Insurance
insures against risks which are largely uncontrollable, have significant or catastrophic consequencesgroupThefor assets and / or revenue and the aggregate costs of which would exceed the limit of exposure the organisationis prepared to accept.
Insurance cover has accordingly been effected for a variety of such risks. Other areas of risk exposure areself-insured, including workers' compensation.
Rail'sQueenslandUntil 30 June 2010, self-insurance and other underwriting activities were performed bywas transferred from AurizonOn Track Insurance Pty LtdLtd.On Track Insurance Ptywholly-owned subsidiary,
Operations Limited on 6 October 2010 and will continue to provide cover for claims relating to events up until 30and the Aurizon Operations Limited group.Queensland RailJune 2010 for both
(aa) Environmental regulation
is subject to a variety of laws and regulations in the jurisdiction in which it operates or maintains land.groupTheWhere remediation measures are probable and can be reliably measured, such costs incurred in complying with
1(u).noterelevant laws and regulations are accounted for in accordance with the policy in
it does2011,Clean Energy Actis not required to purchase carbon permits under thegroupAlthough thehasgrouppurchase electricity and other inputs whose prices have increased as a result of the legislation. The
assessed the impact of these increases and determined that they are not material to its operations.
(ab) Authorisation for issue
managementare authorised for issue by the Chairman at the date of signing thefinancial statementsThecertificate.
Queensland Rail Financial Report FY2012/13 93
Queensland RailNotes to the financial statements
30 June 2013(continued)
2 Financial risk management
activities expose it to a variety of financial risks including market risk, credit risk and liquidity risk. Thegroup'sTheoverall risk management program focuses on the unpredictability of financial markets and seeks togroup's
uses derivative financialgroupThegroup.minimise potential adverse effects on the financial performance of theinstruments such as foreign exchange contracts and commodity swap contracts to hedge significant riskexposures. Trading for profit is strictly prohibited.
under policies approvedgroupFinancial risk management is being carried out by a central treasury unit within theThe treasury unit identifies, evaluates and hedges financial risks inBoard).(theBoardof theMembersby the
approves the Finance Policy for overall riskBoardoperating units. Thegroup'sclose co-operation with themanagement, as well as principles covering specific areas, such as mitigating foreign exchange, commodityprice, interest rate and credit risks, use of derivative financial instruments and investing excess liquidity. Any
Board.breaches of policy are reported to the
Sensitivity analysis has been used to help assess the financial risk of the group. In determining this sensitivity,the average of the 50 day historical volatility of the closing daily spot rate for three years, was used to adjust theforward curve. A three year period was chosen in line with the group's current hedging framework. For foreigncurrency the adjustment was applied to the US Dollar, the Euro and the Japanese Yen. For commodity price risk,the adjustment was applied to the Singapore Gasoil curves.
(a) Market risk
(i) Foreign exchange risk
Foreign exchange risk arises from capital expenditures that are denominated in a currency that is not the entity'sfunctional currency. The group is exposed to foreign exchange risk arising from various currency exposures,primarily with respect to the US Dollar (USD), the Euro (EUR) and the Japanese Yen (JPY). The risk is measuredusing cash flow at risk.
has a Treasury Principle in place to manage foreign exchange risk. All foreign exchange risk isgroupThecentrally managed by the treasury unit using approved derivative instruments.
foreign exchange risk management policy dictates the level of hedging to be undertaken within thegroup'sTheapproved trading range for the foreign exchange risk hedgingBoardapproved limits. At reporting date, theBoard
is:
0 - 1 year: 80% - 100%1 - 2 years: 60% - 100%2 - 3 years: 40% - 100%
designates forward foreign currency derivatives for hedging foreign exchange forecast transactionsgroupTheof foreign exchange hedges were designated for hedge100%which are highly probable. At reporting date,
accounting purposes.
million.$0.4At reporting date, contracts recognised directly in equity were net gains of
million were removed from equity and included in the$0.01gains of2013,30 Juneperiod endedDuring theacquisition cost of capital.
Queensland Rail Financial Report FY2012/13 94
Queensland RailNotes to the financial statements
30 June 2013(continued)
2 (continued)Financial risk management
exposure to foreign currency risk at reporting date was as follows:group'sThe
30 June 2013
ConsolidatedUSD$'000
EUR€'000
JPY¥'000
Cash and cash equivalents 28 125 1Forward exchange contracts- capital expenditure foreign currency (qualifying for hedge accounting) 577 2,525 -
Net exposure 605 2,650 1
30 June 2013
ParentUSD$'000
EUR€'000
JPY¥'000
Cash and cash equivalents - - -Forward exchange contracts- capital expenditure foreign currency (qualifying for hedge accounting) - - -
Net exposure - - -
Sensitivity
against the USD / EUR / JPY with10%At reporting date, had the Australian dollar weakened / strengthened bymillion lower.$0.006higher /nilpost tax profit would have beengroup’sall other variables held constant, the
(ii) Commodity price risk
Commodity price risk arises when future commercial supply agreements are subject to fluctuations in pricemovements. Commodity swap contracts, transacted by the treasury unit, are used to manage commodity pricerisk.
has a Treasury Principle in place to manage commodity price risk. All commodity price risk is centrallygroupTheuses the commodity Singaporegroupmanaged by Group Treasury using approved derivative instruments. The
has chosen Singapore Gasoil 0.05% to hedgegroupGasoil 0.001% due to environmental efficiencies. Theexposures as these are the most liquid markets available.
Boardcommodity price risk management policy dictates the level of hedging to be undertaken withingroup'sTheapproved trading range for the commodity price hedging is:Boardapproved limits. At reporting date, the
0 - 1 year: 0% - 100%1 - 2 years: 0% - 100%2 - 3 years: 0% - 100%
designates forward commodity derivatives for hedging commodity forecast transactions which aregroupThehighly probable. At reporting date, no commodity hedges were designated for hedge accounting purposes.
At reporting date, contracts recognised directly in equity were nil.
million were removed from equity and included in the cost$0.1losses of2013,30 Juneperiod endedDuring theof diesel fuel.
Sensitivity
At reporting date, had the Singapore Gasoil price decreased / increased with all other variables held constant, thepost tax profit would not have been effected as there were no commodity hedges in place.group's
Queensland Rail Financial Report FY2012/13 95
Queensland RailNotes to the financial statements
30 June 2013(continued)
2 (continued)Financial risk management
(iii) Cash flow and fair value interest rate risk
main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates exposegroup'sTheto fair value interestgroupthe group to cash flow interest rate risk. Borrowings issued at fixed rates expose the
rate risk. The QTC has been authorised to manage the interest rate risk of the group within limits in accordanceBoard.with the risk profile approved by the
This is achieved by varying the proportion of the floating and fixed rate funding. The performance of this riskmanagement is assessed against the benchmark duration of the debt portfolio.
had the following exposure to variable rate borrowings:groupAt reporting date the
30 June 2013
Consolidated
Weightedaverage
interest rate%
Balance$'000
Bank overdrafts and bank loans 7.3 3,099,817
Net exposure to cash flow interest rate risk 3,099,817
30 June 2013
Parent
Weightedaverage
interest rate%
Balance$'000
Bank overdrafts and bank loans - -
Net exposure to cash flow interest rate risk -
debt with QTC to interest rate risk:group’sThe following table summarises the sensitivity of the
Interest rate risk-1% +1%
Consolidated30 June 2013
Carryingamount
$'000Profit$'000
Equity$'000
Profit$'000
Equity$'000
Client Specific Debt Pool 3,000,000 1,711 1,711 (1,577) (1,577)Total increase / (decrease) 1,711 1,711 (1,577) (1,577)
Interest rate risk-1% +1%
Parent30 June 2013
Carryingamount
$'000Profit$'000
Equity$'000
Profit$'000
Equity$'000
Client Specific Debt Pool - - - - -Total increase / (decrease) - - - -
Queensland Rail Financial Report FY2012/13 96
Queensland RailNotes to the financial statements
30 June 2013(continued)
2 (continued)Financial risk management
(b) Credit risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting date torecognised financial assets, is the carrying amount, net of any allowances for impairment of those assets, asdisclosed in the balance sheet and notes to the consolidated financial statements.
does not have any material credit risk exposure to any single receivable or group of receivables undergroupTheother than amounts owing by the State of Queensland. For somegroup,financial instruments entered into by the
trade receivables the group may also obtain security in the form of guarantees, deeds of undertaking or letters ofcredit which can be called upon if the counterparty is in default under the terms of the agreement.
Policies are in place to ensure that sales of products and services are only made to customers with anappropriate credit history.
Derivative counterparties and cash transactions are limited to high credit quality financial institutions and arehas policies that limit the amount of credit exposure to any one financialgroupTheBoard.approved by the
had the following credit exposure risk:groupinstitution. At reporting date the
Consolidated Parent2013$'000
2013$'000
Cash at bank and short-term bank depositsAA+ 276,339 -
276,339 -
Derivative financial assetsAA 475 -
475 -
Queensland Rail Financial Report FY2012/13 97
Queensland RailNotes to the financial statements
30 June 2013(continued)
2 (continued)Financial risk management
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability offunding through an adequate amount of committed credit facilities and the ability to close out market positions.
ensures sufficient cash to meet short-term and long-term financialgroupLiquidity risk management within thehas policies in place to manage liquidity risk, including the establishment of an annualgroupcommitments. The
approved borrowing program and the availability of appropriate working capital facilities.
manages liquidity risk by monitoring forecast cash flows and ensuring that adequate cash flow isgroupThemaintained.
Financing arrangements
The borrowing2(a)(iii).The short-term borrowing arrangements with QTC are interest bearing, refer to notearrangements are subject to annual review.
The amount of undrawn short-term borrowing facilities with QTC available at reporting date is shown below:
Consolidated Parent2013$'000
2013$'000
QTC short-term facilitiesUsed at reporting date 99,817 -Unused at reporting date 350,183 -
Total facilities 450,000 -
Long-term borrowings are sourced from the Queensland Rail Client Specific Pool subject to annual approval ofmay draw up to the amount of the approved borrowing program.groupthe Queensland State Treasurer. The
Borrowings are not secured.
Queensland Rail Financial Report FY2012/13 98
Queensland RailNotes to the financial statements
30 June 2013(continued)
2 (continued)Financial risk management
Maturity Analysis
financial liabilities and net and gross settled derivative financial instrumentsgroup'sThe tables below analyse theinto relevant maturity groupings based on the remaining period at the reporting date to the contractual maturitydate. The amounts disclosed in the table are the contractual undiscounted cash flows.
Consolidated30 June 2013
Less than1 year$'000
Between1 and 5 years
$'000
Over5 years$'000
Totalcontractualcash flows
$'000
Non-derivativesNon-interest bearing 168,475 - - 168,475Variable rate 125,328 - - 125,328Fixed rate 219,113 877,056 2,962,320 4,058,489Total non-derivatives 512,916 877,056 2,962,320 4,352,292
Derivatives
Gross settled (foreign exchange hedges)Assets- (inflow) (4,294) - - (4,294)- outflow 3,811 - - 3,811Total derivatives (483) - - (483)
Parent30 June 2013
Less than1 year$'000
Between1 and 5 years
$'000
Over5 years$'000
Totalcontractualcash flows
$'000
Non-derivativesNon-interest bearing 385,709 - - 385,709Variable rate - - - -Fixed rate - - - -Total non-derivatives 385,709 - - 385,709
Derivatives
Gross settled (foreign exchange hedges)Assets- (inflow) - - - -- outflow - - - -Total derivatives - - - -
Queensland Rail Financial Report FY2012/13 99
Queensland RailNotes to the financial statements
30 June 2013(continued)
2 (continued)Financial risk management
(d) Fair value measurements
The fair value of financial assets and financial liabilities must be estimated for recognition and for disclosurepurposes.
requires disclosure of fair value measurements by level of theFinancial Instruments: DisclosuresAASB 7following fair value measurement hierarchy:
(Level 1) quoted prices (unadjusted) in active markets for identical assets or liabilities;(Level 2) inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices); and(Level 3) inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
30 Juneassets and liabilities measured and recognised at fair value atgroup'sThe following table presents the2013:
Consolidated30 June 2013
Level 1$'000
Level 2$'000
Level 3$'000
Total$'000
AssetsDerivatives used for hedging
Forward exchange contracts - 475 - 475Total assets - 475 - 475
Parent30 June 2013
Level 1$'000
Level 2$'000
Level 3$'000
Total$'000
AssetsDerivatives used for hedging
Forward exchange contracts - - - -Total assets - - - -
The fair value of financial instruments traded in active markets (such as foreign exchange and commodityderivatives) is based on observable market prices at reporting date. The observable market price used for
for effective hedges is the average (i.e. mid) forward rate at closegroupfinancial assets and liabilities held by theof business on reporting date.
The fair value of financial instruments that are not traded in an active market (for example, over the counterderivatives) is determined using generally accepted valuation techniques. The group uses a variety of methodsand makes assumptions that are based on market conditions existing at the end of each reporting period.Observable market prices or dealer estimates for similar instruments are used to estimate fair value for long-termdebt for disclosure purposes. Other techniques, such as estimated discounted cash flows, are used to determinefair value for the remaining financial instruments. The fair value of forward exchange contracts and commodityswap contracts is determined using forward market rates at the end of the reporting period. These instrumentsare included in level 2 and comprise derivative financial instruments. In the circumstances where a valuationtechnique for these instruments is based on significant unobservable inputs, such instruments are included inlevel 3.
The carrying amounts of trade receivables and payables are assumed to approximate their fair values due totheir short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting
for similargroupthe future contractual cash flows at the current market interest rate that is available to thefinancial instruments. The carrying amount of current borrowings approximates the fair value, as the impact ofdiscounting is not significant.
Queensland Rail Financial Report FY2012/13 100
Queensland RailNotes to the financial statements
30 June 2013(continued)
3 Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors,including expectations of future events that may have a financial impact on the entity and that are believed to bereasonable under the circumstances.
(a) Critical accounting estimates and assumptions
makes estimates and assumptions concerning the future. The resulting accounting estimates will, bygroupThedefinition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
arefinancial periodcausing a material adjustment to the carrying amounts of assets and liabilities within the nextdiscussed below.
(i) Estimated impairment of property, plant and equipment
tests annually whether property, plant and equipment has suffered any impairment, in accordance withgroupTheThe recoverable amounts of cash generating units have been1(r).the accounting policy stated in note
determined based on value in use calculations or fair value less costs to sell. Value in use calculations requirethe use of assumptions.
(ii) Provisions for insurance claims
managed the self-insurance activities of the AurizonLtd,On Track Insurance PtyThe subsidiary company,belonged untilOn Track Insurance Pty LtdandQueensland Rail LimitedOperations Limited group to which both
30 June 2010 and 6 October 2010 respectively. Actuarial assessments are undertaken annually to assess thefor further information.1(z)value of the provision for any outstanding claims. Refer to note
Accrued insurance liabilities (includes Workers' Compensation) is based on a combination of managementfor more22end. Refer to noteperiodestimates and independent actuarial assessments performed as at
information.
(iii) Provision for land rehabilitation
There is uncertainty as to the amount that will ultimately be required to be expensed to remediate contaminatedfor more information.22land. Refer to note
(iv) Workers compensation self-insurance provision
Independent actuarial valuations are used to estimate the provisions required for self-insured workerscompensation.
The determination of the provisions required is dependent on a number of assumptions including the total futurecost to finalise existing open claims, wage increases that will impact existing claims, inflation and the amount ofclaims that have been incurred but not yet reported.
for more information.22Refer to note
(v) Long service leave provision
The determination of the provisions required is dependent on a number of assumptions including expected wageincreases, length of employee service and bond rates.
for more information.22Refer to note
Queensland Rail Financial Report FY2012/13 101
Queensland RailNotes to the financial statements
30 June 2013(continued)
3 (continued)Critical accounting estimates and judgements
(vi) Taxation
accounting policy for taxation requires management's judgement as to the types of arrangementsgroup'sTheconsidered to be subject to a tax. Judgement is also required in assessing whether deferred tax assets andcertain deferred tax liabilities are recognised on the balance sheet. Deferred tax assets, including those arisingfrom unrecouped tax losses, capital losses and temporary differences, are recognised only when it is consideredprobable that they will be recovered. Recoverability is dependent on the generation of sufficient future taxableprofits.
for carrying amounts of deferred tax assets and deferred tax liabilities.25and18Refer to notes
(vii) Depreciation
Management estimates the useful lives and residual values of property, plant and equipment based on theexpected period of time over which economic benefits from use of the asset will be derived. Management reviewsuseful life assumptions on an annual basis having given consideration to variables including historical andforecast usage rates, technological advancements and changes in legal and economic conditions. Refer to note
for details of current depreciation rates used.1(o)
(viii) Hedge accounting
Management's judgement is necessary when determining whether a derivative financial instrument qualifies forFinancialhedge accounting, such as whether forecast transactions are highly probable as required by AASB 139
The assessment of whether forecast transactions are highlyMeasurement.Instruments: Recognition andprobable is judgmental and is subject to changes to the timing and magnitude of underlying purchases.
4 Correction of error and revision of estimates
There have been no corrections of error in the current reporting period.
There were no material revisions of estimates during the current reporting period.
Queensland Rail Financial Report FY2012/13 102
Queensland RailNotes to the financial statements
30 June 2013(continued)
5 Revenue from continuing operations
Consolidated Parent2013$'000
2013$'000
Transport service contract revenue 246,264 -Services revenue - 120,486Passenger transport revenue 11,577 -Network access revenue 43,174 -Other revenue* 25,916 -Interest revenue 1,722 -Inter-company dividend revenue - 138,610
328,653 259,096
$5.9million, External construction works revenue$8.9* Other revenue includes Insurance claims revenuemillion$1.7million, Telecommunication revenue$2.0million, Airtrain revenue$3.9million, Workshop revenue
million$1.7and Leasing revenue
6 Other income
Consolidated Parent2013$'000
2013$'000
Net foreign exchange gains 19 -Rebates 468 -
487 -
Queensland Rail Financial Report FY2012/13 103
Queensland RailNotes to the financial statements
30 June 2013(continued)
7 Expenses
Consolidated Parent2013$'000
2013$'000
Profit before income tax includes the followingspecific expenses:
Depreciation and amortisationDepreciation
Buildings 3,252 -Plant and equipment 3,844 -Infrastructure 22,631 -Major plant and equipment 18,328 -
Total depreciation 48,055 -Amortisation
Lease fit out 489 -17)Software (note 2,875 -
Total amortisation 3,364 -
Total depreciation and amortisation 51,419 -
Finance costsInterest and finance charges paid / payable 38,371 -
Total finance costs 38,371 -
Other expensesRental expenses relating to leases 9 -Allowance for inventory obsolescence 215 -Research and development costs 75 -Settlement of litigation expenses 83 -Impairment losses
Trade receivables (20) -Net losses on commodity hedge ineffectiveness 3 -Net loss on disposal of property, plant and equipment 1,190 -Other expenses 571 -
Total other expenses 2,126 -
Superannuation expenses*Defined benefit superannuation expense 3,487 2,783Defined contribution superannuation expense 6,802 6,893
Total superannuation expenses 10,289 9,676
* Forms part of employee benefits expense.
Queensland Rail Financial Report FY2012/13 104
Queensland RailNotes to the financial statements
30 June 2013(continued)
8 Income tax expense
(a) Income tax expense
Consolidated Parent2013$'000
2013$'000
Current tax 5,574 1,154Deferred tax 4,930 (1,154)
10,504 -
(benefit) included in income tax expense/expenseDeferred income taxcomprises:
18)(note(Increase) / decrease in deferred tax assets (948) (1,154)25)(noteIncrease / (decrease) in deferred tax liabilities 5,878 -
4,930 (1,154)
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Consolidated Parent2013$'000
2013$'000
Profit from continuing operations before income tax expense 48,219 138,61030%)(2012:30%Tax at the Australian tax rate of 14,466 41,583
Tax effect of amounts which are not deductible / (taxable) in calculatingtaxable income:
Research and development (381) -Inter-company eliminations (3,587) -Dividends received from subsidiaries - (41,583)Other 8 -Non-assessable income (2) -
(3,962) (41,583)
Total income tax expense 10,504 -
(c) Amounts recognised directly in equity
Consolidated Parent2013$'000
2013$'000
Aggregate current and deferred tax arising in the reporting period and notrecognised in net profit or loss but directly debited or credited to equity:
25)and18Net deferred tax - debited / (credited) directly to equity (notes 149 -149 -
Queensland Rail Financial Report FY2012/13 105
Queensland RailNotes to the financial statements
30 June 2013(continued)
9 Current assets - Cash and cash equivalents
Consolidated Parent2013$'000
2013$'000
Cash on hand 129 -Short-term investments 276,339 -
Total cash and cash equivalents 276,468 -
Less: bank overdraft (13,908) -Less: trust monies 2 -
(13,906) -
Balance as per statement of cash flows 262,562 -
(a) Interest rate risk exposure
2.exposure to interest rate risk is discussed in notegroup’sThe
10 Current assets - Trade and other receivables
Consolidated Parent2013$'000
2013$'000
Trade receivables 65,704 -(a)Allowance for impairment of receivables (253) -
Net trade receivables 65,451 -
Inter-company receivables - 537,015Inter-company dividend receivables - 138,610
- 675,625
Transport service contracts 90,437 -Receivables - SEQIPP works 7,345 -Other receivables 18,792 -
116,574 -
Total trade and other receivables 182,025 675,625
Due to the short-term nature of these receivables, their carrying amount is assumed to approximate their fairvalue.
Queensland Rail Financial Report FY2012/13 106
Queensland RailNotes to the financial statements
30 June 2013(continued)
10 (continued)Current assets - Trade and other receivables
(a) Impaired trade receivables
At reporting date, it was assessed that a portion of the impaired receivables is expected to be recovered. Thenominal values and ageing of the impaired trade receivables is as follows:
Consolidated Parent2013$'000
2013$'000
1 to 3 months 6 -3 to 6 months 82 -Over 6 months 252 -
340 -
Movements in the allowance for impairment of receivables are as follows:
Consolidated Parent2013$'000
2013$'000
Opening balance - -Acquisition of subsidiaries 273 -Unused amounts reversed (20) -
253 -
The creation and release of the allowance for impaired receivables has been included in the income statement.Amounts charged to the allowance account are generally written off when there is no expectation of recoveringadditional cash.
(b) Past due but not impaired
trade receivables were past due but not impaired. These relate to agroup’sAt reporting date, some of thenumber of independent customers for whom there is no recent history of default. The ageing analysis of thesetrade receivables is as follows:
Consolidated Parent2013$'000
2013$'000
3 to 6 months 315 -Over 6 months 1,991 -
2,306 -
Queensland Rail Financial Report FY2012/13 107
Queensland RailNotes to the financial statements
30 June 2013(continued)
11 Current assets - Inventories
Consolidated Parent2013$'000
2013$'000
(b)Raw materials and stores 62,314 -Work in progress 125 -Less: allowance for inventory obsolescence (1,202) -
Inventory at lower of cost or net realisable value 61,237 -
(a) Inventory expense
million.$19.639amounted to30 June 2013period endedInventory recognised as expense during the30 Juneperiod endedWrite-downs of inventories to net realisable value recognised as an expense during the
million.$0.004amounted to2013
(b) Raw materials and stores
The amount of raw materials and stores includes surplus materials held to support the existing rollingstock assetsAn independent external valuer performed a stock take and assessed the value of the surplusgroup.of the
materials in connection with the carriages that were de-scoped from the Sunlander 14 capital program to be $5.0million. This amount was transferred to inventory from capital work in progress in the current reporting period.
engaged an independent external valuer to assess and value materials procured in relation toQueensland Railthe portions of the Sunlander 14 capital program that were de-scoped. Key estimates and assumptions were
to supportQueensland Railmade by the valuer in determining the value of the materials that could be used byexisting rollingstock. These include:
• All materials were considered to be new at reporting date and no aging allowances were included in thevalues determined.
• All materials transferred to inventory only included those items that are replaceable units which supportRail.Queenslandthe rendering of services to
• to the supplier where itQueensland RailThe value of procured materials represented the cost paid bycould expect toQueensland Railwas identifiable. Otherwise, the value represented the likely price that
pay for each item.• The materials valued were components created and purchased in order to assemble a narrow gauge tilt
train. Accordingly, it was held that there was no opportunity to dispose of surplus materials inaccordance with its best and highest use to another rail operator.
Physical inspections were included up to and including those on 19 November 2013 and were undertaken byinspecting a representative sample with a focus on high value sub system components first. The inspections andvaluations have been based upon the information provided to the valuer.
Queensland Rail Financial Report FY2012/13 108
Queensland RailNotes to the financial statements
30 June 2013(continued)
12 Derivative financial instruments
Consolidated Parent2013$'000
2013$'000
Current assetsForward exchange contracts - cash flow hedges 475 -Total current derivative financial instrument assets 475 -
Total derivative financial instrument assets 475 -
(a) Instruments used by the group
holds derivative financial instruments to hedge (including economically hedge) its foreign currency andgroupThe2).financial risk management policy (notegroup’scommodity price risk exposures in accordance with the
13 Current assets - Other current assets
Consolidated Parent2013$'000
2013$'000
Prepayments 6,439 -tax*Prepaid income 423 -
6,862 -
has made Pay As You Go quarterly income tax instalments for the 2012/13 period which havegroup* Theexceeded the income tax liability for the same period.
Queensland Rail Financial Report FY2012/13 109
Queensland RailNotes to the financial statements
30 June 2013(continued)
14 Non-current assets - Receivables
Consolidated Parent2013$'000
2013$'000
Loan receivable* 3,843 -Inter-company receivables - 31,375
3,843 31,375
On Track* Loan receivable represents the outstanding balance of the loan between the subsidiary company,and its former parent company, Aurizon Operations Limited. This loan is non-interest bearingInsurance Pty Ltd
settlesOn Track Insurance Pty Ltdand is not repayable on demand. The loan balance is reduced asoutstanding insurance claims by Aurizon Operations Limited and its subsidiaries.
(a) Impaired receivables and receivables past due
None of the non-current receivables are impaired or past due but not impaired.
(b) Fair values
The carrying value of non-current receivables represents the best approximation of fair value.
15 Non-current assets - Inventories
Consolidated Parent2013$'000
2013$'000
Raw materials and stores 22,533 -22,533 -
Queensland Rail Financial Report FY2012/13 110
Queensland RailNotes to the financial statements
30 June 2013(continued)
16 Non-current assets - Property, plant and equipment
Consolidated
Work inprogress
$'000Land$'000
Buildings$'000
Plant andequipment
$'000
Major plantand
equipment$'000
Infrastructure$'000
Total$'000
At 3 May 2013Cost - - - - - - -Accumulated depreciation / amortisation and impairment losses - - - - - - -Net book amount - - - - - - -
30 June 2013Period endedOpening net book amount - - - - - - -Acquisition of subsidiaries 539,096 127,152 409,544 122,829 1,338,346 3,652,751 6,189,718Additions 111,744 - - 42 - - 111,786Transfers between asset classes (76,353) 65 4,001 512 17,288 43,660 (10,827)Disposals - (4) (60) (1,816) (65) (318) (2,263)Depreciation / amortisation expense - - (3,741) (3,844) (18,328) (22,631) (48,544)Closing net book amount 574,487 127,213 409,744 117,723 1,337,241 3,673,462 6,239,870
30 June 2013AtCost 574,487 129,002 540,597 233,999 1,907,339 4,320,286 7,705,710Accumulated depreciation / amortisation and impairment losses - (1,789) (130,853) (116,276) (570,098) (646,824) (1,465,840)Net book amount 574,487 127,213 409,744 117,723 1,337,241 3,673,462 6,239,870
Queensland Rail Financial Report FY2012/13 111
Queensland RailNotes to the financial statements
30 June 2013(continued)
16 (continued)Non-current assets - Property, plant and equipment
Parent
Work inprogress
$'000Land$'000
Leasedproperty
$'000Buildings
$'000
Plant andequipment
$'000
Major plantand
equipment$'000
Infrastructure$'000
Total$'000
At 3 May 2013Cost - - - - - - - -Accumulated depreciation / amortisation andimpairment losses - - - - - - - -Net book amount - - - - - - - -
30 June 2013Period endedOpening net book amount - - - - - - - -Acquisition of subsidiaries - - - - - - - -Additions - - - - - - - -Transfers between asset classes - - - - - - - -Disposals - - - - - - - -Depreciation / amortisation expense - - - - - - - -Closing net book amount - - - - - - - -
30 June 2013AtCost - - - - - - - -Accumulated depreciation / amortisation andimpairment losses - - - - - - - -Net book amount - - - - - - - -
(a) Non-current assets pledged as security
company.No assets have been pledged as security by the(b) Impairment
An impairment assessment was undertaken prior to reporting date. No impairment was recognised in the current or prior reporting periods.
Queensland Rail Financial Report FY2012/13 112
Queensland RailNotes to the financial statements
30 June 2013(continued)
16 (continued)Non-current assets - Property, plant and equipment
(c) Acquisition of subsidiaries for work in progress
The acquisitions of subsidiaries section of work in progress reflect the transfer of costs to consumables expenseand the transfer to inventory relating to the de-scope of the Sunlander 14 capital program. The acquisitions ofsubsidiaries for work in progress have been reduced by $48.2 million representing the transfer of costs toconsumables expense and $5.0 million representing the transfer to inventory.
The transfer of estimated costs to consumables expense represent materials, project management andengineering design costs relating to the de-scoped portions of the capital program. These costs were incurred tobuild carriages which were unique to a narrow gauge tilt train. Accordingly, it was held that these costs did notrepresent a future economic benefit and there was no opportunity to dispose of the surplus materials inaccordance with its best and highest use to another rail operator.
17 Non-current assets - Intangible assets
Consolidated
Computersoftware*
$'000Total$'000
At 3 May 2013Cost - -Accumulated amortisation and impairment - -Net book amount - -
30 June 2013Period endedOpening net book amount - -Acquisition of subsidiaries 39,036 39,036Transfers 10,827 10,827Amortisation expense (2,875) (2,875)Closing net book amount 46,988 46,988
30 June 2013AtCost 74,456 74,456Accumulated amortisation and impairment (27,468) (27,468)Net book amount 46,988 46,988
* Software includes capitalised development costs being an internally generated intangible asset.
Queensland Rail Financial Report FY2012/13 113
Queensland RailNotes to the financial statements
30 June 2013(continued)
17 (continued)Non-current assets - Intangible assets
Parent
Computersoftware*
$'000Total$'000
At 3 May 2013Cost - -Accumulated amortisation and impairment - -Net book amount - -
30 June 2013Period endedOpening net book amount - -Acquisition of subsidiaries - -Transfers - -Amortisation expense - -Closing net book amount - -
30 June 2013AtCost - -Accumulated amortisation and impairment - -Net book amount - -
* Software includes capitalised development costs being an internally generated intangible asset.
An impairment assessment was undertaken prior to reporting date. No impairment was recognised in the currentor prior reporting periods.
Queensland Rail Financial Report FY2012/13 114
Queensland RailNotes to the financial statements
30 June 2013(continued)
18 Non-current assets - Deferred tax assets
Consolidated Parent2013$'000
2013$'000
The balance comprises temporary differences attributable to:Tax losses 2,011 -Accrued expenses 10,230 4,524Capital losses 3,211 -Provisions 81,683 68,903Superannuation contributions 706 (8)Unearned revenue 3,818 -
Total deferred tax assets 101,659 73,419
Consolidated Parent2013$'000
2013$'000
Movements:Opening balance - -Acquisition of subsidiaries 98,734 -Transfer from subsidiaries - 72,265
8)(noteCredited to the consolidated income statement 948 1,154Cash flow hedges (14) -Increase in carried forward tax losses 1,991 -
Closing balance at 30 June 101,659 73,419
Consolidated Parent2013$'000
2013$'000
Deferred tax assets expected to be recovered within 12 months - -
Deferred tax assets expected to be recovered after more than 12 months 101,659 73,419
Queensland Rail Financial Report FY2012/13 115
Queensland RailNotes to the financial statements
30 June 2013(continued)
19 Non-current assets - Other financial assets
Consolidated Parent2013$'000
2013$'000
Shares in subsidiaries - 2,845,324- 2,845,324
20 Non-current assets - Other non-current assets
Consolidated Parent2013$'000
2013$'000
Prepayments 4,834 -4,834 -
21 Current liabilities - Trade and other payables
Consolidated Parent2013$'000
2013$'000
Trade payables 166,086 17,167Inter-company payables - 355,736Dividend payable 115,843 115,843Other payables 27,900 12,806
309,829 501,552
Queensland Rail Financial Report FY2012/13 116
Queensland RailNotes to the financial statements
30 June 2013(continued)
22 Liabilities - Provisions
2013
ConsolidatedCurrent
$'000Non-current
$'000Total$'000
(a)Employee benefits 210,401 19,273 229,674(b)Provision for insurance claims 13,296 - 13,296
(c)Litigation and workers' compensation provision 7,149 19,024 26,173(d)Land rehabilitation provision - 10,967 10,967
(e)Make good provision - 2,760 2,760(f)Other provisions 5,882 - 5,882
236,728 52,024 288,752
2013
ParentCurrent
$'000Non-current
$'000Total$'000
(a)Employee benefits 210,401 19,273 229,674(b)Provision for insurance claims - - -
(c)Litigation and workers' compensation provision 6,670 18,535 25,205(d)Land rehabilitation provision - - -
(e)Make good provision - - -(f)Other provisions - - -
217,071 37,808 254,879
(a) Employee benefits
Consolidated Parent2013$'000
2013$'000
Annual leave and leave loading 60,490 60,490Long service leave 150,661 150,661Other 18,523 18,523
229,674 229,674
The current provision for long service leave covers all unconditional entitlements where employees havecompleted the required period of service and also those where employees are entitled to pro-rata payments in
does not have angroupcertain circumstances. This portion of the provision is presented as current, since theunconditional right to defer settlement for any of these obligations. However, based on past experience, the
does not expect all employees to take the full amount of accrued leave or require payment within the nextgroup12 months.
The non-current provision for long service leave covers all conditional entitlements where employees have notcompleted the required period of service and are not entitled to pro-rata payments. This portion of the provision is
does not have an obligation to settle the provision within the next 12grouppresented as non-current, since themonths.
Other employee benefits includes payroll tax and retirement allowances.
on 3 MayQueensland RailtoQueensland Rail LimitedEmployees and their entitlements were transferred fromThis resulted in the transfer of the entire2013.Queensland Rail Transit Authority Act2013 in accordance with the
balance of the employee benefits on the same day.
Queensland Rail Financial Report FY2012/13 117
Queensland RailNotes to the financial statements
30 June 2013(continued)
22 (continued)Liabilities - Provisions
(b) Provision for Insurance Claims
On Trackas recorded bygroupThe provision for insurance claims is raised for insurance claims external to theinternal captive insurance provider for claims up until 30 June 2010. The provisiongroup'stheLtd,Insurance Pty
as determined by angrouprepresents the estimated requirement to settle all third party claims against theactuarial assessment.
(c) Litigation and workers' compensation
Provision is made for the estimated liability for workers' compensation and litigation claims. Claims are assessedseparately for common law, statutory and asbestos claims. The outstanding liability is determined after factoringfuture claims inflation and discounting future claim payments. Estimates are made based on the average numberof claims and average claim payments over a specified period time. Claims Incurred But Not Reported (IBNR) arealso included in the estimate. Claims are expected to be paid over a period exceeding more than one year.
the Queensland State2013,Queensland Rail Transit Authority ActSubsequent to the enactment of theGovernment issued a Transfer Notice resulting in the transfer of the workers' compensation liability from
Rail.QueenslandtoQueensland Rail Limited
(d) Land rehabilitation provision
group'sThis provision recognises the estimated costs to remediate contaminated land in accordance with theconstructive obligations per the environmental sustainability policy. These estimated costs have arisen as a resultof past events.
The provision for land rehabilitation is the present value of management's best estimate of the expenditurerequired to settle the land rehabilitation present obligation at the reporting date. The provision has beencalculated based on advice from external consultants and management's best estimate of likely remediationcosts.
(e) Make good provision
This provision represents the anticipated costs of the future restoration of leased office premises. Make goodrequirements vary for different properties. The provision includes future cost estimates associated with therestoration of office fixtures and fittings to original condition; removal of all property and equipment to return thepremises to a vacant shell and making good any damage caused by their removal; removing any alterations toreturn to its original layout; and repairing and making good any damage which may be caused to land adjoiningthe premises as a result of carrying out structural work or other improvements. The provision has been calculatedbased on management's best estimate of make good costs.
(f) Other provisions
Other provisions comprise an outstanding commitment at reporting date to compensate a supplier for materialsand project administration and engineering costs associated with the carriages that were de-scoped from the
In accordance with the1.noteSunlander 14 capital program for the amount of $5.9 million as disclosed ingroupaccounting standards, this commitment is recognised as a provision in the current reporting period as the
has a present contractual obligation, relating to an event that has occurred, which is expected to be settled in thenext reporting period.
Queensland Rail Financial Report FY2012/13 118
Queensland RailNotes to the financial statements
30 June 2013(continued)
22 (continued)Liabilities - Provisions
(g) Movements in provisions
other than employee benefits, are set outperiod,financialMovements in each class of provision during thebelow:
Consolidated2013
Provision forinsurance
claims$'000
Litigation andworkers'
compensationprovision
$'000
Landrehabilitation
provision$'000
Make goodprovision
$'000
Otherprovisions
$'000Total$'000
Current and non-currentCarrying amount at start ofperiod - - - - - -Acquisition of subsidiaries 28,616 986 10,882 3,809 - 44,293Transfer from subsidiaries - 31,032 - - - 31,032Charged / (credited) to profitor loss
- additional provisionsrecognised - 2,125 26 - 5,882 8,033
- unused amountsreleased (5,351) (7,134) - (982) - (13,467)
- unwind discount - - 59 31 - 90Amounts used during theperiod (9,969) (836) - (98) - (10,903)Carrying amount at end ofperiod 13,296 26,173 10,967 2,760 5,882 59,078
Parent2013
Provision forinsurance
claims$'000
Litigation andworkers'
compensationprovision
$'000
Landrehabilitation
provision$'000
Make goodprovision
$'000
Otherprovisions
$'000Total$'000
Current and non-currentCarrying amount at start ofperiod - - - - - -Acquisition of subsidiaries - - - - - -Transfer from subsidiaries - 31,032 - - - 31,032Charged / (credited) to profitor loss
- additional provisionsrecognised - 2,078 - - - 2,078
- unused amountsreleased - (7,134) - - - (7,134)
- unwind discount - - - - - -Amounts used during theperiod - (771) - - - (771)Carrying amount at end ofperiod - 25,205 - - - 25,205
Queensland Rail Financial Report FY2012/13 119
Queensland RailNotes to the financial statements
30 June 2013(continued)
23 Current liabilities - Other current liabilities
Consolidated Parent2013$'000
2013$'000
(a)Income in advance 21,592 -Other current liabilities 3,166 67
24,758 67
(a) Income in advance
Income in advance predominantly represents amounts received as prepayment for the development of railinfrastructure and lease payments and/or incentives received in advance. Infrastructure prepayments aredeferred and earned over the term of their respective agreements while lease incentives are amortised to theincome statement over the life of the related lease.
24 Liabilities - Borrowings
2013
ConsolidatedCurrent
$'000Non-Current
$'000Total$'000
Queensland Treasury Corporation borrowings* 99,817 3,000,000 3,099,817
Total borrowings 99,817 3,000,000 3,099,817
2013
ParentCurrent
$'000Non-Current
$'000Total$'000
Queensland Treasury Corporation borrowings* - - -
Total borrowings - - -
* Unsecured
(a) Financing arrangements
2(c).financing arrangements please refer to notegroup'sFor details of the
Queensland Rail Financial Report FY2012/13 120
Queensland RailNotes to the financial statements
30 June 2013(continued)
24 (continued)Liabilities - Borrowings
(b) Fair value
The carrying amounts and fair values of current and non-current borrowings and off-balance sheet guarantees atreporting date are:
2013
Consolidated
Carryingamount
$'000Fair value
$'000
(i)On-balance sheetNon-traded financial liabilitiesCurrent borrowings 99,817 99,817Non-current borrowings 3,000,000 3,225,974
3,099,817 3,325,791
(ii)Off-balance sheetUnrecognised financial assetsThird party guarantees - 293,018Bank guarantees - 93,387Insurance company guarantees - 24,857Unrecognised financial liabilitiesThird party guarantees - (2,000)Bank guarantees - (36,015)
- 373,247
2013
Parent
Carryingamount
$'000Fair value
$'000
(i)On-balance sheetNon-traded financial liabilitiesCurrent borrowings - -Non-current borrowings - -
- -
Off-balance sheetUnrecognised financial assetsThird party guarantees - -Bank guarantees - -Insurance company guarantees - -Unrecognised financial liabilitiesThird party guarantees - -Bank guarantees - -
- -
(i) On-balance sheet
The fair value of borrowings is determined by reference to pricing models and valuation techniques as advised byQTC.
Queensland Rail Financial Report FY2012/13 121
Queensland RailNotes to the financial statements
30 June 2013(continued)
24 (continued)Liabilities - Borrowings
(ii) Off-balance sheet
The off-balance sheet items comprise guarantees either held or issued by the group and contingent assets andliabilities not qualifying for recognition at reporting date. A majority of the guarantees held relate to performanceguarantees on construction contracts provided by third parties.
(c) Risk exposures
2.Information about the entity's exposure to interest rate and foreign currency fluctuations is provided in note
25 Non-current liabilities - Deferred tax liabilities
Consolidated Parent2013$'000
2013$'000
The balance comprises temporary differencesattributable to:Accrued income 1,789 -Consumables and spare parts 6,923 -Property, plant and equipment 401,488 -Prepayments 115 -Cash flow hedges 135 -Foreign exchange gains 1,444 -
Total deferred tax liabilities 411,894 -
Consolidated Parent2013$'000
2013$'000
Movements:Opening balance - -Acquisition of subsidiaries 405,881 -
8)(noteCharged to the consolidated income statement 5,878 -Cash flow hedges 135 -
Closing balance at 30 June 411,894 -
Consolidated Parent2013$'000
2013$'000
Deferred tax liabilities expected to be settled within 12 months - -
Deferred tax liabilities expected to be settled after more than 12 months 411,894 -
Queensland Rail Financial Report FY2012/13 122
Queensland RailNotes to the financial statements
30 June 2013(continued)
26 Non-current liabilities - Other non-current liabilities
Consolidated Parent2013$'000
2013$'000
(a)Income in advance 29,845 -29,845 -
(a) Income in advance
Income in advance predominantly represents amounts received as prepayment for the development of railinfrastructure and lease incentives received in advance. Infrastructure prepayments are deferred and earned overthe term of their respective agreements while lease incentives are amortised to the income statement over the lifeof the related lease.
27 Contributed equity
(a) Share capital
Consolidated Parent2013$'000
2013$'000
Ordinary sharesShares acquired 2,602,628 2,845,324
Total contributed equity 2,602,628 2,845,324
(b) Movements in ordinary share capital
Consolidated
Date Details Number ofshares
$'000
3 May 2013 Opening balance - -Shares acquired 100 2,602,628
30 June 2013 Balance 100 2,602,628
(c) Ordinary shares
incompanyOrdinary shares entitle the holder to participate in dividends and the proceeds on winding up of theproportion to the number of and amounts paid on the shares held.
(d) Capital risk management
objectives when managing capital are to safeguard its ability to continue as a going concern so that itgroup'sThecan continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimalcapital structure to reduce the cost of capital.
The responsible Ministers advise the appropriate methodology in determining the dividend payable annually.
Queensland Rail Financial Report FY2012/13 123
Queensland RailNotes to the financial statements
30 June 2013(continued)
27 (continued)Contributed equity
monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by totalgroupThecapital. Net debt is calculated as total borrowings (including 'borrowings' and ‘trade and other payables' as shownin the balance sheet) less cash and cash equivalents (including bank overdraft). Total capital is calculated as‘equity’ as shown in the balance sheet plus net debt.
gearing ratios are as follows:group'sThe
Consolidated Parent2013$'000
2013$'000
Total borrowings 3,409,646 145,816Less: cash and cash equivalents (including bank overdraft) (262,560) -Net debt 3,147,086 145,816Total equity 2,767,991 2,868,091
Total capital 5,915,077 3,013,907
Consolidated ParentGearing ratio 53% N/A
is also required by QTC to maintain an Earnings Before Interest and Tax (EBIT) Interest Coverage ofgroupThegreater than 1.25:1, except where the total debt to capital is greater than 70%, in which case the EBIT Interest
has complied with this requirement for both the current and priorgroupCoverage must be at least 2:1. Thereporting periods.
28 Reserves and retained earnings
(a) Reserves
Consolidated Parent2013$'000
2013$'000
Hedging reserve - cash flow hedges 314 -314 -
Consolidated Parent2013$'000
2013$'000
Movements:
Hedging reserve - cash flow hedgesOpening balance - -Acquisition of subsidiaries (34) -Fair value gains taken to equity 407 -Deferred tax (122) -Fair value losses matured and included in components cost 101 -Deferred tax (30) -Fair value (gains) matured and capitalised (11) -Deferred tax 3 -
30 JuneBalance 314 -
Queensland Rail Financial Report FY2012/13 124
Queensland RailNotes to the financial statements
30 June 2013(continued)
28 (continued)Reserves and retained earnings
(b) Retained earnings
Movements in retained earnings were as follows:
Consolidated Parent2013$'000
2013$'000
Opening balance - -Acquisition of subsidiaries 243,177 -
periodProfit for the 37,715 138,610Dividends provided (115,843) (115,843)
30 JuneBalance 165,049 22,767
29 Dividends
Ordinary shares
Consolidated Parent2013$'000
2013$'000
dollars per share was declared by1,158,433Dividend of2013:30 Juneperiod endedfor the group for theBoardthe
Dividend declared* 115,843 115,843
* All dividends declared / paid were unfranked.
Queensland Rail Financial Report FY2012/13 125
Queensland RailNotes to the financial statements
30 June 2013(continued)
30 Key management personnel disclosures
(a) Members, directors and specified executives
Compensation and other terms of employment for the specified executives are formalised in service agreements.and directors' terms of appointment and compensation details together with the majormembers'Details of
provisions of the service agreements for specified executives, as at reporting date, relating to compensation areas follows:
(i) Members and directors
Queensland Rail
Members Position Appointment term Expiry date
G Harley Deputy Chairman 2 years 9 months 30 September 2015
D George Member 2 years 9 months 30 September 2015
McArthur1M Member 3 years 3 months 30 September 2013
W McMillan Member 2 years 9 months 30 September 2015
Petie2D Member 2 years 9 months 30 September 2015
Schafer3J Member 3 years 3 months 30 September 2013
Ceased as a Member on 4 August 2013.1
Ceased as a Member on 2 August 2013.2
Ceased as a Member on 30 September 2013.3
as Chairman on 1 October 2013.BoardM Klug was appointed to theon 1 October 2013.Memberas aBoardJ Mickel was appointed to theon 30 October 2013.Memberas aBoardG Poole was appointed to the
ofBoardof theMembersOn 3 May 2013, the directors of Queensland Rail Limited were appointed as2013.Queensland Rail Transit Authority ActQueensland Rail in accordance with section 94 of the
Queensland Rail Limited
Directors Position Appointment term Expiry date
G Harley Deputy Chairman 2 years 9 months 30 September 2015
D George Director 2 years 9 months 30 September 2015
McArthur1M Director 3 years 3 months 30 September 2013
W McMillan Director 2 years 9 months 30 September 2015
Petie2D Director 2 years 9 months 30 September 2015
Schafer3J Director 3 years 3 months 30 September 2013
Ceased as a Director on 4 August 2013.1
Ceased as a Director on 2 August 2013.2
Ceased as a Director on 30 September 2013.3
as Chairman on 1 October 2013.BoardM Klug was appointed to theas a Director on 1 October 2013.BoardJ Mickel was appointed to theas a Director on 30 October 2013.BoardG Poole was appointed to the
Queensland Rail Financial Report FY2012/13 126
Queensland RailNotes to the financial statements
30 June 2013(continued)
30 (continued)Key management personnel disclosures
On Track Insurance Pty Ltd
Directors Position Appointment term Expiry date
Petie1D Chairman No set appointment term No expiry date
J Benstead Managing Director No set appointment term No expiry date
G Pringle Director 3 years 28 February 2014
Ceased as a Director on 2 August 2013.1
(ii) Specified executives
Queensland Rail
Specified executives Position Appointment term Expiry date
Benstead1J Acting Chief Executive Officer 3 years + 2 yearsextension
30 June 2015
N Duce General Manager Human Resources Tenured No expiry date
G Ford Executive General Manager Safety andEnvironment
3 years + 2 yearsextension
30 June 2015
R Green Executive General Manager Network 3 years 16 December 2015
Moller2B Acting Chief Financial Officer 3 years + 2 yearsextension
31 August 2013
T Ripper Executive General Manager Access andBusiness Strategy
3 years 9 December 2015
M Ryan Executive General Manager CustomerService
3 years 11 November 2015
K Wright Executive General Manager Rail Operations 3 years 26 February 2015
Details provided are for this officer’s substantive role.1
Details provided are for this officer's contract term.2
On 3 May 2013, the senior executives of Queensland Rail Limited were transferred to Queensland Rail andQueensland Railappointed as the senior executives of Queensland Rail in accordance with section 95 of the
2013.Transit Authority Act
on 2 August 2013 in accordance with aQueensland RailG Dawe was appointed as Chief Executive Officer of2013.Queensland Rail Transit Authority ActMinisterial Direction by responsible Ministers under section 12 of the
Queensland Rail Financial Report FY2012/13 127
Queensland RailNotes to the financial statements
30 June 2013(continued)
30 (continued)Key management personnel disclosures
Queensland Rail Limited
Specified executives Position Appointment term Expiry date
Benstead1J Acting Chief Executive Officer 3 years + 2 yearsextension
30 June 2015
N Duce General Manager Human Resources Tenured No expiry date
G Ford Executive General Manager Safety andEnvironment
3 years + 2 yearsextension
30 June 2015
R Green Executive General Manager Network 3 years 16 December 2015
Moller2B Acting Chief Financial Officer 3 years + 2 yearsextension
31 August 2013
T Ripper Executive General Manager Access andBusiness Strategy
3 years 9 December 2015
M Ryan Executive General Manager CustomerService
3 years 11 November 2015
K Wright Executive General Manager Rail Operations 3 years 26 February 2015
Details provided are for this officer’s substantive role.1
Details provided are for this officer's contract term.2
These executives provide advice in relation to strategygroup.The above are the key executives representing thedoes not haveOn Track Insurance Pty Ltdunder the business model adopted.groupand future direction of theOn Trackany senior executives who are involved in setting strategy or future direction for the entity and no
executives are disclosed above for this reason.Insurance Pty Ltd
Termination of an executive can be made by the group to the specified executive either with notice, without noticeor due to the incapacity of the specified executive. Termination by notice can be made by the specified executiveor the group at any time by either party giving to the other 3 months written notice of termination.
The specified executive is entitled to 12 weeks salary where termination occurs on the agreed termination date.
will pay thegroupWhen the termination occurs prior to the termination date (assuming no gross misconduct), thespecified executive the following:
• a service payment equal to the greater of 4 weeks salary or 2 weeks salary per year of continuousup to a maximum 52 weeks salary; andgroupservice with the
• a separation payment equal to 20% of the salary that the specified executive would have earned had theemployment continued from the day after the notice period ceased until the termination date.
Specified executives that are tenured are entitled to a service payment equal to the greater of 13 weeks salary orup to a maximum 52 weeks salary.group2 weeks salary per year of continuous service with the
Queensland Rail Financial Report FY2012/13 128
Queensland RailNotes to the financial statements
30 June 2013(continued)
30 (continued)Key management personnel disclosures
(b) Key management personnel compensation
Directors' remuneration and terms of appointment were set by the Governor in Council at the time of a director'sandmembers'2013,Queensland Rail Transit Authority Actappointment. Following the establishment of the
and directors'Members'directors' remuneration and terms of appointment are set by responsible Ministers.remuneration is subsequently reviewed annually by responsible Ministers.
and directors are not entitled to termination payments on termination of their period of service.Members
GovernmentQueensland Rail Chief and Senior Executive Officers are compensated in accordance with thepublication. TheOwned Corporations - Governance Arrangements for Chief and Senior Executives v3.0
Performance Payment Policy - Chief and Senior Executivehas also implemented theBoardQueensland Railwhich reflects the expectations of the Queensland State Government as outlined in the stated policy.
provides for a performance pay process that isPerformance Payment Policy - Chief and Senior ExecutiveTheadministered on a 12 month (financial year) cycle and aligns the executives with Queensland Rail wide andIndividual Key Performance Indicators (KPIs). Performance Payment pays up to a maximum payment of 15% perannum of a Chief or Senior Executive’s total fixed remuneration on the achievement of stretch targets. TheQueensland Rail KPIs are set by the Board at the beginning of the financial year in alignment with the Statementof Strategic Expectations issued by the State Government, the Queensland Rail Statement of Corporate Intentand the delivery of our organisational performance outcomes including safety, reliability, customer outcomes andfinancial performance.
The performance agreement components are weighted as follows:
• Queensland Rail 70%
The Queensland Rail KPIs are aligned to the organisational performance outcomes as follows:
Reliability• On Time Running City network combined peak periods• Below rail delays City network
Financial• Consumable cost reduction• Earnings before interest and tax
Customer• Customer satisfaction City network
Safety• Lost Time Injury Frequency Rate• Signals Passed at Danger
• Individual 30%
The Individual KPIs are set by the Chief Executive Officer on the recommendation of the relevantexecutive member. Individual KPIs are reflective of Queensland Rail and Functional KPIs for which theexecutive has direct accountability and / or reflective of strategic business plans, budgets and capital /infrastructure projects. Eligible executives must also meet minimum expectations for the consistentdemonstration of the Queensland Rail Values and Behaviours.
The Chief and Senior Executives participate in the Queensland Rail performance management process withquarterly and annual performance reviews. Annual performance results of the Executives are assessed and
is responsible forBoardcalibrated by the Chief Executive Officer and General Manager Human Resources. Thethe assessment of the Chief Executive Officer’s performance. The Queensland Rail Board approve thecalculation and payment of the Chief and Senior Executive Performance Payments and provide written advice tothe responsible Ministers in accordance with the Government Arrangements.
Queensland Rail Financial Report FY2012/13 129
Queensland RailNotes to the financial statements
30 June 2013(continued)
30 (continued)Key management personnel disclosures
director and executive are as follows:member,Details of the compensation of each specified
2013$'000
Short-term benefits 512Post-employment benefits 54
566
Short-term benefits includes cash salary, at risk performance incentives (for specified executives only), fees andnon-monetary benefits. Non-monetary benefits represent the value of Exempt and Reportable Fringe Benefits forthe respective Fringe Benefits Tax year.
(i) Members and directors of Queensland Rail and subsidiaries
2013 Short-term benefits Post-employmentbenefits
MembersMember
fees
Non-monetarybenefits
Super-annuation
Retirementbenefits Total
$'000 $'000 $'000 $'000 $'000
G Harley Deputy 6 - 1 - 7(appointed as Deputy Chairman Chairmanon 21 June 2013)
BlankG Dawe Chairman 18 - 2 - 20
(ceased 18 June 2013)Blank
D George Member 6 - 1 - 7Blank
M McArthur Member 6 - 1 - 7Blank
W McMillan Member 7 - 1 - 8Blank
D Petie Member 7 - 1 - 8Blank
J Schafer Member 6 - 1 - 7BlankBlank
Total 56 - 8 - 64
Queensland Railand directors of theBoardQueensland Railof thememberslisted above aremembersAll theBoard.On Track Insurance Pty Ltdexcept for D Petie who is also Chairman of theBoard,Limited
As an executive of Aurizon Operations Limited, former parent company, G Pringle did not receive additionalLtd.On Track Insurance Ptyremuneration in his capacity as director of
J Benstead did not receive additional remuneration in his capacity asRail,QueenslandAs an executive ofdirector of On Track Insurance Pty Ltd.
These amounts are not in addition to the amounts disclosed in the Key Management Personnel note of theQueensland Rail Limited financial statements as they were recharged by the company in accordance with theManaged Services Agreement from 3 May 2013.
Queensland Rail Financial Report FY2012/13 130
Queensland RailNotes to the financial statements
30 June 2013(continued)
30 (continued)Key management personnel disclosures
(ii) Specified executives of the group
2013 Short-term benefits Post-employmentbenefits
Long-termbenefits
Specified executives
Cashsalary
and feesCash
bonuses
Non-monetarybenefits
Super-annuation
Retirementbenefits
Longserviceleave Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
J Benstead 73 - 1 7 - - 81Acting Chief Executive Officer
BlankN Duce 43 - 1 4 - - 48
General Manager HumanResources
BlankG Ford 48 - 2 6 - - 56
Executive General ManagerSafety and Environment
BlankR Green 60 - 2 6 - - 68
Executive General ManagerNetwork
BlankB Moller 42 - 2 4 - - 48
Acting Chief Financial OfficerBlank
T Ripper 54 - 1 6 - - 61Executive General ManagerAccess and Business Strategy
BlankM Ryan 53 - 3 7 - - 63
Executive General ManagerCustomer Service
BlankK Wright 69 - 2 6 - - 77
Executive General ManagerRail Operations
BlankTotal 442 - 14 46 - - 502
These amounts are not in addition to the amounts disclosed in the Key Management Personnel note of theQueensland Rail Limited financial statements as they were recharged by the company in accordance with theManaged Services Agreement from 3 May 2013.
Queensland Rail Financial Report FY2012/13 131
Queensland RailNotes to the financial statements
30 June 2013(continued)
30 (continued)Key management personnel disclosures
2013$'000
Aggregate performance bonus compensation
Aggregate performance bonus compensation accrued for current period* (956)
Aggregate compensation (including performance bonus compensation) to employees eligible forperformance bonus compensation 18,351
2013
Number of employees eligible for performance bonus compensation 979
* Bonus was overaccrued when employee benefits liability was transferred from Queensland Rail Limited. Thiswas reversed on 30 June 2013.
The performance bonus compensation disclosed above is for the period 3 May 2013 to 30 June 2013. For full 12months performance payment, refer to note 30 of Queensland Rail Limited 2012/13 financial statements.
The following categories of employees are eligible for performance based at risk incentive bonus compensation:
• specified executives;
• other executives;
• salaried employees; and
• award employees.
Performance bonus compensation paid to specified executives is granted upon approval by the Queensland RailPerformance bonus compensation paid to other employees is granted upon approval by the ChiefBoard.
Executive Officer or in accordance with a subsidiary agreement. The amount of the compensation is determinedby performance against key performance indicators set at the start of the year for employees or conditions of asubsidiary agreement for work units.
(c) Transactions with members, directors and key management personnel
wasLimited,Queensland RailandQueensland RailG Harley, Deputy Chairman ofperiod,During the reportingLimited.Queensland Railthe Chairman of Queensland Urban Utilities that provided utilities to
wasLimited,Queensland Railand Director ofQueensland RailofMemberD George,period,During the reportingLimited.Queensland Railthe Chief Executive Officer of Rail CRC Limited that provided key innovation services to
provided rental accommodation to Rail CRC Limited.Queensland Rail Limited
All figures displayed below are exclusive of GST.
Consolidated2013$'000
Utilities - Queensland Urban Utilities 15Professional services - Rail CRC Limited 42Rental revenue - Rail CRC Limited (27)
30
Queensland Rail Financial Report FY2012/13 132
Queensland RailNotes to the financial statements
30 June 2013(continued)
31 Contingencies
had contingencies at reporting date in respect of:groupThe
(a) Contingent liabilities
Issues relating to common law claims and product warranties are dealt with as they arise. There were no materialcontingent liabilities requiring disclosures in the financial statements other than as set out below.
Litigation
Provisions are taken up for some of thesegroup.A number of common law claims are pending against the22.determination and are included as such in noteBoard'sexposures based on the
Guarantees and letters of credit
24(b).refer to notegroup,For information about guarantees and letters of credit given by the
Deed of Cross Guarantee
nor its subsidiary were a party to a deed of cross guarantee at reporting date.companyNeither the
(b) Contingent assets
24(b).refer to notegroup,For information about guarantees given to the
32 Commitments
(including GST) at reporting date were as follows:groupThe future commitments of the
(a) Capital commitments
Capital expenditure contracted for at reporting date but not recognised as liabilities is payable as follows:
Consolidated Parent2013$'000
2013$'000
Within one year 187,156 -Later than one year but not later than five years 28,923 -Later than five years - -
216,079 -
(b) Lease commitments
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable asfollows:
Consolidated Parent2013$'000
2013$'000
Within one year 11,145 -Later than one year but not later than five years 43,549 -Later than five years 28,059 -
82,753 -
Queensland Rail Financial Report FY2012/13 133
Queensland RailNotes to the financial statements
30 June 2013(continued)
32 (continued)Commitments
The above commitments flow primarily from operating leases of property. These leases, with terms mostlywith a right of renewal at which times the lease termsgroupranging from one to ten years, generally provide the
are renegotiated. The lease payments comprise a base amount, while some property leases also contain acontingent rental, which is based on either the movements in the Consumer Price Index or another fixedpercentage as agreed between the parties.
(c) Lease commitments receivable: where the company is the lessor
Minimum lease payments receivable but not recognised in the financial statements are receivable as follows:
Consolidated Parent2013$'000
2013$'000
Within one year 3,522 -Later than one year but not later than five years 9,882 -Later than five years 83,318 -
96,722 -
33 Related party transactions
(a) Subsidiaries
34.Interests in subsidiaries are set out in note
(b) Key management personnel
30.Disclosures relating to key management personnel are set out in note
(c) Transactions with related parties
The following transactions occurred with related parties:
Consolidated Parent2013$'000
2013$'000
Sale of goods and services to subsidiaries - 120,486Dividend revenue from subsidiaries - 138,610BlankDividend receivable from subsidiaries - 138,610Receivables from subsidiaries - current - 537,015Receivables from subsidiaries - non-current - 31,375Payables to subsidiaries - current - 355,736BlankShares in subsidiaries - 2,845,324BlankThe current and non-current receivables transferred from subsidiaries on 3 May 2013 include the initial transfer of
Queensland Rail Transit Authority Act 2013employee related liabilities from the subsidiary in accordance with theamounting to $271.9 million. Deferred tax assets amounting to $72.3 million associated with these employeeentitlements were also transferred on the same date.
Queensland Rail Financial Report FY2012/13 134
Queensland RailNotes to the financial statements
30 June 2013(continued)
33 (continued)Related party transactions
(d) Transactions and outstanding balances with State of Queensland controlled entities
is limited by shares with all shares held by the responsible Ministers on behalf of the State ofcompanyTheQueensland.
as set out below:periodtransacted with other State of Queensland controlled entities during thecompanyThe
ConsolidatedNotes 2013
$'000Nature of transaction
Cash and cash equivalents 9 276,339 QTC short-term investments
Trade and other receivables 1410, 114,144 Transport services contracts and otheraccounts receivable
Current tax liabilities - Current tax payable
Other current assets 13 423 Prepaid income tax
Borrowings 24 3,099,817 Unsecured loan facility (QTC)
Trade and other payables 21 141,483 Interest payable, accounts payableand dividend payable
Other current liabilities 23 3,067 Clearing accounts
Revenue 5 252,756 Sales, community service obligation,government concessions and interestrevenue
Interest expense 7 38,281 QTC loan interest (includes financingcost)
Other expenses 7 17,972 Payroll tax, income tax, audit fees,licences and permits andconsumables
Dividends declared 29 115,843 Dividend declared
Queensland Rail Financial Report FY2012/13 135
Queensland RailNotes to the financial statements
30 June 2013(continued)
33 (continued)Related party transactions
ParentNotes 2013
$'000Nature of transaction
Cash and cash equivalents 9 - QTC short-term investments
Trade and other receivables 1410, - Transport services contracts and otheraccounts receivable
Current tax liabilities 1,154 Current tax payable
Other current assets 13 - Prepaid income tax
Borrowings 24 - Unsecured loan facility (QTC)
Trade and other payables 21 115,843 Interest payable, accounts payableand dividend payable
Other current liabilities 23 - Clearing accounts
Revenue 5 - Sales, community service obligation,government concessions and interestrevenue
Interest expense 7 - QTC loan interest (includes financingcost)
Other expenses 7 5,138 Payroll tax, income tax, audit fees,licences and permits andconsumables
Dividends declared 29 115,843 Dividend declared
34 Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary in1(b).accordance with the accounting policy described in note
Name of entityCountry of
incorporation Class of sharesEquity
holding2013
%
Queensland Rail Limited Australia Ordinary 100On Track Insurance Pty Ltd Australia Ordinary 100
Queenslandare to carry out the key objectives of its parent,Queensland Rail LimitedThe principal activities ofretains title of all non-employee related assets,Queensland Rail Limitedin accordance with the QRTA Act.Rail,
liabilities and contracts. The management of its assets are effected through the provision of employee servicesunder a Managed Services Agreement.Queensland Railfrom
are the provision of insurance coverage for all claimsOn Track Insurance Pty LtdThe principal activities ofup until 30Queensland Rail Limitedrelating to events for both Aurizon Operations Limited (former parent) and
June 2010.
Queensland Rail Financial Report FY2012/13 136
Queensland RailNotes to the financial statements
30 June 2013(continued)
34 (continued)Subsidiaries
On Track InsuranceandQueensland Rail LimitedThe Auditor-General of Queensland is the authorised auditor ofLtd.Pty
35 Remuneration of auditors
group:the following fees were paid or payable for services provided by the auditor of theperiodDuring the
(a) Audit services
Consolidated Parent2013$'000
2013$'000
Auditor-General of QueenslandAudit and review of financial reports 510 19
Total auditors' remuneration 510 19
36 Reconciliation of profit after income tax to net cash inflow from operatingactivities
Consolidated Parent2013$'000
2013$'000
Profit for the period 37,715 138,610Depreciation and amortisation 51,419 -Amortisation of prepaid access facilitation charges (263) -Losses on sale of non-current assets 1,190 -Unreaslied loss on derivatives 3 -Impairment of trade receivables (20) -Inventory obsolescence 215 -Change in operating assets and liabilities:
(Increase) / decrease in trade debtors (34,636) (138,610)(Increase) / decrease in inventories (1,233) -(Increase) / decrease in other operating assets (885) (1,154)Increase / (decrease) in trade creditors (2,804) 19,965Increase / (decrease) in other liabilities 18,267 1,221Increase / (decrease) in other provisions (17,447) (7,027)
Net cash inflow from operating activities 51,521 13,005
37 Events occurring after the reporting period
which significantly affected, or mayfinancial periodNo matters or circumstances have arisen since the end of thegroupthe results of those operations, or the state of affairs of thegroup,significantly affect the operations of the
in future financial years.
Queensland Rail Financial Report FY2012/13 137
Queensland RailManagement certificate
30 June 2013
Financialhave been prepared pursuant to section 62(1) of thefinancial statementsThese general purposeFinancial and Performance Management Standard(the Act), relevant sections of theAccountability Act 2009
and other prescribed requirements. In accordance with section 62(1)(b) of the Act we certify that in our2009opinion:
(a) the prescribed requirements for establishing and keeping the accounts have been complied with in allmaterial aspects; and
(b) the statements have been drawn up to present a true and fair view, in accordance with prescribedfinancialand its controlled entities for theQueensland Railaccounting standards, of the transactions of
period.and of the financial position at the end of that30 June 2013endedperiod
M KlugChairman
Brisbane, Qld16 December 2013
Queensland Rail Financial Report FY2012/13 138
Queensland Rail30 June 2013
INDEPENDENT AUDITOR'S REPORT
Queensland RailofBoardTo the
Report on the Financial Report
I have audited the accompanying financial report of Queensland Rail, which comprises the balance sheets as at30 June 2013, income statements, statements of comprehensive income, statements of changes in equity andstatements of cash flows for the year then ended, notes comprising a summary of significant accounting policiesand other explanatory information, and certificates given by the Chairman of the entity and the consolidated entitycomprising the entity and the entities it controlled at the year’s end or from time to time during the financial period3 May to 30 June 2013.
The Board’s Responsibility for the Financial Report
The Board is responsible for the preparation of the financial report that gives a true and fair view in accordanceFinancial andand theFinancial Accountability Act 2009with prescribed accounting requirements identified in the
including compliance with Australian Accounting Standards. The2009,Performance Management StandardBoard’s responsibility also includes such internal control as the Board determines is necessary to enable thepreparation of the financial report that gives a true and fair view and is free from material misstatement, whetherdue to fraud or error.
Auditor’s Responsibility
My responsibility is to express an opinion on the financial report based on the audit. The audit was conducted inwhich incorporate the AustralianStandards,Auditor-General of Queensland Auditingaccordance with the
Auditing Standards. Those standards require compliance with relevant ethical requirements relating to auditengagements and that the audit is planned and performed to obtain reasonable assurance about whether thefinancial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial report. The procedures selected depend on the auditor’s judgement, including the assessment of therisks of material misstatement of the financial report, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the entity’s preparation of the financial report thatgives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but notfor the purpose of expressing an opinion on the effectiveness of the entity’s internal control, other than inexpressing an opinion on compliance with prescribed requirements. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates made by theBoard, as well as evaluating the overall presentation of the financial report including any mandatory financialreporting requirements approved by the Treasurer for application in Queensland.
I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion.
Independence
promotes the independence of the Auditor-General and all authorised auditors.Auditor-General Act 2009TheThe Auditor-General is the auditor of all Queensland public sector entities and can be removed only byParliament.
The Auditor-General may conduct an audit in any way considered appropriate and is not subject to direction byany person about the way in which audit powers are to be exercised. The Auditor-General has for the purposesof conducting an audit, access to all documents and property and can report to Parliament matters which in theAuditor-General’s opinion are significant.
Queensland Rail Financial Report FY2012/13 139
Queensland Rail30 June 2013
(continued)INDEPENDENT AUDITOR'S REPORT
Opinion
-Auditor-General Act 2009In accordance with s.40 of the
(a) I have received all the information and explanations which I have required; and
(b) in my opinion -
(i) the prescribed requirements in relation to the establishment and keeping of accounts have beencomplied with in all material respects; and
(ii) the financial report presents a true and fair view, in accordance with the prescribed accountingstandards, of the transactions of Queensland Rail and the consolidated entity for the financialperiod 3 May 2013 to 30 June 2013 and of the financial position as at the end of that year.
Other Matters - Electronic Presentation of the Audited Financial Report
Those viewing an electronic presentation of these financial statements should note that audit does not provideassurance on the integrity of the information presented electronically and does not provide an opinion on anyinformation which may be hyperlinked to or from the financial statements. If users of the financial statements areconcerned with the inherent risks arising from electronic presentation of information, they are advised to refer tothe printed copy of the audited financial statements to confirm the accuracy of this electronically presentedinformation.
A M GREAVES FCA FCPA Queensland Audit OfficeAuditor-General of Queensland Brisbane
Queensland Rail Financial Report FY2012/13 140
Queensland Rail Limited71 132 181 090ABN
Financial report30 June 2013year endedfor the
Queensland Rail Limited Financial Report FY2012/13 141
71 132 181 090ABNQueensland Rail Limited30 June 2013-Financial report
ContentsPage
Directors' report 1Financial statements
Consolidated income statement 10Consolidated statement of comprehensive income 11Consolidated balance sheet 12Consolidated statement of changes in equity 13Consolidated statement of cash flows 14Notes to the consolidated financial statements
1 Summary of significant accounting policies 152 Financial risk management 293 Critical accounting estimates and judgements 354 Correction of error and revision of estimates 365 Revenue from continuing operations 376 Other income 377 Expenses 388 Income tax expense 399 Current assets - Cash and cash equivalents 4010 Current assets - Trade and other receivables 4011 Current assets - Inventories 4212 Derivative financial instruments 4313 Current assets - Other current assets 4314 Non-current assets - Receivables 4415 Non-current assets - Inventories 4416 Non-current assets - Property, plant and equipment 4517 Non-current assets - Intangible assets 4818 Non-current assets - Deferred tax assets 4919 Non-current assets - Other non-current assets 4920 Current liabilities - Trade and other payables 5021 Liabilities - Provisions 5022 Current liabilities - Other current liabilities 5223 Liabilities - Borrowings 5324 Non-current liabilities - Trade and other payables 5425 Non-current liabilities - Deferred tax liabilities 5426 Non-current liabilities - Other non-current liabilities 5427 Contributed equity 5528 Reserves and retained earnings 5629 Dividends 5730 Key management personnel disclosures 5831 Contingencies 7032 Commitments 7133 Related party transactions 7234 Subsidiaries 7435 Remuneration of auditors 7436 Reconciliation of profit after income tax to net cash inflow from operating activities 7437 Parent entity financial information 7538 Events occurring after the reporting period 75
Directors' declaration 76INDEPENDENT AUDITOR'S REPORT 77
Queensland Rail Limited Financial Report FY2012/13 142
Queensland Rail LimitedDirectors' report
30 June 2013
Directors' report
consisting ofgroup)present their report on the consolidated entity (referred to hereafter as thedirectorsYour2013.30 Juneyear endedand the entity it controlled at the end of, or during, theQueensland Rail Limited
Directors
Chairman (appointed 1 October 2013)M Klug -Deputy Chairman (appointed 20 December 2012, appointed Deputy Chairman 21 June 2013)G Harley -
Chairman (appointed 12 July 2012, ceased 18 June 2013)G Dawe -Chairman (ceased 12 July 2012)S Gregg -(appointed 20 December 2012)D George
(ceased 20 December 2012)M Hayes(ceased 30 September 2012)Dr L Keliher AO
(ceased 4 August 2013)M McArthur(appointed 20 December 2012)W McMillan
(ceased 30 September 2012)D McMillan-Hall(appointed 1 October 2013)J Mickel
(ceased 30 September 2012, reappointed 20 December 2012, ceased 2 August 2013)D Petie(appointed 30 October 2013)G Poole
(ceased 30 September 2013)J Schafer
to the date of this report unless otherwise stated.financial yearDirectors have been in office since the start of the
of the Financial Report.30remuneration is contained in notedirectors'Information relating to
Principal activities
consisted of:groupthe principal activities of theyearDuring the(a) Passenger services throughout Queensland;(b) Network access services throughout Queensland;(c) Design and construction of rail infrastructure; and(d) Associated maintenance of both the above and below rail operations.
Review of operations
million).$128.3(2012:million$144.8amounted tofinancial yearfor thegroupof theprofitThe
stepped up its reforms and produced vastly improved performance, along withgroupthefinancial yearDuring thea much leaner workforce, a significant reduction in spending and efficiency programs that have reshaped thebusiness.
focused its commitment on:groupThe• organisational performance (specifically operational, financial and customer);• affordability;• patronage growth; and• safety and security.
continued to deliver high levels of customer service by focusing on reliability, efficiency, on-timegroupTherunning and customer comfort. Customer satisfaction levels for both our City and Travel networks are at recordhighs.
commenced its Efficiency Improvement Program to identify and realiseQueensland Rail LimitedIn July 2012,significant savings throughout the business. This program improved financial and operating performanceresulting in significant savings in non-labour expenses.
Dividends
million was declared to the holders of$138.6a dividend of2013,30 Juneendedfinancial yearIn respect of the2013.million). This dividend will be paid in December$102.6(2012:fully paid ordinary shares
Queensland Rail Limited Financial Report FY2012/13 143
Queensland Rail LimitedDirectors' report
30 June 2013(continued)
Significant changes in the state of affairs
On 3 May 2013, the shares in Queensland Rail Limited were transferred to Queensland Rail (referred to hereafterQueenslandas the Authority). The Authority is an unincorporated statutory body and was established under the
The group is a wholly-owned subsidiary of the Authority from this date. All2013.Rail Transit Authority Actemployees and their associated leave entitlements payable by the group were also transferred to the Authority.All expenses incurred by the Authority relating to these employees have been recharged to the group in
Queenslandaccordance with a Managed Services Agreement. The changes associated with the enactment ofand the Managed Services Agreement has not impacted the operations of theRail Transit Authority Act 2013
business. The group has and will continue to undertake the principal activities identified in this Directors' Report.
year.financialoccurred during thegroupNo other significant changes in the state of affairs of the
Matters subsequent to the end of the financial year
which significantly affected, or mayfinancial yearNo matters or circumstances have arisen since the end of thegroupthe results of those operations, or the state of affairs of thegroup,significantly affect, the operations of the
years.financialin future
Likely developments and expected results of operations
will continue its transformation to a more competitive business model focusing on maximising value forgroupThemoney, embracing competition and benchmarking its performance against best practice. As it prepares for
will focus on providing smarter, more tailored services to its customers while maintaininggroupcontestability, theimprovements in safety and value for money.
will maintain its commitment on:groupOver the next 12 months the• driving organisational performance (specifically operational, financial and customer);• ensuring value for money and affordability;• facilitating patronage and network tonnage growth;• ensuring safety and security; and• enhancing service delivery.
Environmental regulation
is required to comply with relevant environmental legislation. Exposure in this area is primarily relatedgroupTheto air, land and water pollution, management of flora and fauna, environmental impacts associated withdevelopment, consumption of energy, greenhouse gas emissions and waste disposal. Due to their nature it is notpossible to provide an estimate of the future expenditure in these areas.
is subject are as follows:groupPrimary legislation and regulations to which the
• Environmental Protection Act 1994 (Qld)• Energy Efficiency Opportunities Act 2006 (Commonwealth)• Environmental Protection and Biodiversity Conservation Act 1999 (Commonwealth)• Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 (Commonwealth)• National Greenhouse and Energy Reporting Act 2007 (Commonwealth)• Fisheries Act 1994 (Qld)• Sustainable Planning Act 2009 (Qld)• Land Protection (Pest and Stock Route Management) Act 2002 (Qld)• Nature Conservation Act 1992 (Qld)• Plant Protection Act 1989 (Qld)• Vegetation Management Act 1999 (Qld)• Waste Reduction and Recycling Act 2011 (Qld)• Water Act 2000 (Qld)• Wet Tropics World Heritage Protection and Management Act 1993 (Qld)
Queensland Rail Limited Financial Report FY2012/13 144
Queensland Rail LimitedDirectors' report
30 June 2013(continued)
Greenhouse gas and energy data reporting requirements
National Greenhouse and Energyis subject to the assessment and reporting requirements of thegroupThe2006.Energy Efficiency Opportunities Actand theReporting Act 2007
to report annually its greenhousegrouprequires theNational Greenhouse and Energy Reporting Act 2007Theis registered as aQueensland Rail Limitedgas emissions, energy consumption and energy production.
for the 2012/13groupcontrolling corporation and will be preparing an annual report to cover the activities of theyear for submission in October 2013.
to assess its energy usage, including thegrouprequires theEnergy Efficiency Opportunities Act 2006Theidentification, investigation and evaluation of energy saving opportunities, and subsequently submit a report to
groupthe Commonwealth Government and the public on the assessments undertaken; including what action theQueensland Rail Limited submitted an Assessment PlanAct,intends to take as a result. In accordance with the
in December 2012 to the Federal Department of Resources, Energy & Tourism (DRET). Following feedbackreceived from DRET in April 2013, a revised Assessment Plan was submitted in June 2013. Energy assessmentshave commenced and the first public report will be released by December 2013.
Queensland Rail Limited Financial Report FY2012/13 145
Queensland Rail LimitedDirectors' report
30 June 2013(continued)
Information on directors and officers
M Klug LLB, FAICD Chairman
Mr Klug was appointed as a non-executive director and chairman on 1 October 2013. Mr Klug is a well respectedsolicitor with more than 40 years experience. He recently concluded his third term as Partner in Charge of theBrisbane office of Clayton Utz. He is a leader in the area of Alternative Dispute Resolution and he is one of theoriginal founders of LEADR (Lawyers Engaged in Alternative Dispute Resolution). He was also an originalDirector of the Australasian Disputes Centre and has served on ADR committees nationwide. Mr Klug is anationally recognised practitioner, public speaker and lecturer in negotiation, having taught in Australia andoverseas to university students, the business and public sector communities. Mr Klug has extensive boardexperience across a diverse range of fields including education, health care and transport. He was recentlyappointed Chairman of Autism Queensland. Mr Klug is a Fellow of the Australian Institute of Company Directorsand the Vice-President of the Brisbane Club.
G Harley LLB, FAICD, MAHRI Deputy Chairman
Mr Harley was appointed as a non-executive director on 20 December 2012 and appointed Deputy Chairman on21 June 2013. Mr Harley is a consultant to and former Managing Partner of the Brisbane Office of Clayton Utz.He was for a number of years an Adjunct Professor at the University of Queensland Law School and a memberof the Advisory Council of the Queensland Conservatorium of Music. Mr Harley served in the Australian ArmyReserve for several decades (Infantry and Legal Corps) and retired with the rank of Major. He also holds theReserve Force Decoration. Mr Harley has previously served as Chair of Translink Transit Authority and CSEnergy and is currently Chair of Queensland Urban Utilities. His board experience covers fields as diverse aselectricity generation, communications, information technology, investment attraction, tourism and agribusiness.Mr Harley has practised law for more than 40 years, the last 20 specialising in industrial and employment law. Hisrole as a company director and as Chief Executive of Clayton Utz in Queensland for almost ten years has givenhim invaluable experience in strategy, operational management and governance. He is a Fellow of the AustralianInstitute of Company Directors and a member of the Australian Human Resources Institute.
G Dawe BA (Econ), MAICD, FCILT, MIRO Chairman
and Chairman on 12 July 2012. His father was a StationdirectorMr Dawe was appointed as a non-executiveMaster and he is the third generation of his family to work in Queensland Rail Limited, originally joining as aPorter. His career progressed from planning and development roles to commercial, business and operationsmanagement; including Group General Manager Citytrain, which became Australia’s best performing urban railpassenger business. He then took on the broader role of Group General Manager Metropolitan and RegionalServices which involved managing Queensland Rail Limited’s community service obligation businesses such asCitytrain, Traveltrain and Regional Freight. He then led Queensland Rail Limited’s commercial businesses asGroup General Manager Coal and Mainline Freight before moving to NSW to become General Manager Accessat the Rail Infrastructure Corporation with responsibility for Access, Freight and Country Infrastructure. Finally hemoved to the Manildra Group, which is one of this country’s largest private rail users, as National Manager RailTransport before retiring in 2011. Mr Dawe ceased to be a director and Chairman of Queensland Rail Limited on18 June 2013.
S Gregg MBA, FAICD Chairman
and Chairman on 1 July 2010. He has extensive experiencedirectorMr Gregg was appointed as a non-executivein the Queensland tourism industry. He was previously CEO of North Queensland Airport Limited, where heoversaw the integration of the newly-privatised Cairns and Mackay airports and developed long-term growthstrategies for both businesses. Earlier roles included CEO of Dreamworld and WhiteWater World theme parksand CEO of Tourism Queensland. In addition, Mr Gregg is Chairman of the Queensland Tourism Industry Council
of the Queensland Events Corporation. He holds a Master of Business Administrationdirector(QTIC) and a(MBA) from Griffith University. His experience in customer oriented roles and his significant regional focus has
Mr Gregg ceased to be a director and Chairman ofBoard.enabled him to make a valuable contribution to theQueensland Rail Limited on 12 July 2012.
Queensland Rail Limited Financial Report FY2012/13 146
Queensland Rail LimitedDirectors' report
30 June 2013(continued)
(continued)Information on directors and officers
D George MA (Hons), FAICD, FCILT Director
Mr George was appointed as a non-executive director on 20 December 2012. Mr George has more than 35 yearsexperience in the rail industry. This includes being Chief Executive of ONTRACK (New Zealand rail network)between 2004 and 2007 and responsibility for Queensland Rail Limited’s coal and freight businesses between1998 and 2004. Prior to this he was Director of European Business for British Rail (freight) in the run-up to theopening of the Channel Tunnel. Mr George is currently Chief Executive Officer of the Cooperative ResearchCentre (CRC) for Rail Innovation, a position held since 2007. He is Vice Chair of the International RailwayResearch Board and Chair of the organising committee of the World Congress on Railway Research (WCRR)being jointly hosted by the CRC and Australasian Rail Association in Sydney in late 2013. Mr George is aDirector of TasRail and also a Fellow of both the Australian Institute of Company Directors and the CharteredInstitute of Logistics and Transport Australia.
M Hayes BA, DipEd Director
on 1 July 2010. She served in the Brisbane City CouncildirectorMs Hayes was appointed as a non-executivefrom 1991 to 2008. She was Deputy Mayor during that time but her main role was as Chairperson of Transport,Traffic and Major Projects. Some achievements during that time included overseeing the building of the Inner CityBypass, the Eleanor Schonell Bridge, the introduction of CityCat ferries and the establishment of TransLink inpartnership with the State Government. Ms Hayes is a passionate advocate of public transport. Ms Hayes ceasedto be a director of Queensland Rail Limited on 20 December 2012.
Dr L Keliher AO BEcon (1st Class Hons), MA, PhD Director
on 1 July 2010. He has extensive experience in both thedirectorDr Keliher was appointed as a non-executiveQueensland and New South Wales public service, with roles that include Chairman of the former Service Deliveryand Performance Commission and Director-General of the Department of the Premier and Cabinet. He wasappointed as a director of QR Limited in 2008, and brings his public service experience to his position on the
Dr Keliher ceased to be a director of Queensland Rail Limited on 30 SeptemberBoard.Queensland Rail Limited2012.
M McArthur BA, LLB, DipAppFin Director
Ms McArthur was appointed as a non-executive on 1 July 2010. She was recently appointed Chief ExecutiveOfficer of Virgin Australia Regional Airlines following Virgin Australia's acquisition of Skywest Airlines in WesternAustralia. Ms McArthur joined Virgin Australia (then Virgin Blue) 5 years ago as General Counsel and CompanySecretary and has held various Senior Executive roles including Group Executive-Alliances, Network & Yield andGroup Executive - Corporate Advisory. Prior to joining Virgin, Ms McArthur was Chief Advisor at Rio Tinto IronOre, based in Perth. Her previous positions include Deputy State Solicitor for Western Australia and ExecutivePartner at national law firm Allens Arthur Robinson, based in Melbourne. Ms McArthur ceased to be a director of
on 4 August 2013.Queensland Rail Limited
W McMillan BBus, BA, MAICD, AIM, AMI Director
Ms McMillan was appointed as a non-executive director on 20 December 2012. Ms McMillan has more than 18years of commercial experience in transport, infrastructure, resources, trade, property, marketing and investmentattraction. Her previous positions include Director of Infrastructure for QC Resources Investments Pty Ltd,Manager Strategic Projects and Ports O&M, Transport Services and Strategic Development with the JohnHolland Group, General Manager with the Australia TradeCoast and senior management roles with the Port ofBrisbane Corporation, Carter and Spencer International and Gambaro’s Seafood’s and Exports. Ms McMillanholds a Bachelor of Business and a Bachelor of Arts. She is the Chairman of the judging panel for the Premier ofQueensland’s Export Awards, a Director of St. Aidan’s School Council, a Member of the Australian Institute ofCompany Directors, a Fellow of the Australian Institute of Management and an Associate Fellow and CPM of theAustralian Marketing Institute.
Queensland Rail Limited Financial Report FY2012/13 147
Queensland Rail LimitedDirectors' report
30 June 2013(continued)
(continued)Information on directors and officers
D McMillan-Hall BSc (Hons), DipInd (UK), MBA Director
on 1 July 2010. She has extensive rail industrydirectorMs McMillan-Hall was appointed as a non-executiveexperience, working at the Australian Rail Track Corporation (ARTC) for over 10 years, holding the positions ofStrategic Business Manager, General Manager Operations and Customer Service, and General Manager HunterValley. More recently, she was Head of Business Development for the Asia Pacific region of Ansaldo STS, atransport solutions company. Holding a BSc in Finance and an MBA, Ms McMillan-Hall has a background in
directorfinance, including roles with Westpac and financial markets in London. Ms McMillan-Hall ceased to be aof Queensland Rail Limited on 30 September 2012.
J Mickel M. Lit St, BA, B Ed. St, Dip T Director
The Honourable John Mickel was appointed as a non-executive director on 1 October 2013. Mr Mickel enteredQueensland Parliament in June 1998 as the Member for Logan and was appointed Minister for StateDevelopment, Employment and Industrial Relations from September 2006 to September 2007 and then Ministerfor Transport, Trade, Employment and Industrial Relations from September 2007 to March 2009. Mr Mickel wasalso the 36th Speaker of the Legislative Assembly of the Queensland Parliament. Mr Mickel was first elevated tothe Cabinet as Minister for Environment in February 2004 and appointed Minister for Energy in August 2004. Hegained the additional portfolio of Aboriginal and Torres Strait Islander Policy in March 2005. He has representedAustralia on the Executive of the Commonwealth Parliamentary Association and represented Queenslandbusinesses on trade missions to Asia, India and the Middle East. He oversaw major reforms to the Queenslandenergy sector as Minister for Energy, continued the Smart State initiative as Minister for State Development,implemented new technology reforms to the public transport sector as Minister for Transport and is recognisedfor his skills in diplomatic protocols and public speaking in domestic and international forums. Before entering theQueensland Parliament, Mr Mickel held a number of senior Government roles including Chief of Staff to theQueensland Premier. He is also a former university lecturer in politics and public policy. Currently Mr Mickelserves on the Queensland Catholic Education Commission Political Advisory Committee, is a Board Member ofthe Sisters of St Paul de Chartres Aged Care Facility, and undertakes lecturing and public speakingengagements at Griffith University, the QUT and for community organisations. Mr Mickel has established theVietnamese Orphans and Disability Trust with his wife, is an honorary member of Rotary and has been awardedHonorary Citizenship of Boystown.
D Petie FAICD, FASFA Director
Mr Petie was appointed as a non-executive director on 1 July 2010. Mr Petie ceased to be a director on 30September 2012 and was reappointed as a non-executive director on 20 December 2012. He has more than 30years experience as a company director, including nearly 11 years serving on the board of the group's formerparent entity, QR Limited, where he was chair of the Audit and Risk Committee. Before his retirement fromfull-time employment, Mr Petie was a General Manager for QIC Limited. Mr Petie ceased to be a director of
on 2 August 2013.Queensland Rail Limited
G Poole BEc, GradDip Bus Admin, FCPA, FCA, FAICD Director
Mr Poole was appointed as a non-executive director on 30 October 2013. Mr Poole is a professional seniorexecutive and Board member with over thirty years experience in strategic leadership, governance andmanagement across the public and not-for-profit sectors. He has significant practical experience in corporategovernance and financial management through appointments as a director of boards and audit committees in thegovernment and not-for-profit sectors. He is currently a member of the Local Government Association ofQueensland Audit and Compliance Committee, the Public Trustee of Queensland Audit and Risk ManagementCommittee, the Board of Governors of the Queensland Community Foundation and the Governance, Nominationand Remuneration Committee of the Queensland Synod of the Uniting Church in Australia. Mr Poole is also theChair of the Advisory Board for the Australian Centre for Philanthropy and Nonprofit Studies, QUT. Mr Poole hassuccessfully undertaken senior executive positions in the Queensland Treasury Department providing influentialpolicy advice on economic, financial management and corporate governance issues impacting on the publicsector and the community and most recently was the Auditor-General of Queensland from 2004 to 2011. MrPoole holds a Bachelor of Economics and is a member of CPA Australia, the Institute of Chartered AccountantsAustralia and the Australian Institute of Company Directors.
Queensland Rail Limited Financial Report FY2012/13 148
Queensland Rail LimitedDirectors' report
30 June 2013(continued)
(continued)Information on directors and officers
J Schafer LLB (Hons), GAICD, ANZIIF Director
on 1 July 2010. She brings to Queensland Rail LimiteddirectorMs Schafer was appointed as a non-executivestrong legal credentials and corporate experience, as well as transport experience in Queensland and at nationallevel. She has been chair of RACQ and is a National Transport Commissioner. She is a former QueenslandTelstra Business Women’s award winner, President of the Queensland Law Society, Chair of the Solicitors’Board of Queensland, Deputy Chancellor of the Queensland University of Technology and Adjunct Professor atthe University of Queensland. Ms Schafer was previously a partner in two Queensland legal professional servicesfirms. Ms Schafer holds a Bachelor of Laws (Honours) degree from the University of Queensland and an AICDCompany Directors Diploma. She is a member of the Australian Institute of Company Directors and of theAustralian and New Zealand Institute of Insurance and Finance. Ms Schafer ceased to be a director ofQueensland Rail Limited on 30 September 2013.
P McNamara BCom Company Secretary
Mr McNamara was appointed as a Company Secretary on 29 August 2011. He holds a Bachelor of Commerceand has more than 15 years experience in managerial and senior governance roles with ASX listed entitiesoperating in the property and financial services industries.
Meetings of directors
yearand each board committee held during theDirectorsofBoardcompany'sThe number of meetings thewere:directorand the number of meetings attended by each2013*,30 Juneended
BoardMeetings
Audit & RiskCommittee
People &Safety
Committee
OrganisationalPerformance &
StrategyCommittee
A B A B A B A BChairman
1Deputy-G Harley 6 6 - - 1 2 2 3
Chairman2-G Dawe 11 11 3 5 2 3 1 2
Chairman3-S Gregg 1 1 - - 1 1 - -
George4D 6 6 - - 2 2 3 3Hayes5M 4 7 - - 2 2 - -
AO6Dr L Keliher 3 4 1 1 - - - -M McArthur 11 13 - - 4 4 - -
McMillan4W 6 6 3 3 2 2 - -McMillan-Hall6D 4 4 1 1 - - - -Petie7D 9 10 3 3 1 1 - -Schafer8J 11 13 4 5 - - 3 3
A = Number of meetings attendedheld office or was a member of the committee duringdirectorB = Number of meetings held during the time the
yearthe
* Queensland Rail Limited became a wholly-owned subsidiary of Queensland Rail effective 3 May 2013 in2013.Queensland Rail Transit Authority Actaccordance with the
as a Director on 20 December 2012, appointed as Deputy Chairman on 21 June 20131Appointedas a Director and Chairman on 12 July 2012, ceased as a Director on 18 June 20132Appointed
as a Director and Chairman on 12 July 20123Ceasedas a Director on 20 December 20124Appointed
as a Director on 20 December 20125Ceasedas a Director on 30 September 20126Ceasedas a Director on 30 September 2012, reappointed as a Director on 20 December 20127Ceasedas a Director on 30 September 20138Ceased
Queensland Rail Limited Financial Report FY2012/13 149
Queensland Rail LimitedDirectors' report
30 June 2013(continued)
Insurance of officers
paid a premium in respect of an insurance contract toQueensland Rail Limitedyear,financialDuring theand itsparentindemnify officers against liabilities that may have arisen from their position as officers of the
and all executive officersdirectorscontrolled entity. Officers indemnified include the company secretary,group.participating in the management of the
is prohibited under the terms of theCorporations Act 2001Further disclosure required under section 300 of thecontract.
Proceedings on behalf of the company
for leave to bringCorporations Act 2001No person has applied to the Court under section 237 of theis a party, for thegroupor to intervene in any proceedings to which thegroup,proceedings on behalf of the
for all or part of those proceedings.group,purpose of taking responsibility, on behalf of the
with leave of the Court under sectiongroupNo proceedings have been brought or intervened in on behalf of the2001.Corporations Act237 of the
Auditor's independence declaration
is set outCorporations Act 2001The auditor's independence declaration as required under section 307C of the9.on page
Rounding of amounts
is of a kind referred to in Class Order 98/100, issued by the Australian Securities and InvestmentscompanyThedirectors' reportAmounts in thereport.directors'Commission, relating to the "rounding off" of amounts in the
have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases,to the nearest dollar.
Auditor
Corporations Actcontinues in office in accordance with section 327 of theAuditor-General of QueenslandThe2009.Auditor-General Actthe Auditor-General is appointed in accordance with the2001,
directors.This report is made in accordance with a resolution of
M KlugChairman
Brisbane, Qld16 December 2013
Queensland Rail Limited Financial Report FY2012/13 150
Queensland Rail LimitedDirectors' report
30 June 2013(continued)
AUDITOR’S INDEPENDENCE DECLARATION
Queensland Rail LimitedTo the Directors of
2001.Corporations ActThis auditor’s independence declaration has been provided pursuant to s.307C of the
Independence Declaration
As lead auditor for the audit of Queensland Rail Limited for the year ended 30 June 2013, I declare that, to thebest of my knowledge and belief, there have been -
(a) in relation toCorporations Act 2001no contraventions of the auditor independence requirements of thethe audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Queensland Rail Limited and the entity it controlled during the period.
A M GREAVES FCA FCPA Queensland Audit OfficeAuditor-General of Queensland Brisbane
Queensland Rail Limited Financial Report FY2012/13 151
Queensland Rail LimitedConsolidated income statement
For the year ended 30 June 2013
Notes2013$'000
2012$'000
Revenue from continuing operations 5 1,927,457 1,943,275
Other income 6 3,202 2,782Consumables (477,750) (500,072)Employee benefits expense (726,013) (733,477)Depreciation and amortisation expense 7 (298,240) (296,548)Other expenses 7 (4,182) (7,020)Finance costs 7 (223,638) (222,927)Profit before income tax 200,836 186,013
Income tax expense 8 (56,032) (57,726)yearProfit for the 144,804 128,287
should be read in conjunction with the accompanying notes.consolidated income statementThe above
Queensland Rail Limited Financial Report FY2012/13 152
Queensland Rail LimitedConsolidated statement of comprehensive income
For the year ended 30 June 2013
Notes2013$'000
2012$'000
yearProfit for the 144,804 128,287
Other comprehensive income*Changes in the fair value of cash flow hedges 28 1,924 112Income tax relating to components of other comprehensive income 288, (577) (34)
net of taxyear,Other comprehensive income for the 1,347 78
yearTotal comprehensive income for the 146,151 128,365
* Other comprehensive income comprises amounts that are expected to be reclassified to profit or loss insubsequent periods when specific conditions are met.
should be read in conjunction with theconsolidated statement of comprehensive incomeThe aboveaccompanying notes.
Queensland Rail Limited Financial Report FY2012/13 153
Queensland Rail LimitedConsolidated balance sheet
As at 30 June 2013
Notes2013$'000
2012$'000
ASSETSCurrent assetsCash and cash equivalents 9 276,468 325,370Trade and other receivables 10 537,761 182,040Inventories 11 61,237 56,313Derivative financial instruments 12 475 -Other current assets 13 8,015 6,192Total current assets 883,956 569,915
Non-current assetsReceivables 14 3,843 57,091Inventories 15 22,533 15,240Property, plant and equipment 16 6,239,870 6,046,377Intangible assets 17 46,988 46,481Deferred tax assets 18 28,240 106,432Other non-current assets 19 4,834 5,049Total non-current assets 6,346,308 6,276,670
Total assets 7,230,264 6,846,585
LIABILITIESCurrent liabilitiesBank overdraft 9 13,908 -Trade and other payables 20 839,636 321,019Derivative financial instruments 12 - 1,783Provisions 21 19,658 274,981Borrowings 23 99,817 -Current tax liabilities - 528Other current liabilities 22 24,691 28,195Total current liabilities 997,710 626,506
Non-current liabilitiesTrade and other payables 24 31,375 -Derivative financial instruments 12 - 31Provisions 21 14,216 50,840Borrowings 23 3,000,000 3,000,000Deferred tax liabilities 25 411,894 400,378Other non-current liabilities 26 29,845 31,147Total non-current liabilities 3,487,330 3,482,396
Total liabilities 4,485,040 4,108,902
Net assets 2,745,224 2,737,683
EQUITYContributed equity 27 2,602,628 2,602,628Reserves 28 314 (1,033)Retained earnings 28 142,282 136,088
Total equity 2,745,224 2,737,683
should be read in conjunction with the accompanying notes.consolidated balance sheetThe above
Queensland Rail Limited Financial Report FY2012/13 154
Queensland Rail LimitedConsolidated statement of changes in equity
For the year ended 30 June 2013
Notes
Contributedequity$'000
Reserves$'000
Retainedearnings
$'000
Totalequity$'000
1 July 2011Balance at 2,363,172 (1,111) 110,430 2,472,491
Profit for the year - - 128,287 128,287Other comprehensive income - 78 - 78Total comprehensive income for the year - 78 128,287 128,365
Transactions with owners in their capacityas owners:Contributions of equity 27 246,011 - - 246,011Distributions of equity 27 (6,555) - - (6,555)Dividends provided 29 - - (102,629) (102,629)
239,456 - (102,629) 136,827
30 June 2012Balance at 2,602,628 (1,033) 136,088 2,737,683
1 July 2012Balance at 2,602,628 (1,033) 136,088 2,737,683
Profit for the year - - 144,804 144,804Other comprehensive income - 1,347 - 1,347Total comprehensive income for the year - 1,347 144,804 146,151
Transactions with owners in their capacityas owners:Dividends provided 29 - - (138,610) (138,610)
- - (138,610) (138,610)
30 June 2013Balance at 2,602,628 314 142,282 2,745,224
should be read in conjunction with the accompanyingconsolidated statement of changes in equityThe abovenotes.
Queensland Rail Limited Financial Report FY2012/13 155
Queensland Rail LimitedConsolidated statement of cash flows
For the year ended 30 June 2013
Notes2013$'000
2012$'000
Cash flows from operating activitiesReceipts from customers* 411,622 491,800Receipts from Government* 1,749,972 1,749,838Interest received 17,458 11,000Payments to suppliers and employees* (1,397,621) (1,362,361)Interest and other costs of finance paid (223,598) (222,618)Net GST paid (107,402) (96,724)Income taxes paid (41,271) (14,848)
from operating activitiesinflowNet cash 36 409,160 556,087
Cash flows from investing activitiesProceeds from the disposal of assets 9,541 7,716Payments for fixed assets (491,701) (566,542)
from investing activities(outflow)Net cash (482,160) (558,826)
Cash flows from financing activitiesContributions of equity 27 - 246,011Proceeds from borrowings 99,817 -Loans from related parties 13,005 -Dividends paid 29 (102,629) (84,429)
from financing activitiesinflowNet cash 10,193 161,582
in cash and cash equivalentsincrease/(decrease)Net (62,807) 158,843Cash and cash equivalents at the beginning of the financial year 325,369 166,526
year**Cash and cash equivalents at end of 9 262,562 325,369
* Inclusive of goods and services tax (GST).** Net of bank overdraft and monies held in trust.
should be read in conjunction with the accompanying notes.consolidated statement of cash flowsThe above
Queensland Rail Limited Financial Report FY2012/13 156
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013
1 Summary of significant accounting policies
are setfinancial statementsconsolidatedtheseThe principal accounting policies adopted in the preparation ofpresented, unless otherwise stated. Theyearsout below. These policies have been consistently applied to all the
Onsubsidiary,and itsQueensland Rail Limitedconsisting ofentityconsolidatedare for thefinancial statementsLtd.Track Insurance Pty
The financial statements for Queensland Rail Limited, previously approved by the Board on 28 August 2013,have been amended subsequent to receiving an unqualified audit opinion from the Auditor-General ofQueensland on 30 August 2013. The Board of Queensland Rail resolved to transfer costs from assets underconstruction to consumables expense as those costs no longer represent future economic value. This decisionwas made subsequent to considering the accounting implication of a significant de-scope in its Sunlander 14capital program.
is a corporation limited by shares, incorporated and domiciled in Australia and owned byQueensland Rail Limitedis a for-profit entity. These financial statements are denominated inQueensland Rail LimitedQueensland Rail.
Australian dollars.
Queensland Railis referred to in this financial report as the "company" or the "parent".Queensland Rail Limitedare collectively referred to as the "group".Ltd,On Track Insurance Ptytogether with its subsidiary,Limited
On 3 May 2013, the shares in Queensland Rail Limited were transferred to Queensland Rail (referred to hereafterQueenslandas the Authority). The Authority is an unincorporated statutory body and was established under the
The group is a wholly-owned subsidiary of the Authority from this date.2013.Rail Transit Authority Act
2013.16 DecemberThese financial statements were approved for issue by the directors on
(a) Basis of preparation
been prepared in accordance with Australian Accountinghavefinancial statementsgeneral purposeTheseStandards, other authoritative pronouncements of the Australian Accounting Standards Board, and the
2001.Corporations Act
(i) Compliance with International Financial Reporting Standards (IFRS)
comply with IFRS as issued by the International Accountinggroupof thefinancial statementsconsolidatedTheStandards Board (IASB).
(ii) groupNew and amended standards adopted by the
None of the new standards and amendments to standards that are mandatory for the first time for the financialwere early adopted. Their adoption has not affected any of the amounts recognised in1 July 2012year beginning
the current period or any prior period and is not likely to affect future periods. However, amendments made tonow require the statement of2012,1 JulyeffectiveStatements,Presentation of FinancialAASB 101
comprehensive income to show the items of comprehensive income grouped into those that are not permitted tobe reclassified to profit or loss in a future period and those that may have to be reclassified if certain conditionsare met.
Queensland Rail Limited Financial Report FY2012/13 157
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
1 (continued)Summary of significant accounting policies
(iii) Early adoption of standards
The following standards and amendments to standards are available for early adoption for the financial year2012:1 Julybeginning
Financial InstrumentsAASB 9Amendments to Australian Accounting Standards arising from AASB 9 FinancialAASB 2009-11
InstrumentsAmendments to Australian Accounting Standards arising from AASB 9 FinancialAASB 2010-7
InstrumentsAmendments to Australian Accounting Standards - Mandatory Effective Date of AASB 9 andAASB 2012-6
Transition DisclosuresConsolidated Financial StatementsAASB 10Joint ArrangementsAASB 11Disclosure of Interests in Other EntitiesAASB 12
(2011)Separate Financial StatementsAASB 127(2011)Investments in Associates and Joint VenturesAASB 128
Amendments to Australian Accounting Standards arising from the Consolidation and JointAASB 2011-7Arrangements Standards
Amendments to Australian Accounting Standards - Transition Guidance and otherAASB 2012-10amendments
Fair Value MeasurementAASB 113Amendments to Australian Accounting Standards arising from AASB 113 Fair ValueAASB 2011-8
Measurement(September 2011)Employee BenefitsAASB 119
Amendments to Australian Accounting Standards arising from AASB 119 Employee BenefitsAASB 2012-5(September 2011)
Amendments to Australian Accounting Standards - Disclosures - Offsetting Financial Assets andAASB 2012-2(June 2012)Liabilities
Amendments to Australian Accounting Standards - Offsetting Financial Assets and LiabilitiesAASB 2012-3Amendments to Australian Accounting Standards arising from the Annual ImprovementsAASB 2012-5
2009-2011 CycleApplication of Tiers of Australian Accounting StandardsAASB 1053
Amendments to Australian Accounting Standards arising from Reduced DisclosureAASB 2010-2Requirements
The application of these standards and amendments in future periods is not expected to have a material impacton the accounts of the group. The group has not elected to early adopt any pronouncements for the currentannual reporting period.
There are no other standards that are not yet effective and that are expected to have a material impact on thegroup in the current or future reporting periods and on foreseeable future transactions.
(iv) Historical cost convention
been prepared under the historical cost convention, except for certain assetshavefinancial statementsThesewhich, as stated, are at fair value.
(v) Critical accounting estimates
requires the use of certain critical accounting estimates. It also requiresfinancial statementsThe preparation ofThe areas involving amanagement to exercise its judgement in the process of applying the accounting policies.
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the3.are disclosed in notestatements,financial
Queensland Rail Limited Financial Report FY2012/13 158
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
1 (continued)Summary of significant accounting policies
(vi) Going Concern
The financial report is prepared on a going concern basis despite current liabilities exceeding current assets atreporting date. The shortfall is partly due to the current intercompany loan with the Authority concerningemployee benefits. Funding through Transport Service Contracts, adequate interest coverage and a low gearing
status as a going concern.group'sratio provides adequate assurance of the
(b) Principles of consolidation
(i) Subsidiaries
Queensland Railthe assets and liabilities of the subsidiary ofincorporatefinancial statementsconsolidatedTheas at reporting date and the results of the subsidiary for the year then ended.Limited
has the power to govern thegroupA subsidiary is an entity (including a special purpose entity) over which thefinancial and operating policies so as to obtain benefits from their activities, generally accompanying ashareholding of more than one-half of the voting rights.
They aregroup.Subsidiaries are fully consolidated from the date on which control is transferred to thede-consolidated from the date that control ceases.
companies aregroupInter-company transactions, balances and unrealised gains on transactions betweeneliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment ofthe asset transferred.
Non-current inter-company loans may not be demanded by the other entity and do not become payable otherthan through settlement of obligations associated with the loans or one of the entities exits the wholly-ownedgroup.
group.Accounting policies have been adopted consistently across the
Investment in the subsidiary is accounted for at cost in the financial records of the parent entity.
(c) Foreign currency translation
(i) Functional and presentation currency
entities are measured using the currency of thegroup'sof each of thefinancial statementsItems included in theconsolidatedprimary economic environment in which the entity operates (i.e. the functional currency). The
functional and presentationgroup'spresented in Australian dollars, which is thearefinancial statementscurrency.
(ii) Transactions and balances
Foreign currency transactions are initially translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement ofsuch transactions and from the translation at year end exchange rates of monetary assets and liabilitiesdenominated in foreign currencies are recognised in profit or loss, except when they are deferred in equity asqualifying cash flow hedges and qualifying net investment hedges.
(d) Rounding of amounts / Comparative restatements
is of a kind referred to in Class Order 98/100, issued by the Australian Securities and InvestmentscompanyTheCommission, relating to the "rounding off" of amounts in the financial report. Amounts in the financial report havebeen rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, thenearest dollar.
Comparative information has been restated where necessary to be consistent with disclosures in the currentreporting period.
Queensland Rail Limited Financial Report FY2012/13 159
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
1 (continued)Summary of significant accounting policies
(e) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, except where the amountof GST incurred is not recoverable from the Australian Taxation Office (ATO). In these circumstances, the GST isrecognised as part of the cost of acquisition of the asset or as part of the expense.
Trade receivables and trade payables in the balance sheet are shown inclusive of GST. The net amount of GSTrecoverable from, or payable to, the ATO is included with other receivables or payables in the balance sheet.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component ofinvesting or financing activities, which are disclosed as operating cash flow.
were part of the Aurizon Operations Limited (formerlyOn Track Insurance Pty LtdandQueensland Rail LimitedQR Limited) GST group until 30 September 2010. Any transactions with the Aurizon Operations Limited group tothat date did not attract GST.
are individual entities recognisedOn Track Insurance Pty LtdandQueensland Rail LimitedFrom 1 October 2010as separate taxpayers for the purposes of GST. Transactions between these entities and externally to thirdparties are subject to GST.
(f) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable after taking into account anyrecognises revenue whengroupdiscounts allowed. Amounts disclosed as revenue are net of indirect taxes. The
the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entityactivities as described below. Exchanges of goodsgroup'sand specific criteria have been met for each of the
and services of the same nature and value without any cash consideration are not recognised as revenues.Revenue is recognised for the major business activities as follows:
(i) Services revenue
Services revenue comprises revenue earned from Transport Service Contracts, the provision of passengertransport and track access.
In addition to revenue receivable from non-related parties, the company receives revenue from Transport ServiceContracts with the Department of Transport and Main Roads as well as amounts from various State Governmentdepartments as direct reimbursement for concessions provided to senior citizens, pensioners and students.
Transport Service Contracts
Transport Service Contract revenue is accounted for as follows:
• Transport Service Contract (Rail Infrastructure) (TSC(RI))
with funding to cover capital andcompanyThis contract is a multi-tiered arrangement which provides theoperating costs for the Regional and South East Queensland networks.
Under the contract, a stream of annuity-based funding is provided for operating and capital costs whichhave been previously incurred as well as the capital costs for enhancements to these existing systems.This annuity (which is paid in monthly instalments) is calculated on a seven year forecast of capital andoperating costs for the respective systems under the TSC(RI). Capital costs are based on depreciatingassets over a 30 year period.
• Transport Service Contract - South East Queensland Infrastructure Plan and Program (TSC - SEQIPP)
is contracted tocompanyUnder the South East Queensland Infrastructure Plan and Program, theconstruct infrastructure at various locations throughout the South East Queensland network. The
property, plant and equipment which will generategroup'sinfrastructure constructed forms part of therevenue through the TSC (RI) contract. TSC - SEQIPP revenue is recognised on a systematic basis inaccordance with the agreed rate of return of the SEQIPP assets.
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1 (continued)Summary of significant accounting policies
• SEQIPP - Third party work
Revenue is recognised based on the actual costs incurred for the work performed. The revenue isrecognised when the work is complete and the costs incurred are taken to the income statement in thesame financial period.
• Citytrain and Traveltrain Transport Service Contracts
receives payments under the Transport Service Contract which defines passengercompanyTheRevenue is recognised on a straight-line basis based on thegroup.services to be provided by the
annual Transport Service Contract amount or periodic adjustments thereto.
Passenger Transport
Other train passenger service revenue comprises ticket and travel related sales and is recognised as revenueonce the service has been rendered.
Government concession revenue is recognised in the period in which the service is provided based on apredetermined formula as agreed with the local authority.
Track Access
Revenue generated from rail network access is recognised as the services are provided and is calculated basedon a number of operating parameters (such as tonnage hauled) applied to either regulator approved tariffs ornegotiated access agreements.
(ii) Other revenue
Other revenue comprises revenue earned from the sale of goods and services. Revenue for sale of goods isrecognised when the significant risks and rewards are passed to the buyer and the costs incurred, or to beincurred in respect of the transaction can be measured reliably. Risks and rewards are considered passed to thebuyer at the time of delivery.
(iii) Interest income
Interest income is recognised using the effective interest method.
(g) Other Income
(i) Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that thewill comply with all attached conditions.groupgrant will be received and the
Government grants relating to costs are deferred and recognised in income statement over the period necessaryto match them with the costs that they are intended to compensate.
Government grants relating to the purchase of property, plant and equipment are included in the cost base ofthose assets and amortised to the income statement on a straight-line basis over the expected lives of theassets.
(ii) Disposal of assets
The gain or loss on disposal of an asset is recognised at the date when the significant risks and rewards ofownership of the asset pass to the buyer, usually when the purchaser takes delivery of the asset. The gain orloss on disposal is calculated as the difference between the carrying amount of the asset at the time of disposaland the net proceeds on disposal and is recognised as other income or expenses in the income statement.
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1 (continued)Summary of significant accounting policies
(h) Defined benefit superannuation obligations
The group makes contributions to the State Public Sector Superannuation Scheme (QSuper) on behalf of itsemployees concerning superannuation. QSuper is an employer-sponsored fund, with the major employer beingthe State of Queensland. There are a number of membership categories in QSuper, which are eitheraccumulation or defined benefits in nature.
The Treasurer has ultimate responsibility for funding payments to defined benefit members. The State has inplace funding arrangements designed to meet the defined benefit obligations for its members. The Treasurer hasthe ability to require employers to pay any amounts needed to meet these benefits. Generally, this is handledthrough the regular standard fortnightly contribution paid by every employer, which has been determined on theadvice of the State Actuary. No directions varying this contribution have been received by the group to reportingdate.
The State Actuary makes a recommendation to the Treasurer on the standard employer contribution raterequired to fund the normal range of benefits at the conclusion of each triennial actuarial investigation. The mostrecent actuarial investigation was completed in 2010 and the actuary’s recommendation to leave the employercontribution rate unchanged was approved by the Treasurer. This investigation is undertaken on QSuper as awhole and is not segregated into different employers or occupations.
(i) Income tax
The income tax expense or benefit for the period is the tax payable / receivable on the current period's taxableincome based on the national income tax rate adjusted by changes in deferred tax assets and liabilitiesattributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts inthe financial statements and by unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to applywhen the assets are recovered or liabilities are settled, based on those tax rates that are enacted. The relevanttax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure thedeferred tax asset or liability.
Deferred tax assets are recognised for deductible temporary differences, unused tax losses and tax credits, onlyif it is probable that future taxable amounts will be available to utilise those temporary differences, losses andcredits.
Deferred tax liabilities and assets are not recognised for the temporary differences between the carrying amountand tax bases of investments in controlled entities where the parent entity is able to control the timing of thereversal of the temporary differences and it is probable that the differences will not reverse in the foreseeablefuture.
Current and deferred tax is recognised as an expense or income in the income statement, except when it relatesto items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity.
(i) Tax consolidation legislation
measures current and deferred taxgrouphas not elected to form a tax consolidated group. ThegroupTheas individualOn Track Insurance Pty Ltdand its controlled entityQueensland Rail Limitedamounts for
stand-alone taxpayers and aggregates the balances for disclosure.
(ii) Income tax equivalents
is required to make income tax equivalent payments to the Queensland Government, based upon thegroupThevalue of benefits derived and rulings set out in the National Tax Equivalent Regime (NTER) which is administeredby Australian Taxation Office (ATO).
Queensland Rail Limited Financial Report FY2012/13 162
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1 (continued)Summary of significant accounting policies
and instruction from theQueensland Rail Transit Authority Act 2013These payments are made pursuant to theTreasurer. The NTER gives rise to obligations which reflect in all material respects those obligations for taxation
andIncome Tax Assessment Act 1997the1936,Income Tax Assessment Actwhich would be imposed by theassociated legislation, as well as Rulings and other pronouncements by the ATO to determine the tax payable by
group.the
(j) Cash and cash equivalents
For cash flow statement and presentation purposes, cash and cash equivalents include cash on hand, depositsheld at call with financial institutions and other short-term highly liquid investments that are readily convertible toknown amounts of cash and which are subject to an insignificant risk of changes in value.
(k) Trade receivables
Trade receivables
Trade receivables are initially recorded at fair value less any allowance for uncollectible amounts. Tradereceivables generally have credit terms ranging from 7 to 31 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible arewritten off. An allowance for impairment of trade receivables is established when there is objective evidence that
will not be able to collect all amounts due according to the original terms of the receivables.groupthe
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financialreorganisation and default or delinquency in payments (more than 90 days overdue) are considered indicatorsthat the trade receivable is impaired.
The amount of the impairment loss is recognised in the income statement within other expenses. When a tradereceivable for which an impairment allowance had been recognised becomes uncollectible in a subsequentperiod, it is written off against the allowance account. Subsequent recoveries of amounts previously written offare credited against other expenses in the income statement.
Other receivables
Other receivables include accruals, contractual receivables and GST receivable. Collectability is reviewed on anongoing basis.
(l) Inventories
The value of inventories reported includes items held in centralised stores, workshops and infrastructure androllingstock depots. Cost comprises cost of purchase, cost of conversion and other costs incurred in bringing theinventory to its present location and condition.
Inventories are valued at the lower of cost or net realisable value. Cost is determined predominantly on anaverage cost basis.
Items expected to be consumed after more than one year are classified as non-current.
The allowance for inventory obsolescence is based on assessments by management of particular inventoryclasses and relates specifically to infrastructure and rollingstock maintenance items. The amount of theallowance is based on a proportion of the value of damaged stock, slow moving stock and stock that has becomeobsolete during the reporting period.
has an agreement in place with Aurizon Operations Limited regarding inventory held in the AurizongroupTheOperations Limited workshops on behalf of the group. The agreement includes both "call option" and "put option"clauses and expires on 30 June 2015. The group may exercise a call option upon expiry or termination of theagreement to acquire all or part of the dedicated inventory held by Aurizon Operations Limited at the expiry or
to acquire allgrouptermination date. Aurizon Operations Limited, may in turn, exercise a put option to require theor any part of the dedicated inventory held on behalf of the company at the expiry or termination date.
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1 (continued)Summary of significant accounting policies
(m) Investments and other financial assets
classifies its non-derivative financial assets based on the purpose for which the investments weregroupTheacquired. Management determines the classification of its investments at initial recognition. At reporting date, the
has only one type of non-derivative financial asset: loans and receivables.group
(i) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are notquoted in an active market. They are included in current assets, except for those with maturities greater than 12months after the reporting date which are classified as non-current assets. Loans and receivables are included in
in the balance sheet.14)(noteand non-current receivables10)(notecurrent trade and other receivables
(ii) Recognition and derecognition
Regular purchases and sales of financial assets are recognised on trade-date which is the date on which thecommits to purchase or sell the asset. Investments are initially recognised at fair value plus transactiongroup
costs. Financial assets are derecognised when the rights to receive cash flows from the financial assets havehas transferred substantially all the risks and rewards ofgroupexpired or have been transferred and the
ownership.
(iii) Subsequent measurement
Loans and receivables are carried at amortised cost using the effective interest method.
2.noteDetails on the determination of the fair value of financial instruments are disclosed in
(iv) Impairment
assesses at each reporting date whether there is objective evidence that a financial asset or group ofgroupThefinancial assets carried atgroup’sfinancial assets are impaired. If there is evidence of impairment for any of the
amortised cost, the loss is measured as the difference between the asset’s carrying amount and the presentvalue of estimated future cash flows, excluding future credit losses that have not been incurred. The cash flowsare discounted at the financial asset’s original effective interest rate. The loss is recognised in the incomestatement.
(n) Derivatives and hedging activities
enters into derivative contracts to hedge exposures to foreign exchange rates and commodity pricesgroupThe12.noteDerivative balances are disclosed in2.noteas described in
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and aresubsequently remeasured to their fair value. The method of recognising the resulting gain or loss depends onwhether the derivative is designated as a hedging instrument and, if so, the nature of the item being hedged.
designates certain derivatives as hedges of the cash flows of recognised assets and liabilities andgroupThehighly probable forecast transactions (cash flow hedges).
documents the relationship between hedging instruments and hedged items, as well as itsgroupAt inception, thealso documentsgrouprisk management objective and strategy for undertaking various hedge transactions. The
its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used inhedging transactions have been and will continue to be, highly effective in offsetting future cash flows of hedgeditems.
The full fair value of a hedging derivative is classified as a non-current asset or liability when the remainingmaturity of the hedged item is more than 12 months; it is classified as a current asset or liability when theremaining maturity of the hedged item is less than 12 months.
Queensland Rail Limited Financial Report FY2012/13 164
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1 (continued)Summary of significant accounting policies
(i) Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flowhedges is recognised in other comprehensive income. The gain or loss relating to the ineffective portion isrecognised immediately in the income statement.
Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item willaffect profit or loss. However, when the forecast transaction that is hedged results in the recognition of anon-financial asset, the gains and losses previously deferred in equity are transferred from equity and included inthe measurement of the initial cost or carrying amount of the asset.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria forhedge accounting, any cumulative gain or loss existing in equity at that time is recognised when the forecasttransaction is ultimately recognised in the income statement. When a forecast transaction is no longer expectedto occur, the cumulative gain or loss that was reported in equity is immediately transferred to the incomestatement.
(ii) Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in fair value of any derivativeinstrument that does not qualify for hedge accounting are recognised immediately in the income statement.
(iii) Embedded derivatives
purchase and sale contracts, it is possible that embedded derivatives have been enteredgroup'sThrough theinto. An embedded derivative will cause some or all of the cash flows of the purchase or sale contract (i.e. thehost contract) to be modified by reference to a variable such as a foreign exchange rate or a commodity price ifthat variable is not closely related to the host contract.
Embedded derivatives are separated from the host contract and accounted for as a stand alone derivative if theeconomic characteristics and risks of the embedded derivatives are not closely related to those of the hostcontract.
At reporting date, there were no embedded derivatives not closely related to the host contract.
(o) Property, plant and equipment
Methodology for valuation of fixed assets
Property, plant and equipment is measured at cost less accumulated depreciation. Cost is the amount of cash orcash equivalents paid or the fair value of the other consideration given to acquire an asset at the time of itsacquisition or construction. Cost may also include transfers from other comprehensive income of any gain or losson qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.
The cost of fixed assets constructed by the group includes the cost of all materials used in construction, directlabour, site preparation, interest and foreign currency gains and losses incurred where applicable and anappropriate proportion of variable and fixed overheads.
Gifted and Donated Assets
Assets acquired from government at no cost are measured at fair value as government grants. Fair value meansthe amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing partiesin an arm’s length transaction.
Assets acquired from customers at no cost are recorded at fair value.
Queensland Rail Limited Financial Report FY2012/13 165
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1 (continued)Summary of significant accounting policies
Land
only retains ownership ofgroupstipulates that theTransport Infrastructure Act 1994Land is carried at cost. Theits non-corridor land. As such, only non-corridor land is recorded in these accounts. Ownership of corridor landremains with the Department of Natural Resources and Mines on behalf of the State. This land is leased to the
for no cost. The sub-leasegroupDepartment of Transport and Main Roads and subsequently sub-leased to theterm is for an initial term of 100 years with a renewal option for an additional 100 years.
Owned building, plant and equipment and rollingstock
Owned building, plant and equipment and rollingstock are carried at cost less accumulated depreciation.Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
and the costgrouponly when it is probable that future economic benefits associated with the item will flow to theof the item can be measured reliably.
Owned infrastructure
Infrastructure assets are carried at cost and represent capitalised expenditures that are directly related to capitalprojects and may include materials, labour and equipment, in addition to an allocable portion of indirect costs thatclearly relate to a particular project that will provide future economic benefits and remain within the control of thegroup.
Subsequent and maintenance costs
Costs related to repairs and maintenance activities are expensed when such repairs are performed. Subsequentcosts are only capitalised when it is probable that future economic benefits associated with the item which flow to
and the cost of the item can be measured reliably. The carrying amount of any component accountedgroupthefor as a separate asset is derecognised when replaced.
Leased property, plant and equipment
Capitalised fit out of leased properties is disclosed under leased property.
does not have any finance leases.groupThe
Assets under construction
includes the cost of all materials used in construction, directgroupThe cost of fixed assets constructed by thelabour, site preparation, interest and foreign currency gains and losses incurred where applicable and anappropriate proportion of variable and fixed overheads.
Depreciation and Amortisation
Buildings, plant and equipment, rollingstock and infrastructure are depreciated on a straight-line basis over theuseful life net of the residual value. Motor vehicles are depreciated using the diminishing value basis(percentages range from 13.64% to 35.00%), with land and assets under construction not depreciated.
Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or theestimated useful lives of the improvements.
Assets are depreciated or amortised from the date of acquisition, or, in respect of internally constructed ormanufactured assets, from the time an asset is completed and held ready for use. Major spares purchasedspecifically for particular assets are capitalised and depreciated in line with standard default asset class lives.
Where assets have separately identifiable components that are subject to regular replacement, thesecomponents are assigned useful lives distinct from the asset to which they relate. Any expenditure that increasesthe originally assessed capacity or service potential of an asset is capitalised and the new depreciable amount isdepreciated over the remaining life of the asset.
Queensland Rail Limited Financial Report FY2012/13 166
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1 (continued)Summary of significant accounting policies
The depreciation and amortisation rates used during the year were based on the following range of useful lives:
- Buildings 10 - 50 years- Rollingstock 8 - 40 years- Plant and equipment 3 - 25 years- Infrastructure* 5 - 100 years
The depreciation and amortisation rates are reviewed annually and adjusted if appropriate.
An asset’s carrying amount is written down to its recoverable amount if the asset’s carrying amount is greater1(r)).(notethan its estimated recoverable amount
* Longer life infrastructure includes bridges, tunnels and other long lived civil works. Shorter life infrastructureincludes telecommunications and security and surveillance equipment.
(p) Intangible assets
(i) IT development and software
Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that willcontribute to future period financial benefits are capitalised to software and systems. Costs capitalised includeexternal direct costs of materials and service and direct payroll and payroll related costs of employees' time spenton the project. Amortisation is calculated using the straight-line method over their useful life which varies from 3to 7 years.
IT development costs include only those costs directly attributable to the development phase and are onlyhas an intention and ability to usecompanyrecognised following completion of technical feasibility and where the
the asset.
(q) Classification of expenditure
Items of expenditure in excess of $2,000 which are expected to provide future economic benefits are capitalised,with the exception of the purchase of office equipment and other items of a similar nature that provide limitedquantifiable benefits. The threshold applies to all asset classes except capital spares and intangibles.
Capital spares have a threshold of $20,000. If capital spares are under $20,000, the item is recorded in inventory.Expenditure not capitalised is treated as an operating expense in the period in which the expenditure is incurred.
Intangibles have a threshold of $50,000. If intangibles are under $50,000, expenditure is not capitalised and istreated as an operating expense in the period in which the expenditure is incurred.
(r) Impairment of assets
Assets are reviewed for impairment annually to determine if there are indications that the carrying amount maynot be recoverable.
An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverableamount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For thepurposes of assessing impairment, assets are grouped at the lowest levels for which there are separatelyidentifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets(cash generating units).
Non-financial assets that have suffered impairment are reviewed for possible reversal of the impairment at eachreporting date.
(s) Trade and other payables
financial yearprior to the end ofgroupThese amounts represent liabilities for goods and services provided to thewhich are unpaid. The amounts are unsecured and are usually paid within the terms set by the supplier.
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1 (continued)Summary of significant accounting policies
(t) Borrowings and borrowing costs
Debt is drawn from facilities with the Queensland Treasury Corporation (QTC) incorporating fixed and floatingdebt and is initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequentlymeasured at amortised cost, using the effective interest rate method. Interest is accrued and paid monthly.
Interest costs are calculated and advised by QTC in accordance with an agreed book rate methodology, whichequates with amortised cost using the effective interest rate method. The effective interest rate is the rate thatexactly discounts estimated future cash payments or receipts through the expected life of the financialinstrument.
Borrowing costs, which includes interest calculated using the effective interest method and administration fees,are expensed in the period in which they arise.
Borrowing costs which are directly attributable to the construction of material qualifying assets are capitalised.Qualifying assets are assets not funded from other sources with a cost of more than $1.0 million and which take asubstantial period of time to prepare for intended use or sale. The rate used to determine the amount ofborrowing cost to be capitalised is the QTC interest rate applicable to the entity’s outstanding borrowings during
(2012:million were capitalised$2.2During the year, interest costs of7.49%).(2012:7.48%the year, in this casemillion).$4.1
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement ofthe liability for at least 12 months after the reporting date.
(u) Provisions
has a present legal or constructive obligation as a result of pastgroupProvisions are recognised when theevents, it is probable that an outflow of resources will be required to settle the obligation and the amount hasbeen reliably estimated. Provisions are not recognised for future operating losses.
The amount recognised as a provision is the best estimate of the consideration required to settle the presentobligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where aprovision is measured using the cash flows estimated to settle the present obligation, its carrying amount is thepresent value of those cash flows. The discount rate used to determine the present value is a pre tax rate thatreflects current market assessments of the time value of money and the risks specific to the liability.
(v) Employee benefits
(i) Wages and salaries, annual leave and leave loading
Liabilities for wages and salaries, including non-monetary benefits, annual leave and leave loading arerecognised as current liabilities. These liabilities are in respect of employees' services up to the reporting dateand are measured at the amounts expected to be paid when the liabilities are settled plus related on-costs.Employee benefits disclosed as liabilities and also as employee benefits expense in the consolidated incomestatement include amounts recharged by Queensland Rail from 3 May 2013 in accordance with the ManagedServices Agreement.
(ii) Other long-term employee benefit obligations
Liabilities for long service leave where employees have completed the required period of service, or are entitledto pro-rata payments are recognised as current liabilities at nominal values. The remaining unvested liabilities areincluded as non-current liabilities.
The liability for long service leave is measured using the expected future payments to be made in respect ofservices provided by employees up to the reporting date. Consideration is given to expected future wage andsalary levels, experience of employee departures and periods of service. Expected future non-current paymentsare discounted using market yields at the reporting date on Commonwealth government bonds with terms tomaturity that match, as closely as possible, the estimated future cash outflows.
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30 June 2013(continued)
1 (continued)Summary of significant accounting policies
(iii) Retirement allowance
Retirement allowance is payable to employees that retire or are paid according to Voluntary EmployeeRedundancy Scheme (VERS) or Medical Separation who:
• are not members of a QSuper contributory or defined benefit superannuation fund;• were employed prior to 1 February 1995;• have 10 or more years of continuous service; and• have reached the retirement attainment age of 55.
Liabilities for retirement allowance where employees fulfil all of the above requirements are recognised as currentliabilities at nominal values. The remaining unvested liabilities are included as non-current liabilities.
The liability for retirement allowance is measured using the expected future payments to be made in respect ofservices provided by employees up to the reporting date. Consideration is given to the history of employeedepartures, expected future wage and salary levels as well as expected age of retirement.
Expected future non-current payments are discounted using market yields at the reporting date onCommonwealth government bonds with terms to maturity that match, as closely as possible, the estimated futurecash outflows.
These conditions continue to apply to employees who have transferred, or will transfer, from Aurizon OperationsLimited.Queensland RailLimited and Aurizon Network Pty Ltd (formerly QR Network Pty Ltd) to
(iv) Sick leave
Sick leave is not provided for on the grounds that it is non-vesting and on average, no more than the annualentitlement is taken each year.
(v) Superannuation
Contributions are expensed as they are made.
The group pays an employer subsidy to the Government Superannuation Office in respect of employees who arecontributors to either the Public Sector Superannuation (QSuper) scheme or State Service Superannuation.
Employer contributions to the Super Defined Benefit Fund are determined by the State Actuary. No liability isrecognised for accruing superannuation benefits as this liability is held on a Whole of Government basis andreported in the Whole of Government financial statements. The group also makes superannuation guaranteepayments into the QSuper Accumulation Fund (RailSuper) and QSuper Accumulation Fund (Contributory)administered by the Government Superannuation Office.
No liability / asset is recognised for the group's share of any potential deficit of the Super Defined Benefit Fund offor further information on defined benefit liabilities.1(h)noteQSuper. Refer to
(w) Contributed equity
Ordinary shares are classified as equity.
Equity injections are treated as an increase in the value of issued shares.
(x) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at thebut not distributed at reporting date.financial yearon or before the end of thegroup,discretion of the
Queensland Rail Limited Financial Report FY2012/13 169
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
1 (continued)Summary of significant accounting policies
(y) Leases
(i) Leases on property, plant and equipment
asgroupLeases in which a significant portion of the risks and rewards of ownership are not transferred to theOperating lease rental (net any incentive received from the32).(notelessee are classified as operating leases
lessor) is expensed on a straight-line basis over the lease term and is charged to the income statement.
as lessee, assumes substantially all the risks andgroup,Leases of property, plant and equipment where thedid not have any finance leases at reportinggroupbenefits of ownership are classified as finance leases. The
date.
is a lessor is recognised as income on agroupExpected rental revenue from operating leases where the32).(notestraight-line basis over the lease term
(z) Insurance
insures against risks which are largely uncontrollable, have significant or catastrophic consequencesgroupThefor assets and / or revenue and the aggregate costs of which would exceed the limit of exposure the organisationis prepared to accept.
Insurance cover has accordingly been effected for a variety of such risks. Other areas of risk exposure areself-insured. Other areas of risk exposure include workers' compensation and is self-insured by the Authority.
Limited'sQueensland RailUntil 30 June 2010, self-insurance and other underwriting activities were performed bywas transferred from AurizonOn Track Insurance Pty LtdLtd.On Track Insurance Ptywholly-owned subsidiary,
Operations Limited on 6 October 2010 and will continue to provide cover for claims relating to events up until 30and the Aurizon Operations Limited group.Queensland Rail LimitedJune 2010 for both
(aa) Environmental regulation
is subject to a variety of laws and regulations in the jurisdiction in which it operates or maintains land.groupTheWhere remediation measures are probable and can be reliably measured, such costs incurred in complying with
1(u).noterelevant laws and regulations are accounted for in accordance with the policy in
it does2011,Clean Energy Actis not required to purchase carbon permits under thegroupAlthough thehasgrouppurchase electricity and other inputs whose prices have increased as a result of the legislation. The
assessed the impact of these increases and determined that they are not material to its operations.
(ab) Authorisation for issue
declaration.directors'are authorised for issue by the Chairman at the date of signing thefinancial statementsThe
(ac) Parent entity financial information
has been prepared37notedisclosed inLimited,Queensland RailThe financial information for the parent entity,except as set out below:statements,financialon the same basis as the consolidated
(i) Investments in subsidiaries
Limited.Queensland Railoffinancial statementsInvestments in subsidiaries are accounted for at cost in the
(ii) Tax consolidation legislation
1(i)(i).noteFor information regarding tax consolidation legislation, please refer to
Queensland Rail Limited Financial Report FY2012/13 170
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
2 Financial risk management
activities expose it to a variety of financial risks including market risk, credit risk and liquidity risk. Thegroup'sTheoverall risk management program focuses on the unpredictability of financial markets and seeks togroup's
uses derivative financialgroupThegroup.minimise potential adverse effects on the financial performance of theinstruments such as foreign exchange contracts and commodity swap contracts to hedge significant riskexposures. Trading for profit is strictly prohibited.
under policies approvedgroupFinancial risk management is being carried out by a central treasury unit within theThe treasury unit identifies, evaluates and hedges financial risks in closeBoard).(theDirectorsofBoardby the
approves the Finance Policy for overall riskBoardoperating units. Thegroup'sco-operation with themanagement, as well as principles covering specific areas, such as mitigating foreign exchange, commodityprice, interest rate and credit risks, use of derivative financial instruments and investing excess liquidity. Any
Board.breaches of policy are reported to the
Sensitivity analysis has been used to help assess the financial risk of the group. In determining this sensitivity,the average of the 50 day historical volatility of the closing daily spot rate for three years, was used to adjust theforward curve. A three year period was chosen in line with the group's current hedging framework. For foreigncurrency the adjustment was applied to the US Dollar, the Euro and the Japanese Yen. For commodity price risk,the adjustment was applied to the Singapore Gasoil curves.
(a) Market risk
(i) Foreign exchange risk
Foreign exchange risk arises from capital expenditures that are denominated in a currency that is not the entity'sfunctional currency. The group is exposed to foreign exchange risk arising from various currency exposures,primarily with respect to the US Dollar (USD), the Euro (EUR) and the Japanese Yen (JPY). The risk is measuredusing cash flow at risk.
has a Treasury Principle in place to manage foreign exchange risk. All foreign exchange risk isgroupThecentrally managed by the treasury unit using approved derivative instruments.
foreign exchange risk management policy dictates the level of hedging to be undertaken within thegroup'sTheapproved trading range for the foreign exchange risk hedgingBoardapproved limits. At reporting date, theBoard
is:
0 - 1 year: 80% - 100%1 - 2 years: 60% - 100%2 - 3 years: 40% - 100%
designates forward foreign currency derivatives for hedging foreign exchange forecast transactionsgroupTheof foreign exchange hedges were designated for89%)(2012:100%which are highly probable. At reporting date,
hedge accounting purposes.
$0.6net losses of(2012:million$0.4At reporting date, contracts recognised directly in equity were net gains ofmillion).
million) were removed from equity and$1.2(2012:million$0.7losses of2013,30 JuneDuring the year endedincluded in the acquisition cost of capital.
Queensland Rail Limited Financial Report FY2012/13 171
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
2 (continued)Financial risk management
exposure to foreign currency risk at reporting date was as follows:group'sThe
30 June 2013 30 June 2012USD$'000
EUR€'000
JPY¥'000
USD$'000
EUR€'000
JPY¥'000
Cash and cash equivalents 28 125 1 87 28 86Forward exchange contracts- capital expenditure foreign currency (not
qualifying for hedge accounting) - - - 850 100 -- capital expenditure foreign currency (qualifying
for hedge accounting) 577 2,525 - 1,473 4,325 94,461Net exposure 605 2,650 1 2,410 4,453 94,547
Sensitivity
against the USD / EUR / JPY with10%At reporting date, had the Australian dollar weakened / strengthened bymillion lower$0.006higher /nilpost tax profit would have beengroup’sall other variables held constant, the
million lower).$0.2million higher /$0.313%,(2012:
(ii) Commodity price risk
Commodity price risk arises when future commercial supply agreements are subject to fluctuations in pricemovements. Commodity swap contracts, transacted by the treasury unit, are used to manage commodity pricerisk.
has a Treasury Principle in place to manage commodity price risk. All commodity price risk is centrallygroupTheuses the commodity Singaporegroupmanaged by Group Treasury using approved derivative instruments. The
has chosen Singapore Gasoil 0.5% to hedgegroupGasoil 0.001% due to environmental efficiencies. Theexposures until December 2012 and Singapore Gasoil 0.05% to hedge exposures from January 2013 onwardsas these are the most liquid markets available.
Boardcommodity price risk management policy dictates the level of hedging to be undertaken withingroup'sTheapproved trading range for the commodity price hedging is:Boardapproved limits. At reporting date, the
0 - 1 year: 0% - 100%1 - 2 years: 0% - 100%2 - 3 years: 0% - 100%
designates forward commodity derivatives for hedging commodity forecast transactions which aregroupThe(2012:highly probable. At reporting date, no commodity hedges were designated for hedge accounting purposes
100%).
million).$0.9net losses of(2012:At reporting date, contracts recognised directly in equity were nil
million) were removed from equity and$0.03(2012:million$0.23losses of2013,30 JuneDuring the year endedincluded in the cost of diesel fuel.
Sensitivity
At reporting date, had the Singapore Gasoil price decreased / increased with all other variables held constant, thenil25%,(2012:post tax profit would not have been effected as there were no commodity hedges in placegroup's
lower).nilhigher /
Queensland Rail Limited Financial Report FY2012/13 172
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
2 (continued)Financial risk management
(iii) Cash flow and fair value interest rate risk
main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates exposegroup'sTheto fair value interestgroupthe group to cash flow interest rate risk. Borrowings issued at fixed rates expose the
rate risk. The QTC has been authorised to manage the interest rate risk of the group within limits in accordanceBoard.with the risk profile approved by the
This is achieved by varying the proportion of the floating and fixed rate funding. The performance of this riskmanagement is assessed against the benchmark duration of the debt portfolio.
had the following exposure to variable rate borrowings:groupAt reporting date the
30 June 2013 30 June 2012Weightedaverage
interest rate%
Balance$'000
Weightedaverage
interest rate%
Balance$'000
Bank overdrafts and bank loans 7.3 3,099,817 7.5 3,000,000Net exposure to cash flow interest rate risk 3,099,817 3,000,000
debt with QTC to interest rate risk:group’sThe following table summarises the sensitivity of the
Interest rate risk-1% +1%
30 June 2013
Carryingamount
$'000Profit$'000
Equity$'000
Profit$'000
Equity$'000
Client Specific Debt Pool 3,000,000 1,711 1,711 (1,577) (1,577)Total increase / (decrease) 1,711 1,711 (1,577) (1,577)
Interest rate risk-1% +1%
30 June 2012
Carryingamount$'000
Profit$'000
Equity$'000
Profit$'000
Equity$'000
Client Specific Debt Pool 3,000,000 2,309 2,309 (2,199) (2,199)Total increase / (decrease) 2,309 2,309 (2,199) (2,199)
(b) Credit risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting date torecognised financial assets, is the carrying amount, net of any allowances for impairment of those assets, asdisclosed in the balance sheet and notes to the consolidated financial statements.
does not have any material credit risk exposure to any single receivable or group of receivables undergroupTheother than amounts owing by the State of Queensland. For somegroup,financial instruments entered into by the
trade receivables the group may also obtain security in the form of guarantees, deeds of undertaking or letters ofcredit which can be called upon if the counterparty is in default under the terms of the agreement.
Policies are in place to ensure that sales of products and services are only made to customers with anappropriate credit history.
Queensland Rail Limited Financial Report FY2012/13 173
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
2 (continued)Financial risk management
Derivative counterparties and cash transactions are limited to high credit quality financial institutions and arehas policies that limit the amount of credit exposure to any one financialgroupTheBoard.approved by the
had the following credit exposure risk:groupinstitution. At reporting date the
2013$'000
2012$'000
Cash at bank and short-term bank depositsAA+ 276,339 119,036AA - 206,175
276,339 325,211
Derivative financial assetsAA 475 -
475 -
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability offunding through an adequate amount of committed credit facilities and the ability to close out market positions.
ensures sufficient cash to meet short-term and long-term financialgroupLiquidity risk management within thehas policies in place to manage liquidity risk, including the establishment of an annualgroupcommitments. The
approved borrowing program and the availability of appropriate working capital facilities.
manages liquidity risk by monitoring forecast cash flows and ensuring that adequate cash flow isgroupThemaintained.
Financing arrangements
The borrowing2(a)(iii).The short-term borrowing arrangements with QTC are interest bearing, refer to notearrangements are subject to annual review.
The amount of undrawn short-term borrowing facilities with QTC available at reporting date is shown below:
2013$'000
2012$'000
QTC short-term facilitiesUsed at reporting date 99,817 -Unused at reporting date 350,183 450,000Total facilities 450,000 450,000
Long-term borrowings are sourced from the Queensland Rail Limited Client Specific Pool subject to annualmay draw up to the amount of the approved borrowinggroupapproval of the Queensland State Treasurer. The
program.
Borrowings are not secured.
had a credit standby arrangement with the Commonwealth Bank of Australia in the form of a bankgroupThecancelled during the previous financial year.groupoverdraft totalling $2.0 million which the
Queensland Rail Limited Financial Report FY2012/13 174
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
2 (continued)Financial risk management
Maturity Analysis
financial liabilities and net and gross settled derivative financial instrumentsgroup'sThe tables below analyse theinto relevant maturity groupings based on the remaining period at the reporting date to the contractual maturitydate. The amounts disclosed in the table are the contractual undiscounted cash flows.
Less than1 year
Between1 and 5 years
Over5 years
Totalcontractualcash flows
30 June 2013 $'000 $'000 $'000 $'000
Non-derivativesNon-interest bearing 675,517 31,375 - 706,892Variable rate 125,326 - - 125,326Fixed rate 219,113 877,056 2,962,320 4,058,489Total non-derivatives 1,019,956 908,431 2,962,320 4,890,707
DerivativesNet settled (forward commodity hedges)
- - - -
Gross settled (foreign exchange hedges)Assets- (inflow) (4,294) (1,436) - (5,730)- outflow 3,811 1,428 - 5,239Liabilities- (inflow) - - - -- outflow - - - -Total derivatives (483) (8) - (491)
30 June 2012
Less than1 year$'000
Between1 and 5 years
$'000
Over5 years$'000
Totalcontractualcash flows
$'000
Non-derivativesNon-interest bearing 192,921 - - 192,921Variable rate 25,469 - - 25,469Fixed rate 224,204 897,432 3,024,290 4,145,926Total non-derivatives 442,594 897,432 3,024,290 4,364,316
DerivativesNet settled (forward commodity hedges)Liabilities 859 - - 859
Gross settled (foreign exchange hedges)Assets- (inflow) - - - -- outflow - - - -Liabilities- (inflow) (8,778) (280) - (9,058)- outflow 9,723 313 - 10,036Total derivatives 1,804 33 - 1,837
Queensland Rail Limited Financial Report FY2012/13 175
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
2 (continued)Financial risk management
(d) Fair value measurements
The fair value of financial assets and financial liabilities must be estimated for recognition and for disclosurepurposes.
requires disclosure of fair value measurements by level of theFinancial Instruments: DisclosuresAASB 7following fair value measurement hierarchy:
(Level 1) quoted prices (unadjusted) in active markets for identical assets or liabilities;(Level 2) inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices); and(Level 3) inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
30 Juneassets and liabilities measured and recognised at fair value atgroup'sThe following table presents the2012:30 Juneand2013
30 June 2013Level 1$'000
Level 2$'000
Level 3$'000
Total$'000
AssetsDerivatives used for hedging
Forward exchange contracts - 475 - 475Total assets - 475 - 475
LiabilitiesFinancial liabilities at fair value through profit or loss
Forward exchange contracts - - - -Derivatives used for hedging
Forward exchange contracts - - - -Commodity swaps - - - -
Total liabilities - - - -
30 June 2012Level 1$'000
Level 2$'000
Level 3$'000
Total$'000
AssetsDerivatives used for hedging
Forward exchange contracts - - - -Total assets - - - -
LiabilitiesFinancial liabilities at fair value through profit or loss
Forward exchange contracts - 8 - 8Derivatives used for hedging
Forward exchange contracts - 947 - 947Commodity swaps - 859 - 859
Total liabilities - 1,814 - 1,814
The fair value of financial instruments traded in active markets (such as foreign exchange and commodityderivatives) is based on observable market prices at reporting date. The observable market price used for
for effective hedges is the average (i.e. mid) forward rate at closegroupfinancial assets and liabilities held by theof business on reporting date.
Queensland Rail Limited Financial Report FY2012/13 176
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
2 (continued)Financial risk management
The fair value of financial instruments that are not traded in an active market (for example, over the counterderivatives) is determined using generally accepted valuation techniques. The group uses a variety of methodsand makes assumptions that are based on market conditions existing at the end of each reporting period.Observable market prices or dealer estimates for similar instruments are used to estimate fair value for long-termdebt for disclosure purposes. Other techniques, such as estimated discounted cash flows, are used to determinefair value for the remaining financial instruments. The fair value of forward exchange contracts and commodityswap contracts is determined using forward market rates at the end of the reporting period. These instrumentsare included in level 2 and comprise derivative financial instruments. In the circumstances where a valuationtechnique for these instruments is based on significant unobservable inputs, such instruments are included inlevel 3.
The carrying amounts of trade receivables and payables are assumed to approximate their fair values due totheir short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting
for similargroupthe future contractual cash flows at the current market interest rate that is available to thefinancial instruments. The carrying amount of current borrowings approximates the fair value, as the impact ofdiscounting is not significant.
3 Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors,including expectations of future events that may have a financial impact on the entity and that are believed to bereasonable under the circumstances.
(a) Critical accounting estimates and assumptions
makes estimates and assumptions concerning the future. The resulting accounting estimates will, bygroupThedefinition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
arefinancial yearcausing a material adjustment to the carrying amounts of assets and liabilities within the nextdiscussed below.
(i) Estimated impairment of property, plant and equipment
tests annually whether property, plant and equipment has suffered any impairment, in accordance withgroupTheThe recoverable amounts of cash generating units have been1(r).the accounting policy stated in note
determined based on value in use calculations or fair value less costs to sell. Value in use calculations requirethe use of assumptions.
(ii) Provisions for insurance claims
managed the self-insurance activities of the AurizonLtd,On Track Insurance PtyThe subsidiary company,belonged untilOn Track Insurance Pty LtdandQueensland Rail LimitedOperations Limited group to which both
30 June 2010 and 6 October 2010 respectively. Actuarial assessments are undertaken annually to assess thefor further information.1(z)value of the provision for any outstanding claims. Refer to note
Accrued insurance liabilities (includes Workers' Compensation) is based on a combination of managementfor more21estimates and independent actuarial assessments performed as at year end. Refer to note
information.
(iii) Provision for land rehabilitation
There is uncertainty as to the amount that will ultimately be required to be expensed to remediate contaminatedfor more information.21land. Refer to note
(iv) Workers compensation self-insurance provision
Independent actuarial valuations are used to estimate the provisions required for self-insured workerscompensation.
Queensland Rail Limited Financial Report FY2012/13 177
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
3 (continued)Critical accounting estimates and judgements
The determination of the provisions required is dependent on a number of assumptions including the total futurecost to finalise existing open claims, wage increases that will impact existing claims, inflation and the amount ofclaims that have been incurred but not yet reported.
for more information.21Refer to note
(v) Long service leave provision
The determination of the provisions required is dependent on a number of assumptions including expected wageincreases, length of employee service and bond rates.
for more information.21Refer to note
(vi) Taxation
accounting policy for taxation requires management's judgement as to the types of arrangementsgroup'sTheconsidered to be subject to a tax. Judgement is also required in assessing whether deferred tax assets andcertain deferred tax liabilities are recognised on the balance sheet. Deferred tax assets, including those arisingfrom unrecouped tax losses, capital losses and temporary differences, are recognised only when it is consideredprobable that they will be recovered. Recoverability is dependent on the generation of sufficient future taxableprofits.
for carrying amounts of deferred tax assets and deferred tax liabilities.25and18Refer to notes
(vii) Depreciation
Management estimates the useful lives and residual values of property, plant and equipment based on theexpected period of time over which economic benefits from use of the asset will be derived. Management reviewsuseful life assumptions on an annual basis having given consideration to variables including historical andforecast usage rates, technological advancements and changes in legal and economic conditions. Refer to note
for details on a change in the useful lives in the4for details of current depreciation rates used and note1(o)current reporting period.
(viii) Hedge accounting
Management's judgement is necessary when determining whether a derivative financial instrument qualifies forFinancialhedge accounting, such as whether forecast transactions are highly probable as required by AASB 139
The assessment of whether forecast transactions are highlyMeasurement.Instruments: Recognition andprobable is judgmental and is subject to changes to the timing and magnitude of underlying purchases.
(ix) Sunlander 14 capital program
Management estimated the cost associated with the de-scoped carriages from the Sunlander 14 capital program.Refer to note 16(d) for details.
4 Correction of error and revision of estimates
There have been no corrections of error in the current reporting period.
assets. The reviewgroup’sDuring the reporting period management undertook a review of the useful lives of thegroup’stook into account useful lives adopted by rail managers in Australia and New Zealand as well as the
asset maintenance and replacement history.
As a result of the review, the useful lives of a number of asset classes were amended. The changes wereadopted prospectively from 1 July 2012 and resulted in a reduction in depreciation expense for the reportingperiod of approximately $19.1 million.
There were no other material revisions of estimates during the current reporting period.
Queensland Rail Limited Financial Report FY2012/13 178
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
5 Revenue from continuing operations
2013$'000
2012$'000
Transport service contract revenue 1,526,614 1,530,327Passenger transport revenue 67,831 71,836Network access revenue 218,833 217,463Other revenue* 99,938 109,483Interest revenue 14,241 14,166
1,927,457 1,943,275
million), External construction works$25.0(2012:million$20.5* Other revenue includes Workshop revenuemillion),$13.9(2012:million$12.9million), Leasing revenue$21.5(2012:million$19.2revenue
$10.4(2012:million$11.2million), Airtrain revenue$13.0(2012:million$12.5Telecommunication revenuemillion$3.7million) and Natural disaster funding$0.2(2012:million$9.1million), Insurance claims revenue
million).$14.3(2012:
6 Other income
2013$'000
2012$'000
Net gain on disposal of property, plant and equipment 1,138 -Net gains on non-hedge currency derivatives and hedge ineffectiveness 33 -Net foreign exchange gains - 36Rebates 2,031 2,746
3,202 2,782
Queensland Rail Limited Financial Report FY2012/13 179
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
7 Expenses
2013$'000
2012$'000
Profit before income tax includes the following specific expenses:
Depreciation and amortisationDepreciation
Buildings 19,001 18,445Plant and equipment 21,810 20,958Infrastructure 132,115 139,304Rollingstock 108,243 103,274
Total depreciation 281,169 281,981Amortisation
Lease fit out 3,182 2,61917)Software (note 13,889 11,948
Total amortisation 17,071 14,567
Total depreciation and amortisation 298,240 296,548
Finance costsInterest and finance charges paid / payable 223,638 222,927
Total finance costs 223,638 222,927
Other expensesRental expenses relating to leases 55 55Allowance for inventory obsolescence 571 1,540Research and development costs 100 100Settlement of litigation expenses 303 521Impairment losses
Trade receivables 226 35Net losses on non-hedge currency derivatives and hedgeineffectiveness - 920Net foreign exchange losses 12 -Net loss on disposal of property, plant and equipment - 2,125Other expenses 2,915 1,724
Total other expenses 4,182 7,020
Superannuation expenses*Defined benefit superannuation expense 20,366 20,744Defined contribution superannuation expense 43,662 44,481
Total superannuation expenses 64,028 65,225
* Forms part of employee benefits expense.
Queensland Rail Limited Financial Report FY2012/13 180
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
8 Income tax expense
(a) Income tax expense
2013$'000
2012$'000
Current tax 37,157 32,115Deferred tax 19,476 26,215Adjustments for current tax of prior periods (601) (604)
56,032 57,726
included in income tax expense comprises:expenseDeferred income tax18)(note(Increase) / decrease in deferred tax assets 8,095 (2,221)
25)(noteIncrease / (decrease) in deferred tax liabilities 11,381 28,43619,476 26,215
(b) Numerical reconciliation of income tax expense to prima facie tax payable
2013$'000
2012$'000
Profit from continuing operations before income tax expense 200,836 186,01330%)(2012:30%Tax at the Australian tax rate of 60,251 55,804
Tax effect of amounts which are not deductible / (taxable) in calculatingtaxable income:
Entertainment 2 14Research and development (381) (739)Inter-company eliminations (3,266) 3,242Other 36 18Non-assessable income (9) (9)
Adjustments for current tax of prior periods (601) (604)(4,219) 1,922
Total income tax expense 56,032 57,726
(c) Amounts recognised directly in equity
2013$'000
2012$'000
Aggregate current and deferred tax arising in the reporting period and notrecognised in net profit or loss but directly debited or credited to equity:
25)and18Net deferred tax - debited / (credited) directly to equity (note 577 34577 34
Queensland Rail Limited Financial Report FY2012/13 181
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
9 Current assets - Cash and cash equivalents
2013$'000
2012$'000
Cash on hand 129 158Bank balances - 2,727Short-term investments 276,339 322,484Trust monies - 1Total cash and cash equivalents 276,468 325,370
Less: bank overdraft (13,908) -Less: trust monies 2 (1)
(13,906) (1)
Balance as per statement of cash flows 262,562 325,369
(a) Interest rate risk exposure
2.exposure to interest rate risk is discussed in notegroup’sThe
10 Current assets - Trade and other receivables
2013$'000
2012$'000
Trade receivables 65,704 59,308(a)Allowance for impairment of receivables (253) (119)
Net trade receivables 65,451 59,189
Inter-company receivables 355,736 -355,736 -
Transport service contracts 90,437 106,885Receivables - SEQIPP works 7,345 5,870Other receivables 18,792 10,096
116,574 122,851
Total trade and other receivables 537,761 182,040
Due to the short-term nature of these receivables, their carrying amount is assumed to approximate their fairvalue.
Queensland Rail Limited Financial Report FY2012/13 182
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
10 (continued)Current assets - Trade and other receivables
(a) Impaired trade receivables
At reporting date, it was assessed that a portion of the impaired receivables is expected to be recovered. Thenominal values and ageing of the impaired trade receivables is as follows:
2013$'000
2012$'000
1 to 3 months 6 -3 to 6 months 82 1Over 6 months 252 105
340 106
Movements in the allowance for impairment of receivables are as follows:
2013$'000
2012$'000
Opening balance 119 99Allowance for impairment recognised during the year 226 35Receivables written off during the year as uncollectable (92) (15)
253 119
The creation and release of the allowance for impaired receivables has been included in the income statement.Amounts charged to the allowance account are generally written off when there is no expectation of recoveringadditional cash.
(b) Past due but not impaired
trade receivables were past due but not impaired. These relate to agroup’sAt reporting date, some of thenumber of independent customers for whom there is no recent history of default. The ageing analysis of thesetrade receivables is as follows:
2013$'000
2012$'000
3 to 6 months 315 1,545Over 6 months 1,991 3,805
2,306 5,350
Queensland Rail Limited Financial Report FY2012/13 183
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
11 Current assets - Inventories
2013$'000
2012$'000
(b)Raw materials and stores 62,314 56,907Work in progress 125 431Less: allowance for inventory obsolescence (1,202) (1,025)Inventory at lower of cost or net realisable value 61,237 56,313
(a) Inventory expense
$109.0(2012:million$102.1amounted to30 June 2013year endedInventory recognised as expense during the30year endedmillion). Write-downs of inventories to net realisable value recognised as an expense during the
million).$0.3(2012:million$0.3amounted toJune 2013
(b) Raw material and stores
The amount of raw materials and stores includes surplus materials held to support the existing rollingstock assetsof the group. An independent external valuer performed a stock take and assessed the value of the surplusmaterials in connection with the carriages that were de-scoped from the Sunlander 14 capital program to be $5.0million. This amount was transferred to inventory from assets under construction in the current reporting period.
Queensland Rail engaged an independent external valuer to assess and value materials procured in relation tothe portions of the Sunlander 14 capital program that were de-scoped. Key estimates and assumptions weremade by the valuer in determining the value of the materials that could be used by Queensland Rail to supportexisting rollingstock. These include:
• All materials were considered to be new at reporting date and no aging allowances were included in thevalues determined.
• All materials transferred to inventory only included those items that are replaceable units which supportthe rendering of services to Queensland Rail.
• The value of procured materials represented the cost paid by Queensland Rail to the supplier where itwas identifiable. Otherwise, the value represented the likely price that Queensland Rail could expect topay for each item.
• The materials valued were components created and purchased in order to assemble a narrow gauge tilttrain. Accordingly, it was held that there was no opportunity to dispose of surplus materials inaccordance with its best and highest use to another rail operator.
Physical inspections were included up to and including those on 19 November 2013 and were undertaken byinspecting a representative sample with a focus on high value sub system components first. The inspections andvaluations have been based upon the information provided to the valuer.
Queensland Rail Limited Financial Report FY2012/13 184
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
12 Derivative financial instruments
2013$'000
2012$'000
Current assetsForward exchange contracts - cash flow hedges 475 -Total current derivative financial instrument assets 475 -
Total derivative financial instrument assets 475 -
Current liabilitiesForward exchange contracts - cash flow hedges - 916Forward exchange contracts - at fair value through profit and loss - 8Commodity contracts - cash flow hedges - 859Total current derivative financial instrument liabilities - 1,783
Non-current liabilitiesForward exchange contracts - cash flow hedges - 31Total non-current derivative financial instrument liabilities - 31
Total derivative financial instrument liabilities - 1,814
(a) Instruments used by the group
holds derivative financial instruments to hedge (including economically hedge) its foreign currency andgroupThe2).financial risk management policy (notegroup’scommodity price risk exposures in accordance with the
13 Current assets - Other current assets
2013$'000
2012$'000
Prepayments 6,439 6,192Prepaid Income Tax* 1,576 -
8,015 6,192
* The group has made Pay As You Go quarterly income tax instalments for the 2012/13 period which haveexceeded the income tax liability for the same period.
Queensland Rail Limited Financial Report FY2012/13 185
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
14 Non-current assets - Receivables
2013$'000
2012$'000
Transport service contracts - 39,907Loan receivable* 3,843 17,184
3,843 57,091
* Loan receivable represents the outstanding balance of the loan between the subsidiary company and its formerparent company, Aurizon Operations Limited. This loan is non-interest bearing and is not repayable on demand.The loan balance is reduced as the subsidiary settles outstanding insurance claims by Aurizon OperationsLimited and its subsidiaries.
(a) Impaired receivables and receivables past due
None of the non-current receivables are impaired or past due but not impaired.
(b) Fair values
The carrying value of non-current receivables represents the best approximation of fair value.
15 Non-current assets - Inventories
2013$'000
2012$'000
Raw materials and stores 22,533 15,24022,533 15,240
Queensland Rail Limited Financial Report FY2012/13 186
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
16 Non-current assets - Property, plant and equipment
Assets underconstruction
$'000Land$'000
Leasedproperty
$'000Buildings
$'000
Plant andequipment
$'000Rollingstock
$'000Infrastructure
$'000Total$'000
1 July 2011AtCost 339,570 139,806 21,052 453,194 180,041 1,685,058 3,983,123 6,801,844Accumulated depreciation / amortisation andimpairment losses - (1,812) (1,613) (86,510) (85,391) (420,138) (380,341) (975,805)Net book amount 339,570 137,994 19,439 366,684 94,650 1,264,920 3,602,782 5,826,039
30 June 2012Year endedOpening net book amount 339,570 137,994 19,439 366,684 94,650 1,264,920 3,602,782 5,826,039Additions 558,273 - 1,518 - 5,681 - - 565,472Transfers between asset classes (445,026) 603 2,847 27,707 36,024 179,802 153,904 (44,139)Disposals - (9,315) - (860) (1,459) (273) (4,488) (16,395)Depreciation / amortisation expense - - (2,619) (18,445) (20,958) (103,274) (139,304) (284,600)Closing net book amount 452,817 129,282 21,185 375,086 113,938 1,341,175 3,612,894 6,046,377
30 June 2012AtCost 452,817 131,084 25,416 479,730 215,131 1,830,739 4,129,319 7,264,236Accumulated depreciation / amortisation andimpairment losses - (1,802) (4,231) (104,644) (101,193) (489,564) (516,425) (1,217,859)Net book amount 452,817 129,282 21,185 375,086 113,938 1,341,175 3,612,894 6,046,377
Queensland Rail Limited Financial Report FY2012/13
187
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
16 (continued)Non-current assets - Property, plant and equipment
Assets underconstruction
$'000Land$'000
Leasedproperty
$'000Buildings
$'000
Plant andequipment
$'000Rollingstock
$'000Infrastructure
$'000Total$'000
30 June 2013Year endedOpening net book amount 452,817 129,282 21,185 375,086 113,938 1,341,175 3,612,894 6,046,377Additions 552,651 - 461 - 121 - 561 553,794Transfers between asset classes (377,830) 205 151 35,205 29,274 104,612 193,987 (14,396)Transfers to inventory (c) (5,000) - - - - - - (5,000)Transfers to consumables (d) (48,151) - - - - - - (48,151)Disposals - (2,274) - (161) (3,800) (303) (1,865) (8,403)Depreciation / amortisation expense - - (3,182) (19,001) (21,810) (108,243) (132,115) (284,351)Closing net book amount 574,487 127,213 18,615 391,129 117,723 1,337,241 3,673,462 6,239,870
30 June 2013AtCost 574,487 129,002 26,028 514,569 233,999 1,907,339 4,320,286 7,705,710Accumulated depreciation / amortisation andimpairment losses - (1,789) (7,413) (123,440) (116,276) (570,098) (646,824) (1,465,840)Net book amount 574,487 127,213 18,615 391,129 117,723 1,337,241 3,673,462 6,239,870
(a) Non-current assets pledged as security
company.No assets have been pledged as security by the
(b) Impairment
An impairment assessment was undertaken prior to reporting date. No impairment was recognised in the current or prior reporting periods.
Queensland Rail Limited Financial Report FY2012/13
188
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
16 (continued)Non-current assets - Property, plant and equipment
(c) Transfers to inventory
The transfers to inventory for assets under construction reflect inventory relating to the de-scope of the Sunlander 14 capital program. The value of the inventory transferredwas determined by an independent external valuer. Key assumptions made by the valuer include:
• All materials transferred to inventory only included those items that are replaceable units which support the rendering of services to Queensland Rail.• The value of procured materials represented the cost paid by Queensland Rail to the supplier where it was identifiable. Otherwise, the value represented the likely
price that Queensland Rail could expect to pay for each item.
(d) Transfers to consumables
The transfer of estimated costs from assets under construction to consumables expense represents the costs relating to the de-scope of the Sunlander 14 capital program.These costs represent materials, project management and engineering design costs relating to the de-scoped portions of the capital program. These costs were incurred tobuild carriages which were unique to a narrow gauge tilt train. Accordingly, it was held that these costs did not represent a future economic benefit and that there was noopportunity to dispose of the surplus materials in accordance with its best and highest use to another rail operator.
Queensland Rail Limited Financial Report FY2012/13
189
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
17 Non-current assets - Intangible assets
Computersoftware*
$'000Total$'000
1 July 2011AtCost 15,921 15,921Accumulated amortisation and impairment (1,631) (1,631)Net book amount 14,290 14,290
30 June 2012Year endedOpening net book amount 14,290 14,290Transfers 44,139 44,139Amortisation expense (11,948) (11,948)Closing net book amount 46,481 46,481
30 June 2012AtCost 60,060 60,060Accumulated amortisation and impairment (13,579) (13,579)Net book amount 46,481 46,481
30 June 2013Year endedOpening net book amount 46,481 46,481Transfers 14,396 14,396Amortisation expense (13,889) (13,889)Closing net book amount 46,988 46,988
30 June 2013AtCost 74,456 74,456Accumulated amortisation and impairment (27,468) (27,468)Net book amount 46,988 46,988
* Software includes capitalised development costs being an internally generated intangible asset.
An impairment assessment was undertaken prior to reporting date. No impairment was recognised in the currentor prior reporting periods.
Queensland Rail Limited Financial Report FY2012/13 190
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
18 Non-current assets - Deferred tax assets
2013$'000
2012$'000
The balance comprises temporary differences attributable to:Accrued expenses 5,705 11,213Revenue losses 2,011 -Capital losses 3,211 2,613Provisions 12,781 86,315Superannuation contributions 714 728Unearned revenue 3,818 4,983Cash flow hedges - 443Various adjustments - temporary differences - 137Total deferred tax assets 28,240 106,432
2013$'000
2012$'000
Movements:Opening balance 106,432 103,817
8)(noteCredited / (charged) to the consolidated income statement (8,095) 2,221Cash flow hedge (442) (34)Transfer of provision to Queensland Rail (72,265) -Increase in carried forward tax losses 2,011 -Increase in capital losses 599 428Closing balance at 30 June 28,240 106,432
2013$'000
2012$'000
Deferred tax assets expected to be recovered within 12 months - -Deferred tax assets expected to be recovered after more than 12 months 28,240 106,432
19 Non-current assets - Other non-current assets
2013$'000
2012$'000
Prepayments 4,834 5,0494,834 5,049
Queensland Rail Limited Financial Report FY2012/13 191
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
20 Current liabilities - Trade and other payables
2013$'000
2012$'000
Trade payables 148,917 200,338Trade payables - intercompany 537,015 -Dividend payable 138,610 102,629Other payables 15,094 18,052
839,636 321,019
21 Liabilities - Provisions
2013 2012Current
$'000Non-current
$'000Total$'000
Current$'000
Non-current$'000
Total$'000
(a)Employee benefits - - - 233,786 16,749 250,535(b)Provision for insurance claims 13,296 - 13,296 32,196 - 32,196
Litigation and workers' compensation(c)provision 479 489 968 8,999 19,850 28,849
(d)Land rehabilitation provision - 10,967 10,967 - 10,585 10,585(e)Make good provision - 2,760 2,760 - 3,656 3,656
(f)Other provisions 5,883 - 5,883 - - -19,658 14,216 33,874 274,981 50,840 325,821
(a) Employee benefits
2013$'000
2012$'000
Annual leave and leave loading - 66,938Long service leave - 158,278Other - 25,319
- 250,535
The current provision for long service leave covers all unconditional entitlements where employees havecompleted the required period of service and also those where employees are entitled to pro-rata payments in
does not have angroupcertain circumstances. This portion of the provision is presented as current, since theunconditional right to defer settlement for any of these obligations. However, based on past experience, the
does not expect all employees to take the full amount of accrued leave or require payment within the nextgroup12 months.
The non-current provision for long service leave covers all conditional entitlements where employees have notcompleted the required period of service and are not entitled to pro-rata payments. This portion of the provision is
does not have an obligation to settle the provision within the next 12grouppresented as non-current, since themonths.
Other employee benefits includes payroll tax and retirement allowances.
Employee benefits were previously disclosed under Other current liabilities and Other non-current liabilities.
Queensland Rail Limited Financial Report FY2012/13 192
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
21 (continued)Liabilities - Provisions
Employees and their entitlements were transferred to the Authority on 3 May 2013 in accordance with theThis resulted in the transfer of the entire balance of the employeeQueensland Rail Transit Authority Act 2013.
benefits on the same day.
(b) Provision for Insurance Claims
On Trackas recorded bygroupThe provision for insurance claims is raised for insurance claims external to theinternal captive insurance provider for claims up until 30 June 2010. The provisiongroup'stheLtd,Insurance Pty
as determined by angrouprepresents the estimated requirement to settle all third party claims against theactuarial assessment.
(c) Litigation and workers' compensation
Provision is made for the estimated liability for workers' compensation and litigation claims. Claims are assessedseparately for common law, statutory and asbestos claims. The outstanding liability is determined after factoringfuture claims inflation and discounting future claim payments. Estimates are made based on the average numberof claims and average claim payments over a specified period time. Claims Incurred But Not Reported (IBNR) arealso included in the estimate. Claims are expected to be paid over a period exceeding more than one year.
the Queensland State2013,Queensland Rail Transit Authority ActSubsequent to the enactment of theGovernment issued a Transfer Notice resulting in the transfer of the workers' compensation liability to theAuthority.
(d) Land rehabilitation provision
group'sThis provision recognises the estimated costs to remediate contaminated land in accordance with theconstructive obligations per the environmental sustainability policy. These estimated costs have arisen as a resultof past events.
The provision for land rehabilitation is the present value of management's best estimate of the expenditurerequired to settle the land rehabilitation present obligation at the reporting date. The provision has beencalculated based on advice from external consultants and management's best estimate of likely remediationcosts.
(e) Make good provision
This provision represents the anticipated costs of the future restoration of leased office premises. Make goodrequirements vary for different properties. The provision includes future cost estimates associated with therestoration of office fixtures and fittings to original condition; removal of all property and equipment to return thepremises to a vacant shell and making good any damage caused by their removal; removing any alterations toreturn to its original layout; and repairing and making good any damage which may be caused to land adjoiningthe premises as a result of carrying out structural work or other improvements. The provision has been calculatedbased on management's best estimate of make good costs.
(f) Other provisions
Other provisions comprise an outstanding commitment at reporting date to compensate a supplier for materialsand project administration and engineering costs associated with the carriages that were de-scoped from theSunlander 14 capital program for the amount of $5.9 million as disclosed in Note 1. In accordance with theaccounting standards, this commitment is recognised as a provision in the current reporting period as the grouphas a present contractual obligation, relating to an event that has occurred, which is expected to be settled in thenext reporting period.
Queensland Rail Limited Financial Report FY2012/13 193
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
21 (continued)Liabilities - Provisions
(g) Movements in provisions
other than employee benefits, are set out below:year,financialMovements in each class of provision during the
2013
Provision forinsurance
claims$'000
Litigation andworkers'
compensationprovision
$'000
Landrehabilitation
provision$'000
Make goodprovision
$'000Other$'000
Total$'000
Current and non-currentCarrying amount at start of year 32,196 28,849 10,585 3,656 - 75,286Charged / (credited) to profit orloss
- additional provisionsrecognised - 10,821 26 - 5,883 16,730- unused amounts released (5,351) (435) - (982) - (6,768)- unwind discount - - 356 184 - 540
Transfer to Queensland Rail - (31,032) - - - (31,032)Amounts used during the year (13,549) (7,235) - (98) - (20,882)Carrying amount at end of year 13,296 968 10,967 2,760 5,883 33,874
22 Current liabilities - Other current liabilities
2013$'000
2012$'000
(a)Income in advance 21,592 24,958Other current liabilities 3,099 3,237
24,691 28,195
(a) Income in advance
Income in advance predominantly represents amounts received as prepayment for the development of railinfrastructure and lease payments and / or incentives received in advance. Infrastructure prepayments aredeferred and earned over the term of their respective agreements while lease incentives are amortised to theincome statement over the life of the related lease.
Queensland Rail Limited Financial Report FY2012/13 194
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
23 Liabilities - Borrowings
2013 2012Current
$'000Non-Current
$'000Total$'000
Current$'000
Non-current$'000
Total$'000
Queensland Treasury Corporationborrowings* 99,817 3,000,000 3,099,817 - 3,000,000 3,000,000Total borrowings 99,817 3,000,000 3,099,817 - 3,000,000 3,000,000
* Unsecured
(a) Financing arrangements
2(c).financing arrangements please refer to notegroup'sFor details of the
(b) Fair value
The carrying amounts and fair values of current and non-current borrowings and off-balance sheet guarantees atreporting date are:
2013 2012Carryingamount
$'000Fair value
$'000
Carryingamount$'000
Fair value$'000
(i)On-balance sheetNon-traded financial liabilitiesCurrent borrowings 99,817 99,817 - -Non-current borrowings 3,000,000 3,225,974 3,000,000 3,284,595
3,099,817 3,325,791 3,000,000 3,284,595
Off-balance sheetUnrecognised financial assetsThird party guarantees - 293,018 - 302,555Bank guarantees - 93,387 - 108,246Insurance company guarantees - 24,857 - 28,269Unrecognised financial liabilitiesThird party guarantees - (2,000) - (2,000)Bank guarantees - (36,015) - (35,904)
- 373,247 - 401,166
(i) On-balance sheet
The fair value of borrowings is determined by reference to pricing models and valuation techniques as advised byQTC.
(ii) Off-balance sheet
The off-balance sheet items comprise guarantees either held or issued by the group and contingent assets andliabilities not qualifying for recognition at reporting date. A majority of the guarantees held relate to performanceguarantees on construction contracts provided by third parties.
(c) Risk exposures
2.Information about the entity's exposure to interest rate and foreign currency fluctuations is provided in note
Queensland Rail Limited Financial Report FY2012/13 195
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
24 Non-current liabilities - Trade and other payables
2013$'000
2012$'000
Trade payables - intercompany 31,375 -31,375 -
25 Non-current liabilities - Deferred tax liabilities
2013$'000
2012$'000
The balance comprises temporary differences attributable to:Accrued income 1,788 2,019Consumables and spare parts 6,924 6,298Cash flow hedges 135 -Property, plant and equipment 401,488 390,579Prepayments 115 199Foreign exchange gains 1,444 1,283Total deferred tax liabilities 411,894 400,378
Movements:Opening balance 400,378 371,942
8)(noteCharged / (credited) to the consolidated income statement 11,381 28,436Cash flow hedges 135 -Closing balance at 30 June 411,894 400,378
2013$'000
2012$'000
Deferred tax liabilities expected to be settled within 12 months - -Deferred tax liabilities expected to be settled after more than 12 months 411,894 400,378
26 Non-current liabilities - Other non-current liabilities
2013$'000
2012$'000
(a)Income in advance 29,845 31,14729,845 31,147
(a) Income in advance
Income in advance predominantly represents amounts received as prepayment for the development of railinfrastructure and lease incentives received in advance. Infrastructure prepayments are deferred and earned overthe term of their respective agreements while lease incentives are amortised to the income statement over the lifeof the related lease.
Queensland Rail Limited Financial Report FY2012/13 196
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
27 Contributed equity
(a) Share capital
2013$'000
2012$'000
Ordinary sharesFully paid at the beginning of the year 2,602,628 2,363,172Distributions of equity - (6,555)Equity injections - 246,011
Total contributed equity 2,602,628 2,602,628
(b) Movements in ordinary share capital
Date Details Number ofshares
$'000
1 July 2011 Opening balance 100 2,363,172Capital distributions - (6,555)Equity injections - 246,011
30 June 2012 Balance 100 2,602,628
1 July 2012 Opening balance 100 2,602,62830 June 2013 Balance 100 2,602,628
(c) Ordinary shares
incompanyOrdinary shares entitle the holder to participate in dividends and the proceeds on winding up of theproportion to the number of and amounts paid on the shares held.
(d) Capital risk management
objectives when managing capital are to safeguard its ability to continue as a going concern so that itgroup'sThecan continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimalcapital structure to reduce the cost of capital.
The responsible Ministers advise the appropriate methodology in determining the dividend payable annually.
monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by totalgroupThecapital. Net debt is calculated as total borrowings (including 'borrowings' and external ‘trade and other payables'as shown in the balance sheet) less cash and cash equivalents (including bank overdraft). Total capital iscalculated as ‘equity’ as shown in the balance sheet plus net debt.
Queensland Rail Limited Financial Report FY2012/13 197
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
27 (continued)Contributed equity
gearing ratios are as follows:group'sThe
2013$'000
2012$'000
Total borrowings 3,263,827 3,321,019Less: cash and cash equivalents (including bank overdraft) (262,560) (325,370)Net debt 3,001,267 2,995,649Total equity 2,745,224 2,737,683Total capital 5,746,491 5,733,332
Gearing ratio 52% 52%
is also required by QTC to maintain an Earnings Before Interest and Tax (EBIT) Interest Coverage ofgroupThegreater than 1.25:1, except where the total debt to capital is greater than 70%, in which case the EBIT Interest
has complied with this requirement for both the current and priorgroupCoverage must be at least 2:1. Thereporting periods.
28 Reserves and retained earnings
(a) Reserves
2013$'000
2012$'000
Hedging reserve - cash flow hedges 314 (1,033)314 (1,033)
2013$'000
2012$'000
Movements:
Hedging reserve - cash flow hedgesOpening balance (1,033) (1,111)Fair value gains / (losses) taken to equity 1,021 (1,093)Deferred tax (306) 328Fair value losses matured and included in components cost 237 29Deferred tax (71) (9)Fair value losses matured and capitalised 666 1,176Deferred tax (200) (353)
30 JuneBalance 314 (1,033)
Queensland Rail Limited Financial Report FY2012/13 198
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
28 (continued)Reserves and retained earnings
(b) Retained earnings
Movements in retained earnings were as follows:
2013$'000
2012$'000
Opening balance 136,088 110,430yearProfit for the 144,804 128,287
providedDividends (138,610) (102,629)30 JuneBalance 142,282 136,088
29 Dividends
Ordinary shares
2013$'000
2012$'000
was declared by1,026,290)(2012:dollars per share1,386,103Dividend of2013:30 Juneyear endedfor theBoardthe
Dividend declared* 138,610 102,629Dividend paid* 102,629 84,429
* All dividends declared / paid were unfranked.
Queensland Rail Limited Financial Report FY2012/13 199
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
30 Key management personnel disclosures
(a) Directors and specified executives
Compensation and other terms of employment for the specified executives are formalised in service agreements.terms of appointment and compensation details together with the major provisions of thedirectors'Details of
service agreements for specified executives, as at reporting date, relating to compensation are as follows:
(i) Directors
Queensland Rail Limited
Directors Position Appointment term Expiry date
G Harley Deputy Chairman 2 years 9 months 30 September 2015
D George Director 2 years 9 months 30 September 2015
McArthur1M Director 3 years 3 months 30 September 2013
W McMillan Director 2 years 9 months 30 September 2015
Petie2D Director 2 years 9 months 30 September 2015
Schafer3J Director 3 years 3 months 30 September 2013
as a Director on 4 August 2013.1Ceasedas a Director on 2 August 2013.2Ceasedas a Director on 30 September 2013.3Ceased
M Klug was appointed to the Board as Chairman on 1 October 2013.J Mickel was appointed to the Board as a Director on 1 October 2013.G Poole was appointed to the Board as a Director on 30 October 2013.
On Track Insurance Pty Ltd
Directors Position Appointment term Expiry date
Petie1D Chairman No set appointment term No expiry date
J Benstead Managing Director No set appointment term No expiry date
G Pringle Director 3 years 28 February 2014
as Chairman on 2 August 2013.1Ceased
Queensland Rail Limited Financial Report FY2012/13 200
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
30 (continued)Key management personnel disclosures
(ii) Specified executives
Queensland Rail Limited
Specified executives Position Appointment term Expiry date
Benstead1J Acting Chief Executive Officer 3 years + 2 yearsextension
30 June 2015
N Duce General Manager Human Resources Tenured No expiry date
G Ford Executive General Manager Safety andEnvironment
3 years + 2 yearsextension
30 June 2015
R Green Executive General Manager Network 3 years 16 December 2015
Moller2B Acting Chief Financial Officer 3 years + 2 yearsextension
31 August 2013
T Ripper Executive General Manager Access andBusiness Strategy
3 years 9 December 2015
M Ryan Executive General Manager CustomerService
3 years 11 November 2015
K Wright Executive General Manager Rail Operations 3 years 26 February 2015
provided are for this officer’s substantive role.1Detailsprovided are for this officer's contract term.2Details
These executives provide advice in relation to strategygroup.The above are the key executives representing theunder the business model adopted. The subsidiary entity does not have anygroupand future direction of the
senior executives who are involved in setting strategy or future direction for the entity and no subsidiaryexecutives are disclosed above for this reason.
Termination of an executive can be made by the group to the specified executive either with notice, without noticeor due to the incapacity of the specified executive. Termination by notice can be made by the specified executiveor the group at any time by either party giving to the other 3 months written notice of termination.
The specified executive is entitled to 12 weeks salary where termination occurs on the agreed termination date.
will pay thegroupWhen the termination occurs prior to the termination date (assuming no gross misconduct), thespecified executive the following:
• a service payment equal to the greater of 4 weeks salary or 2 weeks salary per year of continuousup to a maximum 52 weeks salary; andgroupservice with the
• a separation payment equal to 20% of the salary that the specified executive would have earned had theemployment continued from the day after the notice period ceased until the termination date.
Specified executives that are tenured are entitled to a service payment equal to the greater of 13 weeks salary orup to a maximum 52 weeks salary.group2 weeks salary per year of continuous service with the
Queensland Rail Limited Financial Report FY2012/13 201
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
30 (continued)Key management personnel disclosures
(b) Key management personnel compensation
director'sDirectors' remuneration and terms of appointment were set by the Governor in Council at the time of adirectors'2013,Queensland Rail Transit Authority Actappointment. Following the establishment of the
remuneration and terms of appointment are set by responsible Ministers. Directors' remuneration is subsequentlyreviewed annually by responsible Ministers.
Directors are not entitled to termination payments on termination of their period of service.
Queensland Rail Limited Chief and Senior Executive Officers are compensated in accordance with thepublication.Government Owned Corporations - Governance Arrangements for Chief and Senior Executives v3.0
Performance Payment Policy - Chief and Seniorhas also implemented theBoardThe Queensland Rail Limitedwhich reflects the expectations of the Queensland State Government as outlined in the stated policy.Executive
provides for a performance pay process that isPerformance Payment Policy - Chief and Senior ExecutiveTheadministered on a 12 month (financial year) cycle and aligns the executives with Queensland Rail Limited wideand Individual Key Performance Indicators (KPIs). Performance Payment pays up to a maximum payment of15% per annum of a Chief or Senior Executive’s total fixed remuneration on the achievement of stretch targets.The Queensland Rail Limited KPIs are set by the Board at the beginning of the financial year in alignment withthe Statement of Strategic Expectations issued by the State Government, the Queensland Rail Limited Statementof Corporate Intent and the delivery of our organisational performance outcomes including safety, reliability,customer outcomes and financial performance.
The performance agreement components are weighted as follows:
• Queensland Rail Limited 70%
The Queensland Rail Limited KPIs are aligned to the organisational performance outcomes as follows:
Reliability• On Time Running City network combined peak periods• Below rail delays City network
Financial• Consumable cost reduction• Earnings before interest and tax
Customer• Customer satisfaction City network
Safety• Lost Time Injury Frequency Rate• Signals Passed at Danger
• Individual 30%
The Individual KPIs are set by the Chief Executive Officer on the recommendation of the relevantexecutive member. Individual KPIs are reflective of Queensland Rail Limited and Functional KPIs forwhich the executive has direct accountability and / or reflective of strategic business plans, budgets andcapital / infrastructure projects. Eligible executives must also meet minimum expectations for theconsistent demonstration of the Queensland Rail Limited Values and Behaviours.
The Chief and Senior Executives participate in the Queensland Rail Limited performance management processwith quarterly and annual performance reviews. Annual performance results of the Executives are assessed and
is responsible forBoardcalibrated by the Chief Executive Officer and General Manager Human Resources. Thethe assessment of the Chief Executive Officer’s performance. The Queensland Rail Limited Board approve thecalculation and payment of the Chief and Senior Executive Performance Payments and provide written advice tothe responsible Ministers in accordance with the Government Arrangements.
Queensland Rail Limited Financial Report FY2012/13 202
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
30 (continued)Key management personnel disclosures
Details of the compensation of each specified director and executive are as follows:
2013$'000
2012$'000
Short-term benefits 3,858 5,058Post-employment benefits 368 474Long-term benefits 331 -Termination benefits 1,808 -
6,365 5,532
Short-term benefits includes cash salary, at risk performance incentives (for specified executives only), fees andnon-monetary benefits. Non-monetary benefits represent the value of Exempt and Reportable Fringe Benefits forthe respective Fringe Benefits Tax year ending 31 March.
Queensland Rail Limited Financial Report FY2012/13 203
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
30 (continued)Key management personnel disclosures
(i) Directors of Queensland Rail Limited and On Track Insurance Pty Ltd
2013 Short-term benefits Post-employmentbenefits
Directors
Directorfees and
allowances
Non-monetarybenefits
Super-annuation
Retirementbenefits Total
$'000 $'000 $'000 $'000 $'000
G Harley Deputy 19 - 2 - 21(appointed as Deputy Chairman on Chairman21 June 2013)(appointed as Director on20 December 2012)
G Dawe Chairman 133 - 11 - 144(appointed 12 July 2012)(ceased 18 June 2013)
S Gregg Chairman 10 - - - 10(ceased 12 July 2012)
D George Director 19 - 2 - 21(appointed 20 December 2012)
M Hayes Director 20 - 2 - 22(ceased 20 December 2012)
Dr L Keliher AO Director 11 - 1 - 12(ceased 30 September 2012)
M McArthur Director 40 - 4 - 44
W McMillan Director 21 - 2 - 23(appointed 20 December 2012)
D McMillan-Hall Director 12 - 1 - 13(ceased 30 September 2012)
D Petie* Director 37 - 3 - 40(ceased 30 September 2012)(reappointed 20 December 2012)
J Schafer Director 40 - 4 - 44
R Ashton Director 4 - - - 4(ceased 4 November 2012)
BlankTotal 366 - 32 - 398
Board.On Track Insurance Pty Ltdand Chairman of theBoardQueensland Rail Limited* D Petie is a director of the
The above directors' fees include amounts recharged from Queensland Rail from 3 May 2013 in accordance with the ManagedServices Agreement. The amounts for this period were incurred by Queensland Rail on behalf of the company and are alsodisclosed in the Key Management Personnel note of the Queensland Rail financial statements.
As an executive of Aurizon Operations Limited, former parent company, G Pringle did not receive additional remuneration in hisLtd.On Track Insurance Ptyofdirectorcapacity as
J Benstead did not receive additional remuneration in his capacity as director ofLimited,Queensland RailAs an executive ofOn Track Insurance Pty Ltd.
Queensland Rail Limited Financial Report FY2012/13 204
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
30 (continued)Key management personnel disclosures
2012 Short-term benefits Post-employmentbenefits
Directors
Directorfees and
allowances
Non-monetarybenefits
Super-annuation
Retirementbenefits Total
$'000 $'000 $'000 $'000 $'000
S Gregg Chairman 129 - 12 - 141Blank
M Hayes Director 39 - 4 - 43Blank
Dr L Keliher AO Director 39 - 4 - 43Blank
M McArthur Director 39 - 4 - 43Blank
D McMillan-Hall Director 40 - 4 - 44Blank
D Petie* Director 46 - 4 - 50Blank
J Schafer Director 39 - 4 - 43Blank
R Ashton Director 4 - - - 4Blank
Total 375 - 36 - 411
On Track Insurance Pty Ltdand Chairman of theBoardQueensland Rail Limited* D Petie is a director of theBoard.
As an executive of Aurizon Operations Limited, former parent company, G Pringle did not receive additionalLtd.On Track Insurance Ptyofdirectorremuneration in his capacity as
J Benstead did not receive additional remuneration in his capacityLimited,Queensland RailAs an executive ofLtd.On Track Insurance Ptyofdirectoras
Queensland Rail Limited Financial Report FY2012/13 205
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
30 (continued)Key management personnel disclosures
(ii) Specified executives of the company
2013Short-term benefits Post-
employmentbenefits
Long-term
benefits
Term-ination
benefits
Specified executives
Cashsalary
and feesCash
bonuses
Non-monetarybenefits
Super-annuation
Longserviceleave
Term-ination
benefits Total$'000 $'000 $'000 $'000 $'000 $'000 $'000
J Benstead 475 - 6 48 - - 529Acting Chief Executive Officer
BlankS Campbell 139 - 2 16 - 196 353
Company Secretary,Corporate Governance andLegal(from 11 September 2012until position abolished 23November 2012)General Counsel / CompanySecretary(until 11 September 2012)
BlankP Coleman 10 - - 1 - - 11
Acting Chief Project DeliveryOfficer(from 31 August 2012 untilposition abolished 11September 2012)
BlankN Duce 206 - 5 21 - - 232
General Manager HumanResources(from 11 September 2012)
BlankM Eisentrager 98 - 1 8 - - 107
Acting Chief Financial Officer(from 11 September 2012until 29 January 2013)
BlankG Ford 311 - 10 34 - - 355
Executive General ManagerSafety and Environment(from 11 September 2012)Chief Safety and EnvironmentOfficer(until 11 September 2012)
BlankR Franklin* - - - - - - -
Acting Chief HumanResources Officer(until 11 September 2012)
Blank
Queensland Rail Limited Financial Report FY2012/13 206
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
30 (continued)Key management personnel disclosures
2013Short-term benefits Post-
employmentbenefits
Long-term
benefits
Term-ination
benefits
Specified executives
Cashsalary
and feesCash
bonuses
Non-monetarybenefits
Super-annuation
Longserviceleave
Term-ination
benefits Total$'000 $'000 $'000 $'000 $'000 $'000 $'000
R Green 313 - 6 32 - - 351Executive General ManagerNetwork(from 11 September 2012)Acting Chief Network Officer(from 31 August 2012 until 11September 2012)
BlankC Heffernan 188 - 3 15 203 546 955
Executive General ManagerCustomer Service(from 11 September 2012until ceased on 19 October2012)Chief Customer Officer(until 11 September 2012)
BlankL Lefcourt 82 - 7 8 - - 97
Acting Chief Financial Officer(until 10 September 2012)
BlankB Moller 108 - 5 10 - - 123
Acting Chief Financial Officer(from 29 January 2013)
BlankC Petersen 135 - 8 12 - 186 341
Chief Strategy and CorporateServices Officer(position abolished 24September 2012)
BlankJ Pistak 111 - 1 10 128 505 755
Chief Network Officer(ceased 31 August 2012)
BlankT Ripper 212 - 4 23 - - 239
Executive General ManagerAccess and BusinessStrategy(from 16 November 2012)
BlankM Ryan 334 - 19 41 - - 394
Executive General ManagerCustomer Service(from 27 August 2012)Chief Communications Officer(until 26 August 2012)
Blank
Queensland Rail Limited Financial Report FY2012/13 207
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
30 (continued)Key management personnel disclosures
2013Short-term benefits Post-
employmentbenefits
Long-term
benefits
Term-ination
benefits
Specified executives
Cashsalary
and feesCash
bonuses
Non-monetarybenefits
Super-annuation
Longserviceleave
Term-ination
benefits Total$'000 $'000 $'000 $'000 $'000 $'000 $'000
T Taifalos 104 - 3 10 - - 117Chief Operating Officer(position abolished 11September 2012)
BlankM Williams 126 - 1 7 - 375 509
Chief Rail OperationsManager(ceased 31 August 2012)
BlankK Wright 447 - 12 40 - - 499
Executive General ManagerRail Operations(from 31 August 2012)Chief Project Delivery Officer(until 31 August 2012)
BlankTotal 3,399 - 93 336 331 1,808 5,967
* This officer did not receive monetary benefits directly. Payments made to the company in which this officer is a30(c).Principal is disclosed in note
The above executives' remuneration include amounts recharged from Queensland Rail from 3 May 2013 inaccordance with the Managed Services Agreement. The amounts for this period were incurred by QueenslandRail on behalf of the company and are also disclosed in the Key Management Personnel note of the QueenslandRail financial statements.
Queensland Rail Limited Financial Report FY2012/13 208
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
30 (continued)Key management personnel disclosures
2012Short-term benefits Post-
employmentbenefits
Long-term
benefits
Term-ination
benefits
Specified executives
Cashsalary
and feesCashbonus
Non-monetarybenefits
Super-annuation
Longserviceleave
Terminationbenefits Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
J Benstead 420 52 5 47 - - 524Acting Chief ExecutiveOfficer(from 5 December 2011)Chief Financial Officer(until 4 December 2011)
BlankP Scurrah 365 76 4 24 - - 469
Chief Executive Officer(resigned 2 December 2011)
BlankS Campbell 174 - 2 22 - - 198
General Counsel / CompanySecretary(from 14 November 2011)
TestG Ford 304 41 8 39 - - 392
Chief Safety & EnvironmentOfficer
BlankR Franklin* - - - - - - -
Acting Chief HumanResources Officer(from 1 September 2011)Acting General Counsel /Company Secretary(until 31 August 2011)
BlankC Heffernan 332 41 7 37 - - 417
Chief Customer Officer(from 1 September 2011)Chief Human ResourcesOfficer(until 31 August 2011)
BlankL Lefcourt 133 - 8 14 - - 155
Acting Chief Financial Officer(from 8 January 2012)
BlankC Petersen 357 49 11 46 - - 463
Chief Strategy & CorporateServices Officer
BlankJ Pistak 398 56 22 51 - - 527
Chief Network Officer
Blank
Queensland Rail Limited Financial Report FY2012/13 209
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
30 (continued)Key management personnel disclosures
2012Short-term benefits Post-
employmentbenefits
Long-term
benefits
Term-ination
benefits
Specified executives
Cashsalary
and feesCashbonus
Non-monetarybenefits
Super-annuation
Longserviceleave
Terminationbenefits Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
M Ryan 290 40 15 37 - - 382Chief CommunicationsOfficer
BlankT Taifalos 434 52 8 45 - - 539
Chief Operating Officer(from 1 September 2011)Chief Customer Officer(until 31 August 2011)
BlankM Williams 390 60 25 36 - - 511
Chief Rail Operations Officer(from 1 September 2011)Deputy Chief OperationsOfficer(until position abolished on31 August 2011)
BlankK Wright 437 57 10 40 - - 544
Chief Project Delivery Officer(from 1 September 2011)Chief Operations Officer(until position abolished on31 August 2011)
BlankTotal 4,034 524 125 438 - - 5,121
* This officer did not receive monetary benefits directly. Payments made to the company in which this officer is a30(c).Principal is disclosed in note
Queensland Rail Limited Financial Report FY2012/13 210
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
30 (continued)Key management personnel disclosures
2013 2012$'000 $'000
Aggregate performance bonus compensation
Aggregate performance bonus compensation paid 19 9,226
Aggregate performance bonus compensation accrued for the current period 10,508 11,586
Aggregate compensation (including performance bonus compensation) toemployees eligible for performance bonus compensation for current period 124,281 180,519
2013 2012
Number of employees eligible for performance bonus compensation 1,050 1,490
The 2012 bonus accrued in the prior period was reversed in full in the current period as the group did not meet allof its performance targets.
The following categories of employees are eligible for performance based at risk incentive bonus compensation:
• specified executives;
• other executives;
• salaried employees; and
• award employees.
Performance bonus compensation paid to specified executives is granted upon approval by the Queensland RailPerformance bonus compensation paid to other employees is granted upon approval by the ChiefBoard.Limited
Executive Officer or in accordance with a subsidiary agreement. The amount of the compensation is determinedby performance against key performance indicators set at the start of the year for employees or conditions of asubsidiary agreement for work units.
(c) Transactions with directors and key management personnel
During the reporting period, G Harley, Deputy Chairman of Queensland Rail Limited, was the Chairman ofQueensland Urban Utilities that provided utilities to Queensland Rail Limited.
During the reporting period, D George, Director of Queensland Rail Limited from December 2012, was the ChiefExecutive Officer of Rail CRC Limited that provided key innovation services to Queensland Rail Limited.Queensland Rail Limited provided rental accommodation to Rail CRC Limited.
During the reporting period, R Franklin, specified executive of Queensland Rail Limited, until the 11 September2012, was a principal of the corporation Franklin Athanasellis Cullen Pty Ltd that had provided key managementpersonnel and consultancy services to Queensland Rail Limited.
The specified executive has the individual capacity to control or significantly influence the financial and operatingLimited.Queensland Railpolicies of another corporation but not
until cessation on 4 NovemberOn Track Insurance Pty LtdDuring the reporting period, R Ashton, Director ofcompany.2012, was compensated for legal advice provided to the same
Queensland Rail Limited Financial Report FY2012/13 211
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
30 (continued)Key management personnel disclosures
All figures displayed below are exclusive of GST.
2013$'000
2012$'000
Utilities - Queensland Urban Utilities 230 -Professional Services - Rail CRC Limited 239 -Rental Revenue - Rail CRC Limited (93) -Legal fees - R Ashton 2 -Consultancy fees - Franklin Athanasellis Cullen Pty Ltd 252 922
630 922
31 Contingencies
had contingencies at reporting date in respect of:groupThe
(a) Contingent liabilities
Issues relating to common law claims and product warranties are dealt with as they arise. There were no materialcontingent liabilities requiring disclosures in the financial statements other than as set out below.
Litigation
Provisions are taken up for some of thesegroup.A number of common law claims are pending against the21.determination and are included as such in noteBoard'sexposures based on the
Guarantees and letters of credit
23(b).refer to notegroup,For information about guarantees and letters of credit given by the
Deed of Cross Guarantee
nor its subsidiary were a party to a deed of cross guarantee at reporting date.companyNeither the
(b) Contingent assets
23(b).refer to notegroup,For information about guarantees given to the
Queensland Rail Limited Financial Report FY2012/13 212
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
32 Commitments
(excluding GST) at reporting date were as follows:groupThe future commitments of the
(a) Capital commitments
Capital expenditure contracted for at reporting date but not recognised as liabilities is payable as follows:
2013$'000
2012$'000
Property, plant and equipment 196,435 343,393196,435 343,393
(b) Lease commitments
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable asfollows:
2013$'000
2012$'000
Within one year 10,132 14,071Later than one year but not later than five years 39,590 36,373Later than five years 25,508 31,827
75,230 82,271
The above commitments flow primarily from operating leases of property. These leases, with terms mostlywith a right of renewal at which timesQueensland Rail Limitedranging from one to ten years, generally provide
the lease terms are renegotiated. The lease payments comprise a base amount, while some property leases alsocontain a contingent rental, which is based on either the movements in the Consumer Price Index or anotherfixed percentage as agreed between the parties.
(c) Lease commitments receivable: where the company is the lessor
Minimum lease payments receivable but not recognised in the financial statements are receivable as follows:
2013$'000
2012$'000
Within one year 3,202 12,232Later than one year but not later than five years 8,984 10,948Later than five years 75,744 62,754
87,930 85,934
Queensland Rail Limited Financial Report FY2012/13 213
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
33 Related party transactions
(a) Subsidiaries
34.Interests in subsidiaries are set out in note
(b) Key management personnel
30.Disclosures relating to key management personnel are set out in note
(c) Transactions with related parties
The following transactions occurred with related parties:
2013$'000
2012$'000
Purchase of goods and services from Queensland Rail 120,486 -blank
Receivables from Queensland Rail - current 355,736 -Dividend payable to Queensland Rail 138,610 -Payables to Queensland Rail - current 537,015 -Payables to Queensland Rail - non-current 31,375 -
The current and non-current payables transferred to Queensland Rail on 3 May 2013 include the initial transfer ofQueensland Rail Transit Authority Act 2013employee related liabilities from the company in accordance with the
amounting to $271.9 million. Deferred tax assets amounting to $72.3 million associated with these employeeentitlements were also transferred on the same date.
Queensland Rail Limited Financial Report FY2012/13 214
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
33 (continued)Related party transactions
(d) Transactions and outstanding balances with State of Queensland controlled entities
is limited by shares with all shares held by the responsible Ministers on behalf of the State ofcompanyTheQueensland.
transacted with other State of Queensland controlled entities during the year as set out below:companyThe
Notes 2013$'000
2012$'000
Nature of transaction
Cash and cash equivalents 9 276,339 119,036 QTC short-term investments
Trade and other receivables 1410, 114,144 165,143 Transport services contracts and otheraccounts receivable
Other current assets 13 1,576 - Prepaid income tax
Current tax liabilities - 528 Current tax payable
Borrowings 23 3,099,817 3,000,000 Unsecured loan facility (QTC)
Trade and other payables 20 164,250 128,257 Interest payable, accounts payableand dividend payable
Other current liabilities 22 3,067 3,453 Clearing accounts
Contributed equity 27 - 239,456 Equity contributions and capitaldistributions
Revenue 5 1,568,747 1,576,921 Sales, community service obligation,government concessions and interestrevenue
Interest expense 7 223,083 221,961 QTC loan interest (includes financingcost)
Other expenses 7 103,491 112,578 Payroll tax, income tax, audit fees,licences and permits andconsumables
Dividends declared 29 - 102,629 Dividend declared
Queensland Rail Limited Financial Report FY2012/13 215
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
34 Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary in1(b).accordance with the accounting policy described in note
Name of entityCountry of
incorporation Class of shares Equity holding2013
%2012
%
On Track Insurance Pty Ltd Australia Ordinary 100 100
are the provision of insurance coverage for all claimsOn Track Insurance Pty LtdThe principal activities ofup until 30Queensland Rail Limitedrelating to events for both Aurizon Operations Limited (former parent) and
June 2010.
Ltd.On Track Insurance PtyThe Auditor-General of Queensland is the authorised auditor of
35 Remuneration of auditors
group:During the year the following fees were paid or payable for services provided by the auditor of the
(a) Audit services
2013$'000
2012$'000
Auditor-General of QueenslandAudit and review of financial reports 491 560
Total auditors' remuneration 491 560
36 Reconciliation of profit after income tax to net cash inflow from operatingactivities
2013$'000
2012$'000
Profit for the year 144,804 128,287Depreciation and amortisation 298,240 296,548Amortisation of prepaid access facilitation charges (1,577) (1,577)(Gains) / losses on sale of non-current assets (1,138) 2,125Unrealised gain on derivatives - (686)Impairment of trade receivables 226 35Inventory obsolescence 571 1,540Change in operating assets and liabilities:
(Increase) / decrease in trade debtors 53,040 132,285(Increase) / decrease in inventories (12,787) (10,877)(Increase) / decrease in other operating assets (4,969) 38,198Increase / (decrease) in trade creditors (54,930) (44,361)Increase / (decrease) in other liabilities 17,720 1,571Increase / (decrease) in other provisions (30,040) 12,999
Net cash inflow from operating activities 409,160 556,087
Queensland Rail Limited Financial Report FY2012/13 216
Queensland Rail LimitedNotes to the consolidated financial statements
30 June 2013(continued)
37 Parent entity financial information
(a) Summary financial information
the following aggregate amounts:entity showparentfor thefinancial statementsThe individual
2013$'000
2012$'000
Balance sheet
Current assets 883,943 569,890Non-current assets 6,349,671 6,266,585Total assets 7,233,614 6,836,475
Current liabilities 984,376 592,162Non-current liabilities 3,511,769 3,508,192Total liabilities 4,496,145 4,100,354
Net assets 2,737,469 2,736,121(8,212,407) (8,208,363)
Contributed equity 2,596,824 2,596,824Hedging reserves 314 (1,033)Retained earnings 140,331 140,330Total equity 2,737,469 2,736,121
yearProfit for the 138,610 134,160
Total comprehensive income 139,957 134,238
(b) Guarantees entered into by the parent entity
The parent entity has not provided financial guarantees in respect of bank overdrafts and loans of subsidiaries.
Ltd.On Track Insurance PtytoQueensland Rail LimitedIn addition, there is no cross guarantee given by
(c) Contingent liabilities of the parent entity
Issues relating to common law claims and product warranties are dealt with as they arise. There were no materialAll provisions31.except as outlined in notefinancial statementscontingent liabilities requiring disclosures in the
except provision for insurance claims relate to the parent entity.
(d) Contractual commitments for the acquisition of property, plant or equipment
At reporting date, the parent entity had contractual commitments. For information about these commitmentsAll commitments outlined in this note relate to the parent entity.32.please see note
38 Events occurring after the reporting period
No matters or circumstances have arisen since the end of the financial year which significantly affected, or maygroupthe results of those operations, or the state of affairs of thegroup,significantly affect the operations of the
in future financial years.
Queensland Rail Limited Financial Report FY2012/13 217
Queensland Rail LimitedDirectors' declaration
30 June 2013
opinion:directors'In the
(a) Corporations Actare in accordance with the75to10and notes set out on pagesfinancial statementstheincluding:2001,
(i) and other mandatoryCorporations Regulations 2001complying with Accounting Standards, theprofessional reporting requirements, and
(ii) and of30 June 2013entity's financial position as atconsolidatedgiving a true and fair view of theon that date, andyear endedits performance for the
(b) will be able to pay its debts as and when theycompanythere are reasonable grounds to believe that thepayable.become due and
(c) with International Financial Reportingcomplyalsofinancial statementsconfirms that the1(a)noteStandards as issued by the International Accounting Standards Board.
directors.This declaration is made in accordance with a resolution of
M KlugChairman
Brisbane, Qld16 December 2013
Queensland Rail Limited Financial Report FY2012/13 218
Queensland Rail Limited30 June 2013
INDEPENDENT AUDITOR'S REPORT
Queensland Rail LimitedTo the Members of
Report on the Financial Report
I have audited the accompanying financial report of Queensland Rail Limited which comprises the consolidatedbalance sheet as at 30 June 2013, consolidated income statement, consolidated statement of comprehensiveincome, consolidated statement of changes in equity and consolidated statement of cash flows for the year thenended, notes comprising a summary of significant accounting policies and other explanatory information, and thedirectors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’send or from time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a true and fairand for such internal2001,Corporations Actview in accordance with Australian Accounting Standards and the
control as the directors determine is necessary to enable the preparation of the financial report that gives a trueand fair view and is free from material misstatement, whether due to fraud or error. In Note 1(a)(i) the directors
that theStatements,Presentation of Financialalso state, in accordance with Accounting Standard AASB 101Standards.International Financial Reportingfinancial statements comply with
Auditor’s Responsibility
My responsibility is to express an opinion on the financial report based on the audit. The audit was conducted inwhich incorporate the AustralianStandards,Auditor-General of Queensland Auditingaccordance with the
Auditing Standards. Those standards require compliance with relevant ethical requirements relating to auditengagements and that the audit is planned and performed to obtain reasonable assurance about whether thefinancial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial report. The procedures selected depend on the auditor’s judgement, including the assessment of therisks of material misstatement of the financial report, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the company’s preparation of the financial reportthat gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, butnot for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonableness of accountingestimates made by the directors, as well as evaluating the overall presentation of the financial report.
I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion.
Independence
promotes the independence of the Auditor-General and all authorised auditors.Auditor-General Act 2009TheThe Auditor-General is the auditor of all Queensland public sector entities and can be removed only byParliament.
The Auditor-General may conduct an audit in any way considered appropriate and is not subject to direction byany person about the way in which audit powers are to be exercised. The Auditor-General has for the purposesof conducting an audit, access to all documents and property and can report to Parliament matters which in theAuditor-General’s opinion are significant.
have been complied with. ICorporations Act 2001In conducting the audit, the independence requirements of thewhich has been given to the2001,Corporations Actconfirm that the independence declaration required by the
directors of Queensland Rail Limited, would be in the same terms if given to the directors as at the time of thisauditor’s report.
Queensland Rail Limited Financial Report FY2012/13 219
Queensland Rail Limited30 June 2013
(continued)INDEPENDENT AUDITOR'S REPORT
Opinion
In my opinion -
(a) 2001,Corporations Actthe financial report of Queensland Rail Limited is in accordance with theincluding -
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2013 and oftheir performance for the year ended on that date; and
(ii) Corporations Regulations 2001complying with Australian Accounting Standards and the
(b) as disclosed inInternational Financial Reporting Standardsthe financial report also complies withNote 1(a)(i).
Other Matters - Electronic Presentation of the Audited Financial Report
Those viewing an electronic presentation of these financial statements should note that audit does not provideassurance on the integrity of the information presented electronically and does not provide an opinion on anyinformation which may be hyperlinked to or from the financial statements. If users of the financial statements areconcerned with the inherent risks arising from electronic presentation of information, they are advised to refer tothe printed copy of the audited financial statements to confirm the accuracy of this electronically presentedinformation.
A M GREAVES FCA FCPA Queensland Audit OfficeAuditor-General of Queensland Brisbane
Queensland Rail Limited Financial Report FY2012/13 220
Queensland Rail FY2012/13 Annual and Financial Report
Compliance Checklist
Summary of Requirement
Basis for requirement
Annual report reference
Letter of Compliance
• A letter of compliance from the
accountable officer or statutory body
to the relevant Minister.
ARRS – Section 8
Page 4
Accessibility
• Table of contents
• Glossary
ARRS – Section 10.1
Page 5
• Public availability
ARRS – Section 10.2
Page 2
• Interpreter service statement
Queensland Government
Language Services Policy
ARRS – Section 10.3
Page 2
• Copyright notice
Copyright Act 1968
ARRS – Section 10.4
N/A
• Information licensing
Queensland Government
Enterprise Architecture –
Information Licensing
ARRS – Section 10.5
N/A
General Information
• Introductory information
ARRS – Section 11.1
Page 3
• Agency role and main functions
ARRS – Section 11.2
Page 6
• Operating environment
ARRS – Section 11.3
Pages 21-45
• Machinery of government changes
ARRS – Section 11.4
Page 14
Non-financial Performance
• Government objectives for the
community
ARRS – Section 12.1
Page 40
221
Queensland Rail FY2012/13 Annual and Financial Report
• Other whole-of-government plans /
specific initiatives
ARRs – Section 12.2
Page 54
• Agency objectives and performance
indicators
ARRS – Section 12.3
Page 54
• Agency services areas, service
standards and other measures
ARRS – Section 12.4
Page 54
Financial Performance
• Summary of financial performances
ARRS – Section 13.1
Page 8-9
• Chief Finance Officer statement
ARRS – Section 13.2
As per Submission by
Chief Finance Officer
Governance – Management and Structure
• Organisational structure
ARRS – Section 14.1
Page 46
• Executive management
ARRS – Section 14.2
Page 51
• Related entities
ARRS – Section 14.3
Page 47-50
• Boards and committees
ARRS – Section 14.4
Page 47-50
• Public Sector Ethics (PSE) Act 1994
PSE Act 1994 (Section 23 and
Schedule) ARRS – Section 14.5
Pages 54-68
Governance – Risk Management and Accountability
• Risk Management
ARRS – Section 15.1
Pages 54-68
• External Scrutiny
ARRS – Section 15.2
Pages 54-68
• Audit Committee
ARRS – Section 15.3
Pages 54-68
• Internal Audit
ARRS – Section 15.4
Pages 54-68
• Public Sector Renewal Program
ARRS – Section 15.5
Pages 54-68
• Information systems and record-
keeping
ARRS – Section 15.7
Pages 54-68
222
Queensland Rail FY2012/13 Annual and Financial Report
Governance – Human Resources
• Workforce planning, attraction and
retention and performance
ARRS – Section 16.1
Pages 54-68
• Early retirement, redundancy and
retrenchment
Directive No. 11/12 Early
Retirement, Redundancy and
Retrenchment
Page 32
Page 92
Page 169
• Voluntary Separation Program
ARRS – Section 16.3
Page 32
Page 92
Page 128
Open Data
• Open Data
ARRS – Section 17
Pages 2-3
Financial Statements
• Certification of Financial Statements
FAA – Section 62
FPMS – Sections 42, 43 and 50
As per Submission by
Chief Finance Officer
• Independent Auditors Report
FAA – Section 62
FPMS – Section 50
ARRS – Section 18.2
Pages 139-140
Pages 219-220
• Remuneration Disclosures
Financial Reporting
Requirements for Queensland
Government Agencies
ARRS – Section 18.3
Pages 54-68
FAA Financial Accountability Act 2009
FPMS Financial and Performance Management Standard 2009
ARRs Annual Report requirements for Queensland Government Agencies
223
Queensland Rail FY2012/13 Annual and Financial Report
Glossary
AASB
Australian Accounting Standards Board
AICD
Australian Institute of Company Directors
ASX
Australian Securities Exchange
ATO
Australian Taxation Office
ATSB
Australian Transport Safety Bureau
CCTV
Closed Circuit Television
CEO
Chief Executive Officer
CFO
Chief Finance Officer
City network
A collective term for the tracks, stations, trains and infrastructure providing train services in South East Queensland bounded by the Gold Coast in the south, Rosewood in the west and the Sunshine Coast in the north
CMC
Crime and Misconduct Commission
Corporations Act
Corporations Act 2011
CSIA
Customer Service Institute of Australia – Australia’s premier customer service resource organisation
DDA
Disability Discrimination Act 1992
DTMR
Department of Transport and Main Roads
EAMS
Enterprise Asset Management System
EBIT
Earnings Before Interest and Tax
EBITDA
Earnings Before Interest, Tax, Depreciation and Amortisation
EGP
Enterprise Governance Program – established to create a robust governance framework for Queensland Rail
FTE
Full-time equivalent (employee)
General Freight
Freight that is not transported in a bulk train and does not include intermodal and industrial products
GOC
Government-owned Corporation
GOC Act
Government Owned Corporations Act 1993
ICSS
International Customer Service Standard – the global standard for customer service excellence
ICT
Information and Communication Technology, the information technology and telecommunications management division of Queensland Rail
KPIs
Key Performance Indicators
KSR
Kuranda Scenic Railway
LTIFR
A measure of the number of lost time injuries per million hours worked, used by Queensland Rail to monitor and report employee health and safety
MOU
Memorandum of Understanding
MP
Member of Parliament
Network
Queensland’s rail system, including all main railway lines, marshalling yards, bulk freight loading and unloading points and customer stations
NGR
New Generation Rollingstock – a project for the purchase of new rollingstock for the City network
NPAT
Net Profit After Tax – defined as net profit after allowance for tax expense
OGOC
Office of Government-owned Corporations
Positive pARTnerships
A Queensland Rail program that involves working with community groups, local schools and stakeholders to collaborate and produce high quality public artwork projects that transform rail stations across South East Queensland
224
Queensland Rail FY2012/13 Annual and Financial Report
QR Limited
A GOC that ceased to exist on 30 June 2010, following creation of two companies – Queensland Rail Limited and QR National Limited (now Aurizon) (private)
QR National (now Aurizon)
QR National was re-branded as Aurizon in December 2012 – one of the largest publicly listed rail freight haulage companies in Australia
QTC
Queensland Treasury Corporation
Quiet Carriage
The second and fifth carriage of every six-car and the middle of every three-car City network train – a designated quiet area where customers are asked to refrain from having loud conversations, talking on their mobile phone or listening to loud musical devices
Rail Operator
A party (Queensland Rail and/or non-Queensland Rail) that operates rollingstock on a railway
ROA
Return on Assets – defined as EBIT less income from investments, divided by average operating assets
ROE
Return on Equity – defined as operating profit after tax divided by average equity
Rollingstock
Rail locomotives and wagons
SCI
Statement of Corporate Intent – the document in which a GOC sets out its corporate targets and objectives for each financial year
SEQIPP
South East Queensland Infrastructure Plan and Program
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