ANNUAL REPORT 2015 Cover photo supplied by Peter Bennetts. This report has been printed on 100% post consumer recycled stock. © State of , & Olympic Parks Trust 2015. This publication is copyright. No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968. CONTENTS

Governance 4 The Chairman’s Report 6 The CEO’s Report 7 Highlights 2014-15 9 Our Partners 11 Financial Overview 12 Financial Statements 13 Administrative Reporting Requirements 56 Disclosure Index 59 GOVERNANCE

• To provide for the planning, development, promotion, Establishment management, operation and use of other sports, recreation The Melbourne and Olympic Parks Trust (MOPT) was established and entertainment facilities and services in Victoria. on 5 October 1995 pursuant to the provisions of the Melbourne • To provide for the development, promotion, management, and Olympic Parks Act 1985 (as amended). It was created by the operation and use of facilities and services for the parking merger of the National Centre Trust (established 13 Nov of vehicles and other necessary services to be used in 1985) and the Olympic Park Committee of Management (formed conjunction with any of the facilities operated or managed by originally in 1909). The Act is jointly administered by both the the Trust. Premier of Victoria, the Honourable Daniel Andrews, and the Minister for Tourism and Major Events, the Honourable John Eren. • To provide for the management of Gosch’s Paddock by the Trust as a committee of management under the Crown Lands (Reserves) Act 1978. The Melbourne and Olympic Parks Act 1985 Melbourne & Olympic Parks’ Formula for Success The Purpose of the Act: Melbourne & Olympic Parks' strategic direction is outlined by the The purposes of the Act as outlined in Section 3 are: following purpose, vision and goals: • To create a Melbourne and Olympic Parks Trust to administer Purpose , Olympic Park and certain other land and facilities for the purposes of tennis, other sports, recreation To administer, manage and promote the use of Melbourne & and entertainment. Olympic Park lands for the purposes of tennis, other sports, recreation and entertainment (Melbourne and Olympic Parks Act). • To provide for the management and operation of Melbourne Park and Olympic Park. Vision • To provide for the use and promotion of Melbourne Park and Melbourne & Olympic Parks – a world class business delivering Olympic Park. world class customer experiences. • To provide for the development, promotion, management, Our Goals operation and use of sports, recreation and entertainment 1. Maintain our financial sustainability. facilities and services in Victoria in addition to those at Melbourne Park and Olympic Park. 2. Increase benefits to the people of Victoria. Under the Act, the Trust has the following primary functions: 3. Ensure the customer experience is at the heart of everything we do. • To accept appointment and act as a committee of management of Crown lands. 4. Grow by expanding into new markets. • To be responsible for the care, improvement, use and 5. Transform our business processes to deliver cost effective promotion of Melbourne Park and Olympic Park as facilities for services. tennis, other sports, recreation and entertainment. 6. Build an integrated team of talented people who consistently • To operate Melbourne Park and Olympic Park efficiently and strive to achieve. effectively to obtain the best possible use of the facilities. • To provide planning for the operation of Melbourne Park and Olympic Park, which is coordinated between the two facilities. • To be responsible for proper financial management of Melbourne Park and Olympic Park. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

4 GOVERNANCE

TRUSTEES Mr Russell Caplan (Chairman) Ms Sharelle McMahon Mr Raymond Smith Mr Scott Tanner Ms Deborah Beale Ms Diana Nicholson Ms Mikaela Stafrace (to 12 November 2014) (from 22 July 2014) Mr Kenneth Roche AO Mr Steve Healy Mr David Stobart

EXECUTIVE TEAM

Mr Brian Morris – Chief Executive Officer Mr Travis Mardling – Chief Financial Officer Mr Russell Fakira – Director of People & Operations Mr Shane Mates – General Manager AAMI Park Mr Greg George – Director of Commercial & Strategy Mr Geoff McDonald – Director of Infrastructure Ms Enna Giampiccolo – Corporate Communications Manager

Statement of Corporate Governance Finance Audit and Risk Committee Procedures have been established at the Trust and executive The Trust has established a Finance Audit and Risk Committee to management level, which are designed to safeguard the assets provide advice in relation to matters falling into the broad areas of: and interests of the Trust and to ensure integrity of reporting. • financial reporting, accounting policies and internal controls The Trust acknowledges the need for and continued maintenance of the highest standards of corporate governance practice and • risk management ethical conduct by all Trustees and employees of the Trust. • governance, and • funding. Remuneration Committee The Committee meets monthly, or more often as required, and The Trust has established a Remuneration Committee to govern makes recommendations to the Trust on specific issues. the Trust’s policy and practice for executive remuneration and to determine the individual remuneration packages for its The members of the Committee during the year ended 30 June executive staff. The Committee meets as required and makes 2015 were: recommendations to the Trust on specific issues. The members of the Committee during the year ended 30 June 2015 were: Mr Raymond Smith (Chair) Ms Diana Nicholson Ms Deborah Beale Mr Kenneth Roche AO Mr Russell Caplan (Chair) (to 12 November 2014) Ms Mikaela Stafrace Ms Diana Nicholson Mr Russell Caplan Mr Kenneth Roche AO Mr Raymond Smith All Finance, Audit and Risk Committee members are independent from management.

Strategic Planning Committee

The Trust’s Strategic Planning Committee is established to provide independent and expert advice to assist the Trust to discharge its strategic planning responsibilities. The Members of the Committee during the year ended 30 June 2015 were:

Mr Russell Caplan (Chair) Mr Raymond Smith Ms Deborah Beale Ms Mikaela Stafrace (to 12 November 2014) Mr Scott Tanner TRUST PARKS & OLYMPIC MELBOURNE

5 THE CHAIRMAN’S REPORT

The Melbourne & Olympic Parks precinct continues to serve our was beamed into hundreds of millions of homes across the world, patrons and stakeholders well, while at the same time delivering delivering the most incredible advertisement for our venue and world class new and expanded facilities in a comprehensive its award-winning pitch. In May, the stadium hosted the A-League redevelopment set out in the Melbourne Park Master Plan. Grand Final which resulted in Melbourne Victory defeating Sydney FC. This was the perfect way to cap off an incredible year for the The Trust produced positive financial results in FY2015, reporting AAMI Park team. a net profit of $745,000. This is despite the significant increase in depreciation stemming from the major investment in facilities and Hisense Arena continues to cement its reputation as an non-revenue earning infrastructure and a cyclical downturn in the outstanding venue for indoor sports. This year saw the number of events at , partly offset by an increase introduction of a centre hung video cube and enhanced in new local music events at Arena and a strong audio capability, improving the game experience in-line with focus on cost control. international trends. Both home teams, the and continue to grow. The velodrome was also in Our earnings are reinvested into the precinct, so that it is action this year with the hosting of the 117th Austral Wheelrace. operated and maintained at a level that enhances its reputation in Melbourne and around the world. Construction is now well advanced on the new Collingwood Football Club Community Facility at Olympic Park. The centre will The redevelopment of Melbourne Park continued throughout provide new public amenities, sports change rooms and a health the year. Stage 1 of the Master Plan was completed with and wellness facility. As a part of the ongoing enhancement of the opening of the refurbished Margaret Court Arena, now a Melbourne & Olympic Parks, these facilities will provide greater genuine, multi-purpose venue with a distinctive retractable roof. recreational opportunities for the public, for schools and for Melbourne Park is the only tennis venue in the world sporting and community groups. with three operable roofs, allowing play to continue regardless of the weather - an important contributor to the ongoing success I would like to express my thanks to the Premier of Victoria, of the . the Honourable Daniel Andrews, and the Minister for Tourism and Major Events, the Honourable John Eren, for their strong, In February, construction began on a new building that will continued support for Melbourne & Olympic Parks. The Trust deeply house meeting rooms, production spaces, a media centre for appreciates the bipartisan backing of the precinct in the Parliament. events and offices for Tennis and for the Melbourne & Olympic Parks team. Design work also began on the new I would like also to record the Trust’s appreciation to CEO Brian footbridge connecting Melbourne Park and Birrarung Marr, Morris and the team at Melbourne & Olympic Parks for their Flinders Street Station and the CBD. expertise and their commitment to delivering exceptional guest experiences, despite the ongoing challenges presented by the Rod Laver Arena is nearing its 30th birthday and as part of the major redevelopment works. Master Plan will undergo a comprehensive refurbishment to benefit patrons, players and performers and to ensure it retains Finally, thanks to my fellow Trustees for their contribution its preeminent global standing. In June, the Victorian Government and support and, in particular, thanks to Deborah Beale who unveiled the designs prepared by Cox Architects and work will completed her term as a Trustee in the last year. She made an begin following the . The refurbishment is outstanding contribution as a member of the Finance Audit and part of the already announced Stage 2 funding of the Melbourne Risk Committee and the Strategic Planning Committee, and I Park redevelopment, to which the Trust is contributing $40 thank her very much for all her hard work and drive. million. The Trust appreciates the support provided by successive In accordance with the Financial Management Act 1994, I am Victorian Governments to ensure that Melbourne & Olympic Parks pleased to present the Report of Operations for the Melbourne and maintains its world class venue status. Olympic Parks Trust for the year ending 30 June 2015. The was again a great success, attended by a record 703,899 patrons. Margaret Court Arena was acclaimed as a wonderful new addition to the tournament, thrilling fans with its superior comfort and up-close-and-personal viewing. Hisense Arena with its more than 10,000 seats was opened up this year to the public as a general admission area. This along with increased external court seating and shade areas provided tennis fans with more options and opportunity to view outstanding tennis for the Russell Caplan price of a ground pass. Both Tennis Australia and M&OP staff deserve congratulations for conducting yet another outstanding tournament and ensuring the safety, comfort and enjoyment of all attendees. AAMI Park also had an unforgettable year. It hosted the biggest football tournament ever played in Australia - the Asian Cup. More than 125,000 soccer fans attended AAMI Park throughout January to witness first class football. AAMI Park in all its glory MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

6 THE CEO’S REPORT

In January, Melbourne & Olympic Parks was front and centre on Hisense Arena the world’s stage as we simultaneously delivered two international In total, Hisense Arena attracted 259,325 patrons to 54 event sporting tournaments, each generating priceless global broadcast days, six event days up on 2013/14. Sport continues to be coverage and cementing our reputation as an unbeatable sport a primary focus for this arena with ongoing investments in and entertainment precinct. A record-breaking Australian Open, improving the team and patron experience. the fortnight-long Asian Cup (football) as well as the opening of Margaret Court Arena as a sport and entertainment venue, made and again proved the major drawcard; with for an unforgettable 2015 financial year. the Melbourne Vixens and Melbourne United each continuing to draw good crowds throughout their seasons. During the year Overall Performance the venue team introduced patrons to the “Cube”, a four-sided The Trust reported a positive result with a net profit after viewing and entertainment platform designed to improve the depreciation of $745,000. The year ended with earnings game experience. The pilot proved successful and the Trust will (EBITDA) of $31.617 million which was 2 per cent down on the now invest in new technology to add an exciting dimension to the prior year due mainly to a slowdown in the international live viewing experience of indoor sports at Hisense Arena. music touring market. This had a significant impact on Rod In December, the world’s best cyclists returned to the velodrome Laver Arena earnings, which were partly offset by the strong at Hisense Arena to compete in the 117th Austral Wheelrace while performance of AAMI Park, Margaret Court Arena and Hisense in May, following a successful first year in FY2014, we saw the Arena. A concentration on cost management also helped to return of the Australian Gymnastics Championships. maintain profitability. The arena’s versatility was brought to the fore throughout the The precinct total of 194 stadium and arena event days was year with: electronic dance music events, Disney on Ice and slightly up on the prior year figure of 191. Total number of Dancesports also adding to the long list of varied events at contracted days ie, the number of days our venues were booked by Hisense Arena. hirers increased from 213 last year to 237 in 2014/15. AAMI Park Australian Open A total of 84 event days drew 855,872 patrons to AAMI Park in a A record 703,899 patrons broke the attendance record at the year where the stadium hosted the Asian Cup, an A-League Grand 2015 Australian Open. The Melbourne weather provided perfect Final and two Monster Jam events. conditions, helping to lure almost 70,000 more fans to the event than the prior year. Margaret Court Arena made its debut at the The transformation of AAMI Park to a monster truck obstacle Australian Open as a new venue and received high praise for its course captured the imagination of many, with more than 40,000 stylish design and exceptional patron amenities. Hisense Arena people attending the two shows. Meticulous preparation ensured was opened to the public this year to allow ground passes to the stadium’s award-winning pitch was well-equipped to handle witness some of the biggest stars in action. During the second the 3.5-metre tall, five-tonne machines. Dedicated crews worked week, Hisense Arena was transformed into a Disney activation, around the clock to build a custom-designed racetrack from 3,000 providing families with a great new option as part of the tennis cubic metres of dirt, dropped into the stadium specifically for the experience. event. Rod Laver Arena In November, the AAMI Park pitch was replaced – the first time since the stadium opened in 2010. The refurbishment ensured the In total Rod Laver Arena attracted 597,045 patrons over 52 event pitch was in optimum condition for the seven Asian Cup games at days. Katy Perry performed eight capacity shows, providing AAMI Park in January. delighted fans with a series of fun, energetic and thoroughly entertaining concerts. This year we also saw the return of music AAMI Park hosted the Asian Cup opening ceremony, where a legends, The Eagles, John Farnham and Olivia Newton-John, Rod sold-out sea of yellow and green football fans cheered on the Stewart and the ever-popular, Kylie Minogue. Socceroos to victory. More than 125,000 fans attended the seven matches at the stadium – an outstanding result and an excellent As set out in the Melbourne Park Master Plan, the next phase advertisement for the game. of the $700 million transformation of our site includes a comprehensive refurbishment of our much-loved Rod Laver The A-League Grand Final was also hosted at AAMI Park, with Arena. Early designs were released to the public in June and a thrilling premiership win by home club, Melbourne Victory. were met with much excitement from industry and the general Congratulations to Ian Robson, Kevin Muscat and all of the team public. Rod Laver Arena was opened in 1988 and at the time at Melbourne Victory. was seen as ground breaking with its opening roof and modern facilities. However, the needs of patrons and the entertainment Our other stadium teams, Melbourne City, Melbourne Storm and landscape have changed considerably since then and we welcome Melbourne Rebels also enjoyed strong performances and growing refurbishments that will ensure Rod Laver Arena remains in the game attendances. top echelon of multi-purpose arenas worldwide. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

7 THE CEO’S REPORT

Margaret Court Arena Some significant projects undertaken by the Trust during the year included: This year saw the opening of Margaret Court Arena as a venue in its own right, following its stunning transformation from an • upgrades to the concourse, lifts, plant, catering and the outdoor showcourt to an arena in its own right. A number of test operable roof at Rod Laver Arena events were held in October, followed by the first commercial • improvements to the Hisense Arena concourse and patron event in November – an NBL game between Melbourne United and amenities the . Australian hip-hop pioneers the Hilltop Hoods were the first ticketed act to grace the stage when they brought • significant improvements to plant and lifts in Rod Laver their ‘Cosby Sweater Tour’ to the arena in late 2014. Arena A total of 101,075 patrons attended 16 event days at Margaret • AAMI Park pitch replacement and retail improvements, and Court Arena, which was well above expectations and an excellent indication the arena is an exciting new addition to Melbourne’s • amenity refurbishments at the Melbourne Park Function live music scene. The boutique arena provides an intimate Centre. atmosphere and world-class sound, and can accommodate Works began on the Stage 2 of the Melbourne Park Master around 6,500 people when in concert mode. Plan with all three significant projects underway. Construction Melbourne United and Melbourne Vixens have also played a of the new administration building to the north of the site is selection of matches from their respective fixtures at Margaret advancing well, so too is the design and planning for the new Court Arena, which again proves the flexibility of our venues in bridge connecting Birrarung Marr to Melbourne Park and for the hosting a wide range of sport and entertainment events. extensive upgrades to Rod Laver Arena. Community Activities Gosch’s Paddock The Trust continues to strengthen its connection to the Gosch’s Paddock continues to be used for training by Melbourne community both through the provision of quality parkland, public Football Club, Melbourne Victory and Melbourne Storm, as well open space and support for community activities. as a variety of other organisations. Its fields and surrounds are open for public use when not used for formal training. Annual This year Rod Laver Arena featured in Open House Melbourne renovations were carried out on all the pitches to ensure they which provided a rare and exclusive behind the scenes tour of were maintained to a high standard. Except for the small areas the arena, taking in backstage areas, green rooms and Australian under maintenance, Gosch’s Paddock was not closed to the public Open change rooms. Staff who acted as guides provided visitors during the year. with personal anecdotes, which added to the unique experience. Health & Safety Three other community events were supported by Melbourne & Olympic Parks, including the Great Amazing Race (raising money M&OP continues its strong commitment to health and safety, this for the Royal Children’s Hospital Foundation), the Seven Parks year maintaining its AS4801 accreditation for Safety Management Walk (mass participation event, raising funds for the Cancer Systems. Employee, patron and tenant safety continues to be Council Victoria) and the Rapid Ascent CityTrail (participation an important focus in event planning, event delivery and in the event utilising the unique footprint of the precinct). workplace. Two charity partnerships were signed this year. Melbourne & Finally, my deep appreciation to the Chairman of the Trust, Olympic Parks continued to strengthen its relationship with its Russell Caplan and all of the Trustees, Dr Peter Hertan from Major charity partner Alkira, delivering programs in support of those Sporting Events at the Department of Economic Development, with an intellectual disability. An Alkira student completed an Jobs, Transport and Resources, Tim Bamford at Major Projects eight-week work placement with M&OP’s Horticulture team in Victoria, and their respective teams, for their support during the FY2015, helping to build work-ready skills. A new partnership with year. A special thanks to the Melbourne & Olympic Parks team Whitelion – an organisation working to support at-risk youth – who should feel very proud of the role they are playing at this very was also started this year. significant time in the history of the precinct. Capital Projects & Infrastructure The Trust currently has assets under management of $1.3 billion, requiring an intensive maintenance and capital replacement regime. During the year the more than $17.9 million was spent or committed by the Trust on capital works to improve and upgrade facilities and infrastructure. The Trust also committed $40 million to the Stage 2 Master Plan Redevelopment. Brian Morris MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

8 HIGHLIGHTS 2014-2015

Events

Rod Laver Arena 2015 Ice Hockey Classic Melbourne Storm – NRL International Ice Hockey 5 Seconds of Summer (11 home matches and 1 final) WWE 2014 Melbourne Victory – Hyundai A-League (8 home matches) Lady Gaga Hisense Arena Disney on Ice Presents – Treasure Trove Monster Jam Queen + Adam Lambert (2 shows) The Voice Live Kanye West Rugby League 4 Nations – Australia v Robbie Williams Story Night England Gabriel Iglesias Victorian State School Spectacular 2014 AFC Asian Cup 2015 Andrea Bocelli Australia v New Zealand International (7 matches) Test Match The Footy Show Grand Final Edition Hyundai A-League Grand Final – The Madden Brothers Melbourne Victory v Sydney FC Miley Cyrus Mundine v Rabchenko The Rolling Stones 69th Australian DanceSport Margaret Court Arena Mariah Carey Championship 2014 Mushroom Free for All Katy Perry The Austral Wheelrace Hilltop Hoods The Wiggles A State of Trance Laura Pausini Sting & Paul Simon on Stage Together Walking with Dinosaurs Angus & Julia Stone Roxette Planetshakers Conference 2015 Billy Idol Guy Sebastian 2015 Australian Gymnastic Amplify The Eagles Championships Demi Lovato Drake Atlantis Ben Howard Lady Antebellum X-Factor Auditions 2015 Harlem Globetrotters Kylie Minogue Melbourne United – NBL Melbourne United – NBL Rod Stewart (7 home games) (4 home games) Russell Peters Vixens – ANZ Championships Vixens – ANZ Championships (4 home games) Ed Sheeran (3 home games) John Farnham & Oliva Newton-John AAMI Park Melbourne Park The Script Melbourne City – Hyundai A-League Ricky Martin Australian Open 2015 (13 home matches) (19 Jan - 1 Feb 2015) Backstreet Boys Melbourne Rebels – Super Rugby Alt – J (8 home matches) Motley Crue Melbourne Rising – National Rugby Nickelback Championship (4 home matches and 1 final) Spandau Ballet

Key Statistics

2014/15 2013/14 Number of contracted days - Melbourne Park arenas 237 213 Number of contracted days - AAMI Park 84 58 Number of contracted days - Melbourne Park Function Centre 123 159 Total ticketed patronage 2,518,843 2,431,567 Rod Laver Arena event ticketed attendance 597,045 914,387 Hisense Arena event ticketed attendance 259,325 202,667 AAMI Park event ticketed attendance 855,872* 674,059 Margaret Court Arena (opened in November 2014) 101,075 N/A Melbourne Park Function Centre patrons 67,994 89,532 Attendance at Australian Open 703,899 640,454

Number of website visitors (all M&OP sites) 1,139,786 1,086,694 TRUST PARKS & OLYMPIC MELBOURNE *including 125,368 at the Asian Cup 9 HIGHLIGHTS 2014-2015

Major Capital Expenditure

Expenditure Type Amount Details

Melbourne Park $4.3 million Lift upgrades, improvements to tennis facilities, works to medical suites and the Player Café extension. Also included refurbishments to the Room and the Melbourne Park Function Centre bathrooms. Rod Laver Arena $4.4 million Included upgrades to the concourse, amenities, chiller plant and initial works on the operable roof upgrade project. Margaret Court Arena $0.5 million Margaret Court Arena fixtures, fittings and equipment.

Equipment and Technology $3.0 million Included works relating to upgrade of the CCTV access and control system, IPTV servers and encoders; catering equipment and office furniture relating to office relocations. Hisense Arena $4.4 million Included upgrades to concourse, amenities and scoreboards.

Olympic Park Precinct $1.3 million Included audio visual upgrades to the AAMI Park control room, retail bar improvements and artificial turf replacement. TOTAL $17.9 million

Note: The ongoing Melbourne Park redevelopment continues to be managed and undertaken by Major Projects Victoria. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

10 OUR PARTNERS

The Trust would like to thank the following organisations for their support over the past year

Tenants Venue Partners Calibre Feasts AAMI Collingwood Football Club Capricorn Stages and Rigging Imaging @ Olympic Park Delaware North Melbourne Football Club Hisense Australia Melbourne Storm O’Brien Catering Group Australia Melbourne Victory Microhire Olympic Park Sports Medicine Centre TechGuard Security Tennis Australia Tennis Australia Tennis Victoria Ticketek Victorian Olympic Council Regular Arena Hirers Suppliers Chugg Entertainment Carlton & United Breweries Dainty Consolidated Entertainment Coca-Cola Amatil Feld Entertainment Diageo Australia Frontier Touring Heineken Lion Australia Live Nation Australasia Mondelez Melbourne United Patties Foods Limited Melbourne Vixens Pernod Ricard Australia Nine Live Peters Treasury Wine Estates AAMI Park Clubs Melbourne City Melbourne Rebels Melbourne Storm Melbourne Victory MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

11 FINANCIAL OVERVIEW

The financial statements in this report relate to the activities of Melbourne and Olympic Parks Trust for the year ended 30 June 2015. The net result for 2015 was a profit of $0.745 million (2014: $3.596 million). In the 2014/15 year the Trust received grants from the Victorian Government totalling $28.390 million all of which was treated as contributed capital (2014: $85.330 million). The grants in 2015 were further contributions towards the redevelopment of the Melbourne Park precinct. The grants in 2015 and 2014 were contributions towards the redevelopment of the Melbourne Park precinct. Total income for 2014/15 was $91.390 million, (2014: $92.557 million). Income related to the sales of goods and services decreased by 1.2 per cent which was primarily due to the shortfall of 26 event days at Rod Laver Arena compared to the prior year (2013/14 including the run of 18 P!nk shows). This was partially offset by additional revenue from Margaret Court Arena’s early commencement in November 2014 attributing to a positive impact on Melbourne & Olympic Parks’ primary revenue stream (venue rental) and further uplifts to secondary revenue streams including ticketing, catering and merchandise. There was also an increase in ticketing royalties in 2014/15 which was attributed to the new ticketing services agreement with Ticketek ($3.2 million). The significant factors in reaching Melbourne & Olympic Parks’ income for 2014/15 were: • Australian Open and tennis was $0.638 million better than the prior year due to catering and venue rental receipts from a higher public attendance than the previous year (2015: 703,899 and 2014: 640,454). • Rod Laver Arena hosted 52 event days which was considerably down on the previous year due to the 18 P!nk shows in 2014. • Hisense Arena hosted 54 event days, which was higher than the prior year, with the 2014 figures affected by the venue being unavailable for four months due to tennis court resurfacing works. Event-related income was higher than the previous year due to the mix of events which resulted in higher yields (particularly Walking with Dinosaurs; five event days) and higher corporate sales income. • The construction of Margaret Court Arena was completed in October of 2014 and hosted a total of 16 event days, which was well above expectations. • AAMI Park hosted 58 event days, which was 14 per cent more than the previous year. In addition to being the home of the Melbourne Storm (rugby league), Melbourne Rebels (rugby union), Melbourne Victory and Melbourne City (football), AAMI Park also hosted notable events including Monster Jam and Asian Cup (football) matches. • The Trust again made a $3 million financial transfer to government (2014:$3 million), which is used to support the Victorian Government’s sport and recreation programs and facilities. Total expenditure in 2015 was $90.712 million, (2014: $88.987 million). This increase in expenditure was due to the increasing cost of depreciation (an increase of $2.1 million from 2014) because of the completion of building upgrades and the new Margaret Court Arena. This was slightly offset by decreased cost of staff and lower event related costs. Property, Plant and Equipment (less accumulated depreciation) increased by $33.780 million compared to last year, primarily due to the Melbourne Park redevelopment construction costs. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

12 MELBOURNE & OLYMPIC PARKS TRUST FINANCIAL STATEMENTS

Comprehensive Operating Statement Balance Sheet Statement of Changes in Equity Cash Flow Statement Financial Year Ended 30 June 2015 MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

13 COMPREHENSIVE OPERATING STATEMENT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

NOTE 2015 2014 $’000 $’000

CONTINUING OPERATIONS

INCOME FROM TRANSACTIONS Sales of goods and services (2a) 87,874 88,505 Interest (2b) 1,456 1,708 Grants (2c) - 8 Other Income (2d) 2,061 1,912 TOTAL INCOME FROM TRANSACTIONS 91,391 92,133

EXPENSES FROM TRANSACTIONS Cost of goods sold/distributed (3a) 14,444 14,523 Purchase of services (3b) 19,684 19,985 Employee expenses (3c) 17,357 17,827 Depreciation & amortisation (7) 29,451 27,334 Other operating expenses (3d) 6,777 5,895 Government financial transfer (3e) 3,000 3,000 TOTAL EXPENSES FROM TRANSACTIONS 90,713 88,564

NET RESULT FROM TRANSACTIONS (NET OPERATING BALANCE) 678 3,569

Other economic flows included in net result Net gain/(loss) on non-financial assets (4a) - 5 Net gain/(loss) arising from revaluation of long service liability (4b) 67 21 Total other economic flows included in net result 67 26

Net result 745 3,595

Comprehensive result 745 3,595

The above Comprehensive Operating Statement should be read in conjunction with the accompanying notes. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

14 BALANCE SHEET FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

NOTE 2015 2014 $’000 $’000

ASSETS

FINANCIAL ASSETS Cash and cash equivalents (5) 58,110 60,177 Cash held on behalf of customers (1d) 46,590 42,972 Receivables (6) 4,748 2,775 TOTAL FINANCIAL ASSETS 109,448 105,924

NON-FINANCIAL ASSETS Property, plant and equipment and intangible assets (7) 1,326,829 1,293,051 Other (8) 255 301 TOTAL NON-FINANCIAL ASSETS 1,327,084 1,293,352

TOTAL ASSETS 1,436,532 1,399,276

LIABILITIES Payables (9) 17,068 12,471 Provisions (10) 3,070 2,909 Other (11) 58,195 54,832 TOTAL LIABILITIES 78,333 70,212

NET ASSETS 1,358,199 1,329,064

EQUITY Accumulated surplus/(deficit) 203,540 202,795 Reserves 314,675 314,675 Contributed capital 839,984 811,594 NET WORTH 1,358,199 1,329,064

Commitments for expenditure (13) Contingent assets and contingent liabilities (14/15)

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

MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

15 STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

NOTE Physical Asset Accumulated Contributions Total Revaluation Surplus by Owner $’000 Surplus $’000 $’000 $’000

Balance at 30 June 2013 314,675 199,200 726,264 1,240,139

Net Result for the Year 3,595 3,595

Transactions with owners in their 85,330 85,330 capacity as owners

Balance at 30 June 2014 314,675 202,795 811,594 1,329,064

Net Result for the Year 745 745

Transactions with owners in their 28,390 28,390 capacity as owners

Balance at 30 June 2015 314,675 203,540 839,984 1,358,199

The above statement of changes in equity should be read in conjunction with the accompanying notes. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

16 CASH FLOW STATEMENT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

NOTE 2015 2014 $’000 $’000

CASH FLOWS FROM OPERATING ACTIVITIES

RECEIPTS Receipts from customers 85,692 86,023 Interest received 1,456 1,708 Goods and Services Tax received from the ATO 5,939 5,313 Other receipts 2,061 1,920 TOTAL RECEIPTS FROM OPERATING ACTIVITIES 95,148 94,964

PAYMENTS Payments to suppliers and employees (49,209) (53,415) Goods and Services Tax paid to the ATO (9,530) (9,209) Payments to government (financial transfer) (3,000) (3,000) TOTAL PAYMENTS FROM OPERATING ACTIVITIES (61,739) (65,624)

NET CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES (17b) 33,409 29,340

CASH FLOWS FROM INVESTING ACTIVITIES Payments for non-financial assets (63,866) (110,262) Receipts on sale of non-financial assets - 5

NET CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES (63,866) (110,257)

CASH FLOWS FROM FINANCING ACTIVITIES Receipts from government (capital) 28,390 85,330

NET CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES 28,390 85,330

Net increase/(decrease) in cash and cash equivalents (2,067) 4,413

Cash and cash equivalents at the beginning of the financial year 60,177 55,765

CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR (17a) 58,110 60,177

The above cash flow statement should be read in conjunction with the accompanying notes. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

17 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the (a) Statement of Compliance fair value hierarchy, described as follows, based on the lowest These general-purpose financial statements have been prepared level input that is significant to the fair value measurement as a in accordance with the Financial Management Act 1994 (FMA), whole: applicable Australian Accounting Standards (AAS), which • Level 1 – Quoted (unadjusted) market prices in active includes the Australian accounting standards issued by the markets for identical assets or liabilities; Australian Accounting Standards Board (AASB). In particular, they are presented in a manner consistent with the requirements • Level 2 – Valuation techniques for which the lowest level of AASB 1049 Whole of Government and General Government input that is significant to the fair value measurement is Sector Financial Reporting. directly or indirectly observable; and • Level 3 – Valuation techniques for which the lowest level Where appropriate, those AASs paragraphs applicable to not-for- input that is significant to the fair value measurement is profit entities have been applied. unobservable. Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the For the purpose of fair value disclosures, the Trust has concepts of relevance and reliability, thereby ensuring that the determined classes of assets and liabilities based on the nature, substance of the underlying transactions or other events is characteristics and risks of the asset or liability and the level of reported. the fair value hierarchy as explained above.

To gain a better understanding of the terminology used in this In addition, the Trust determines whether transfers have report, a glossary of terms and style conventions can be found occurred between levels in the hierarchy by re-assessing in Note 23. categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each (b) Basis of accounting preparation and measurement reporting period. The accrual basis of accounting has been applied in the preparation of these financial statements whereby assets, The Valuer-General Victoria (VGV) is the Trust’s independent liabilities, equity, income and expenses are recognised in the valuation agency. VGV has utilised the services of Napier & reporting period to which they relate, regardless of when cash is Blakeley, a third party valuer to determine fair value of the Trust’s received or paid. assets.

Judgements, estimates and assumptions are required to be The Trust, in conjunction with VGV (and Napier & Blakeley), made about the carrying values of assets and liabilities that monitors changes in the fair value of each asset and liability are not readily apparent from other sources. The estimates and through relevant data sources to determine whether revaluation associated assumptions are based on professional judgements is required. derived from historical experience and various other factors that are believed to be reasonable under the circumstances. Actual These financial statements are presented in Australian dollars, results may differ from these estimates. the functional and presentation currency of the Trust.

The estimates and underlying assumptions are reviewed on an The accounting policies set out below have been applied in ongoing basis. Revisions to accounting estimates are recognised preparing the financial statements for the year ended 30 June in the period in which the estimate is revised if the revision 2015 and the comparative information presented for the year affects only that period or in the period of the revision, and future ended 30 June 2014. periods if the revision affects both current and future periods. Judgements and assumptions made by management in the (c) Reporting entity application of AASs that have significant effects on the financial The financial statements cover the Trust as an individual statements and estimates relate to: reporting entity. The Trust is a government agency of the State of Victoria, established pursuant to the provisions of the Melbourne • the fair value of land, buildings, infrastructure, plant and and Olympic Parks Act 1985. Its principal address is: equipment, (refer to Note 1(j)), and Melbourne and Olympic Parks Trust • actuarial assumptions for employee benefit provisions based Batman Avenue on likely tenure of existing staff, patterns of leave claims, Melbourne VIC 3001 future salary movements and future discount rates (refer to Note 1(k)). (d) Scope and presentations of financial statements Comprehensive Operating Statement Consistent with AASB 13 Fair Value Management, Melbourne The Comprehensive Operating Statement comprises three and Olympic Parks Trust (the Trust) determines the policies and components, being ‘net result from transactions’ (or termed as procedures for recurring fair value measurements for property, ‘net operating balance’), ‘other economic flows included in net plant and equipment, in accordance with the requirements of result’, as well as ‘other economic flows – other comprehensive MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE AASB 13 and the relevant Financial Reporting Directions. income’. The sum of the former two, together with the net result from discontinued operations, represents the net result. 18 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

The net result is equivalent to profit or loss derived in accordance (e) Changes in accounting policies with AASs. Subsequent to the 2013-14 reporting period, the following new and revised Standards have been adopted for the first time in the ‘Other economic flows’ are changes arising from market current period with their financial impacts disclosed. remeasurements. They include: • gains and losses from disposals of non-financial assets AASB 10 Consolidated Financial Statements

• revaluations and impairments of non-financial physical and AASB 10 provides a new approach to determine whether an tangible assets entity has control over an entity, and therefore must present • remeasurement arising from defined benefit superannuation consolidated financial statements. The new approach requires plans the satisfaction of all three criteria for control to exist over an entity for financial reporting purposes: • fair value changes of financial instruments and agricultural (a) The investor has control over the investee assets, and (b) The investor has exposure, or rights to variable returns from • depletion of natural assets (non-produced) from their use or its involvement with the investee, and removal. (c) The investor has the ability to use its power over the investee to affect the amount of the investor’s returns.

This classification is consistent with the whole of government Based on the new criteria prescribed in AASB 10, the Trust has reporting format and is allowed under AASB 101 Presentation of reviewed the existing arrangements to determine if there are any Financial Statements. additional entities that need to be consolidated into the group. The Trust has concluded that no additional entities have met the Refer to Note 23 Glossary for the definitions of ‘net result from control criteria. transactions, ‘other economic flows included in net result’ and ‘other economic flows – other comprehensive income’. (f) Events after reporting date Assets, liabilities, income or expenses arise from past Balance sheet transactions or other past events. Where the transactions Assets and liabilities are presented in liquidity order with assets result from an agreement between the Trust and other parties, aggregated into, financial assets and non-financial assets. the transactions are only recognised when the agreement is Current and non-current assets or liabilities (those expected to irrevocable at or before the end of the reporting period. be recovered or settled beyond 12 months) are disclosed in the notes, where relevant. Adjustments are made to amounts recognised in the financial statements for events which occur after the reporting period and Cash held on behalf of customers represents cash received for before the date the financial statements are authorised for issue, event ticket sales which is held at bank from the time tickets are where those events provide information about conditions which purchased and paid out to the hirer after the event has taken existed in the reporting period. Note disclosure is made about place. events between the end of the reporting period and the date the financial statements are authorised for issue where the events Cash flow statement relate to conditions which arose after the end of the reporting Cash flows are classified according to whether or not they period and which may have a material impact on the results of arise from operating activities, investing activities, or financing subsequent reporting periods. activities. This classification is consistent with requirements under AASB 107 Statement of Cash Flows. (g) Goods and Services Tax (GST) Income, expenses and assets are recognised net of the amount For cash flow statement presentation purposes, cash and cash of associated GST, unless the GST incurred is not recoverable equivalents include bank overdrafts, which are included as from the taxation authority. In this case it is recognised as part of current borrowings on the balance sheet. the cost of acquisition of the asset or as part of the expense.

Statement of changes in equity Receivables and payables are stated inclusive of the amount of The statement of changes in equity presents reconciliations of GST receivable or payable. The net amount of GST recoverable non-owner and owner changes in equity from opening balance from, or payable to, the taxation authority is included with other at the beginning of the reporting period to the closing balance receivables or payables in the balance sheet. at the end of the reporting period. It also shows separately changes due to amounts recognised in the ‘comprehensive Cash flows are presented on a gross basis. The GST components result’ and amounts recognised in ‘other economic flows – other of cash flows arising from investing or financing activities which movements in equity’ related to ‘transactions with owner in its are recoverable from, or payable to the taxation authority, are capacity as owner’. presented as operating cash flows. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

19 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

(h) Income from transactions The following are typical estimated useful lives for different asset Income is measured at the fair value of the consideration classes for both current and prior years: received or receivable. Amounts disclosed as income are net of Asset Class Useful Life returns, trade allowances and duties and taxes. Sale of goods and services Buildings 50 - 110 years Sale of goods and services is recognised upon delivery of the Property Plant & Equipment 5 - 60 years goods and services to the customer and when the Trust gains Motor Vehicles 5 years control of the underlying assets. Intangible Assets 5 years Interest Interest income is recognised on a time proportionate basis that Other operating expenses takes into account the effective yield on the financial asset. Other operating expenses generally represent the day-to-day running costs incurred in normal operations and are recognised Grants as an expense in the reporting period in which they are incurred. Grants from third parties are recognised as income in the reporting period in which the Trust gains control over the contribution. Government financial transfers Government financial transfers represents payment made by Other income the Trust to the Government for support of sport and recreation Sinking fund income is recognised as income in the reporting programs. period in which the Trust gains control over the underlying assets. (j) Other economic flows included in the net result (i) Expenses from transactions Net gain/(loss) on non-financial assets Payments to third parties are recognised as an expense in the reporting period in which they are paid or are payable. (i) Net gain/(loss) on disposal of non-financial assets Any gain or loss on disposal of non-current assets is Cost of goods sold/distributed recognised at the date control of the asset is passed to Purchase of cost of goods sold/distributed are recognised as an the buyer and is determined after deducting from the expense in the reporting period in which they are incurred. proceeds the carrying value of the asset at that time.

Purchase of services (ii) Impairment of non-financial assets Purchase of services are recognised as an expense in the All of the Trust’s assets are assessed annually for reporting period in which they are incurred. indications of impairment.

Employee expenses If there is an indication of impairment, the assets These expenses include all costs related to employment (other concerned are tested as to whether their carrying than superannuation which is accounted for separately) value exceeds their possible recoverable amount. including wages and salaries, Fringe Benefits Tax, leave Where an asset’s carrying value exceeds its entitlements, redundancy payments and WorkCover premiums. recoverable amount, the difference is written-off by a charge to the Comprehensive Operating Statement Superannuation except to the extent that the write-down can be The amount recognised in the Comprehensive Operating debited to an asset revaluation reserve amount Statement is the employer contributions for members of both applicable to that class of asset. defined benefit and defined contribution superannuation plans that are paid or payable during the reporting period. It is deemed that, in the event of the loss of an asset, the future economic benefits arising from the use of Details of the funds which the Trust made superannuation the asset will be replaced unless a specific decision to contributions to during the year are disclosed in Note 21. the contrary has been made. The recoverable amount of most major assets is measured at the higher of the Depreciation and amortisation depreciated replacement cost and fair value less costs In compliance with Australian Accounting Standard AASB116 to sell. The depreciated replacement cost is the current Property, Plant and Equipment, depreciation and amortisation replacement cost of an asset less, where applicable, has been charged on all fixed assets and capital works accumulated depreciation calculated on the basis of developments, with the exception of Land. The provisions for such cost to reflect the already consumed or expired depreciation are made using the straight-line method, at rates future economic benefits of the asset. appropriate to the estimated useful life to the Trust of each individual asset. Estimates of the remaining useful lives for all Net gain/(loss) arising from revaluation of long service leave assets are reviewed annually and range from greater than zero liability up to 110 years. The Trust’s policy is to capitalise assets valued Net gain/(loss) from the revaluation of long service over $5,000, whilst assets of less than $5,000 in value are leave liability arises due to changes in the bond expensed immediately. interest rates; MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

20 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

(k) Financial instruments transaction costs. Subsequent to initial recognition held-to- Financial instruments arise out of contractual agreements that maturity financial assets are measured at amortised cost using give rise to a financial asset of one entity and a financial liability the effective interest method, less any impairment losses. or equity instrument of another entity. Due to the nature of the Trust’s activities, certain financial assets and financial liabilities The Trust makes limited use of this classification because any arise under statute rather than a contract. Such financial assets sale or reclassification of more than an insignificant amount of and financial liabilities do not meet the definition of financial held-to-maturity investments not close to their maturity, would instruments in AASB 132 Financial Instruments: Presentation. result in the whole category being reclassified as available- For example, statutory receivables arising from taxes, fines and for-sale. The Trust would also be prevented from classifying penalties do not meet the definition of financial instruments as investment securities as held-to-maturity for the current and the they do not arise under contract. following two financial years.

Where relevant, for note disclosure purposes, a distinction is The held-to-maturity category includes certain term deposits and made between those financial assets and financial liabilities that debt securities for which the entity concerned intends to hold to meet the definition of financial instruments in accordance with maturity. AASB 132 and those that do not. Financial assets and liabilities at fair value through profit The following refers to financial instruments unless otherwise and loss stated. Financial assets are categorised as fair value through profit or loss at trade date if they are classified as held for trading or Categories of non-derivative financial instruments designated as such upon initial recognition. Financial instrument assets are designated at fair value through profit or loss on the Loans and receivables basis that the financial assets form part of a group of financial Loans and receivables are financial instrument assets with fixed assets that are managed by the entity concerned based on their and determinable payments that are not quoted on an active fair values, and have their performance evaluated in accordance market. These assets are initially recognised at fair value plus with documented risk management and investment strategies. any directly attributable transaction costs. Subsequent to initial measurement, loans and receivables are measured at amortised Financial instruments at fair value through profit or loss are cost using effective interest method, less any impairment. initially measured at fair value and attributable transaction costs are expensed as incurred. Subsequently, any changes in fair Loans and receivables category includes cash and cash value are recognised in the net result as other economic flows. equivalents (refer to Note 1 (l)), term deposits with maturity Any dividend or interest on a financial asset is recognised in the greater than three months, trade receivables, loans and other net result from transactions. receivables, but not statutory receivables. Financial liabilities amortised at cost Available-for-sale financial assets Financial instrument liabilities are initially recognised on the Available-for-sale financial instrument assets are those date they are originated. They are initially measured at fair value designated as available-for-sale or not classified in any other plus any directly attributable transaction costs. Subsequent to category of financial instrument asset. initial recognition, these financial instruments are measured at amortised cost with any difference between the initial Such assets are initially recognised at fair value. Subsequent recognised amount and the redemption value being recognised to initial recognition, they are measured at fair value in profit and loss over the period of the interest-bearing liability, with gains and losses arising from changes in fair value, using the effective interest rate method. recognised in ‘other economic flows – other comprehensive income’ until the investments are disposed. Financial instrument liabilities measured at amortised cost include all of the Trusts contractual payables, deposits held and Movements resulting from impairment and foreign currency advances received, and interest-bearing arrangements other changes are recognised in the net result as other economic than those designated at fair value through profit or loss. flows. On disposal, the cumulative gain or loss previously recognised in ‘other economic flows – other comprehensive Derivative financial instruments income’ is transferred to other economic flows in the net Derivative financial instruments are classified as held for trading result. financial assets and liabilities. They are initially recognised at fair value on the date on which a derivative contract is entered Available-for-sale category includes certain equity into. Derivatives are carried as assets when their fair value investments and those debt securities that are designated as is positive and as liabilities when their fair value is negative. available-for-sale. Any gains or losses arising from changes in the fair value of derivatives after initial recognition, are recognised in the Held-to-maturity financial assets consolidated comprehensive operating statement as another If the Trust has the positive intent and ability to hold nominated economic flow included in the net result. investments to maturity, then such financial assets may be classified as held-to-maturity. Held-to-maturity financial assets are recognised initially at fair value plus any directly attributable TRUST PARKS & OLYMPIC MELBOURNE

21 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

Offsetting financial instruments Receivables are recognised initially at fair value and Financial instrument assets and liabilities are offset and the net subsequently measured at amortised cost, using the effective amount presented in the consolidated balance sheet when, and interest method, less an allowance for impairment. only when, the Trust concerned has a legal right to offset the amounts and intend either to settle on a net basis or to realise A provision for doubtful receivables is made when there is the asset and settle the liability simultaneously. objective evidence that the debts will not be collected. Bad debts are written-off when identified. Some master netting arrangements do not result in an offset of balance sheet assets and liabilities. Where the Trust does not Property, Plant and Equipment have a legally enforceable right to offset recognised amounts, Land, buildings and plant and equipment are recognised because the right to offset is enforceable only on the occurrence initially at cost and subsequently measured at fair value, less of future events such as default, insolvency or bankruptcy, they accumulated depreciation and impairment. are reported on a gross basis. Revaluations of non-current physical assets Reclassification of financial instruments Non-current physical assets measured at fair value are revalued Subsequent to initial recognition and under rare circumstances, in accordance with the new FRD 103F issued by the Minister non-derivative financial instruments assets that have not been for Finance. A full revaluation occurs at least every five years, designated at fair value through profit or loss upon recognition based on the asset’s government purpose classification, but may may be reclassified out of the fair value through profit or loss occur more frequently if fair value assessments indicate material category, if they are no longer held for the purpose of selling or changes in values. Independent valuers are used to conduct repurchasing in the near term. these scheduled revaluations and any interim revaluations are determined in accordance with the requirements of the FRDs. Financial instrument assets that meet the definition of loans and receivables may be reclassified out of the fair value Revaluation increases or decreases arise from differences through profit and loss category into the loans and receivables between an asset’s carrying value and fair value. category, where they would have met the definition of loans and receivables had they not been required to be classified as Revaluation increases are credited directly to equity in the fair value through profit and loss. In these cases, the financial revaluation reserve, except that, to the extent that an increment instrument assets may be reclassified out of the fair value reverses a revaluation decrement in respect of that class of through profit and loss category, if there is the intention and asset previously recognised as an expense in the net result, the ability to hold them for the foreseeable future or until maturity. increment is recognised as income in determining the net result.

Available-for-sale financial instrument assets that meet the Revaluation decreases are recognised immediately as expenses definition of loans and receivables may be reclassified into the in the net result, except that, to the extent that a credit balance loans and receivables category if there is the intention and ability exists in the revaluation reserve in respect of the same class of to hold them for the foreseeable future or until maturity. assets, they are debited to the revaluation reserve.

(l) Assets Revaluation increases and revaluation decreases relating to All assets controlled by the Trust are reported in the balance sheet. individual assets within a class of Property, Plant and Equipment are offset against one another within that class but are not Cash and cash equivalents offset in respect of assets in different classes. Cash and cash equivalents, comprise cash on hand and cash at bank, deposits at call and those highly liquid investments with Other an original maturity of three months or less, which are held for Prepayments the purpose of meeting short term cash commitments rather Other non-financial assets include prepayments which represent than for investment purposes, and which are readily convertible payments in advance of receipts of goods and services or that to known amounts of cash and are subject to an insignificant risk part of expenditure made in one accounting period covering a of changes in value. term extending beyond that period.

Receivables (m) Liabilities Receivables consist of: Payables • statutory receivables, which include predominantly Payables consist of: amounts owing from the Victorian Government and GST • contractual payables, such as accounts payable, and input tax credits recoverable, and unearned income including deferred income from • contractual receivables, which include mainly debtors in concession notes. Accounts payable represent liabilities for relation to goods and services and accrued investment goods and services provided to the Trust prior to the end of income. the financial year that are unpaid, and arise when the Trust becomes obliged to make future payments in respect of the Receivables that are contractual are classified as financial purchase of those goods and services, and instruments. Statutory receivables are not classified as financial • statutory payables, such as goods and services tax and instruments. fringe benefits tax payables. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

22 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

Provisions This non-current LSL liability is measured at present value. Provisions are recognised when the Trust has a present Any gain or loss following revaluation of the present value of obligation, the future sacrifice of economic benefits is probable non-current LSL liability is recognised in the ‘net result from and the amount of the provision can be measured reliably. transactions’, except to the extent that a gain or loss arises due to changes in bond interest rates for which it is then recognised The amount recognised as a provision is the best estimate of the in the net result as another economic flow. consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding (iii) Termination benefits the obligation. Where a provision is measured using the cash flows Termination benefits are payable when employment is estimated to settle the present obligation, its carrying amount is terminated before the normal retirement date, or when an the present value of those cash flows, using a discount rate that employee accepts voluntary redundancy in exchange for reflects the time value of money and risks specific to the provision. these benefits. The Trust recognises termination benefits when it is demonstrably committed to either terminating Employee Benefits the employment of current employees according to a (i) Wages, salaries and annual leave detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer Liabilities for wages and salaries, including non-monetary made to encourage voluntary redundancy. Benefits falling benefits and annual leave are recognised in the provision due more than 12 months after balance sheet date are for employee benefits as ‘current liabilities’ because discounted to present value. the Trust does not have an unconditional right to defer settlements of these liabilities. Employee Benefit On-Costs Employee benefits on-costs such as Payroll Tax and workers Depending on the expectation of the timing of the compensation are recognised separately from the provision for settlement, liabilities for wages and salaries and annual employee benefits. leave are measured at: • undiscounted value – if the Trust expects to wholly (n) Income taxes settle within 12 months, or The Australian Taxation Office has deemed the Trust to be a • present value – if the Trust does not expect to wholly “Public Authority” within the terms of Section 50-25 of the Income settle within 12 months. Tax Assessment Act 1997 and therefore any income shall be exempt from income tax. The Trust is not subject to the National (ii) Long Service Leave Tax Equivalent Regime. No provisions for income taxes payable A liability for Long Service Leave (LSL) is recognised, and is have been raised. measured as the present value of expected future payments to be made in respect of services provided by employees (o) Contingent assets and contingent liabilities up to the reporting date. Consideration is given to expected Contingent assets and contingent liabilities are not recognised future wage and salary levels, experience of employee in the balance sheet, but are disclosed by way of a note and, if departures and period of service. All unconditional vested quantifiable, are measured at nominal value. LSL representing seven years or greater of continuous service is disclosed in accordance with AASB 101 (p) Cash flow statement Presentation of Financial Statements, as a current liability. For the purposes of the cash flow statement, cash comprises petty cash, cash floats, deposits in bank accounts, cash at bank Liability for LSL is recognised in the provision for employee and short-term deposits. benefits. (q) Rounding of Amounts • Current liability unconditional LSL (representing Amounts in the financial statements have been rounded to the seven or more years of continuous service for staff) nearest $1,000 unless otherwise stated. is disclosed as a current liability even where the Trust does not expect to settle the liability within 12 months (r) Contributed Capital because it will not have the unconditional right to defer Transfers from the Department of Economic Development, the settlement of the entitlement should an employee Jobs, Transport and Resources (Ecodev) that are in the nature take leave within 12 months. of contributions or distributions of capital have also been designated as contributed capital. Other transfers that are The components of this current LSL liability are measured at: in the nature of contributions or distributions have also been – present value – component that the Trust does not designated as contributions by owners. expect to settle within 12 months, and – nominal value – component that the Trust expects to (s) Intangible assets settle within 12 months. Intangible assets represent identifiable non-monetary assets without physical substance. Intangible assets are recognised • Non-current liability – conditional LSL (representing at cost. Cost incurred subsequent to initial acquisition are less than seven years of continuous service for capitalised when it is expected that additional future economic staff) is disclosed as a non-current liability. There is benefits will flow to the Trust.

an unconditional right to defer the settlement of the TRUST PARKS & OLYMPIC MELBOURNE entitlement until the employee has completed the requisite years of service. 23 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

(t) Leased assets provides additional relevant information to users, the net present All leased assets are classified as operating leases. values of significant individual projects are stated. These future expenditures cease to be disclosed as commitments once the Operating lease payments, including any contingent rentals, related liabilities are recognised in the balance sheet. are recognised as an expense in the Comprehensive Operating Statement on a straight line basis over the lease term, except (v) Australian Accounting Standards issued that are not yet where another systematic basis is more representative of the effective time pattern of the benefits derived from the use of the leased Certain new AASs have been published that are not mandatory for asset. The leased asset is not recognised in the balance sheet. the 30 June 2015 reporting period. The Department of Treasury and Finance assesses the impact of these new standards and (u) Commitments advises the Trust of their applicability and early adoption where Commitments for future expenditure include operating and applicable. capital commitments arising from contracts. These commitments are disclosed by way of a note (refer to Note 13 Commitments As at 30 June 2015, the following standard and interpretation had for expenditure) at their nominal value and inclusive of the GST been issued but was not mandatory for the financial year ending payable. In addition, where it is considered appropriate and 30 June 2015. The Trust has not early adopted this standard.

Standard/Interpretation Summary Applicable for annual Impact on public sector entity reporting periods financial statements beginning on

AASB 9 Financial The key changes include the Beginning The assessment has identified Instruments simplified requirements for the 1 Jan 2018 that the financial impact of classification and measurement available for sale (AFS) assets will

of financial assets, a new hedging now be reported through other accounting model and a revised comprehensive income (OCI) and no impairment loss model to recognise longer recycled to the profit and loss. impairment losses earlier, as While the prelimary assessment has opposed to the current approcah not identified any material impact that recognises impairment only arising from AASB 9, it will continue to when incurred. be monitored and assessed

AASB 15 Revenue from The core principle of AASB 15 1 Jan 2017 The changes in revenue recognition Contracts with Customers requires an entity to recognise requirements in AASB 15 may result revenue when the entity satisfies in changes to the timing and amount (Exposure Draft 263 a performance obligation by of revenue recorded in the financial – potential deferral to transferring a promised good or statements. The Standard will also 1 Jan 2018) service to a customer. require additional disclosures on service revenue and contract modifications. A potential impact will be the upfront recognition of revenue from licenses that cover multiple reporting periods. Revenue that was deferred and amortised over a period may now need to be recognised immediately as a transitional adjustment against the opening returned earnings if there are no former performance obligations outstanding. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

24 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

AASB 2014 1 Amendments Amends various AASs to reflect 1 Jan 2018 This amending standard will defer to Australian Accounting the AASB's decision to defer the the application period of AASB 9 Standards [Part E mandatory application date of to the 2018-19 reporting period Financial Instruments] AASB 9 to annual reporting periods in accordance with the transition beginning on or after 1 January requirements. 2018 as a consequence of Chapter 6 Hedge Accounting, and to amend reduced disclosure requirements.

AASB 2014 4 Amendments Amends AASB 116 Property, Plant 1 Jan 2016 The assessment has indicated that to Australian Accounting and Equipment and AASB 138 there is no expected impact as the Standards – Clarification Intangible Assets to: revenue-based method is not used of Acceptable Methods • establish the principle for for depreciation and amortisation. of Depreciation and the basis of depreciation and Amortisation amortisation as being the [AASB 116 & AASB 138] expected pattern of consumption of the future economic benefits of an asset, and • prohibit the use of revenue based methods to calculate the depreciation or amortisation of an asset, tangible or intangible, because revenue generally reflects the pattern of economic benefits that are generated from operating the business, rather than the consumption through the use of the asset.

There are a number of non-mandatory standards at 30 June 2015 not listed which have been assessed to have minimal or no impact to the Trust. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

25 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

2. INCOME FROM TRANSACTIONS

2015 2014 $’000 $’000

(a) Sales of goods and services Sale of goods 11,622 11,869 Rendering of services 63,635 67,466 Royalties 12,617 9,170 87,874 88,505

(b) Interest Interest on bank deposits 1,456 1,708 1,456 1,708

(c) Grants Other public bodies - 8 - 8

(d) Other income Delaware North Sinking Fund 455 443 Delaware North Capital Contribution 843 929 Tennis Australia Special Purpose Account 537 540 Cancelled event ticket income 226 - 2,061 1,912 MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

26 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

3. EXPENSES FROM TRANSACTIONS

2015 2014 $’000 $’000

(a) Cost of goods/sold distributed Venue hire 1,814 2,310 Catering 10,433 10,490 Other 2,197 1,723 14,444 14,523

(b) Purchase of services Administration 3,951 4,951 Event contractors 9,807 8,981 Utilities 2,580 2,619 Other 3,346 3,434 19,684 19,985

(c) Employee expenses Defined contribution superannuation expense 1,394 1,347 Termination benefits 48 73 Salaries, wages and Long Service Leave 15,915 16,407 17,357 17,827

(d) Other operating expenses Maintenance 5,390 4,634 Operating lease expenses 199 206 Purchase of supplies and consumables 990 967 Other 198 88 6,777 5,895

(e) Government financial transfers Payment to government for support of sport and recreation programs 3,000 3,000 3,000 3,000 MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

27 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

4. OTHER ECONOMIC FLOWS INCLUDED IN NET RESULT

2015 2014 $’000 $’000

(a) Net gain/(loss) on non-financial assets Net gain/(loss) on disposal of Property Plant and Equipment - 5 (including intangible assets) - 5

(b) Net gain/(loss) arising from revaluation of long service liability Net gain/(loss) arising from revaluation of long service liability 67 21 67 21

5. CASH AND CASH EQUIVALENTS

2015 2014 $’000 $’000

Cash floats held 104 78 Cash at bank 11,020 11,320 Term deposits 44,800 47,000 Bank deposits (restricted use) 2,186 1,779 Total cash and cash equivalents 58,110 60,177

6. RECEIVABLES 2015 2014 $’000 $’000

Current Contractual Other receivables (ii) 3,272 1,959 Provision for doubtful debts (iii) (5) (5) 3,267 1,954 Statutory Amount owing from Victorian Government (i) 302 52 Taxes recoverable 1,179 769 1,481 821

Total current receivables 4,748 2,775

(i) The amounts receivable from the Victorian Government represent monies owing from Victorian Government departments/agencies relating to contributions towards capital projects, tenancies and redevelopment costs. (ii) Receivables are carried at nominal amounts due. The average credit period on settling of monies owed is 7 days. No interest is charged on other receivables for outstanding balances. (iii) A provision has been made for amounts where collection is considered no longer probable, determined by reference to issues relating to individual accounts. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

28 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

2015 2014 $’000 $’000

(a) Movement in the allowance for doubtful debts

Balance at beginning of financial year 5 5 Balance at end of financial year 5 5

(b) Ageing analysis of receivables Please refer to Table 16.3 in Note 16 for ageing analysis of receivables.

(c) Nature and extent of risk arising from receivables Please refer to Note 16 for the nature and extent of credit risk arising from receivables.

7. PROPERTY, PLANT, EQUIPMENT AND INTANGIBLE ASSETS

2015 2014 $’000 $’000

Land at fair value 2012 (i) 387,600 387,600 387,600 387,600

Buildings and improvements at revaluation 2012 (ii) 458,158 458,158 Buildings at fair value 290,480 113,442 Less accumulated depreciation (44,750) (27,582) Written down value 703,888 544,018

Plant and equipment at revaluation 2012 (ii) 93,074 93,074 Plant and equipment at fair value 145,131 86,668 Less accumulated depreciation (40,330) (28,248) Written down value 197,875 151,494

Work in progress 37,021 209,369 37,021 209,369

Total Property, Plant and Equipment 1,411,464 1,348,311 Less accumulated depreciation (85,080) (55,830) Written down value 1,326,384 1,292,481

Intangible assets 1,606 1,532 Less accumulated amortisation (1,161) (962) Written down value 445 570

Written down value property, plant, equipment and intangible assets 1,326,829 1,293,051 MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

29 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

(i) Land at fair value 30 June 2012 Land was last independently revalued at 30 June 2012 as required by the Financial Management Act 1994 and was conducted by the Valuer-General Victoria. Due to restrictions on the usage of the land, a notional discount of 40% known as ‘Community Service Obligation’ has been applied to the Unrestricted Land Value.

(ii) Buildings and Improvements and Plant and Equipment at revaluation 2012 Buildings, Plant & Equipment was last independently revalued at June 30 2012 as required by the Financial Management Act 1994 and was conducted by Napier & Blakeley on behalf of the Valuer-General Victoria who have provided replacement cost and depreciated replacement cost on the inspected properties (Rod Laver Arena and surrounding grounds, Hisense Arena, AAMI Park and Westpac Centre). Works in Progress relating to the redevelopment have not been included in the revaluation.

RECONCILIATIONS Classification by ‘Public safety and environment’ purpose group – Movements in carrying amounts Land Buildings Plant & Intangibles Work in Total Equipment Progress $’000 $’000 $’000 $’000 $’000 $’000 Year ended 30 June 2015 Carrying amount at start of year 387,600 544,018 151,494 570 209,369 1,293,051 Additions - - 6,844 27 56,369 63,240 Transfers - 177,038 51,633 46 (228,717) - Disposals - - (13) - - (13) Revaluations/Impairments ------Depreciation expense - (17,168) (12,083) - - (29,251) Amortisation expense - - - (198) - (198) Carrying amount at end of year 387,600 703,888 197,875 445 37,021 1,326,829

Land Buildings Plant & Intangibles Work in Total Equipment Progress $’000 $’000 $’000 $’000 $’000 $’000 Year ended 30 June 2014 Carrying amount at start of year 387,600 576,502 98,395 661 143,215 1,206,373 Additions - - 1,920 47 112,045 114,012 Transfers - (18,946) 64,776 61 (45,891) - Disposals ------Revaluations/Impairments ------Depreciation expense - (13,538) (13,597) - - (27,135) Amortisation expense - - - (199) - (199) Carrying amount at end of year (i) 387,600 544,018 151,494 570 209,369 1,293,051

(i) Carrying amount at end of year Work in Progress at June 30 2014 contained $184.5m relating to Stage 1 of the Melbourne Park redevelopment (Margaret Court Arena redevelopment), which was completed in 2015.

Aggregate depreciation & amortisation recognised as an expense during the year

2015 2014 $'000 $'000 Buildings at fair value 17,16 8 13,538 Plant, equipment and vehicles at fair value 12,083 13,597 Intangibles at fair value 198 199 MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE 29,449 27,334 30 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

Fair value measurement hierarchy for assets

Carrying amount Fair Value Measurement at end of reporting period using: as at 30 June 2015 Level 1 Level 2 Level 3 $’000 $’000 $’000 $’000 Land at fair value Specialised land 387,600 - - 387,600 Total of land at fair value 387,600 - - 387,600 Buildings at fair value Specialised buildings 703,888 - - 703,888 Total of buildings at fair value 703,888 - - 703,888 Plant, equipment and vehicles at fair value Vehicles 298 - - 298 Plant and equipment 197,577 - - 197,577 Total of plant, equipment and vehicles at fair value 197,875 - - 197,875

Carrying amount Fair Value Measurement at end of reporting period using: as at 30 June 2014 Level 1 Level 2 Level 3 $’000 $’000 $’000 $’000 Land at fair value Specialised land 387,600 - - 387,600 Total of land at fair value 387,600 - - 387,600 Buildings at fair value Specialised buildings 544,018 - - 544,018 Total of buildings at fair value 544,018 - - 544,018 Plant, equipment and vehicles at fair value Vehicles 349 - - 349 Plant and equipment 151,145 - - 151,145 Total of plant, equipment and vehicles at fair value 151,494 - - 151,494

Specialised land and specialised buildings The market approach is also used for specialised land, although is adjusted for the Community Service Obligation (CSO) to reflect the specialised nature of the land being valued.

The CSO adjustment is a reflection of the valuer’s assessment of the impact of restrictions associated with an asset to the extent that is also equally applicable to market participants. This approach is in light of the highest and best use consideration required for fair value measurement, and takes into account the use of the asset that is physically possible, legally permissible, and financially feasible. As adjustments of CSO are considered as significant unobservable inputs, specialised land would be classified as Level 3 assets.

For the Trust’s majority of specialised buildings, the depreciated replacement cost method is used, adjusting for the associated depreciations. As depreciation adjustments are considered as significant, unobservable inputs in nature, specialised buildings are classified as Level 3 fair value measurements.

An independent valuation of the Trust’s specialised land and specialised buildings was performed by the Valuer-General Victoria. The effective date of the valuation is 30 June 2012. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

31 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

Vehicles Vehicles are valued using the depreciated replacement cost method. The Trust acquires new vehicles and at times disposes of them before the end of their economic life. The process of acquisition, use and disposal in the market is managed within the Trust. Depreciation rates are set to reflect the utilisation of the vehicles.

Plant and equipment Plant and equipment is held at fair value. When plant and equipment is specialised in use, such that it is rarely sold other than as part of a going concern, fair value is determined using the depreciated replacement cost method.

There were no changes in valuation techniques throughout the period to 30 June 2015.

For all assets measured at fair value, the current use is considered the highest and best use.

Reconciliation of level 3 fair value Specialised Plant and 2015 Specialised land buildings Vehicles equipment $'000 $'000 $'000 $'000 Opening balance 387,600 544,018 349 151,145 Purchases (sales) - 177,038 88 58,376 Transfers in (out) of - - - - Level 3

Gains or losses recognised in net result

Depreciation - (17,168) (139) (11,944) Impairment loss - - - - Subtotal - (17,168) (139) (11,944) Gains or losses recognised in other economic flows - other comprehensive income Revaluation - - - - Subtotal - - - - Closing balance 387,600 703,888 298 197,577 Unrealised gains/(losses) on non-financial assets - - - -

Specialised Plant and 2014 Specialised land buildings Vehicles equipment $'000 $'000 $'000 $'000 Opening balance 387,600 576,502 329 98,066 Purchases (sales) - (18,946) 155 66,542 Transfers in (out) of - - - - Level 3

Gains or losses recognised in net result

Depreciation - (13,538) (135) (13,462) Impairment loss - - - - Subtotal - (13,538) (135) (13,462) Gains or losses recognised in other economic flows - other comprehensive income Revaluation - - - - Subtotal - - - -

MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE Closing balance 387,600 544,018 349 151,145 Unrealised gains/(losses) on non-financial assets - - - - 32 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

Description of significant unobservable inputs to Level 3 valuations

Sensitivity of fair value measurement Range (weighted Range (weighted to changes Valuation Significant unobservable average) at 30 average) at 30 in significant Technique inputs June 2015 June 2014 unobservable inputs

Land Market value - Land price per square metre. $1,600 /m² $1,600 /m² A significant increase adjusted for - CSO obligation. (40%) (40%) or decrease in the CSO Community adjustment would result Service in a significantly lower Obligation (higher) fair value. (CSO)

Rod Laver Depreciated - Useful lives of structure / shell 50 - 70 years (60 50 - 70 years A significant increase / building fabric, site engineering or decrease in the Arena / replacement years) (60 years) cost services and central plant, fit-outs estimated useful life of Melbourne and trunk reticulated building the asset would result in Park systems. a significantly higher or lower valuation. - Replacement cost per m² and $2,300 - $2,500 / $2,300 - $2,500 / A significant increase per unit of plant. This reflects the m² ($2,430) m² ($2,430) or decrease in direct cost of replacing Rod Laver Arena/ cost per square metre Melbourne Park to its current adjustment would result condition taking into account its in a significantly higher age (27 years). or lower fair value.

Hisense Depreciated - Useful lives of structure / shell 50 - 70 years (60 50 - 70 years (60 A significant increase / building fabric, site engineering or decrease in the Arena replacement years) years) cost services and central plant, fit-outs estimated useful life of and trunk reticulated building the asset would result in systems. a significantly higher or lower valuation. - Replacement cost per m² and $3,800 - $4,200 / $3,800 - $4,200 / A significant increase per unit of plant. This reflects the m² ($4,000) m² ($4,000) or decrease in direct cost of replacing Hisense Arena cost per square metre to its current condition taking into adjustment would result account its age (15 years). in a significantly higher or lower fair value.

Margaret Depreciated - Useful lives of structure / shell 50 - 70 years (60 not applicable A significant increase / building fabric, site engineering or decrease in the Court Arena replacement years) cost services and central plant, fit-outs estimated useful life of and trunk reticulated building the asset would result in systems. a significantly higher or lower valuation.

- Replacement cost per m² and per $4,800 - $5,300 / not applicable A significant increase unit of plant. This reflects the cost m² ($5,100) or decrease in direct of replacing Margaret Court Arena cost per square metre to its current condition taking into adjustment would result account its age (1 year). in a significantly higher or lower fair value.

AAMI Park Depreciated - Useful lives of structure / shell 60 - 80 years (70 60 - 80 years A significant increase replacement / building fabric, site engineering years) (70 years) or decrease in the cost services and central plant, fit-outs estimated useful life of and trunk reticulated building the asset would result in systems. a significantly higher or lower valuation. - Replacement cost per m² and $4,800 - $5,300 / $4,800 - $5,300 / A significant increase per unit of plant. This reflects m² ($5,100) m² ($5,100) or decrease in direct the cost of replacing AAMI Park to cost per square metre its current condition taking into adjustment would result account its age (5 years). in a significantly higher TRUST PARKS & OLYMPIC MELBOURNE or lower fair value. 33 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

Westpac Depreciated - Useful lives of structure / shell 90 - 110 years 90 - 110 years A significant increase / building fabric, site engineering or decrease in the Centre replacement (100 years) (100 years) cost services and central plant, fit-outs estimated useful life of and trunk reticulated building the asset would result in systems. a significantly higher or lower valuation. - Replacement cost per m² and per $2,000 - $2,500 / $2,000 - $2,500 / A significant increase unit of plant. This reflects the cost m² ($2,300) m² ($2,300) or decrease in direct of replacing the Westpac Centre cost per square metre to its current condition taking into adjustment would result account its age (59 years). in a significantly higher or lower fair value.

Vehicles Depreciated - Cost per unit. $9,500-$10,500 $12,500-$13,500 A significant increase replacement per unit per unit or decrease in cost per cost unit would result in a ($10,000 per unit) ($12,900 per unit) significantly higher or lower valuation. - Useful life of vehicles. 4 - 6 years (5 4 - 6 years (5 A significant increase years) years) or decrease in direct cost per square metre adjustment would result in a significantly higher or lower fair value.

Plant and Depreciated - Cost per unit. $4,000-$6,000 $4,000-$6,000 A significant increase equipment replacement per unit per unit or decrease in cost per cost unit would result in a ($5,000 per unit) ($5,000 per unit) significantly higher or lower valuation. - Useful life of plant and 5 - 30 years (15 5 - 30 years (15 A significant increase equipment. years) years) or decrease in direct cost per square metre adjustment would result in a significantly higher or lower fair value. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

34 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

8. OTHER ASSETS 2015 2014 $’000 $’000

Current Prepayments 255 301 255 301 9. PAYABLES

2015 2014 $’000 $’000

Current Contractual Trade creditors (i) 150 6 Other payables 1,803 1,189 Accrued expenses 15,051 11,210 17,004 12,405 Statutory Taxes payable 64 66

Total current payables 17,068 12,471

(i)  The average credit period is 30 days. No interest is charged on other payables for the first 30 days from the date of invoice. Payables are generally paid within the payment period thereby avoiding any interest charges that may be incurred on late payments.

(a) Maturity analysis of payables Please refer to Table 16.5 in Note 16 for the ageing analysis of payables.

(b) Nature and extent of risk arising from payables Please refer to Note 16 for the nature and extent of risks arising from payables. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

35 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

10. PROVISIONS 2015 2014 $’000 $’000

Current provisions Employee benefits

Annual Leave Unconditional and expected to be settled within 12 months (i) 292 279 Unconditional and expected to be settled after 12 months (ii) 307 294

Long Service Leave Unconditional and expected to be settled within 12 months (i) 794 773 Unconditional and expected to be settled after 12 months (ii) 855 725 2,248 2,071

Provisions for on-costs Unconditional and expected to be settled within 12 months (i) 182 175 Unconditional and expected to be settled after 12 months (ii) 194 170 376 345

Total current provisions 2,624 2,416

Non-current provisions Employee benefits Long Service Leave (ii) 385 426 On-costs 61 67

Total non-current provisions 446 493

Total provisions 3,070 2,909

(i) The amounts disclosed are nominal amounts. (ii) The amounts disclosed are discounted to present values. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

36 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

(a) Employee benefits and on-costs 2015 2014 $’000 $’000

Current employee benefits

Annual Leave 599 573 Long Service Leave 1,649 1,498

Non-current employee benefits Long Service Leave 385 426

Total employee benefits 2,633 2,497

Current on-costs 376 345 Non-current on-costs 61 67 Total on-costs 437 412

Total employee benefits and on-costs 3,070 2,909

(b) Movement in provisions On-costs 2015 $'000

Opening Balance 412 Additional provisions recognised 184 Reductions arising from payments/other sacrifices of future economic benefits (143) Reductions resulting from re-measurement or settlement without cost (27) Unwind of discount and effect of changes in the discount rate 11

Closing Balance 437

Current 376 Non-current 61

Closing Balance 437

11. OTHER LIABILITIES 2015 2014 $’000 $’000

Income received in advance 11,606 11,860 Ticket sales for future events held in trust 46,589 42,972 58,195 54,832 TRUST PARKS & OLYMPIC MELBOURNE 37 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

12. LEASES

Operating lease payables Leasing arrangements Operating lease payables relate to plant and office equipment with lease terms between one and two years.

Non-cancellable operating leases Total lease expenditure contracted for at balance date but not provided for in the accounts:

2015 2014 $’000 $’000

Payable no later than one year 84 165 Later than one year and not later than five years 4 88 88 253

Operating Lease Receivables

Leasing arrangements Operating lease receivables relate to 11 tenancies (12 in 2013-14) within the Trust’s precinct with lease terms between one and 21 years.

2015 2014 $’000 $’000

Receivable no later than one year 4,007 4,099 Later than one year and not later than five years 16,315 13,881 Later than five years 35,773 39,828 56,095 57,8 0 8

13. COMMITMENTS FOR EXPENDITURE The following commitments have not been recognised as liabilities in the financial statements. All amounts shown in the commitments note are nominal amounts inclusive of GST.

(a) Capital expenditure commitments The Trust has $25.6m in commitments for capital works relating to Stage 2 of the Melbourne Park redevelopment project at the date of this report (2014: $34.9m). All other capital commitments relating to the Melbourne Park redevelopment project sit with Major Project Victoria, which is the project manager.

2015 2014 $’000 $’000

Payable no later than one year 25,647 32,743 Later than one year and not later than five years - 4,173 25,647 36,916 MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

38 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

(b) Operating expenditure commitments The Trust has $0.9m in commitments for operating expenditure relating to the supply of service agreements for mechanical services and lifts at the date of this report (2014: $1.5m).

2015 2014 $’000 $’000

Payable no later than one year 657 652 Later than one year and not later than five years 237 894 894 1,546

(c) Lease commitments Non-cancellable operating lease commitments are disclosed in Note 12 of the financial statements.

14. CONTINGENT LIABILITIES The Trust has no contingent liabilities at the date of this report.

15.CONTINGENT ASSETS There is a contingent asset in relation to Collingwood Football Club’s ground lease at Olympic Park. In December 2013, the Collingwood Football Club was granted permission by the Trust for the construction of the Olympic Park Community Facility on the Trust’s land. Ownership of improvements to the land and any buildings will transfer to the Trust upon expiration of the current lease on 31 May 2033.

16. FINANCIAL INSTRUMENTS

(a) Significant accounting policies The Trust’s principal financial instruments comprise: • cash assets • term deposits • receivables (excluding statutory receivables), and • payables (excluding statutory payables). Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement, and the basis on which income and expenses are recognised, with respect to each class of financial asset, financial liability and equity instrument are disclosed in Note 1 to the financial statements. The main purpose in holding financial instruments is to prudentially manage the Trust’s financial risks in the government policy parameters. The Trust’s main financial risks include credit risk, liquidity risk and interest rate risk. The Trust manages these risks in accordance with its Treasury Policy. Primary responsibility for the identification and management of financial risks rests with the Finance, Audit and Risk Committee of the Trust. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

39 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

(b) Table 16.1: Categorisation of financial instruments

Note Contractual Contractual Total financial financial assets - loans liablilities at and receivables amortised cost $'000 $'000 $'000 Contractual financial assets Cash and cash equivalents 5 13,310 - 13,310 Cash held on behalf of customers 46,589 - 46,589 Total cash 59,899 - 59,899

Receivables: (i) Other receivables 6 3,272 - 3,272 Investments and other contractual financial assets: Term deposits 5 44,800 - 44,800

Total contractual financial assets 107,971 - 107,971

Contractual financial liablities

Payables: (i) Supplies and services 9 - 17,004 17,004 Other payables 11 - 46,589 46,589

Total contractual financial liabilities - 63,593 63,593

(i) The amount of receivables and payables disclosed exclude statutory amounts (e.g.: amounts owing from Victorian Government and GST input tax credit recoverable and taxes payable) MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

40 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

(c) Credit risk exposure Credit risk arises when there is the possibility of the Trust’s debtors defaulting on their contractual obligations resulting in financial loss to the Trust. The Trust measures credit risk on a fair value basis and monitors risk on a regular basis.

The Trust does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The Trust has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral or credit enhancements where appropriate, as a means of mitigating the risk of financial loss from defaults. Credit risk in trade receivables is managed by payment terms of seven days and sound debt collection policies and procedures.

In addition, the Trust does not engage in any hedging for its financial assets. The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

Provision of impairment for financial assets is calculated based on past experience, and current and expected changes in client credit ratings. The carrying amount of financial assets recorded in the Financial Report, net of any allowances for losses, represents the Trust’s maximum exposure to credit risk without taking account of the value of any collateral obtained.

Financial assets that are either past due or impaired

Currently the Trust does not hold any collateral as security nor credit enhancements relating to any of its financial assets.

As at the reporting date, there is no event to indicate that any of the financial assets are impaired.

There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired and they are stated at the carrying amounts as indicated. The following table discloses the ageing only of financial assets that are past due but not impaired:

Table 16.2: Credit quality of contractual financial assets that are neither past due nor impaired

Government agencies Other (min triple-B 2015 (triple-A credit rating) credit rating) Total Cash and cash equivalents 8,229 5,081 13,310 Cash held on behalf of customers 445 46,144 46,589 Receivables (i) - 3,272 3,272 Investments and other financial assets 42,800 2,000 44,800 Total contractual financial assets 51,474 56,497 107,971

2014 Cash and cash equivalents 9,048 4,129 13,177 Cash held on behalf of customers 29,599 13,373 42,972 Receivables (i) - 1,959 1,959 Investments and other financial assets 45,000 2,000 47,000 Total contractual financial assets 83,647 21,461 105,108 (i) The amount of receivables and payables disclosed exclude statutory amounts (eg, amounts owing from Victorian Government and GST input tax credit recoverable and taxes payable). MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

41 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

Table 16.3: Ageing analysis of contractual financial assets

Not past Carrying due & not Past due but not impaired amount impaired Less 3 1-3 1-5 than 1 months months years month - 1 year

30 June 2015 $'000 $'000 $'000 $'000 $'000 $'000 Receivables (i) 3,272 2,906 349 17 - - 3,272 2,906 349 17 - -

30 June 2014 $'000 $'000 $'000 $'000 $'000 $'000 Receivables (i) 1,959 1,773 185 1 - - 1,959 1,773 185 1 - -

(i) Ageing analysis of financial assets excludes statutory financial assets (eg, amounts owing from Victorian Government and GST input tax credits recoverable).

(d) Liquidity risk Liquidity risk arises when the Trust is unable to meet its financial obligations as they fall due. The Trust operates under the government's fair payments policy of settling financial obligations within 30 days and in the event of a dispute, makes payments within 30 days from the date of resolution. It also continuously manages risk through monitoring future cash flows and maturities planning to ensure adequate holding of high quality liquid assets and dealing in highly liquid markets. The Trust’s exposure to liquidity risk is deemed insignificant based on prior periods’ data and current assessment of risk. Cash for unexpected events could be sourced from early liquidation of cash held on deposit if required. Maximum exposure to liquidity risk is the carrying amounts of financial liabilities. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

42 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

Table 16.4: Interest rate exposure of financial assets

Weighted average Carrying Interest rate exposure interest amount rate

Fixed Variable Non- interest interest interest rate rate bearing 30 June 2015 % $’000 $’000 $’000 $’000 Cash and cash equivalents: Cash floats held 104 - - 104 Cash at bank 1.92% 11,020 - 11,020 - Term deposits 2.19% 44,800 - 44,800 - Bank deposits (restricted use) 1.93% 2,186 - 2,186 - Cash at bank (ticket sales for future events - not available for use) 2.90% 46,589 - 46,589 -

Receivables (i) 3,272 - - 3,272 107,971 - 104,595 3,376

30 June 2014 % $'000 $'000 $'000 $'000 Cash and cash equivalents: Cash floats held 78 - - 78 Cash at bank 2.16% 11,320 - 11,320 - Term deposits 2.73% 47,000 - 47,000 - Bank deposits (restricted use) 2.44% 1,779 - 1,779 - Cash at bank (ticket sales for future events - not available for use) 2.90% 42,972 - 42,972 -

Receivables (i) 1,959 - - 1,959 105,108 - 103,071 2,037

(i) Ageing analysis of financial assets excludes statutory financial assets (eg, amounts owing from Victorian Government and GST input tax credits recoverable). MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

43 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

Table 16.5: Interest rate exposure and maturity analysis of financial liabilities Carrying Interest rate Nominal Maturity dates (i) amount exposure amount Variable Non- Less 1-3 3 1-5 interest interest than 1 months months years rate bearing month - 1 year $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 30 June 2015 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Payables (ii) 17,004 - 17,004 17,004 17,004 - - - Other 46,589 - 46,589 46,589 3,694 4,590 38,305 - 63,593 - 63,593 63,593 20,698 4,590 38,305 -

30 June 2014 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Payables (ii) 12,405 - 12,405 12,405 12,405 - - - Other 42,972 - 42,972 42,972 8,876 13,379 20,717 - 55,377 - 55,377 55,377 21,281 13,379 20,717 -

(i) The amounts disclosed are the contractual undiscounted cash flows of each class of financial liabilities. (ii) The carrying amounts disclosed exclude statutory amounts (eg, amounts payable to Victorian Government and taxes payable).

(e) Market risk The Trust’s exposures to market risk, including interest rate risk and foreign currency are insignificant. Objectives, policies and processes used to manage each of these risks are disclosed in the paragraphs below.

Foreign currency risk The Trust is exposed to insignificant foreign currency risk through its payables relating to purchases of supplies and consumables from overseas, due to the limited amount of purchases denominated in foreign currencies and the short timeframe between commitment and settlement.

The Trust’s exposure to foreign currency risk is set out in Table 16.6.

Interest rate risk The Trust is exposed to insignificant interest rate risk as it does not have any loans. Additionally, monies on term deposits are with financial institutions with high credit ratings.

The Trust’s exposure to interest rate risk is set out in Table 16.6. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

44 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

Table 16.6: Market risk Foreign exchange Interest rate risk risk -1% +1% -10% / 10% (100 basis points) (100 basis points) Carrying Profit Equity Profit Equity Profit Equity amount 30 June 2015 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Financial Assets: Cash and cash equivalents 13,310 - - (133) (133) 133 133 Cash held on behalf of 46,589 - - (466) (466) 466 466 customers

Investments and other 44,800 - - (448) (448) 448 448 contractual financial assets

Total Impact - - (1,047) (1,047) 1,047 1,047

30 June 2014 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Contractual financial assets: Cash and cash equivalents 13,177 - - (132) (132) 132 132 Cash held on behalf of customers 42,972 - - (430) (430) 430 430

Investments and other contractual financial assets 47,000 - - (470) (470) 470 470

Total Impact - - (1,031) (1,031) 1,031 1,031 MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

45 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

(f) Fair value The Trust considers that the carrying amount of financial assets and financial liabilities recorded in the financial report to be a fair approximation of their fair values, because of the short-term nature of the financial instruments and the expectation that they will be paid in full.

17. CASH FLOW INFORMATION

(a) Reconciliation of cash and cash equivalents

2015 2014 $’000 $’000

Total cash and cash equivalents disclosed in note 5 58,110 60,177 Balance as per cash flow statement 58,110 60,177

(b) Reconciliation of net result for the period to net cash flows from operating activities 2015 2014 $’000 $’000

Net Result for the financial year 745 3,596

Add/(less) non-cash movements: Depreciation and amortisation of non-current assets 29,451 27,334 Net gain/(loss) on non-financial assets - (5)

Movements in assets and liabilities: (Increase)/decrease in current receivables (1,972) (617) (Increase)/decrease in other current assets 46 (101) (Decrease)/increase in current payables 5,234 680 (Decrease)/increase in current provisions 208 120 (Decrease)/increase in other current liabilities (256) (1,765) (Decrease)/increase in non-current provisions (47) 99 Net cash flows from/(used in) operating activities 33,409 29,340 MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

46 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

18. RESPONSIBLE PERSONS In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994, the following disclosures are made regarding responsible persons for the reporting period.

Names The persons who held the positions of Ministers and Accountable Officers for the Trust are as follows:

Premier The Honourable Denis Napthine, Premier of Victoria (to 03/12/14) The Honourable Daniel Andrews, Premier of Victoria (from 04/12/14)

Minister The Honourable Damian Drum, Minister for Sport and Recreation (to 03/12/14) The Honourable John Eren, Minister for Sport, Minister for Tourism and Major Events and Minister for Veterans Affairs (from 04/12/14)

Trust Mr Russell Caplan (Chairman) Ms Deborah Beale (to 12/11/14) Mr Stephen Healy Ms Sharelle McMahon Ms Diana Nicholson Mr Kenneth Roche, AO Mr Raymond Smith Ms Mikaela Stafrace (from 22/07/14) Mr David Stobart Mr Scott Tanner

Trust Secretary and Chief Executive Officer Mr Brian Morris

Remuneration Total remuneration (including incentive payments) received or receivable by the Accountable Officer in connection with the management of the Trust during the reporting period was in the range of $450,000 - $459,999 ($420,000 - $429,999 in 2013-14).

Trustees did not receive any remuneration from the Trust during the financial year. (2013-14: $0).

Related party transactions Commercial dealings were undertaken during the reporting period with Tennis Australia and Tennis Victoria, both of which have representatives holding positions as Trustees on the Melbourne and Olympic Parks Trust.

During 2014-15, the Trust invoiced Tennis Australia $30,077,095 ($28,432,448 in 2013-14) and as at 30 June 2015, Tennis Australia owed the Trust $640,400 ($560,764 at 30 June 2014). Mr Stephen Healy and Mr Scott Tanner hold positions on the Melbourne and Olympic Parks Trust and also hold positions at Tennis Australia (President and Director respectively). Tennis Australia is the promoter of the Australian Open event, runs a court hire business on the Trust’s premises and rents office space from the Trust.

During 2014-15, the Trust invoiced Tennis Victoria $199,062 ($132,343 in 2013-14) and at 30 June 2015, Tennis Victoria owed the Trust $11,731 ($0 at 30 June 2014). Mr David Stobart holds a position on the Melbourne and Olympic Parks Trust and also holds the position of President of Tennis Victoria. Tennis Victoria rents office space on the Trust’s premises and purchase related services from the Trust.

There are no other receivable amounts or loans outstanding in relation to related parties, as at 30 June 2015. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

47 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

19. REMUNERATION OF EXECUTIVES AND PAYMENTS TO OTHER PERSONNEL (a) Remuneration of executives The number of Executive Officers and employees with management responsibilities, other than the Accountable Officer, and their total remuneration during the reporting period are shown in the first two columns in the tables below in their relevant income bands. The base remuneration of is shown in the third column and a comparative to the prior year in the fourth column. Base remuneration is exclusive of bonus payments, long service leave payments, redundancy payments and retirement benefits.

Income band Total Remuneration Base Remuneration 2015 2014 2015 2014 No. No. No. No. < $99,999 - - - 1 $110,000 - $119,999 1 1 2 - $120,000 - $129,999 1 - - - $140,000 - $149,999 - 3 - 3 $150,000 - $159,999 3 2 3 2 $160,000 - $169,999 2 - 2 - $220,000 - $229,999 1 1 1 1 $230,000 - $239,999 1 - 1 - $240,000 - $249,999 - 1 - 1 $250,000 - $259,999 1 - 1 - $240,000 - $249,999 - 1 - 1 $250,000 - $259,999 1 - 1 - Total numbers of executives 10 8 10 8 Total annualised employee equivalents (i) 10 8 10 8

$’000 $’000 $’000 $’000 Total remuneration 1,742 1,345 1,736 1,279 Note: (i) Annualised employee equivalent is based on paid working hour of 38 ordinary hours per week over the 52 weeks for a reporting period. (b) Remuneration of employees with management responsibilities

Income band Total Remuneration Base Remuneration 2015 2014 2015 2014 No. No. No. No. < $99,999 - - - 1 $100,000 - $109,999 4 4 4 4 $110,000 - $119,999 4 1 4 2 $120,000 - $129,999 1 3 1 2 $130,000 - $139,999 3 3 3 3 $140,000 - $149,999 1 - 1 - $150,000 - $159,999 - 1 - - Total numbers 13 12 13 12

$’000 $’000 $’000 $’000 Total remuneration 1,559 1,480 1,555 1,408 MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

48 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

(c) Payments to other personnel (i.e. contractors with significant management responsibilities) The following disclosures are made in relation to other personnel of Melbourne and Olympic Parks Trust, i.e. contractors charged with significant management responsibilities. Payments have been made to a contractor with significant management responsibilities, which are disclosed in the $10,000 expense band. This contractor is responsible for planning, directing or controlling, directly or indirectly, the Trust’s activities. The change in the total expenses from 2014 to 2015 was driven by a contractor with significant management responsibilities being formally employed by the Trust during the 2015 reporting period.

Expense band Total Expenses (exclusive of GST) 2015 2014 No. No. $100,000 - $109,999 - 1 $170,000 - $179,999 1 - $240,000 - $249,999 - 1

Total numbers 1 2

$’000 $’000

Total expenses (exclusive of GST) 172 345

20. REMUNERATION OF AUDITORS Audit fees paid or payable to the Victorian Auditor-General’s Office for the audit of the Trust’s financial report and KPMG for the Trust’s internal audit program: 2015 2014 $’000 $’000

Audit or review of the financial statements 56 54 Internal audit services 81 105 137 159 MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

49 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

21. EMPLOYEE SUPERANNUATION Superannuation contributions for the reporting period are included as part of employee benefits and on-costs in the comprehensive operating statement of the Trust. The name and details of the major employee superannuation funds and contributions (above $10,000) made by the Trust during the reporting period are as follows: 2015 2014 $’000 $’000 AustralianSuper 860 847 HOSTPLUS 105 89 NAVIGATOR Super Solutions 78 104 CARE Super 35 22 VicSuper Pty Ltd 34 36 RETAIL Employees Superannuation Pty Ltd 34 29 Colonial First State First Choice Personal Super 24 16 First State Super 22 22 OnePath MasterFund 20 6 AMP Flexible Lifetime Super (901245955) 16 12 BT Super for Life 14 5 C+BUS 14 15 Optimum Corporate Super 13 2 Others 126 144 Emergency Services Superannuation Scheme 11 4 Others 125 139 TOTAL 1,394 1,347

At the reporting date, superannuation contributions outstanding were $0 (2014 $0). 22. SUBSEQUENT EVENTS No material or significant events occurred after the reporting date. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

50 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

23. GLOSSARY OF TERMS Financial liability A financial liability is any liability that is: Cash and cash equivalents (a) a contractual or statutory obligation: Cash and cash equivalents is petty cash, cash floats, deposits in bank accounts, bank overdrafts and short-term deposits (i) to deliver cash or another financial asset to (up to 90 days). another entity, or Comprehensive result (ii) to exchange financial assets or financial liabilities Total comprehensive result is the change in equity for the period with another entity under conditions that are other than changes arising from transactions with owners. It is the potentially unfavourable to the entity, or aggregate of net result and other non-owner changes in equity. (b) a contract that will or may be settled in the entity’s own equity instruments and is: Commitments Commitments include those operating, capital and other (i) a non-derivative for which the entity is or may be outsourcing commitments arising from non cancellable obliged to deliver a variable number of the entity’s contractual or statutory sources. own equity instruments, or (ii) a derivative that will or may be settled other than Delaware North Sinking Fund by the exchange of a fixed amount of cash or Refers to an account managed jointly by the Trust and the Trust’s another financial asset for a fixed number of the caterer (Delaware North) and is used for the replacement or entity’s own equity instruments. For this purpose improvement of catering equipment or infrastructure. the entity’s own equity instruments do not include instruments that are themselves contracts for the Employee benefits expense future receipt or delivery of the entity’s own equity Employee benefits expenses include all costs related to instruments. employment including wages and salaries, leave entitlements, redundancy payments, defined benefits superannuation plans, Financial statements and defined contribution superannuation plans. Depending on the context of the sentence where the term ‘financial statements’ is used, it may include only the main financial Financial asset statements (i.e. Comprehensive Operating Statement, balance A financial asset is any asset that is: sheet, cash flow statements, and statement of changes in equity); (a) cash and cash equivalents, or it may also be used to replace the old term ‘financial report’ under the revised AASB 101 (September 2007), which means it (b) an equity instrument of another entity, may include the main financial statements and the notes. (c) a contractual or statutory right: Grants • to receive cash or another financial asset from Grants can be paid as general purpose grants which refer to another entity, or grants that are not subject to conditions regarding their use. Alternatively, they may be paid as specific purpose grants which • to exchange financial assets or financial liabilities with are paid for a particular purpose and/or have conditions attached another entity under conditions that are potentially regarding their use. favourable to the entity, or (d) a contract that will or may be settled in the entity’s Intangible assets own equity instruments and is: Intangible assets represent identifiable non monetary assets without physical substance. • a non derivative for which the entity is or may be obliged to receive a variable number of the entity’s Interest expense own equity instruments, or Costs incurred in connection with the borrowing of funds interest • a derivative that will or may be settled other than by expenses include interest on bank overdrafts and short term and the exchange of a fixed amount of cash or another long term borrowings, amortisation of discounts or premiums financial asset for a fixed number of the entity’s own relating to borrowings, interest component of finance leases equity instruments. repayments, and the increase in financial liabilities and non employee provisions due to the unwinding of discounts to reflect Financial instrument the passage of time. A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity Interest income instrument of another entity. Financial assets or liabilities that Interest income includes interest received on bank term are not contractual (such as statutory receivables or payables deposits, interest from investments and other interest received. that arise as a result of statutory requirements imposed by governments) are not financial instruments. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

51 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

Net acquisition of non-financial assets (from transactions) Sales of goods and services Purchases (and other acquisitions) of non financial assets less Refers to revenue from direct provision of goods and services sales (or disposals) of non financial assets less depreciation and includes fees and charges for services rendered and sales of plus changes in inventories and other movements in non goods and services. financial assets. It includes only those increases or decreases in non financial assets resulting from transactions and therefore Tennis Australia Special Purpose Account excludes write-offs, impairment write-downs and revaluations. Refers to a separate account established by the Melbourne and Olympic Parks Trust for tennis-related capital improvements to Net result Melbourne Park. Net result is a measure of financial performance of the operations for the period. It is the net result of items of income, Transactions gains and expenses (including losses) recognised for the period, Transactions are those economic flows that interact between two excluding those that are classified as other non owner changes entities by mutual agreement. in equity. Style conventions Net result from transactions (net operating balance) Figures in the tables and in the text have been rounded. Net result from transactions or net operating balance is a Discrepancies in tables between totals and sums of components key fiscal aggregate and is income from transactions minus reflect rounding. Percentage variations in all tables are based on expenses from transactions. It is a summary measure of the the underlying unrounded amounts. ongoing sustainability of operations. It excludes gains and losses resulting from changes in price levels and other changes in the The notion used in the tables is as follows: volume of assets. It is the component of the change in net worth - zero, or rounded to zero that is due to transactions. (xxx) negative numbers 20xx year Non-financial assets 20xx-xx year period Non financial assets are all assets that are not ‘financial assets’. Other economic flows included in net result Other economic flows included in net result are changes in the volume or value of an asset or liability that do not result from transactions. It includes: • gains and losses from disposals, revaluations and impairments of non-financial physical and intangible assets, and • gains and losses arising from revaluation of long service liability. Other economic flows – other comprehensive income Other economic flows – other comprehensive income comprises items (including reclassification adjustments) that are not recognised in net result as required or permitted by other Australian Accounting Standards. The components of other economic flows other comprehensive income include: • changes in physical asset revaluation surplus. Payables Includes short and long term trade debt and accounts payable, grants, taxes and interest payable. Receivables Includes amounts owing from government through appropriation receivable, short and long term trade credit and accounts receivable, accrued investment income, grants, taxes and interest receivable. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

52 CERTIFICATION

In accordance with a resolution of the members of the Melbourne and Olympic Parks Trust and in our opinion: (a) the accompanying financial report of the Trust, comprising operating statement, balance sheet, cash flow statement and statement of changes in equity read in conjunction with the notes thereto present fairly the financial operations of the Trust for the year ended 30 June 2015 and the State of Affairs of the Trust on that date; (b) these accounts have been prepared in accordance with the Financial Management Act 1994, Australian Accounting Standards and other mandatory professional reporting requirements; and (c) at the date of this statement we are not aware of any circumstances which would render any particulars included in the statement to be misleading or inaccurate.

Russell Caplan Member of Responsible Body Chairman Melbourne and Olympic Parks Trust

Brian Morris Accountable Officer Chief Executive Officer Melbourne and Olympic Parks Trust

Travis Mardling Chief Financial Officer Melbourne and Olympic Parks Trust

Melbourne 7 September 2015 MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

53 INDEPENDENT AUDIT REPORT MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

54 INDEPENDENT AUDIT REPORT MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

55 ADMINISTRATIVE REPORTING REQUIREMENTS

Competitive Neutrality Policy compliance Disability Act (2006) The Trust regularly reviews whether its activities are subject to M&OP is committed to providing equitable, dignified access to the requirements of the National Competition Policy, including goods and services to premises used by the public. A key focus compliance with the requirements of the policy statement of the $700 million redevelopment of Melbourne Park has been ‘Competitive Neutrality Policy Victoria’, and takes necessary the inclusion of universal design principles. This proactive work action to implement competitive neutrality measures where ensures the design of new buildings or upgraded infrastructure required. are centred around improved access for all Victorians. Throughout the course of this financial year, M&OP continued Statement of compliance with the to implement its Diversity and Inclusion Plan, setting short, medium and long term goals to improve the guest experience for Building Act 1993. people with a disability. A copy of the plan is available at www.mopt.com.au The Trust complies with the relevant guidelines, pursuant to Section 220 of the Building Act 1993. Occupational Health and Safety (OH&S) Implementation of the Victorian Industry M&OP is committed to providing and maintaining an environment Participation Policy that is safe for all who visit and work within the precinct or who may be affected by its business operations. M&OP aspires to In October 2003, the Victorian Parliament passed the Victorian eliminate risks to health and safety, and where elimination is not Industry Participation Policy Act 2003 which required public reasonably achievable, to reduce risks to health and safety so bodies and departments to report on the implementation of far as is reasonably practicable. As part of delivering world class the Victorian Industry Participation Policy (VIPP). The Trust is customer experience, M&OP is commited to the safety of the required to apply the VIPP where Trust funding exceeds $3 million multitude of guests who step into the precinct grounds each year. in metropolitan Melbourne and $1 million in regional Victoria. M&OP maintained AS4801 accreditation for Safety Management There were no projects undertaken by the Trust in 2014/15 to Systems (AS4801). This achievement is underpinned by M&OP’s which the VIPP applied. leadership-driven safety culture, which encourages collaboration, consultation and ownership throughout all of the organisation levels. M&OP’s commitment to continuous improvement, Financial and other information retained is reflected in its updated Health and Safety Policy, which by the accountable officer highlights the accountabilities shared across the workforce. The importance of Toolbox meetings continues to be reinforced with Relevant information detailed in Financial Reporting Direction 177 meetings held across the precinct during the financial year. (FRD) 22D ‘Standard Disclosures in the Report of Operations’ In addition, 282 workplace inspections were carried out, which under the Financial Management Act 1994 Section 3 is retained ensures a proactive approach to safety is adopted. by the Trust’s Accountable Officer and is available on request, subject to the Freedom of Information Act 1982. Key achievements for the year included a 38 per cent improvement in the number of injuries sustained across the precinct compared to 13/14 results, which includes a 36 per Protected Disclosure Act 2012 cent reduction in guest injuries. An organisation-wide training program targeted at incident, hazard and injury management Melbourne & Olympic Parks is committed to the aims and was completed. A strong consultative approach to safety is objectives of the Protected Disclosure Act. It recognises the value reflected in Toolbox meetings, workplace inspections, audits, of transparency and accountability in its administrative and training, hazard reporting and incident investigation. An engaged management practices, and supports the making of disclosures OHS Committee have also helped produce positive OH&S that reveal improper conduct. It does not tolerate improper conduct outcomes this year. by the organisation, its employees, officers or members, nor the taking of detrimental action in reprisal against those who come A full copy of the Trust’s OHS policy is available on M&OP’s forward to disclose such conduct. According to the Independent website – www.mopt.com.au Broad-based Anti-corruption Commission (“IBAC”), M&OP is not permitted to receive disclosures made under the Act. Therefore, those wishing to make a disclosure about M&OP, its officers, members or employees, will need to make that disclosure directly to the IBAC. If M&OP believes a disclosure may be a protected disclosure made in accordance with the Act, it will ask for that disclosure to be made to the IBAC. The IBAC will deal with the disclosure. Procedures in relation to the Protected Disclosure Act 2012 are available on the M&OP website. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

56 ADMINISTRATIVE REPORTING REQUIREMENTS

Statement of Workforce Data Melbourne and Olympic Parks Trust employed 106 full time and contractors provided by our key partners also contribute to part time staff as at 30 June 2015 (2014:100). The number M&OP’s workforce (TechGuard Security, Capricorn Stages and of Full Time Equivalent (FTE) staff at 30 June 2015 was 100 Rigging, Delaware North, O’Brien Catering Group Australia and (2014:96). The number of fixed term and casual employees Ticketek). at 30 June 2015 was 706 (2014:904) and a large number of The breakdown of staff is as follows:

Fixed Term Employees Full time Part time FTE & Casual (Headcount) (Headcount) (Headcount) Employees June 2015 106 88 18 100 706 June 2014 100 84 16 96 904

June 2015 June 2014

Fixed Term Fixed Term Employees Employee FTE & Casual FTE & Casual (Headcount) (Headcount) Employees Employees Accountable Officer 1 1 1 1 1 1 Executive Officers 6 6 6 5 5 4 Administration Staff 99 93 699 94 90 899 Males 64 63 360 56 55 457 Females 42 37 346 44 41 447

Freedom of information The Freedom of Information Act 1982 allows the public a right of access to documents held by Melbourne and Olympic Parks Trust. For the 12 months ending June 2015, the Trust received one FOI request. The Chief Financial Officer is the contact officer in relation to all Freedom of Information requests. Access to documents may be obtained through written request to the Chief Financial Officer, addressed as follows: Freedom of Information Melbourne and Olympic Parks Trust GPO Box 4611, Melbourne VIC 3001 Requests can also be lodged via email to [email protected]. All requests must be accompanied by the application fee ($27.20 from 1 July 2015 but may be waived in certain circumstances) and must provide such information concerning the document as is reasonably necessary to enable M&OP to identify the document. Charges may also apply once documents have been processed and a decision on access is made; for example photocopying and search and retrieval charges. MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

57 ADMINISTRATIVE REPORTING REQUIREMENTS

Consultants

Details of consultancies over $10,000 Consultant Purpose of consultancy Start date End date Total expenditure Future 2014/15 commitments (excluding GST) Iouriv Water Advice in relation to AAMI Park rainwater April 2015 June 2015 $25,750 Nil Solutions harvesting Details of consultancies less than $10,000 Number: 3 Total Amount: $11,000

Gosch’s Paddock Gosch’s Paddock remained open at all times throughout the 2014/15 year.

Risk Attestation Statement I, Chair of the Trust, certify that the Melbourne and Olympic Parks Trust has risk management processes in place consistent with the Australian/New Zealand Risk Management Standard (AS/NZS ISO 31000:2009) and an internal control system is in place that enables the executive to understand, manage and satisfactorily control risk exposures. The Trust verifies this assurance and that the risk profile of the Melbourne and Olympic Parks Trust has been critically reviewed within the last 12 months. Melbourne and Olympic Parks Trust has complied with the Ministerial Standing Direction 4.5.5 – Risk Management Framework and Processes.

Russell Caplan Chairman Melbourne and Olympic Parks Trust MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

58 DISCLOSURE INDEX

The Annual Report of Melbourne and Olympic Parks Trust is prepared in accordance with all Victorian Legislation. This index has been prepared to facilitate identification of compliance with statutory disclosure requirements.

Ministerial Directions

Charter and Purpose FRD 22D Manner of establishment and the relevant Minister 4 FRD 22D Objectives, functions, powers and duties 4 FRD 22D Nature and range of services provided 4

Management and structure FRD 22D Organisational Structure 5

Financial and other information FRD 10 Disclosure index 59 FRD 15B Executive officer disclosures 48 FRD 22D Application and operation of Freedom of Information Act 1982 57 FRD 22D Application and operation of the Protected Disclosure Act 2012 56 FRD 22D Compliance with building and maintenance provision of Building Act 1993 56 FRD 22D Details of consultancies over $10,000 58 FRD 22D Details of consultancies under $10,000 58 FRD 22D Major changes or factors affecting performance 12 FRD 22D Occupational Health and Safety 56 SD 4.5.5 Risk Management Compliance 58 FRD 22D Statement of availability of other information 56 FRD 22D Statement on Competitive Neutrality Policy 56 FRD 22D Summary of financial results for the year 12 FRD 22D Summary of major activities 9-10 FRD 22D Subsequent events N/A FRD 25A Victorian Industry Participation Policy disclosures 56 FRD 29 Statement on Workforce Data 57

Financial Statements required under Part 7 of the FMA SD 4.2 (a) Financial Statements 13-55 SD 4.2 (b) Balance Sheet 15 SD 4.2 (b) Cash Flow Statement 17 SD 4.2 (b) Comprehensive Operating Statement 14 SD 4.2 (b) Statement of Changes in Equity 19 SD 4.2 (c) Accountable officer’s declaration 53 SD 4.2 (c) Compliance with Australian accounting standards and other authoritative 18 pronouncement SD 4.2 (c) Compliance with Ministerial Directions 44 SD 4.2 (d) Rounding of amounts 52

Other disclosures in notes to the financial statements FRD 9A Departmental disclosure of administered assets and liabilities N/A FRD 11 Disclosure of ex-gratia payments N/A FRD 13 Disclosure of parliamentary appropriations N/A FRD 21B Responsible person and executive officer disclosures 47, 4 8

Legislation Audit Act 1994 Melbourne and Olympic Parks Act 1985 (amended) Building Act 1993 Occupational Health and Safety Act 2004 Crown Land (Reserves) Act 1978 Protected Disclosure Act 2012 Disability Act 2006 Public Administration Act 2004 Financial Management Act 1994 Victorian Industry Participation Policy Act 2003 Freedom of Information Act 1982 Victorian Managed Insurance Authority Act 1996 MELBOURNE & OLYMPIC PARKS TRUST PARKS & OLYMPIC MELBOURNE

59