TransAdelaide Annual Report 2006-07
Office Address Adelaide Railway Station North Terrace ADELAIDE SA 5000
Postal Address GPO Box 2351 ADELAIDE SA 5001
ABN 64 260 242 307
Phone 08 8218 2200
Facsimile 08 8218 2206
Website www.transadelaide.com.au
ISSN 1441-421X
Page 2 TransAdelaide Annual Report 2006-07
Letter of Transmittal
28 September 2007
The Hon. Patrick Conlon MP Minister for Transport Parliament House North Terrace ADELAIDE SA 5000
Dear Minister
On behalf of the Board and Management of TransAdelaide, I am pleased to present the TransAdelaide Annual Report for the year ended 30 June 2007.
The report documents the achievements and activities of TransAdelaide over the past twelve months and on behalf of TransAdelaide staff, I commend the report for presentation to Parliament.
The Annual Report complies with the requirements of the Public Corporations Act 1993 (SA) , the TransAdelaide (Corporate Structure) Act 1998 (SA) , the Public Sector Management Act 1995 (SA) and the Department of Premier and Cabinet Reporting Requirements.
Yours sincerely
Bill Watson GENERAL MANAGER
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TABLE OF CONTENTS
TransAdelaide’s Vision ______7 Year in Review______8 Trams ______9 Trains ______9 Safety______10 The Future______10 Conclusion______11 Our Corporate Values ______12 Our Role: Adelaide’s Rail System______13 About TransAdelaide ______13 Providing Our Services ______15 TransAdelaide Patronage ______16 Special Event Services and Promotions______17 Improving Our Service: Customer Satisfaction ______17 Communications ______18 Maintaining and Developing our Infrastructure______19 Stations, Stops and Infrastructure ______19 Security upgrades ______19 Safety Upgrades______20 Track and Signals______20 Computerised Train Control ______20 Asbestos Reduction______21 Our Volunteers – ‘Adopt a Station’ ______21 An understanding community ______21 Our People ______22 Learning and Development ______22 Occupational Health, Safety and Injury Management ______24 Injury Management and Prevention______25 Industrial Relations______25 Workplace Agreements______25
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Equity and Diversity in Employment ______25 Employee Statistics ______26 The Way Forward ______31 Organisational Chart ______31 Our Commitment ______33 Rail Safety (Safety in the Public Sector 2007-2010)______33 Education Programs ______33 National Rail Safety Week ______33 Security ______34 The Environment ______34 Groundwater Remediation ______36 Promoting Independence – Disability Action Plan ______36 Responding to Our Community ______38 Corporate Governance ______39 TransAdelaide’s Board of Directors ______39 Strategic and Business Planning, Monitoring and Accountability ______41 Meetings of Directors ______41 Board ex-officio attendance by:______41 Audit & Risk Committee ex-officio attendance by: ______42 Board Member Remuneration ______42 Board Member Benefits ______42 Risk Management ______42 Strategic Risk ______43 Operational Risk ______43 Internal Control and Assurance______43 External Audit ______43 Contract & Procurement Management ______43 Consultancies engaged during the past year are listed below. ______44 Statutory Information______45 Freedom of Information Act – Information Statement ______45 Structure and Function of TransAdelaide ______45 Arrangements for Public Participation______45 Contact Arrangements ______45 TransAdelaide’s Policies: ______46 Documents held by TransAdelaide available at www.transadelaide.com.au ___ 46 Whistleblower Legislation______46 Privacy Legislation ______46 Ethical Standards and Performance ______47 Fraud ______47 Third Party Claims______47 Overseas Travel ______47 Financial Report ______48
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Directors’ Report______48 Principal Activities ______48 Review of Operating Result______48 Capital Expenditure______48 Significant Changes in the Economic Entity______49 Ministerial Control and Direction ______49 Payment of Accounts______49 Board Member’s Benefits______49 Board Member’s Interests in Contracts ______49 Indemnities and Insurance ______49 Contractual Arrangements ______49 New Contracts ______49 Continuation of Existing Contracts ______49 Income Statement______51 Balance Sheet______52 Statement of Changes in Equity ______54 Cash Flow Statement ______55 Notes Index ______58 Certification of the Financial Report ______95 Independent Auditor’s Report______96
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TransAdelaide’s Vision
We will continue to develop a customer focussed, integrated transport system providing frequent, rapid, reliable and safe services across greater Adelaide.
TransAdelaide will be a dynamic contributor to the State’s economic, social and environmental prosperity through at least doubling rail patronage by 2018.
This will have major impact on achieving South Australia’s Strategic Plan target (T3.6): to increase public transport to 10 percent of weekday passenger vehicle kilometres by that year.
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Year in Review This year was an exciting one for public transport in Adelaide with the first full year of operation of our new trams, Bombardier’s Flexity Classic, work commencing on the City West tram extension and the announcement in the State 2007/2008 budget of a significant investment in rail infrastructure. The Rail Revitalisation Program with the allocation of $115 million for the concrete resleepering of the Belair and Noarlunga lines, plus the $157 million Adelaide Rail Yards relocation project provide a tremendous opportunity and platform for continued development of our rail system.
Bill Watson Patronage figures for the year were mixed with trams General Manager showing considerable growth but a decline in trains produced a combined figure only fractionally up on the previous year. This result was anticipated as people responded very positively to the full introduction of the new Flexity fleet of trams and the upgraded tram line. On the other hand, disruptions to rail lines, especially Noarlunga and Belair due to the Bakewell Underpass project had significant impact as people made alternative transport arrangements for extended periods. We expect further patronage softness when these two lines are concrete resleepered under the recently announced Rail Revitalisation program.
In some ways, this past year has been something of a transitional period in which past projects such as the new Centralised Train Control system have been progressing through implementation and commissioning phases whilst other proposed major projects have been committed with their planning becoming the imperative. A lot has been achieved in the background.
Development of our Integrated Management System (IMS) is progressing well. The IMS will encompass document management and administration as well as human resources and training; safety and organisation-wide risk management. The IMS is a critical element of TransAdelaide’s response to the national rail safety reform package.
Capturing our corporate knowledge, succession planning and strengthening recruitment and retention has been recognised as increasingly important. Along with a restructure of our executive team, in particular the addition of an Executive Manager Planning and Development, this system and organisational development is aimed at preparing and positioning TransAdelaide for a very challenging, yet exciting future.
As noted above Adelaide’s rail system will be transformed over the next four years with concrete resleepering the Belair and Noarlunga lines through the Rail Revitalisation program and the transformation of the Railcar depot site on North Terrace into the site of the Marjorie Jackson-Nelson Hospital. Relocation of TransAdelaide’s activities on the Railcar depot site will provide us with a once in a generation opportunity to rebuild our services.
Development of Adelaide’s public transport infrastructure continued throughout 2006- 07 with many projects moving from the drawing boards to reality. The most high profile of these of course has been the tramline extension from Victoria Square to City
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West adjacent to the University of South Australia and the proposed Marjorie Jackson- Nelson Hospital. This ushers in a very exciting period for both our tram and train arms with the Government committing to continued major investment in our infrastructure.
A concern this year was the discovery of historic soil and water contamination adjacent to the Adelaide Rail Yards. The source of the contamination is understood to be old fuel storage facilities that have been long removed. Monitoring and remediation works commenced in September and will continue with oversight from the Environment Protection Authority. Fortunately, we are satisfied that the problem has been contained.
Trams The appointment of a new Executive Manager Trams and Business Analyst reflects the growing importance of our light rail network. The soon to be completed line extension confirms the tram division as the key to realising the Government’s vision of a fully integrated public transport system for Adelaide and its environs. The new line not only links light rail trams with the heavy rail train network but also provides a platform for further extensions.
Growth in tram patronage showed a very positive response to the Flexities. The old H-Class trams did have their charm but also had limitations, especially in regards to access for people with disabilities and anyone who uses a mobility aid of some description such as a shopping trolley or pram. All but five have now been sold with many going to tram museums around the country. The remaining five are now used on weekends, public holidays and other special occasions to maintain an important link to our heritage.
A three week mystery shopper exercise provided some solid benchmarking to target for future improvements. The aspects assessed were based on the customer service related factors from our Key Performance Indicators such as observed customer satisfaction, tram operator performance and observed fare evasion that are applied by the Passenger Transport Division for our service provider contract.
Trains As already mentioned, major works on the Bakewell Underpass had an impact on rail patronage figures. This is a significant contributor to the small decrease in patronage as opposed to last year’s increase. Nonetheless it is understood that such infrastructure work is absolutely necessary for all of our transport needs. The next four years will also prove challenging with the concrete resleepering of the Belair and Noarlunga lines; but the benefits will be well worth the short-term disruption. When completed, the new rail will not only provide a smoother ride but will enable us to achieve improved on-time running with speed restrictions generally a thing of the past.
The recommissioning of six 2000 series railcars, with two back in service and the remainder to follow shortly, will be a boon for our operations. They bring added capacity and give us an improved ability to adjust services for spikes in demand. These spikes are usually associated with special events such as the Royal Adelaide Show and the Credit Union Christmas Pageant when we do our best to provide transport for a mix of regular passengers and those who probably only use us at these times. These special events provide a great opportunity for people to sample the
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benefits of using public transport and hopefully continue to do so. Shifting people away from their private vehicles and onto public transport has enormous economic and environmental benefits.
We continue to take steps to reduce our own environmental footprint and have embraced the Greening of Government Operations plan and South Australia’s Greenhouse Strategy. We’ve now increased to B10 (10 percent bio-diesel) and our engineers are working on being able to use B30. The concrete resleepering project will also have a positive environmental impact by increasing railcar running efficiency as well as playing a part in conserving forests by not using traditional hardwood timbers.
Safety Several developments over the past year have enhanced our efforts to achieving the best safety record of any suburban rail operator in Australia.
The highlight has definitely been the Safety Science Leadership course developed and delivered by Dr Matthew Thomas and his colleagues from the Human Factors and Safety Management Systems team at the University of South Australia. Ninety-three managers, supervisors, union representatives and safety representatives (17 percent of our workforce) have completed the program since October 2006. Combined with the soon to be completed Safety and Risk Management component of our new Integrated Management System, this and other training programs continue to reinforce the safety culture within TransAdelaide.
The Future All indicators point to continued increase in demand for rail services. This demand will be primarily driven by fuel and other costs associated with private vehicle usage. Last year we recognised a substantial increase in patronage due to the opening of the Mawson Interchange and we look forward to a similar facility to be completed at Oaklands.
This type of facility is the future for our heavy rail, train system as it provides the spine of a truly integrated public transport system. Such facilities really do provide a transport hub with bus services feeding in from surrounding residential areas, extensive parking facilities for people to park and ride, complemented by safe drop off and pick up areas for people to be driven to the interchange to catch a train to their destination. This model has potential for further development of interchanges that have the critical mass to warrant and sustain high quality facilities. It certainly represents a very positive future that sees us maximising the use of our resources. Continued development of these transport hubs based on heavy rail quite simply enables efficient, effective and ultimately, economic use of trains.
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Conclusion It has been a pleasure to lead TransAdelaide over the last twelve months; the commitment of all staff to public transport is unquestioned. The culture of the organisation is changing positively to meet the increasing focus on system safety and superior customer service.
The organisation is committed to realising its vision of developing “A customer focussed integrated transport system providing frequent, rapid, reliable and safe services across greater Adelaide”.
Cultural change to achieve that vision is a lengthy journey; but we have sound foundations for that journey, and a goal to strive for.
As noted in previous reports, an apparently simple business is in fact a complex beast. It requires considerable effort to ensure our trains and trams are able to operate for around twenty hours a day, every day. Most of that effort is in the background and requires significant personal commitment. Track and signals need maintenance and repair, likewise our fleet of trains and trams, and then there’s refuelling and other operating preparations. This continuous cycle of behind the scenes work is greatly appreciated.
We would like to thank all of those in TransAdelaide who as a team have all contributed to our successes during the year. Thank you.
On behalf of the Board
Virginia Hickey Bill Watson Chair General Manager
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Our Corporate Values
• Safety and security for the public and our people;
• Building a successful organisation with foundations of trust and respect for the individual;
• Customer service of the highest order;
• Financial responsibility supported by good governance and ethical conduct;
• Awareness of our responsibilities to the community;
• Encouraging innovation and creativity;
• Sustainability by caring for the environment.
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Our Role: Adelaide’s Rail System TransAdelaide’s rail system is the spine of Adelaide’s public transport system. Adelaide’s train network provides this service for people from Gawler to Noarlunga, Outer Harbor down past the Port, Belair in the Hills, Grange on the coast. Trams run from Glenelg into the city, and very soon, through its heart, past the Adelaide Railway Station along North Terrace, terminating adjacent to the University of South Australia’s City West campus. Thousands of people rely on us every day as we strive to meet their transport needs.
Public Transport has a vital role in the life of any city. It is vital to the way a city functions. It connects: providing the link from peoples’ homes to their work, education, sport and recreation. Public transport gives people access to all that their city offers.
TransAdelaide’s train and tram services provide affordable transport for thousands of commuters, saving them from all the expenses and difficulties associated with commuting by car: rising fuel prices, wear and tear on their vehicle, the cost of parking and the stress of driving in peak hour. TransAdelaide’s rail systems are also far more energy efficient than private motor vehicles. But the benefits are not restricted to cost savings for individuals and being environmentally smart. It is also a counter to the growing congestion of our urban roads and thereby has the wider, economic impact of enabling more efficient use of our roads for essential transport requirements.
‘Safe’ ‘Affordable’ ‘Convenient’ ‘Energy Efficient’ ‘Economically and Environmentally Smart’
TransAdelaide is positioning itself to play an important and prominent role in our integrated public transport system to assist the development of Adelaide and its surrounds as we face the many challenges of the 21 st Century.
About TransAdelaide TransAdelaide has been in its present form since corporatisation by the State Government via the TransAdelaide (Corporate Structure) Act 1998 and the awarding of contracts for the operating of Metroticket Bus Services to private operators in 2000. TransAdelaide does have one remaining interest in bus services via a contract for routes in the Adelaide Hills in partnership with Australian Transport Enterprises Pty Ltd under the name, TransitPlus. This contract expires in 2010.
As a statutory authority, TransAdelaide reports to the Minister for Transport, Hon. Patrick Conlon MP and provides its services under a contract with the Department for Transport, Energy and Infrastructure’s Passenger Transport Division. This contract operates on a key performance indicator basis with rigorous service requirements that attract financial penalties when not met. We have maintained our status as an accredited rail operator under the Rail Safety Act 1996 whilst preparatory work continues to meet the introduction of new state rail safety legislation expected to be introduced by January 2008.
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TransAdelaide has an important role to play in achieving several targets from South Australia’s Strategic Plan. The primary target is within Objective 3: Attaining Sustainability. Specifically it is to contribute to the achievement of T3.6 which is to increase the use of public transport to 10 percent of metropolitan weekday passenger vehicle kilometres by 2018. But TransAdelaide’s contribution to achievement of South Australia’s Strategic Plan objectives range far wider than this as we have significant impact on achieving many other goals set out in the Plan. TransAdelaide makes a real contribution to the quality of life for the people of Adelaide and its surrounds.
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Providing Our Services TransAdelaide exists to provide rail transport to thousands of South Australians as they go about their lives, 24 hours a day, seven days a week, 365 days a year. We do this with 93 railcars and 16 tramcars running on 130 kilometres of track.
Almost 14 million people used our services during 2006-07 representing an increase of 1.5 percent over the previous year. This was made up of a significant rise in tram patronage of 14 percent compensating for a slight fall of 0.7 percent in train passengers. Both branches were affected by disruptions caused by either our own infrastructure maintenance and development programs, or civil works conducted by other organisations. A prime example of this is the new Bakewell Underpass Project to replace the bridge on Henley Beach Road into the city. This work disrupted train services for the period between 15 October 2006 to 1 May 2007 (28 weeks) and led to a temporary decline in train patronage on the Belair and Noarlunga lines as people made other arrangements for their transport needs.
The negative impact such disruptions have on peoples’ commuting patterns is regrettable and patronage figures are compromised; however such development and upgrade work is essential for all our long term transport requirements. As rail infrastructure does not allow easy detours, such disruptions will continue for the next four years with the commencement of the concrete resleepering of the Belair and Noarlunga lines. The most obvious benefit expected from our upcoming infrastructure upgrades will be improved on-time running as existing speed restrictions are no longer required. On-time running for trains has nonetheless improved to 90.3 percent from 83.8 percent from the previous year, as has the percentage of timetabled services operated, edging up from 99.6 to 99.7 percent. We look forward to the completion of the work as substantial benefits are anticipated; as demonstrated by the trams division experience following significant upgrades to the tram line and fleet.
Adelaide’s famous tram service connects the city centre to the beachside suburb of Glenelg. The past year has seen the beginning of a new and exciting era for the tram division with delivery of the eleventh and final Flexity tram from Bombardier Transportation in Germany in mid June. This, and one other Flexity remained to be commissioned by 30 June 2007. The new Flexities not only provide a greater level of service, especially due to having low-floor access for people with wheelchairs, prams and other mobility devices; they also provide a level of comfort and reliability way beyond the old H-Class of 1929. Nonetheless, with a sense of heritage and in recognition of their charm, five H-Class trams will continue to be used on weekends, public holidays and on special occasions.
There have also been developments with the train fleet. No new rolling stock has been added, however the refurbishment and recommissioning of six 2000 series railcars (the final four by November 2007) will make a significant difference to service capacity and our ability to adjust the size of trains to satisfy demand. We look forward to a major refurbishment program on the 3000/3100 fleet of 70 railcars planned to commence in 2008. This will significantly extend the service life of the fleet and be more in accordance with community expectations of a modern rail system.
Bombardier Transportation has now completed the second of its ten year rail fleet maintenance contract. An important contractual requirement to continually improve
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our railcars’ general condition can now be assessed following development and acceptance of a benchmarking mechanism over the past year.
Total Patronage has increased 1.5%
Although the community is becoming much more environmentally aware and conscious of the benefits of public transport, surveys indicate the major motivating factor remains the comparatively high, and increasing cost of private vehicle use. Facilities such as the Mawson Lakes Interchange have also made a positive contribution. Completed in March 2006, the Interchange provides integrated bus and train interconnection and services. It also provides a drop off area and car park with direct access for vehicles, pedestrians and cyclists from Elder Smith Road, Mawson Lakes Town Centre, the University of South Australia and Technology Park. The Mawson Lakes Interchange is an important element of integrated urban planning where a transport hub has been established to serve an increasingly more important location.
This model, to provide people with strategic transport hubs, has also been adopted for the Marion Oaklands Interchange project. Work on this has been progressing well since commencing in May 2007 and is on schedule to be completed by March 2008. Such integrated transport hubs, serving large suburban catchment areas, are becoming a feature along TransAdelaide’s rail corridors. It is hoped that providing these facilities that provide bus connections, safe drop-off areas, large car parks for ‘Park and Ride’ commuters and secure bicycle lockers will continue to attract commuters and provide some relief for City congestion.
13 983 000 Trips Were Made on TransAdelaide’s Services during 2006/07
Patronage of TransAdelaide’s services continued the trend of incremental growth. Month to month fluctuations can be attributed to periods of short-term service disruption from our own track maintenance and upgrade works, as well as major civil works such as the Bakewell Underpass mentioned above. Such disruptions are expected to continue over the next four years as the major re-sleepering project announced in the 2007-08 State Budget for the Belair and Noarlunga lines is carried out.
TransAdelaide Patronage
+ - 2002-03 2003-04 2004-05 2005-06 2006-07 % Train 10.66m 11.191m 11.173m 11.7m 11 617 000 -0.7 Tram 2.08m 2.159m 2.095m 2.07m 2 366 000 +14 TOTAL 12.74m 13.35m 13.268m 13.77m 13 983 000 +1.5
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TransAdelaide’s performance is not simply judged on patronage figures. Our contract with the Passenger Transport Division of the Department for Transport, Energy and Infrastructure has very strict performance-based requirements. These Key Performance Indicators (KPIs) set targets that must be achieved with some, such as late services, attracting financial penalties for each incident of non-compliance. This past financial year has seen both tram and train operations consistently achieve targets in eleven of the twelve KPIs with trams actually scoring twelve in the quarter ended December 2006. The failure has been in ‘Observed Fare Evasion’ which is required to be less than two percent (Train 6.5% and Tram 2.05%). In an attempt to combat this problem we will introduce Ticket Inspectors wearing identifiable uniforms over the next financial year.
Special Event Services and Promotions Providing special event services essentially involves substituting weekday peak period service levels for otherwise quiet weekend schedules for the duration of the event. Tram services for the City-Bay Fun Run are a good example of the importance TransAdelaide places on, and the effort taken to provide excellent service for our community. To cater, in stark contrast to normal Sunday morning schedules, double carriage trams operated from the Bay to the City every 10 minutes from 6.20 until 8.20am. Single trams then ran every ten minutes from the city to intermediate start points including the normally closed (except for the Adelaide Cup) Morphetville stop, thereby enabling people to easily reach the 3 kilometre start line. Other events catered for include the Adelaide Festival; Fringe Festival; Clipsal 500 and the Credit Union Christmas Pageant. Two events require operating special stations on location: the previously mentioned Morphetville stop for the Adelaide Cup and the Show Shuttle that operates between the Adelaide Railway Station and the temporary Showground Central station at Wayville. Both these services are very popular: the weeklong Showgrounds Central service catered for 60,000 passengers on services running every 15 minutes.
Providing special services at these times is seen as a great opportunity for TransAdelaide. The fact that people who use these special services are often not regular users of public transport means that we are able to demonstrate the benefits of our service: economical, convenient and environmentally smart commuting. Such ‘sampling’ is an opportunity for converting motorists and increasing rail patronage.
Improving Our Service: Customer Satisfaction Surveys undertaken by the Passenger Transport Division have confirmed the factors that need attention to improve levels of passenger satisfaction. It is no surprise that on-time running for both trams and trains is the most important. Both rail systems shared on-board safety as the second most important factor with train passengers then having cleanliness and off-board safety high on the list whilst trams were impacted by driver helpfulness and the related ‘waiting for passengers to be seated’. Although on-time running has been within acceptable mandated limits we continue to struggle to meet the expectations of our customers, particularly and not surprisingly at peak periods when the system is under maximum pressure. The peak morning and evening periods are characterised by high frequency services and longer boarding times simply due to the increased volume of passengers. Timetable and system reviews as well as infrastructure developments are expected to ease the impact of these factors.
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The Gawler rail line received particular attention over the past year with surveys being conducted at Gawler, Gawler Central and Smithfield. These surveys focussed on peoples’ mode of transport to the station, their destination, time of travel and reason for the trip. Such information is vital for service planning: times and numbers of express trains compared to those that stop at stations en route to the Adelaide Railway Station.
Our customer satisfaction survey confirmed the clear link between passenger satisfaction and the propensity to use public transport services and also that, as customer perceptions of acceptable standards change, Adelaide’s public transport network will need to keep up to date with these standards. The following section of this report ‘Maintaining and Developing Our Infrastructure’ outlines the many projects that have been undertaken to do just that.
Communications Reaching our customers with information regarding any changes in service or advising of upcoming disruptions is vital to enable people to make the necessary adjustments to the routines that enable them to go about their daily business. Our Business Development and Marketing unit has responsibility for this function and follow a set procedure to ensure maximum reach within an affected line’s customer catchment area:
• Advertisements in the Advertiser and Messenger newspapers in affected areas; • Temporary timetables and passenger information leaflets distributed on services that will be affected; • Regular pre-announcements at affected stations; • Signage at all access points of affected stations; • Information displayed on Passenger Information Screens at Adelaide Railway Station; • Media releases to print and electronic media; • Notices hand delivered to businesses in the immediate area of affected stations.
The effectiveness of customer information is continually reviewed. Timetables and route maps provided by the Passenger Transport Division are the mainstay of customer communications. New monitors have been installed at the Adelaide Railway Station to display service announcements with more to be installed at other locations during the coming year. Our monthly newsletter, Express continues to be popular and is available in hardcopy on trams and trains, at passenger information stands as well as from the website, www.transadelaide.com.au .
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Maintaining and Developing our Infrastructure As customer perceptions of acceptable standards change, the Adelaide public transport network will need to keep up to date.
Customer perceptions of TransAdelaide services begin at our tram stops, train stations and interchanges. As such, our ongoing maintenance and upgrade program is a very important element of our commitment to meeting our customers’ requirements. To do this work we have a team of 140 people with a range of skills from civil engineering and electronics to the full range of building trades on new construction, repairs and installation of new equipment. Mention must also be made of over 500 volunteers in our Adopt-a Station program who look after gardens, remove graffiti and similar helpful contributions at most railway stations and tram stops on our network.
Stations, Stops and Infrastructure Several stations such as Lynton on the Belair line have been given general seating and shelter upgrades over the past year whilst others have had Disability Discrimination Act (1992) compliance upgrades (listed in DDA compliance table ‘Our Commitment’ section page 37).
Extensive community consultation and subsequent planning has been completed for the Marion Oaklands Interchange on the Noarlunga rail line establishing this as a major construction project for next year (07-08). The community choice for the interchange to be relocated was endorsed by City of Marion Ward Councillors. This has been accommodated by realigning the track to enable the development of a new, completely integrated facility with excellent parking facilities and landscaped surrounds. Marion Oaklands is due for completion before mid 2008. A feature of the Marion Oaklands Interchange will be that it will meet all the requirements of the Disability Standards for Accessible Public Transport under the DDA. Ensuring that all TransAdelaide’s stops and stations are similarly compliant is an on-going project that has seen significant progress over the past year. The ‘Our Commitment’ section on page 36 contains more information on our efforts towards DDA compliance.
Security upgrades One of our highest priorities is providing our passengers with a safe and secure environment. This is reflected by our practise of having security guards on all services that run after 7.00pm as well as doing all possible to provide facilities that meet safety and security standards. Adequate lighting, Closed Circuit Television (CCTV), carparks clear of bushes and emergency help phones all contribute to provide reassuring facilities for our passengers. Upgrading and maintaining these resources is a continuous process. Significant works to augment security over the past year include:
• Upgrading of lighting (Emerson, Chidda, Clarence Park, Hallett Cove, Hove and Ovingham) • Installation of new upgraded emergency help phones at major stations at Blackwood, Brighton, Christie Downs, Coromandel, Elizabeth, Gawler, Glanville, Hallett Cove, Noarlunga, Salisbury, Smithfield and Woodville as well as the Noarlunga and Salisbury interchanges.
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Safety Upgrades Providing warning signs and safe pedestrian crossings are obviously vital elements to providing a safe environment for our passengers and anyone who needs to cross our rail lines or use our facilities. A major program is underway to provide a range of pedestrian safety improvements including automatic pedestrian gates at key, high traffic locations on the network. Installation is now completed at Salisbury and Hove, with Woodville scheduled for July 2007 soon to be followed by Parafield, Smithfield and Oaklands (as part of the Oaklands Interchange development).
One of our biggest concerns is the danger of pedestrians being unaware of a second train approaching a crossing. This danger has led to TransAdelaide, over the last year, completing the development of Australia’s first multiple train warning system. An initial installation of the devices will be accompanied by a research study by Dr Mathew Thomas of the University of South Australia’s Centre for Applied Behavioural Science. These signs will be installed at up to 60 locations across the rail network.
Track and Signals Track upgrades and maintenance programs have continued throughout the past year with several sections of the Belair rail line being concrete resleepered. Following a major State Government funding commitment announced in the 2007-08 State Budget this project will continue followed by the complete concrete resleepering of the Noarlunga line.
TransAdelaide’s track network is visually inspected on a 28 day rolling basis. This surveillance program is augmented by rigorous measurement and digital storage of data by special track measuring equipment every three months.
Computerised Train Control TransAdelaide’s most technically demanding project for several years has been the installation of the new, integrated Computerised Train Control and Passenger Information system. Implementation of the system has provided difficulties over this reporting period with some remaining issues being addressed by the supplier, United Goninan, following takeover of the project on their acquisition of Alstom Australia Limited. These software/hardware interface issues have, on occasion, disrupted normal services and created delays.
Besides behind-the-scenes technology, a lot of other very important work is undertaken by TransAdelaide that, although not apparent to the general public is nonetheless of vital importance for the running of our services. Such work completed over the past year includes the Noarlunga Embankment Stabilisation and Drainage project for drainage and crib walls at the Meyer Road overbridge and the Grand Central Avenue overbridge. This project also included drainage work undertaken as a joint project with the City of Holdfast Bay at the Wheatland Street crossing in Seacliff.
Two further significant projects undertaken during 2006-07 were replacement of the Grand Central Avenue bridge on the Noarlunga line and the commencement of upgrading of the Port Adelaide Viaduct.
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Many of these civil works projects tend to be cooperative efforts with local government and other authorities. Rail crossing upgrades fall into this co-project category as they require significant coordination to minimise disruption. Rail crossings degrade quite significantly over time hence our ongoing project to upgrade with concrete encased rail at crossings. Concrete provides a much more durable, smoother and therefore safer surface for motor vehicles, trams and trains alike. Most of this work has focussed on the Glenelg tram line and the Grange rail line with the major Port Road crossing being completed during this reporting period. Level crossings on the Belair line at Main Road, Belair and Blackwood were also concreted during the past year as part of resleepering work in the area.
Asbestos Reduction Asbestos is still present in a number of locations on the TransAdelaide system, primarily embedded in concrete based sheeting used for cladding of station building structures or lineside battery boxes. We have surveyed and signmarked the locations where asbestos is present. Given the good condition of the concrete sheeting, the stability of the structures and therefore the low risk posed by the asbestos, removal is being carried out as part of regular upgrade work. TransAdelaide staff are not permitted to work with asbestos and any removal or disposal is undertaken by appropriately licensed contractors.
Our Volunteers – ‘Adopt a Station’ Volunteers are involved in just about all facets of life in South Australia, and we greatly appreciate the selfless work of our own ‘Adopt a Station’ group. Made up of over 500 dedicated people, our ‘Adopt a Station’ volunteers are divided into smaller work units that look after their own, nearby train and tram stations. Sixty-seven railway stations and 10 tram stops benefit from the work of these dedicated people who take great pride in ‘their’ station or stop. Work carried out includes landscaping and gardening as well as graffiti removal. TransAdelaide greatly appreciates the valuable contribution made by our volunteers. Our ‘Adopt a Station’ coordinator ensures they have tools, safety equipment and materials that are put to very good use by these generous and energetic people for the benefit of the wider community. Their work also contributes to South Australia’s Strategic Plan, Objective 5: Building Communities T5.6 to maintain our 50% volunteer participation rate.
An understanding community We greatly appreciate the work undertaken by our staff and contractors who, because of the logistics of operating a rail network, are often required to work out of train or tram operating hours with all the difficulties that entails. Such night work does at times have impact on our communities and we do understand that significant intrusions and inconvenience are experienced. As such we greatly appreciate the understanding shown by people living nearby to our work sites.
Page 21 TransAdelaide Annual Report 2006-07
Our People TransAdelaide is a very diverse organisation. We have over five hundred and fifty staff throughout the organisation fulfilling roles ranging from management and administration, people who are highly skilled in very specialised technology applications, information systems, electrical and mechanical engineering. There are train drivers and tram operators, passenger service assistants and other customer service people along with civil engineers and people with the trade skills required for our construction and maintenance programs.
Developing our people to enable us to continuously improve our operations and meet the significant challenge of providing rail services into the twenty-first century has been, and will remain, a key priority. This is part of the continuing development of our corporate culture in which we seek to provide an environment that encourages staff to proactively apply their experience, skills and ideas for improving all aspects of our business. We have also responded to the implications of an ageing workforce by focussing on succession planning as part of our business cycle. This has featured mentoring, extended placements in higher roles along with recruitment and retention strategies that have included extending the number of under/graduate placements in engineering. The past year has also seen the introduction of a program that financially supports appropriate employee team sport and social activities as a means of encouraging team work and a healthy work/life balance.
Learning and Development Results of significant organisational development reviews conducted during 2005-06 have been applied over the past year. These have revolved around providing more comprehensive induction processes for new employees (extending through the first three months of employment) and wider ranging and more comprehensive training opportunities. Whilst there is great faith held in “tried and true” methods, in many cases training programs are now more likely to utilise external expertise to ensure TransAdelaide staff are exposed to fresh perspectives and methods. Our internal trainers have also participated in workshops to enhance their knowledge and skills. This is seen as not only a key strategy towards achieving one of our corporate objectives for continuous improvement, but to also tune courses to be more stimulating and of greater personal and professional benefit for the people receiving them.
Much of the progress in training and staff development can be attributed to responding to staff feedback, an important element in continued retention of our status as a Registered Training Organisation. This has meant that we are able to issue qualifications accredited to the Australian Framework for Certificate I-IV in Transport and Distribution in Rail Operations, Administration and Infrastructure.
Page 22 TransAdelaide Annual Report 2006-07
Specialised training has been provided in areas of leadership and management skills. There has also been emphasis on continued development of a safety and service culture as well as improving consultation and communication within and between workgroups. Again, in response to our 2005-06 reviews, the following key training programs have been enhanced through adoption of teaching methods that are more in line with adult learning principles. These revised courses have continued to support our primary operational business objectives:
• Suburban Train Drivers (all grades) • Flexity Tram Introduction for Levels I-III Rail Operations • Certificate IV in Training and Assessment • OHS Workplace Representative Level I & II • Report writing • Passenger Service Assistant training • Multi Skilled Tram Drivers • Preventative Security Awareness • Rail Safeworking Rules • Rail Safety Awareness • Senior First Aid • Workzone Traffic Management • Fire Safety and Building Emergency
It is no coincidence that much of this key training cluster relates specifically to safety. The rail industry demands the highest possible safety standards. The industry is inherently dangerous: when things go wrong, consequences can be extreme. Imbuing the organisation with a strong safety culture in which every employee sees incidents with a ‘what if’ mentality and a commitment to continuous improvement is vital. As such there has been an enormous amount of effort over the 2006-07 reporting period towards its development.
Significant investment has been made in establishing and running a tailor-made Safety Science Leadership program. Developed and delivered by Dr Matthew Thomas and his colleagues from the Human Factors and Safety Management Systems team at the University of South Australia, the Safety Science program has proven a valuable element of our safety culture strategy. Ninety-three managers, supervisors and safety representatives (17 percent of workforce) have completed the program since October 2006.
Another manifestation of the primacy given to safety within TransAdelaide has been the development of an on-line Risk Management System. Organisation-wide adoption of the Risk Management System will not only provide a mechanism for assessing corporate risk and adjusting actions when necessary, but will also be rigorously applied to situations that impact on personal safety and injury management. The Risk Management System is expected to contribute to continuation of the generally favourable trends across the range of elements within the table below.
Page 23 TransAdelaide Annual Report 2006-07
Occupational Health, Safety and Injury Management Requirement 2006-07 2005-06 2004-05 1 OHS legislative requirements Number of notifiable occurrences pursuant to 4 11 5 OHS&W Regulations Division 6.6 Number of notifiable injuries pursuant to 0 0 0 OHS&W Regulations Division 6.6 Number of notices served pursuant to OHS&W Act s35,s39 and s40 (default, improvement and 0 8 7 prohibition notices) 2 Injury Management legislative requirements Total number of employees who participated in 44 49 46 rehab programs Total number of employees rehabilitated and 2 4 2 reassigned to alternative duties Total number of employees rehabilitated back to 32 27 35 their original work Number of open claims as at 30 June 89 76 107 Percentage of workers compensation 4.1 4.4 5.6 expenditure over gross annual remuneration 3 Number of claims Number of new workers compensation claims in 137 137 154 the financial year Number of fatalities 0 0 0 Lost time injuries 84 88 62 Medical treatment only 57 63 92 Total number of whole working days lost 2 064 2 487 1 288 4 Cost of workers compensation $ $ $ Cost of new claims for financial year 170 162 190 691 281 706 Cost of all claims excluding lump sum payments 843 725 1 384 696 402 867 Amount paid for lump sum payments on the 1 078 825 906 154 648 settlement of a claim (under the WRC Act) 540 Future liabilities for weekly payments/medical/loss of earnings (s42) and 319,794 116,267 393,814 Permanent disability (s43) Lump sum payment on death to Spouse/Child 0 0 0 (s44) Amount paid for lump sum payments on the (s42) settlement of a claim (under the WRC Act) 1 078 (s43) 825 906 154 648 540
(s44) Total amount recovered from external sources (WRC Act s54) including from a negligent third 50 943 0 87 250 party Budget allocation for workers compensation 790 570 775 830 761 350
Page 24 TransAdelaide Annual Report 2006-07
5 Trends Injury frequency rate for new lost-time 68 71 72 injury/disease for each million hours worked Most frequent cause (mechanism) of injury Muscle Body Slips, loading stressor trip and - s falls posture Most expensive cause (mechanism) of injury Stress Body Stress related stress related 6 Meeting the organisation’s strategic targets Yes Yes Yes Note: TransAdelaide has adopted the whole of government safety initiative Safety in the Public Sector (SIPS) 2007-2010 . The SIPS targets are incorporated into TransAdelaide’s strategic plan and area a key element of TransAdelaide’s safety improvement monitoring programme. See ‘Our Commitment’ section p 33.
Injury Management and Prevention TransAdelaide is self-insured for the purposes of managing workers rehabilitation and compensation. To maintain self insured status TransAdelaide is required to demonstrate compliance with WorkCover Performance Standards that are due for the next periodic evaluation in December 2007. To exceed requirements improved procedures for supporting workers injured on the job came into practise during the past year. These procedures focus on early intervention and were supported by an education program provided to all our employees.
Industrial Relations We continued to enjoy a dispute free industrial relations environment over the past financial year. Credit for this is given to mutual understanding and essentially shared objectives between management and staff and their union representation. This convergence has enabled a principled bargaining approach which in turn resulted in the needs of employees and the business to be satisfied.
Workplace Agreements TransAdelaide has negotiated new enterprise agreements for Rolling Stock, Signals and Power Maintenance employees as well as Infrastructure (Track, Stations and surrounds) Maintenance employees. Agreements covering Rail and Tram Operations and Salaried employees will be negotiated through 2007-08.
Equity and Diversity in Employment Human resource policies and procedures will be reviewed and revised on a continuing basis to address access, equity and diversity issues as part of our organisation-wide Disability Action Plan. TransAdelaide is an equal opportunity employer and we seek to ensure that our recruitment policies and procedures are inclusive of those with a disability.
Page 25 TransAdelaide Annual Report 2006-07
Employee Statistics The following tables provide a comprehensive and detailed profile of TransAdelaide’s staff for the 2006-07 period:
Total Number of Employees Gender % Persons % FTEs Persons 562 Male 88 88 FTEs 558.9 Female 12 12
Number of Persons During the 06-07 Financial Year Separated from TransAdelaide 29 Recruited to TransAdelaide 43
Number of Persons at 30 June 2007 On leave without pay 10
Number of Employees By Salary Bracket Salary Bracket Male Female Total $0-$43,999 200 29 229 $44,000-$56,999 80 18 98 $57,000-$72,999 179 16 195 $73,000-$91,999 23 2 25 $92,000+ 12 3 15 TOTAL 494 68 562
Page 26 TransAdelaide Annual Report 2006-07
Status of Employees in Current Position Short-term Long-term Other FTEs Ongoing Total Contract Contract (Casual) Male 476.2 0 11 6 493.2 Female 58.9 2.8 4 0 65.7 TOTAL 535.1 2.8 15 6 558.9 Short-term Long-term Other PERSONS Ongoing Total Contract Contract (Casual) Male 477 0 11 6 494 Female 61 3 4 0 68 TOTAL 538 3 15 6 562
Executives by Gender, Classification and Status Ongoing Contract Contract Other (Casual) Total Tenured Untenured Classification Male Female Male Female Male Female Male Female Male Female GRPM 0 0 2 0 3 3 0 0 5 3 Total 0 0 2 3 3 3 0 0 5 3
Average Days Leave per Full Time Equivalent Employee Leave Type 2003-04 2004-05 2005-06 2006-07 Sick Leave 8.4 9.4 9.0 8.4 Family Carer’s Leave 0.6 0.3 0.4 0.4 Miscellaneous Special 0.4 0.4 0.4 0.2 Leave
Page 27 TransAdelaide Annual Report 2006-07
Number of Employees by Age Bracket by Gender Age Bracket Male Female Total % of Total Workforce Benchmark* 15-19 3 0 3 0.5 6.7 20-24 11 3 14 2.5 10.5 25-29 8 4 12 2.1 10.2 30-34 21 8 29 5.2 9.9 35-39 51 5 56 10.0 11.2 40-44 98 11 109 19.4 11.9 45-49 98 14 112 19.9 12.3 50-54 93 10 103 18.3 11.3 55-59 67 8 75 13.3 8.6 60-64 40 4 44 7.8 5.0 65+ 4 1 5 0.9 2.4 TOTAL 494 68 562 100.0 100.0 * Source: Australian Bureau of Statistics Australian Demographic Statistics, Labour Force Status (ST LM8) by sex, age, state, marital staus – employed – total from Feb78 Supertable, South Australia at March 2007.
Aboriginal and/or Torres Strait Islander Employees Male Female Total % of TA Target* 0 0 0 0 2% * Target from South Australia’s Strategic Plan
Cultural and Linguistic Diversity Male Female Total % TA % SA Community* # of employees born overseas 105 21 126 22.4 20.3% # of employees who speak language(s) other than 54 8 62 11.0 15.5% English at home * Benchmarks from ABS Publication Basic Community Profile (SA) Cat No. 2001.0
Page 28 TransAdelaide Annual Report 2006-07
Number of Employees With Ongoing Disabilities Requiring Workplace Adaptation Male Female Total % TransAdelaide employees 12 4 16 2.8
Voluntary Flexible Working Arrangements by Gender Male Female Total Purchased Leave N/A N/A N/A Flexitime N/A N/A N/A Compressed Weeks N/A N/A N/A Part-time Job Share N/A N/A N/A Working from Home N/A N/A N/A * TransAdelaide flexi time is determined at the business unit level and not formally recorded.
Documented Review of Individual Performance Management Employees with: % of Total Workforce A review within the past 12 months 67 A review older than 12 months 33 No review -
Leadership and Management Training Reporting % of Total Salary Training and Development Total Cost Expenditure Training and Development Expenditure $512 000 1.69% Total leadership and management $160 000 3.78% development expenditure
Page 29 TransAdelaide Annual Report 2006-07
Accredited Training Packages by Classification Number of Classification Accredited Training Packages Multiskilled Tram Driver: • Certificate I in Transport & Distribution (Rail Operations) 49 • Certificate II in Transport & Distribution (Rail 44 Operations) • Certificate III in Transport & Distribution (Rail 44 Operations) Senior Passenger Service Assistant: 1 • Certificate IV in TAA Training & Assessment Shift Coordinator: 1 • Certificate IV in TAA Training & Assessment Tram Support Officer: 4 • Certificate IV in TAA Training & Assessment Suburban Train Driver 6 • Certificate IV in TAA Training & Assessment
Positions with Customer Service Reflected in Job and Person Spec Positions Percentage % with Customer Service in Job and Person Spec 100 % without Customer Service in Job and Person Spec 0
Page 30 TransAdelaide Annual Report 2006-07
The Way Forward These are exciting, yet challenging times for TransAdelaide. Stresses on infrastructure are being addressed with significant track upgrade programs being announced for the next few years. Major projects such as the Oaklands Interchange and the tram line extension will be coming into operation in late 2007 and a refurbishment program of our fleet is being planned for 2008.
We have recognised that TransAdelaide must adapt and evolve in response to our changing environment. Great effort has therefore been given over the past year to align our organisational structure and systems to meet these challenges.
Organisational Chart
MINISTER FOR TRANSPORT Hon Patrick Conlon MP
TRANSADELAIDE TRANSADELAIDE TRANSADELAIDE TRANSADELAIDE TRANSADELAIDE BOARD MEMBER BOARD MEMBER BOARD MEMBER BOARD MEMBER BOARD MEMBER Virginia Hickey Frances Magill Kevin Benger Libby Kosmala Roger Jowett (Chair)
GENERAL MANAGER TRANSITPLUS Bill Watson
Executive Manager Executive Manager Executive Manager Executive Manager Executive Manager Organisation Planning & Executive Manager Corporate Services Infrastructure Trams Development Development Rail Systems Suzanne Ridding Vi Nguyen James Hall Fiona Kidd Randall Barry Valdis Evele
Business Finance & Human Tram Rolling Development Business Administration Track & Resource Stock & Marketing Support Structures Management Information & Payroll Rail Tram Signals & Systems Operations Infrastructure Power Learning & Tram Compliance & Development Rail Education Risk Projects Group Operations Management Workers Service & Train Rolling Compensation & Planning Contracts & Stock Rehabilitation Procurement Redeployment Property Centre Management
Security One of our major challenges during rail upgrades, given rail infrastructure obviously makes it impossible to simply detour, is to minimise disruption and enable a level of service that satisfies our customers’ expectations. This led to the creation of a separate Planning and Development Division in April 2007.
Headed by the former Executive Manager Corridor Services it has also absorbed the Business Development and Marketing Unit with its communications function. This decision was in recognition of the imperative to keep the general public and other major stakeholders fully informed.
Page 31 TransAdelaide Annual Report 2006-07
Our corporate governance was strengthened further with the appointment of a Risk and Compliance Manager to oversee a specialist group with responsibility for statutory requirements and the growing importance of meeting various Australian Standards and Best Practise benchmarks.
The Trams Division has also been given greater autonomy following the appointment of an Executive Manager Trams and a specialised Business Analyst. These appointments not only reflect the significant investment made in upgrading and extension of the light rail system but also anticipate possible future developments and the already realised expectation of increased patronage.
Besides ensuring that we have people with appropriate expertise in place to reflect our changing environment, a lot of effort has been placed in developing internal systems designed to enhance our capabilities. This includes an on-line Integrated Management System to capture knowledge and processes as well as provide a platform for informed decision making into the future.
This has been a major project that commenced with the definition of specifications and preliminary planning in late 2005. One major element is up and running: Transdelaide’s Recordkeeping Documents and Information System (TARDIS) whilst development continues on others. A lot of work has been done over the past year to document and update policies and procedures that are then made readily available throughout the organisation via TARDIS and our intranet. This has captured organisational knowledge which, combined with reviews of all procedures, has aligned TransAdelaide with rail system best practise.
The opportunity has also been taken to upgrade our training database. The choice of software has enabled its integration with the Human Resources database and ensures Registered Training Organisation requirements are met.
Development of an on-line Risk Management System commenced in February and is due for completion by late September 2007. Designed to encompass risk management procedures required by Australian Standard 4360, it will consolidate all risk management information and be used to assess strategic objectives and project management as well as safety, health and environment risks.
Safety, health and the environment are vital considerations in the way TransAdelaide operates. Providing rail passenger transport services is inherently dangerous and rigorous health and safety requirements are embedded in all aspects of our operations.
TransAdelaide is a dynamic organisation that is responding to a changing environment that provides both opportunities and very real challenges. We are committed to providing our community with the best possible passenger rail services into the twenty-first century.
Page 32 TransAdelaide Annual Report 2006-07
Our Commitment We are committed to maximising our given resources to provide the best possible rail service for the people of Adelaide and its environs. This is supported by many other commitments and obligations that are addressed below:
Rail Safety (Safety in the Public Sector 2007-2010) TransAdelaide is committed to providing a safe environment for our staff, passengers and the South Australian community in general. Continued development of our new on-line Risk Management System and appointment of a Risk and Compliance Manager has augmented our commitment to Health and Safety. Since October 2006, 93 Occupational Health and Safety Representatives, union delegates, supervisors and managers have participated in Safety Science courses designed for us and delivered by the University of South Australia. This course is an integral component of our strategy to achieve a resilient safety culture and further demonstrates the importance given to satisfying the four key elements of the South Australian Government’s ‘Safety in the Public Sector 2007-2010’ strategy:
• Sustainable Commitment • Financial Accountability • Risk Management • Rigorous Evaluation
Stringent standards and requirements contained in the Rail Safety Act 1996 and the Rail Safety Regulations 1996 are rigorously administered by South Australia’s Rail Regulator. TransAdelaide provides and ensures the means for staff to make direct reports with complete confidentiality to the Rail Safety Regulator.
Education Programs TransAdelaide’s Rail Education Unit continues its good work in schools spreading the rail safety message to almost 2500 primary students at 22 schools along our rail corridors. This joint initiative with the South Australia Police promotes safe and appropriate behaviour on trains and near rail lines. The program involves school visits and excursions to the Adelaide Railway Station and often utilises a life size character, the Rail Bug, to have impact on four to seven year olds. Although focussed on reaching students themselves, sessions to demonstrate the easy-to-use Safe Track Teacher Resource are also held with staff to encourage them to continually reinforce the rail safety message.
National Rail Safety Week The inaugural Rail Safety Week was held in July 2006 and saw TransAdelaide hosting media familiarisations for journalists on trains with the drivers. It proved to be an excellent week with several articles published carrying the message of rail safety from the driver’s perspective.
Communication efforts such as Rail Safety Week, reaching young school students with the Rail Education Unit, augmented by safety advertisements sponsored by the Department for Transport, Energy and Infrastructure’s Passenger Transport Division are important elements of the overall effort to foster rail awareness and safety within our community.
Page 33 TransAdelaide Annual Report 2006-07
Security Providing an environment that gives a sense of safety and security for our customers is one of our very high priorities. Whilst some security assurance is provided by our train’s Passenger Service Assistants and Tram Operators we greatly appreciate the support of South Australia Police Transit Security. These people have been augmented by contracted security guards (ISS Security Pty Ltd) who travel on all services leaving the city after 7.00pm weekdays, weekends and public holidays.
A Closed Circuit Television (CCTV) audit in conjunction with the Passenger Transport Division was carried out to ensure adequate coverage and to confirm compliance with the National Code of Practice for CCTV. Stations and their precincts have continued to be upgraded. This work has consisted of extending Closed Circuit Television (CCTV) capability and upgrading of lighting for stations and other TransAdelaide facilities. The installation of security cameras on all 2000 and 2100 railcars has been completed and all Emergency Phones throughout the network have been replaced with more visible, upgraded units.
TransAdelaide is an active partner in emergency security as laid out in the Intergovernmental Agreement on Surface Transport Security . We participate in several security committees and have developed strong relationships in security matters with the Department for Premier and Cabinet; Transit Services Branch; Police Security Services Branch; State Protective Services Branch, South Australia’s Department for Transport, Energy and Infrastructure and the Federal Department of Transport and Regional Services.
The Environment TransAdelaide seeks to make a strong contribution to the continued quality of life enjoyed by all South Australians and is proud to provide the rail backbone of an integrated public transport system. A public transport system that is economic, reliable, environmentally sound, safe for our staff, passengers and the community, that is accessible to all and which, as a result, continues to enjoy growing support and patronage.
As a service provider, we have a primary role in achieving South Australia’s Strategic Plan target T3.6: Use of Public Transport; Increase the use of public transport to 10 percent of metropolitan weekday passenger vehicle kilometres by 2018. Achieving this target will mean a significant reduction in Adelaide’s commuters’ reliance on the motor car that will reduce traffic congestion, and thereby add economic value through transport efficiencies. Such a shift to public transport will also reduce car emissions and help reduce South Australia’s ecological footprint. Also, being a large organisation with over 500 staff in several locations, and as a major user of fuel we aim to reduce our own direct environmental impact. In this regard TransAdelaide is committed to the Greening of Government Operations (GoGo) Action Plan. Our Green Plan has been formulated and is based on that of the Department for Transport, Energy and Infrastructure. Although a formal implementation process with related targets is not expected until October 2007 much has been already achieved.
The past year has seen us increase from five to 10 percent biodiesel. Some difficulties with engines had been encountered but subsequently overcome and testing is continuing for the possible use of B20. Energy savings are expected from infrastructure developments such as concrete resleepering and the resulting efficiency of smoother, less speed-restricted railcar performance. Recycling and energy
Page 34 TransAdelaide Annual Report 2006-07
conservation have become standard practise across our business units and the appointment of an Environmental Coordinator further demonstrates our commitment to contributing to Greening of Government Operations and South Australia’s Greenhouse Strategy 2007-2020.
Performance against the annual energy use target has been encouraging and shows the positive impact of the B10 with diesel consumption reduced in spite of a 19.5 percent increase in train kilometres through increased services. Our diesel savings were offset to a degree by an increase in both petrol and electricity consumption, leaving an overall reduction of 2517 Gigajoules. The increase in electricity use has been attributed to continued lighting upgrades and a 10.6 percent increase in tram services.
ENERGY USE COMPARISON
Energy Use Expenditure GHG Emissions (Tonnes CO 2 (GJ) ($) equivalent) Base year 2000-01 Electricity 30 969 1 031 005 10 202 Diesel 287 237 5 917 274 22 433 Petrol 718 17 424 58 Total 318 924 6 965 703 32 693 Current year 2006-07 (+/- 2005-06) Electricity 35 711 1 221 578 9 920 (+2 407) (- 1 694) (+604) Diesel 324 934 9 254 335 22 729 (-5 610) (-443 187) (-391) Petrol 6 487 221 992 446 (+686) (28 658) (+31) Total 367 131 10 697 905 33 105 (-2 517) (-416 223) (+244) Target for 2010 297 532 N/A 29 576
Page 35 TransAdelaide Annual Report 2006-07
ANNUAL ASBESTOS MANAGEMENT REPORT 2006-07 Category # Sites # Sites Category Description Interpretation Start of End of One or more items at Year Year these sites … Remove Should be removed 1 0 1 promptly Remove as soon as May need removal 2 42 37 practicable during maintenance works Use care during May need removal 3 N/A maintenance during maintenance works Monitor condition Has asbestos present. 4 N/A Inspect according to legislation and policy No asbestos All asbestos identified identified/identified as per OHS&W 5 N/A asbestos has been 4.2.10(1) has been removed removed Further information These sites not yet 6 N/A required categorised
Groundwater Remediation Monitoring and remediation works have continued at the Adelaide Rail Yards site adjacent to the Morphett Bridge since investigative drilling in September 2006 revealed the extent of historic contamination from fuel storage leakages. The project, utilising the services of Soil and Groundwater Consulting Pty Ltd will continue under oversight from the Environment Protection Authority.
Promoting Independence – Disability Action Plan Providing access and equity for customers is a key program for TransAdelaide and making our transport system available to people with a disability is a very important component of our customer service. The last several years have seen substantial modifications made to our infrastructure and vehicles. This work is ongoing and achievements over the past financial year are listed in the table below. Two committees, the internal Disability Action Plan Implementation Committee and the external Disability Consultative Committee were formed in June 2007 to guide our efforts. We would like to thank the Office for Disability and Client Services for its assistance in the development of our Disability Action Plan. Senior Policy Officer, Helen Beavan and our external committee (below) have already made excellent contributions, especially in regards to updating training programs for staff and providing input towards the six outcome areas outlined in Promoting Independence:
• Ensuring accessibility; • Ensuring inclusiveness of information for disabled people; • Awareness and understanding of issues for disabled people;
Page 36 TransAdelaide Annual Report 2006-07
• Providing mechanisms for consultation; • Ensuring the meeting of requirements of the Disability Discrimination Act (DDA) and the Equal Opportunity Act; • Strategies to increase the rate of employment for people with a disability.
The external committee comprises people with disabilities representing the disability sector and will essentially operate as a focus group and source of specialist consultation services.
Although all possible resources are being used to address DDA requirements within deadlines, not all targets will be achieved i.e. we will not reach twenty-five percent compliance for the train fleet by 31 December 2007. A major refurbishment program for our seventy 3000/3100 series railcars planned to commence during 2008 will make most stop-gap modifications redundant and wasteful of resources. Similarly some works on infrastructure such as stations and platforms are being coordinated with the recently announced major rail upgrade program as a means of minimising the impact of service disruptions.
DDA Infrastructure Projects Project Completed 2006-07 at: Work in Progress at: Raising and levelling Lynton Platform Upgrading ramps Due Dec 07: Salisbury, Smithfield, Parafield, Gawler Central Providing compliant Mitcham, Ethelton Adelaide, Noarlunga doors, lifts and stairs Shelters upgrades Elizabeth, Womma Ovingham, Dudley Park, including installation of Tambelin compliant seating Step treatments and Adelaide, Mitcham handrail modification Upgrade lighting to DDA Kilkenny, Lynton Woodville Park, Kilkenny, standards Osborne, Noarlunga, North Haven Installation of backlit Kilkenny, Lynton, West Croyden, Largs signs Woodville Park North, Draper, Midlunga, Outer Harbor, Albert Park, Seaton Park East, Grange, Largs Manouvering areas and Mitcham, Hove, Woodville modified crossing mazes Laying of tactile tiles Gawler Central New, or modification to Adelaide counter tops
Page 37 TransAdelaide Annual Report 2006-07
Responding to Our Community Feedback is vital for us to maintain close links with our community and to stay in touch with their requirements. The monthly meetings of the Rail Customer Panel’s seven members continue to be a very important complement to passenger surveys. Members of the panel are interested commuters, representing a particular line, who have responded to vacancy notices to join this advisory group.
Although our staff do their best, problems sometimes arise. Rail networks, being closed systems are very unforgiving and issues tend to cascade through the system with compounding impact. TransAdelaide prides itself on being proactive to mitigate the impact of problems and to be responsive and transparent when dealing with legitimate customer concerns. Our Passenger Rail Information System (PARIS) provides a mechanism to log passenger concerns and provide timely responses. As such, PARIS also provides an excellent management tool that identifies issues that may require particular attention.
Page 38 TransAdelaide Annual Report 2006-07
Corporate Governance A strong and effective Corporate Governance Framework is the foundation for the achievement of TransAdelaide’s strategic goals. It confirms our commitment to transparency and accountability with clear communication between the Minister for Transport, our Board of Directors and General Manager.
Our Corporate Governance Framework is based on the principles of ethical dealings with all stakeholders and the pursuit of continuous improvement. It is guided by the TransAdelaide (Corporate Structure) Act 1998; guidelines issued by the Department of Premier and Cabinet and the Department of Treasury and Finance’s Financial Management Framework.
TransAdelaide’s Board of Directors The Governor of South Australia appoints the Board of Directors in accordance with the TransAdelaide (Corporate Structure) Act 1998 which, amongst other things requires that:
It will consist of not more than six members; • one person will be a person nominated by the Minister after taking into account the recommendations of the United Trades and Labour Council; and • the remainder will be persons nominated by the Minister.
Meetings of the board are chaired by Ms Virginia Hickey who has been nominated by the Governor. Profiles of the Board’s five directors are given below.
Directors are independent of the organisation and have been chosen on the basis of their skills and experience in matters that impact TransAdelaide’s operations and future development.
They have responsibility for setting TransAdelaide’s strategic direction, oversight of the organisation and its management, establishing performance goals for management and monitoring the attainment of these goals. The board provides accountability to the Government of South Australia. The authority, responsibility and accountability for implementation of strategic plans cascades from the General Manager and the Executive Group with all employees expected to fulfil their roles to the best of their ability.
The Board is assisted by its Audit and Risk Committee. Comprising three Board Members, the Audit and Risk Committee assists the full board by monitoring the achievement of a high standard of corporate governance. It takes oversight responsibilities for financial accounting practices, financial management and reporting, risk management and internal controls, the internal and external audit function and compliance with laws and regulations.
The three members of this specialist committee, chaired by Kevin Benger have been chosen for their particular expertise in finance and the law. With Kevin are Virginia Hickey and Frances Magill.
Page 39 TransAdelaide Annual Report 2006-07
Ms Virginia Hickey, the Chair of the Board, brings expertise in corporate governance and commercial law, as well as experience in transport. She is a corporate governance consultant, lawyer, and a director on a number of government and private sector boards including being a Councillor of the National Competition Council and on the board of Flinders Ports. Virginia is a member of the TransAdelaide Audit & Risk Committee and on the Board of TransAdelaide’s joint venture, Transitplus.
Mr Kevin Benger is Chief Executive Officer of Community CPS Australia Ltd. Kevin brings financial and transport skills to the Board from both his current role and 30 years involvement with transport, including his role as former General Manager of TransAdelaide.
Kevin is Chair of the TransAdelaide Audit & Risk Committee and a member of the Board of Transitplus.
Ms Frances Magill is the Chief Executive Officer of Statewide Superannuation Trust and Managing Director of Statewide Financial Management Services. Frances brings a wealth of commercial experience to the TransAdelaide Board and the Audit & Risk Committee, as well as a strong personal focus on improving community involvement. Recently awarded the Centenary Medal for Services to the Community and Statewide Superannuation Trust, Frances has been a recipient of the Telstra Business Woman of the Year and was the 2006 South Australian of the Year (Business).
Mrs Libby Kosmala is a Public Relations / Fundraiser for the Spina Bifida and Hydrocephalus Association of South Australia and a well-known South Australian paralympian. Libby has a wealth of experience of the Government and Community sectors and is highly regarded for her wide-ranging skills. She brings a unique perspective of public relations, sporting achievement and disability access to the Board.
Mr Roger Jowett is the National Transport Policy Advisor for the Rail, Tram and Bus Union. He was formerly National Secretary of the Rail Tram and Bus Union and was a member of the Australian Council of Trade Unions Executive. Roger has represented the Union on a number of Union / employer consultative committees at both State and National level.
Page 40 TransAdelaide Annual Report 2006-07
Strategic and Business Planning, Monitoring and Accountability The Board, with the executive team and direction from the Minister and Government policy sets TransAdelaide’s strategic goals to maintain our position as a key player in providing Adelaide with an integrated passenger transport network.
The foundation of our corporate mission is the responsibility to contribute strongly to the achievement of South Australia’s Strategic Plan (SASP) target T3.9: Double the use of public transport to 10% of weekday travel by 2018. A number of initiatives that contribute to patronage growth feature within our strategic, Rail Revitalisation Plan 2005-2010, thus aligning with our primary SASP target above. TransAdelaide also contributes to the achievement of many other SASP targets: • A majority of female Directors on the TransAdelaide Board, including our Chair, Virginia Hickey (SASP Targets T5.1 and T5.2); • Fifty percent of our Executive Managers are female (SASP Target T6.23). For further information see Employee Statistics in ‘Our People’. • Continued upgrading of systems and infrastructure is expected to impact achievement towards the public sector performance targets, T1.7, T1.8 and T1.9.
Meetings of Directors Board Meetings Audit & Risk Committee Number Number Eligible to Attended Eligible to Attended Attend Attend Ms Virginia 11 11 4 4 Hickey Mr Kevin Benger 11 10 4 4 Ms Frances 11 10 4 3 Magill Mrs Libby 11 10 Kosmala Mr Roger Jowett 11 10
Board ex-officio attendance by: Attendee Position Meeting Attended General Manager, Mr Bill Watson All TransAdelaide Executive Manager Ms Suzanne Ridding Corporate Services, All TransAdelaide Observer, Department for Mr Damien Anderson 9 Treasury & Finance
Page 41 TransAdelaide Annual Report 2006-07
As part of our on-going leadership development program a number of Managers have attended board meetings as observers throughout the year. Other external guests have also attended by invitation.
Audit & Risk Committee ex-officio attendance by:
Attendee Position Meeting Attended General Manager, Mr Bill Watson All TransAdelaide Executive Manager Ms Suzanne Ridding Corporate Services, All TransAdelaide Director of Audits, Auditor- Mr Salvatore Bianco All General’s Department Audit Manager, Auditor- Mr Ben Brincat All General’s Department KPMG (Internal Auditor for Mr Laurie Kozlovic to March 2007 TransAdelaide) KPMG (Internal Auditor for Mr Maurice Pagnozzi from March 2007 TransAdelaide) KPMG (Internal Auditor for Mr Justin Jamieson All TransAdelaide)
Board Member Remuneration Board remuneration is determined by the Commissioner of Public Employment. Final approval rests with the Governor following advice and approval from Cabinet.
Board Member Benefits No Board member has received or become entitled to receive, during or since the 2006-07 financial year, a personal benfit (other than a remuneration benefit included in the financial statements) because of a contract made with TransAdelaide by: • the Board member; • a firm or government department of which the Board member is a member; or • an entity in which the Board member has a substantial financial interest.
Risk Management TransAdelaide has an organisation-wide approach to risk management making it a fundamental element of TransAdelaide’s corporate culture. Risk is assessed and dealt with appropriately at all levels of the organisation. Our risk management policy reflects the South Australian Government Risk Management Policy Statement (spanning several SASP targets), relevant Treasurer’s Instructions and best practice.
Whilst risk management is a primary responsibility of the Board, it has given specific roles and responsibilities to the Risk and Audit Committee (above). The committee monitors the annual Risk Management Plan and regularly reviews the areas of highest risk.
Page 42 TransAdelaide Annual Report 2006-07
TransAdelaide uses the AS/NZS 4360:2004 Risk Management framework to identify, analyse, evaluate and treat risks. It is an integral part of our daily activities. A major review of our risk management processes has been undertaken over the past twelve months. The review assessed the structure of the risk management plan; the criteria used to analyse risks; the software required to support risk management processes and risk reporting within the organisation. As a result, an enterprise-wide, strategic risk management system is presently being developed. The system will contain modules for operational-level risk management.
Strategic Risk Assessment of opportunities and risk is fundamental to all planning. This is particularly so at board level with strategic planning taking into consideration the external environment, Ministerial and government objectives and our present capabilities.
Operational Risk The electronic risk management system being developed will be based on TransAdelaide’s existing risk management policies and procedures. The new system will enable documentation to be easily accessible across the organisation, ensure currency and also aid the compilation of reports for trend analysis and subsequent management actions. Management continually reviews risk profiles and internal controls. Relevant safety related incidents are recorded, thoroughly investigated and reported to relevant authorities.
Internal Control and Assurance TransAdelaide engages KPMG as its internal auditor to assist the Board by reviewing compliance with established internal controls for effective risk identification and management. The internal auditors have direct access to the Audit and Risk Committee and when required meet independently of management. The Audit and Risk Committee approves the annual internal audit plan.
External Audit TransAdelaide’s external auditor is the Auditor-General’s Department. The scope of the audit program is determined by the Auditor-General to comply with the obligations as required by Section 31 of the Public Finance and Audit Act 1987 and sub section 32(4) of the Public Corporations Act 1993.
Contract & Procurement Management TransAdelaide is committed to a tender and procurement governance process that ensures open and fair competition with integrity and probity. Competitive tendering also ensures that we remain accountable and that we receive value for the expenditure of funds.
A number of tenders and contracts were issued throughout the year for stations and rail track upgrades, including resleepering, embankment repairs and upgrades, lighting and illuminated signage upgrades. A public Request for Tender was issued in March 2007 for the construction of the Oaklands Transport Interchange Project. All tenders are placed on the Government Tenders and Contracts website at www.tenders.sa.gov.au .
Page 43 TransAdelaide Annual Report 2006-07
Consultancies engaged during the past year are listed below. Consultancy expenditure 2006-07 Consultant Below $10 000 Cost 3 18 198 Total consultancies 18 198 < $10 000 Consultant $10 000 - $50 000 Cost Purpose Soil and Groundwater Environmental consulting Consulting 13 970 Total consultancies $10 000 - $50 000 13 970 Consultant Above $50 000 Cost Purpose Sinclair Knight Merz TransAdelaide future station upgrade strategy 81 401 Total Consultancies > $50 000 81 401 Total Consultants 113 569
Page 44 TransAdelaide Annual Report 2006-07
Statutory Information
Freedom of Information Act – Information Statement In accordance with section 9 of the Freedom of Information Act 1991 , the following represents TransAdelaide’s information statement as at 30 June 2007.
Structure and Function of TransAdelaide Detailed information on TransAdelaide’s structure and principal activity or function can be found within the Directors’ Report. As will be noted, the primary activity of TransAdelaide is the provision of regular passenger transport services incorporating rail operations and rail infrastructure services. These activities affect members of the public, primarily by providing access to regular passenger transport services throughout the Adelaide Metropolitan Area.
Arrangements for Public Participation TransAdelaide facilitates public participation in the development of services through a Rail Customer Panel that meets monthly to provide feedback and input to service design and delivery. TransAdelaide also has an ‘Adopt-a-Station’ program that provides avenues for community groups to participate in the maintenance and beautification of stations (infrastructure) and their environs.
Contact Arrangements Requests for access to TransAdelaide documents or requests to seek amendment of TransAdelaide’s records concerning the personal affairs of an individual should be directed in writing to:
The Freedom of Information Officer TransAdelaide GPO Box 2351 ADELAIDE SA 5001
Page 45 TransAdelaide Annual Report 2006-07
TransAdelaide’s Policies: • Assessment Appeals • Capital Expenditure • Car Parking • Closed Circuit Television • Consultants • Corporate Governance Framework • Counselling / Disciplinary Action • Credit Control • Delegations & Authorisations • Elimination of Harassment / Bullying • Emergency Procedure Manual • Employee Code of Conduct • Environmental • Executive Remuneration • Flexi-Time • Freedom of Information • Information Technology Security • Intellectual Property • Leadership Principles • Licenses & Accreditation • Near-Miss • Performance Development • Personal and Other Leave • Psychometric Assessment • Purchasing & Procurement • Quality • Records Management • Redeployment • Risk Management • Second Job • Security • Study Assistance • TransAdelaide Safety • Use of Company Motor Vehicles
Documents held by TransAdelaide available at www.transadelaide.com.au • Annual Reports • ‘Year in Review’ • ‘Express’ newsletters
Whistleblower Legislation TransAdelaide’s Executive Manager Corporate Services is responsible for the application of the Whistleblowers Protection Act within TransAdelaide to provide TransAdelaide’s employees, suppliers and members of the public with confidentiality regarding allegations of mal-administration, waste or illegal activities or corruption in the workplace.
Privacy Legislation TransAdelaide is required to comply with the State Government’s ‘Information Privacy Principles Instruction’. These principles are applied throughout the organisation to provide appropriate levels of privacy protection to personal information.
Page 46 TransAdelaide Annual Report 2006-07
Ethical Standards and Performance A Code of Conduct has been in place throughout the course of the year to ensure all business affairs are conducted legally, ethically and with the strict observance of the highest standards of integrity and propriety. This Code of Conduct applies to all executives, employees and contractors of TransAdelaide.
Fraud There were no instances of fraud detected within TransAdelaide or its joint venture, Transitplus, during the financial year.
Third Party Claims Rail related third party and public liability claims continue to be managed in-house by TransAdelaide. The number and value of claims remains at similar levels to last year. During the year risk assessments were conducted and risk mitigation strategies implemented to reduce the likelihood and severity of incidents.
Overseas Travel No. of employees Destinations Reason for travel Total cost Investigate the suitability of UK, Germany, rostering and scheduling 2 $15 400 Austria software used by similarly structured rail systems.
Page 47 TransAdelaide Annual Report 2006-07
Financial Report
Directors’ Report The TransAdelaide Board has pleasure in presenting its report on the Financial Report of the economic entity for the financial year ended 30 June 2007.
Principal Activities TransAdelaide is a body corporate subject to the provisions of the Public Corporations Act 1993. The TransAdelaide (Corporate Structure) Act 1998 provides that TransAdelaide’s principal activity is to operate passenger transport services. This continued to be our primary focus throughout the year.
TransAdelaide’s five-year agreement for the provision of metropolitan rail services with the Public Transport Division (PTD) was renewed by the Government in 2005 taking the contract through until April 2010.
TransAdelaide is a joint shareholder in Transitplus Pty Ltd, a private company that provides passenger transport services in the Adelaide Hills region also under contract with the PTD.
Providing our passenger transport services within greater metropolitan Adelaide requires management of tram and train fleets as well as substantial infrastructure. The focus in 2006-07 has been on improving our services to provide our customers with reliable, regular and safe public transport through continual upgrading of our fleets and infrastructure. This also progresses us towards compliance with Disability Discrimination Act requirements and enhances general passenger comfort and safety.
Review of Operating Result
The financial year ended 30 June 2007 has seen TransAdelaide record a net profit before tax of $1.614m. We are proud of this outcome as it has seen TransAdelaide return to a positive result whilst taking into account Government efficiency savings and a challenging year from an operational perspective. Whilst a $16.157 million profit was shown in 2005-06, this was largely due to the $18 million income recognised from the sale of the tram infrastructure to the Department of Transport, Energy & Infrastructure.
This year’s profit has enabled us to return a dividend to the Government of $0.971 million; the first ordinary dividend paid in the last four years. Special dividends totalling $4.325 million were also paid.
Capital Expenditure TransAdelaide’s capital expenditure for the year was $20 million. This was $8 million under-budget mainly due to circumstances outside of the organisation’s control including long lead times on sourcing parts, additional consultation requirements on public works and delays in the manufacture of critical components.
Page 48 TransAdelaide Annual Report 2006-07
Significant Changes in the Economic Entity There have been no significant changes in the operations or structure of the economic entity this year. 2007-08 will see the transfer of the majority of TransAdelaide’s fixed assets to the Department of Transport, Energy & Infrastructure along with the capital budget allocated to carryover funding and capital funding allocations for future years.
Ministerial Control and Direction TransAdelaide did not receive any specific Ministerial Direction during 2006-07.
Payment of Accounts Account Payment Performance Percentage Value in $A Percentage of Number of Particulars of Accts paid of Accts Accts paid Accts Paid (by number) paid (by value) Paid by due date 15 105 97.66% $91 472 305 96.5% Paid late, within 30 285 1.95% $2 296 396 2.82% days of due date Paid more than 30 65 0.40% $471 864 0.67% days from due date
Board Member’s Benefits Neither during, nor since the financial year has any Board Member received or been entitled to receive a benefit, other than their disclosed remuneration as shown in note 13.
Board Member’s Interests in Contracts As at the date of this report, no Board Member had interests in contracts or proposed contracts with any part of the economic entity.
Indemnities and Insurance TransAdelaide pays an insurance premium in respect of insuring the Board mebers, the General Manager, all of its Executive Officers and employees of any related body corporate against a liability incurred as a Board Member, Secretary or Executive Officer to the extent permitted by the Passenger Transport Act 1994.
Contractual Arrangements
New Contracts TransAdelaide did not enter into any new contacts exceeding $4 million for the provision of services undertaken by the Public Sector during 2006-07.
Continuation of Existing Contracts The following contractual arrangements exceeding $4.0m entered into previously were continued during 2006-07.
Page 49 TransAdelaide Annual Report 2006-07
1 Provision of railcar maintenance and related services. The contract was awarded to Bombardier Transportation Australia Pty Ltd on a ten- year term, commencing 11 June 2005. The scope of the contract is: to carry out planned preventative and corrective maintenance of railcars; to carry out unplanned preventative and corrective maintenance of railcars; the cleaning of railcars; and monitoring of railcar condition.
The contract’s objectives are to: provide a public transport service which achieves the highest standard of reliability, safety and comfort for our customers in a manner which is economical and cost- effective; provide the services in a manner which is designed to enhance the overall quality and performance of TransAdelaide’s rail operations; provide the services fully in compliance with the Rail Safety Act and required standards.
At 30 June 2007 there has been no transfer of assets to Bombardier Transportation Australia Pty Ltd and there are no contingent and other liabilities that have not been reflected in the accounts.
2 Upgrading of TransAdelaide’s existing Computerised Traffic Control (CTC) and Passenger Information (PI) systems.
The contract was awarded to Alstom Australia Ltd and commenced on 14 March 2003, with a practical completion yet to be achieved. The scope of the contract is to upgrade the CTC and PI systems which have been in service since 1988.
The contract’s objectives are to: provide train passengers with a public transport service that achieves the highest standards of reliability and safety; eliminate the risk of the current network reaching technical obsolescence and diminishing the level of available equipment support; improve the efficiency, productivity and adaptability of the CTC and PI systems to better meet the current and future operational and business needs of TransAdelaide.
At 30 June 2007, there has been no transfer of assets to Alstom Australia Ltd and there are no contingent and other liabilities.
Page 50 TransAdelaide Annual Report 2006-07
Income Statement 30 June 2007
Note 2007 2006 Income $'000 $'000 Revenues from the provision of services 7 97 166 96 779 Appropriation from SA Government 8 2 669 2 356 Financial income 9 1 400 984 Net gain (loss) from the disposal of assets 10 376 (891) Other revenues 11 11 473 33 846 Income from joint venture 26 942 972
Total Income 114 026 134 046
Expenses Employee benefits costs 12 42 450 40 118 Supplies and services 15 43 124 40 181 Depreciation and amortisation expense 16 19 806 21 123 Finance costs 17 5 411 5 956 Other expenses 18 1 621 (20) Change in taxation policy 19 - 10 531
Total Expenses 112 412 117 889
Profit before income tax equivalents 1 614 16 157
Income tax equivalent expense 19 (484) -
Net profit/(loss) after income tax equivalents 1 130 16 157
The net profit/(loss) after income tax equivalents is attributable to the SA Government as owner
The above statement should be read in conjunction with the accompanying notes
Page 51 TransAdelaide Annual Report 2006-07
Balance Sheet 30 June 2007
Note 2007 2006 Assets $'000 $'000 Current Assets Cash and cash equivalents 20 20 670 22 106 Receivables 21 2 393 2 550 Inventories 22 4 886 4 309
Total Current Assets 27 949 28 965
Non-Current Assets Property, plant and equipment 23 638 763 640 461 Investment property 24 10 322 11 074 Intangible assets 25 156 114 Investment accounted for using the equity method 26 200 200
Total Non-Current Assets 649 441 651 849
Total Assets 677 390 680 814
Liabilities Current Liabilities Payables 28 10 884 12 404 Short-term employee benefits 30 7 627 7 646 Short-term provisions 31 2 655 2 837 Other current liabilities 32 271 419
Total Current Liabilities 21 437 23 306
Page 52 TransAdelaide Annual Report 2006-07
2007 2006 Non-Current Liabilities $’000 $’000 Long-term borrowings 29 75 205 75 205 Long-term employee benefits 30 11 094 10 531 Long-term provisions 31 10 520 10 551 Government grants 33 8 735 6 656
Total Non-Current Liabilities 105 554 102 943
Total Liabilities 126 991 126 249
Net Assets 550 399 554 565
Equity Contributed capital - - Asset revaluation reserve 34 469 278 474 510 Retained earnings 81 121 80 055
Total Equity 550 399 554 565
The Total Equity is attributable to the SA Government as owner
Commitments for expenditure 35 Contingent assets and liabilities 36
The above statement should be read in conjunction with the accompanying notes
Page 53 TransAdelaide Annual Report 2006-07
Statement of Changes in Equity 30 June 2007
Asset Revaluation Retained Note Reserve Earnings Total $'000 $'000 $'000 Balance at 30 June 2005 482 635 91 397 574 032 Changes in accounting policy - - - Error correction 18 - (806) (806)
Restated balance at 30 June 2005 482 635 90 591 573 226
Gain (loss) on revaluations during 2005-06 34 (61) - (61) Net income (expense) recognised directly in equity for 2005-06 (61) - (61) Profit (loss) after income tax equivalent for 2005-06 - 14 855 14 855 Total recognised income and expense for 2005-06 (61) 14 855 14 794 Transferred to retained profits amounts realised on disposal of assets 34 (8 064) 8 064 - Dividends to SA Government - (34 757) (34 757)
Balance at 30 June 2006 474 510 78 753 553 263
18 & Error correction 24 - 1 302 1 302
Restated balance at 30 June 2006 474 510 80 055 554 565
Page 54 TransAdelaide Annual Report 2006-07
Gain (loss) on revaluations during 2006-07 - - - Net income (expense) recognised directly in equity for 2006-07 - - - Profit (loss) after income tax equivalent for 2006-07 - 1 130 1 130
Total recognised income and expense for 2006-07 - 1 130 1 130
Transferred to retained profits amounts realised on disposal of assets 34 (5 232) 5 232 - Dividends to SA Government 8(b) - (5 296) (5 296)
Balance at 30 June 2007 469 278 81 121 550 399
All changes in equity are attributable to the SA Government as owner.
The above statement should be read in conjunction with the accompanying notes
Cash Flow Statement 30 June 2007
Note 2007 2006 Cash flows from Operating Activities $'000 $'000 Cash Inflows Receipts from the sale of goods and services 97 322 97 852 Interest received 1 383 970 Receipts from SA Government 5 454 20 832 Dividends received 999 971 GST input tax credits claimed 10 700 15 772 Other receipts 10 821 16 813
Cash generated from operations 126 679 153 210
Page 55 TransAdelaide Annual Report 2006-07
2007 2006 Cash Outflows $’000 $’000 Employee benefit payments (42 489) (41 311) Supplies and services (41 850) (42 831) Interest paid (5 434) (5 992) Income tax equivalents paid (694) - GST payments on purchases (5 863) (6 756) GST remitted to ATO (8 303) (5 283)
Cash used in operations (104 633) (102 173)
Net cash provided by operating activities 37 22 046 51 037
Cash flows from Investing Activities Cash Inflows Proceeds from sale of property, plant and equipment 34 34 388 Proceeds from sale of investments 1 588 -
Cash generated from investing activities 1 622 34 388
Cash Outflows Purchase of property, plant and equipment (19,667) (36 894) Purchase of intangibles (141) -
Cash used in investing activities (19 808) (36 894)
Net cash provided by (used in) investing activities (18,186) (2 506)
Cash flows from Financing Activities
Cash Outflows Dividends paid (5 296) (34 757) Repayment of borrowings - (6 166)
Net cash used in financing activities (5 296) (40 923)
Page 56 TransAdelaide Annual Report 2006-07
2007 2006 $’000 $’000
Net (decrease)/increase in cash and cash equivalents (1,436) 7 608 Cash and cash equivalents at the beginning of the financial year 22 106 14 498 Cash and cash equivalents at the end of the financial year 20 20 670 22 106
The above statement should be read in conjunction with the accompanying notes
Page 57 TransAdelaide Annual Report 2006-07
Notes Index Note 1 Objectives of TransAdelaide______59 Note 2 Summary of Significant Accounting Policies______59 Note 3 Financial Risk Management ______67 Note 4 Changes in accounting policies ______68 Note 5 Segment information______68 Note 6 - Reclassifications ______68 Note 7 - Revenues from the provision of services ______69 Note 8 - Revenues from/payments to SA Government______69 Note 9 - Financial income ______70 Note 10 - Net gain (loss) from the disposal of assets ______70 Note 11 - Other revenues______71 Note 12 - Employee benefits cost ______72 Note 13 - Key management personnel ______73 Note 14 - Related party disclosures______75 Note 15 - Supplies and services ______76 Note 16 - Depreciation and amortisation expense ______77 Note 17 - Finance Costs ______77 Note 18 - Other expenses ______78 Note 19 - Income tax equivalent expense ______79 Note 20 - Cash and cash equivalents ______79 Note 21 - Receivables______80 Note 22 - Inventories ______81 Note 23 - Property, plant and equipment______81 Note 24 - Investment property ______83 Note 25 - Intangible assets______84 Note 26 - Investments accounted for using the equity method______84 Note 27 - Reconciliation of asset carrying amounts______85 Note 28 - Payables______86 Note 29 - Borrowings ______87 Note 30 - Employee benefits______87 Note 31 - Provisions ______88 Note 32 - Other liabilities______89 Note 33 - Government Grants ______90 Note 34 - Reserves ______90 Note 35 - Commitments ______91 Note 36 - Contingent assets and contingent liabilities ______92 Note 37 - Reconciliation of cash and cash equivalents ______93 Note 38 - After balance date events ______94
Page 58 TransAdelaide Annual Report 2006-07
Note 1 Objectives of TransAdelaide TransAdelaide was established as a Public Authority under the TransAdelaide (Corporate Structure) Act 1998 in January 1999. TransAdelaide also has a 50% interest in Transitplus Pty Ltd, a joint venture entity established for the provision of bus services through the Adelaide Hills.
TransAdelaide is a body corporate subject to the provisions of the Public Corporations Act 1993 . The TransAdelaide (Corporate Structure) Act 1998 provides that TransAdelaide’s principal activity is to operate passenger transport services, an activity that continued to be the primary focus throughout the year.
Note 2 Summary of Significant Accounting Policies a) Basis of Accounting The financial report is a general purpose financial report. The accounts have been prepared in accordance with applicable Australian Accounting Standards and Treasurer’s Instructions and Accounting Policy Statements promulgated under the provision of the Public Finance and Audit Act 1987 (PFAA). Australian accounting standards include Australian equivalents to International Financial Reporting Standards. TransAdelaide has early-adopted the amendments to AASB101 Presentation of Financial Statement. Refer to Note 4. TransAdelaide’s Income Statement, Balance Sheet and Statement of Changes in Equity have been prepared on an accrual basis and are in accordance with historical cost convention, except for certain assets that were valued in accordance with the valuation policy applicable. The preparation of the financial report requires: - the use of certain accounting estimates and requires management to exercise its judgement in the process of applying TransAdelaide’s accounting policies. The areas involving high degrees of judgement or where assumptions and estimates are significant to the financial statements, these are outlined in the applicable notes; and - compliance with accounting policy statements issued pursuant to section 41 of the Public Finance and Audit Act 1987, by authority of Treasurer’s Instruction 19 Financial Reporting. In the interest of public accountability and transparency the accounting policy statements require the following note disclosures, that have been included in this financial report: a) revenues, expenses, financial assets and liabilities where the counterparty/transaction is with an entity within the SA Government as at reporting date, classified according to their nature. A threshold of $100,000 for separate identification of these items applies; b) expenses incurred as a result of engaging consultants; c) employee targeted voluntary separation package information; and d) employees whose normal remuneration is $100,000 or more (within $10,000 bandwidths) and the aggregate of remuneration paid or payable or otherwise made available, directly or indirectly by the entity to those employees.
Page 59 TransAdelaide Annual Report 2006-07
The financial report has been prepared on a 12 month operating cycle and presented in Australian currency. b) Comparative Information The presentation and classification of items in the financial report are consistent with prior periods except where a specific Accounting Policy Statement or Australian Accounting Standard has required a change.
Where presentation or classification of items in the financial report has been amended, comparative amounts have been reclassified unless reclassification is impracticable.
The restated comparative amounts do not replace the original financial report for the preceding period. c) Rounding All amounts in the financial statements have been rounded to the nearest thousand dollars ($’000). d) Taxation In accordance with Treasurer’s Instruction 22 Tax Equivalent Payments, TransAdelaide is required to pay to the State Government an income tax equivalent. The income tax liability is based on the State Taxation Equivalent Regime, which applies the accounting profit method. This requires that the corporate income tax rate be applied to the net profit. The current income tax liability relates to the income tax outstanding for the current period.
TransAdelaide is liable for payroll tax, fringe benefits tax, goods and services tax (GST), emergency services levy, land tax equivalents and local government rate equivalents.
Income, expenses and assets are recognised net of the amount of GST except: when the GST incurred on a purchase of goods or services is not recoverable from the Australian Taxation Office, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item applicable; and
Receivable and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the Australian Tax Office is included as part of receivables or payables in the Balance Sheet.
Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the Australian Tax Office is classified as part of the operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the Australian Tax Office. If GST is not payable to, or recoverable from, the Australian Tax Office, the commitments and contingencies are disclosed on a gross basis
Page 60 TransAdelaide Annual Report 2006-07
e) Income and Expenses Income and expenses are recognised to the extent that it is probable that the flow of economic benefits to or from the entity will occur and can be reliably measured. Income and expenses have been classified according to their nature and have not been offset unless required or permitted by a specific accounting standard, or where offsetting reflects the substance of the transaction or other event.
The notes accompanying the financial statements disclose income, expenses, financial assets and financial liabilities where the counterparty/transaction is with an entity within the SA Government as at the reporting date, classified according to their nature.
Transactions with SA Government entities below the threshold of $100,000 have been included with the non-government transactions, classified according to their nature.
Revenues Revenues from fees and charges and from the provision of services Revenues from fees and charges and the provision of services are derived from goods and services to the public and other SA government agencies. This revenue is recognised upon delivery of the service to the clients or by reference to the stage of completion.
Services directly related to the provision of rail services are disclosed under Note 7. Other services provided on an ad hoc basis are disclosed as Other Income under Note 11.
Revenues from sales Revenues from sales are recognised when the significant risks and rewards of ownership are transferred to the purchaser.
Rental income Rental income arising on investment properties is accounted for on a straight line basis over the lease term.
Revenues from the SA Government Grants from the Government are recognised at their fair value where there is a reasonable assurance that the grant will be received and TransAdelaide will comply with all attached conditions.
Government grants relating to capital expenditure are deferred and recognised in the Income Statement over the period necessary to match them with the costs that they are intended to compensate. Government grants relating to the purchase of property, plant and equipment are recognised as deferred income and are credited to the Income Statement on a straight line basis over the expected lives of the related assets.
Where money has been received in the form of a loan, TransAdelaide has recorded a loan receivable. Where money has been received in the form of an equity contribution, the Treasurer has acquired a financial interest in the net assets of TransAdelaide and the funding is recorded as contributed equity.
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Other contributions All contributions from non-government entities are recognised as income when TransAdelaide obtains control of the contribution or the right to receive the contribution and the income recognition criteria are met.
All contributions paid by TransAdelaide have been unconditional.
Disposal of non-current assets Income from the disposal of non-current assets is recognised when control of the asset has passed to the buyer and is determined by comparing proceeds with carrying amount. When revalued assets are sold, the revaluation increments are transferred to retained earnings.
Resources received/provided free of charge Resources received/provided free of charge are recorded as revenue/expenditure in the Income Statement at their fair value.
Maintenance Expenses TransAdelaide undertakes major cyclical maintenance on its infrastructure assets. All costs involved with the major cyclical maintenance are recorded as an expense unless they add to the service potential of the existing infrastructure asset.
Finance costs All finance costs are recognised as an expense. f) Current and Non-Current Classification Assets and liabilities are characterised as either current or non-current in nature. TransAdelaide has a clearly identifiable operating cycle of twelve months. Assets and liabilities that are sold, consumed or realised as part of the normal operating cycle even when they are not expected to be realised within twelve months after the reporting date have been classified as current assets or current liabilities. All other assets and liabilities are classified as non-current.
Where asset and liability line items combine amounts expected to be realised within twelve months and more than twelve months, TransAdelaide has separately disclosed the amounts expected to be recovered or settled after more than twelve months. g) Cash and Cash Equivalents Cash and cash equivalents in the Balance Sheet includes cash at bank and on hand and which are subject to insignificant risk of changes of value. For the purpose of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above. Cash is measured at nominal value.
Page 62 TransAdelaide Annual Report 2006-07
h) Receivables Receivables include amounts receivable from trade, prepayments and other accruals.
Trade receivables arise in the normal course of selling goods and services to the public and other agencies. Trade receivables are generally receivable within 30 days after the issue of an invoice or the goods/services have been provided under a contractual arrangement.
Collectibility of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off when identified. An allowance for doubtful debts is raised when there is objective evidence that TransAdelaide may not be able to collect the debt. i) Inventories Inventories are measured at the lower of cost or their net realisable value. Cost is allocated in accordance with the weighted average cost method. Net realisable value is determined using the estimated sales proceeds less costs incurred in marketing, selling and distribution to customers.
The amount of any inventory write-down to net realisable value/replacement cost or inventory losses are recognised as an expense in the period the write-down or loss occurred. Any write-down reversals are recognised as an expense reduction.
Inventories include train, tram and infrastructure spare parts. j) Non-Current Asset Acquisition and Recognition Assets are initially recorded at cost or at the value of any liabilities assumed, plus any incidental cost involved with the acquisition. Where assets are acquired at no value, or minimal value, they are recorded at their fair value in the Balance Sheet. If, however, the assets are acquired at no or nominal value as part of a restructuring of administrative arrangements then the assets are recorded at the value recorded by the transferor prior to transfer.
Where payment for an asset is deferred, TransAdelaide measures the obligation at the present value of the future outflow, discounted using the interest rate of a similar length borrowing.
All non-current tangible assets with a value of $4,000 or above are capitalised. k) Revaluation of Property, Plant and Equipment All non-current tangible assets are valued at written down cost, and revaluation of non-current assets or group of assets is only performed when its fair value at the time of acquisition is greater than $1 million and the estimated useful life is greater than three years.
Every five years, TransAdelaide revalues its land and buildings. However, if at anytime management considers that the carrying amount of an asset materially differs from its fair value, then the asset will be revalued regardless of when the last valuation took place. Non-current tangible assets that are acquired between valuations are held at cost until the next valuation, where they are revalued to fair value.
Page 63 TransAdelaide Annual Report 2006-07
Any revaluation increment is credited to the asset revaluation reserve, except to the extent that it reverses a revaluation decrement of the same asset class previously recognized in the Income Statement, in which case the increase is recognised in the Income Statement.
Any revaluation decrease is recognised in the Income Statement, except to the extent that it offsets a previous revaluation increase for the same asset class, in which case the decrease is debited directly to the asset revaluation reserve to the extent of the credit balance existing in revaluation reserve for that asset class.
TransAdelaide uses the gross method of revaluation where the gross asset value and the accumulated depreciation are both restated to the revalued amounts of the assets.
Upon disposal or derecognition, any revaluation reserve relating to the asset is transferred to retained earnings. l) Impairment All non-current tangible and intangible assets are tested for indication of impairment at each reporting date. Where there is an indication of impairment, the recoverable amount is estimated. An amount by which the asset’s carrying amount exceeds the recoverable amount is recorded as an impairment loss.
For revalued assets an impairment loss is offset against the asset revaluation reserve to the extent of any revaluation credit for that asset within the reserve. m) Depreciation and Amortisation of Non-Current Assets All non-current assets, having a limited useful life, are systematically depreciated/amortised over their useful lives in a manner that reflects the consumption of their service potential. Amortisation is used in relation to intangible assets such as software, while depreciation is applied to tangible assets such as property, plant and equipment.
Assets’ residual values, useful lives and amortisation methods are reviewed and adjusted if appropriate, on an annual basis.
Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for prospectively by changing the time period, or method, as appropriate, which is a change in accounting estimate.
The value of leasehold improvements is amortised over the estimated useful life of each improvement, or the unexpired period of the relevant lease, whichever is shorter.
Land and assets held for sale are not depreciated.
Depreciation/amortisation is calculated on a straight line basis over the estimated useful life of the following classes of assets as follows:
Page 64 TransAdelaide Annual Report 2006-07
Class of Assets Depreciation Method Useful Life (Years) Rollingstock Railcars Straight Line 20 – 42 Tramcars Straight Line 10 – 87 Buildings Straight Line 10 – 100 Permanent Way Straight Line 20 – 242 Machinery, Plant & Straight Line 3 – 100 Equipment Intangibles Straight Line 3 n) Intangible Assets An intangible asset is an identifiable non-monetary asset without physical substance. Intangible assets are measured at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.
The useful lives of intangible assets are assessed to be either finite or indefinite. TransAdelaide only has intangible assets with finite lives. The amortisation period and the amortisation method for intangible assets is reviewed on an annual basis.
The acquisition of, or internal development of software is capitalised only when the expenditure meets the definition criteria (identifiability, control and the existence of future economic benefits) and recognition criteria (probability of future economic benefits and reliable measurement and when the amount of expenditure is greater than or equal to $4,000).
All research and development costs that do not meet the capitalisation criteria outlined in AASB 138 are expensed.
Subsequent expenditure on intangible assets has not been capitalised. This is because TransAdelaide has been unable to attribute this expenditure to the intangible asset rather than to TransAdelaide as a whole. o) Investment Property Investment property, principally comprising of freehold land, is held for a long term yield and is not occupied by TransAdelaide. Investment property is carried at fair value. Changes in fair value are recorded in the Income Statement as part of other income. p) Payables Payables include creditors, accrued expenses and employment on-costs.
Creditors represent the amounts owing for goods and services received prior to the end of the reporting period that are unpaid at the end of the reporting period. Creditors include all unpaid invoices received relating to the normal operations of TransAdelaide.
Page 65 TransAdelaide Annual Report 2006-07
Accrued expenses represent goods and services provided by other parties during the period that are unpaid at the end of the reporting period and where an invoice has not been received.
All payables are measured at their nominal amount and are normally settled within 30 days from the date of the invoice or date the invoice is first received.
Employment on-costs include superannuation contributions and payroll tax with respect to outstanding liabilities for salaries and wages, long service leave and annual leave.
TransAdelaide makes contributions to several State Government and externally managed superannuation schemes. These contributions are treated as an expense when they occur. There is no liability for payments to beneficiaries as they have been assumed by the respective superannuation schemes. The only liability outstanding at balance date relates to any contributions due but not yet paid. q) Employee Benefits These benefits accrue for employees as a result of services provided up to the reporting date that remain unpaid. Long-term employee benefits are measured at present value and short-term employee benefits are measured at nominal amounts.
Wages, salaries, annual leave and sick leave
Liability for salaries and wages are measured as the amount unpaid at the reporting date at remuneration rates current at reporting date.
The annual leave liability is expected to be payable within twelve months and is measured at the undiscounted amount expected to be paid. In the unusual event where salary and wages and annual leave are payable later than 12 months, the liability will be measured at present value.
No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees is estimated to be less than the annual entitlement of sick leave.
Long service leave The liability for long service leave is recognised after an employee has completed six and a half years of service. An actuarial assessment of Long Service Leave undertaken by the Department of Treasury and Finance based on a significant sample of employees throughout the South Australian public sector determined that the liability measured using the short-hand method was not materially different from the liability measured using the present value of expected future payments. This calculation is consistent with TransAdelaide’s experience of employee retention and leave taken. r) Leases The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement. TransAdelaide has assessed whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset. TransAdelaide has entered into operating leases.
Page 66 TransAdelaide Annual Report 2006-07
Operating Leases Operating leases are recognised as an expense in the Income Statement on a straight-line basis over the lease term. The straight-line basis is representative of the pattern of benefits derived from the leased assets. s) Insurance TransAdelaide has arranged, through the SA Government Financing Authority, SAICORP Division (SAICORP), to insure all major risks of TransAdelaide, excluding the Adelaide Railway Station Building, which is insured through Aon Services Pty Ltd (Aon).
The excess payable with Aon varies depending on the aspect of risk insured. There is a standard $1 million excess on all insurance cover with SAICORP.
t) Joint Venture In TransAdelaide’s financial statements the investment in joint venture entity is carried at the lower of cost or recoverable amount. TransAdelaide’s share of the joint venture entity’s net profit or loss is recognised in the Income Statement from the date joint control commenced.
The economic entity’s investment in joint venture entity is based upon the equity method of accounting for investment in associates as per Australian Accounting Standard AASB 128, “Investments in Associates”.
Note 3 Financial Risk Management TransAdelaide is exposed to a variety of financial risks, market risk (foreign exchange and price), credit risk and liquidity risk.
Risk management is carried out by the Corporate Services unit and risk management policies and practices are in accordance with Australian Risk Management Standards and internal written policies approved by the Board.
TransAdelaide has non-interest bearing assets (cash on hand and on call and receivables) and liabilities (payables) and interest bearing assets (held to maturity investments) and liabilities (borrowings from the SA Government).
TransAdelaide’s exposure to foreign exchange risk and cash flow interest risk is minimal. TransAdelaide is exposed to price risk for changes in interest rates that relate to long-term debt obligations and investments classified either as available-for- sale or fair value.
TransAdelaide has no significant concentration of credit risk. TransAdelaide has policies and procedures in place to ensure that transactions occur with customers with appropriate credit history.
In relation to liquidity/funding risk, the continued existence of TransAdelaide in its present form, and with its present segments/services, is dependent on SA Government policy and on continuing capital appropriations by Parliament to maintain TransAdelaide’s asset base/programs.
Page 67 TransAdelaide Annual Report 2006-07
Note 4 Changes in accounting policies Except for the amendments to AASB 101 Presentation of Financial Statements, which TransAdelaide has early-adopted, the Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective, have not been adopted by TransAdelaide for the reporting period ending 30 June 2007. TransAdelaide has assessed the impact of the new and amended standards and interpretations and considers there will be no impact on the accounting policies or the financial report of TransAdelaide.
Note 5 Segment information TransAdelaide operations fully relate to the provision of public transportation services in the Adelaide metropolitan area.
Note 6 - Reclassifications Reclassification of income and expenses: To better reflect the total income and expenses:
Contract penalties previously reported as expenses have been reclassified to show as a reduction to revenues from the provision of services from entities within SA Government.
Revenues from ad hoc project work previously netted against various expense items have been identified and shown as other revenue, resulting in an offsetting increase to the underlying employee benefits and supplies and services expense items.
Reclassification between income lines: To better reflect the true nature of the income received: 2006 $'000 Other revenues from entities within SA Government 11 Other services provided to Department of Transport, Energy and Infrastructure (DTEI) 1 655
Amortisation of capitalised funding grants 305 Write-off of capitalised grants when asset disposed 24 558
Other services provided to DTEI includes items previously classified as recurrent grants, other income and provision of other services, the classification has been changed as the income is received for the provision of services outside of the provision of rail services.
Other revenues from entities external to SA Government Property rental 514 Advertising revenue previously classified as revenues from the provision of services is now included in property rental in other revenues.
Page 68 TransAdelaide Annual Report 2006-07
Reclassification of costs The following reclassifications have occurred to reflect the true nature of costs incurred.
Supplies and Services Other employment costs 12 & 15 487 These costs now included within employee expenses had previously been accounted for within supplies and services.
Note 7 - Revenues from the provision of services
2007 2006 $'000 $'000 Services received by entities within SA Government 93 555 93 127 Services received by entities external to the SA Government 3 611 3 652
Total revenues from the provision of services 6 97 166 96 779
Note 8 - Revenues from/payments to SA Government 2007 2006 $'000 $'000 (a) Revenues from SA Government Included in Income Statement: Appropriations from Consolidated Account pursuant to the Appropriation Act 2 669 2 356
Included in Balance Sheet movements: Grants for capital expenditure 33 2 753 20 060 (b) Payments to SA Government Dividends paid 5 296 34 757 Dividends paid and payable have been specifically determined and approved in consultation with the Treasurer and TransAdelaide’s Minister. Special dividends paid during 2006-07; $2.296m relates to an ongoing arrangement, $1.369m for the tram asset sale and $0.66m for the sale of land. These special dividends were paid to the South Australian Government’s Consolidated Account on 29 June 2007.An ordinary dividend of $0.971m was paid by TransAdelaide for 2006-07.
Page 69 TransAdelaide Annual Report 2006-07
Note 9 - Financial income
2007 2006 $'000 $'000 Interest received/receivable from entities within SA Government 1 400 984
Total financial income 1 400 984
Note 10 - Net gain (loss) from the disposal of assets 2007 2006 $'000 $'000 Rollingstock Proceeds from disposal 8 78 Less net book value of assets disposed (95) (96)
Net gain (loss) from disposal of rollingstock (87) (18)
Permanent way Proceeds from disposal * - 31 485 Less net book value of assets disposed (86) (32 200)
Net gain (loss) from disposal of permanent way (86) (715)
Land and buildings Proceeds from disposal 18 2 619 Less net book value of assets disposed (48) (2 619)
Net gain (loss) from disposal of land and buildings (30) -
Other property, plant and equipment Proceeds from disposal 8 143 Less net book value of assets disposed (7) (152)
Net gain (loss) from disposal of other property, plant and equipment 1 (9)
Page 70 TransAdelaide Annual Report 2006-07
2007 2006 Investment Properties $’000 $’000 Proceeds from disposal 1 588 - Less net book value of assets disposed (1 010) (149)
Net gain (loss) from disposal of investment properties 578 (149)
Total Assets Total proceeds from disposal * 1 622 34 325 Less total value of assets disposed (1 246) (35 216)
Total net gain (loss) from disposal of assets 376 (891) On 26 June 2006 the Acting Treasurer approved the sale of tram related infrastructure assets by TransAdelaide to DTEI for consideration of $32.461m. These asset sales include Permanent Way, Land & Buildings and Other Plant & Equipment asset classes.
Note 11 - Other revenues 2007 2006 $'000 $'000 Other revenues from entities external to the SA Government Property rental 4 250 3 711 Fair value adjustment to investment properties 258 496 Other revenue 2 290 2 325
6 798 6 532 Other revenues from entities within SA Government Other services provided to Department of Transport, Energy and Infrastructure (DTEI) 6 3 071 1 655 Property rental 930 796 Amortisation of capitalised funding grants 6 521 305 Write-off of capitalised grants when asset disposed 6 153 24 558
4 675 27 314
Total other revenues 11 473 33 846 Future minimum payments receivable from non-cancellable operating leases of non- investment properties are: (i) within one year $2,992,000, (ii) between 2 and 5 years $8,480,000, and (iii) later than 5 years $24,456,000. Leases include advertising and display sites, mobile telephone transmitters and real estate with tenancies ranging from monthly to 95 years, whilst providing for regular reviews.
Page 71 TransAdelaide Annual Report 2006-07
Note 12 - Employee benefits cost 2007 2006 $'000 $'000 Salaries and wages 31 260 28 573
TVSPs (refer below) - 183 Long Service Leave 1 393 1 688 Annual Leave 3 033 2 991 Block Book Off 564 581 Retiring and Death Gratuity 7 14 Employment on-costs - superannuation 3 526 3 411 Employment on-costs - payroll tax 1 796 2 051 Employment costs - other 6 733 487 Board fees 138 139
Total employee benefits costs 6 42 450 40 118
Targeted Voluntary Separation Packages (TVSPs) Amounts paid to these employees: TVSPs - 183 Annual Leave and Long Service Leave paid during the reporting period - 89
- 272 Recovery from the Department of Treasury and Finance - (183)
Number of employees who were paid TVSPs during the reporting period - 1
Remuneration of Employees
Total Remuneration for employees > $100,000 3 954 3 188
Page 72 TransAdelaide Annual Report 2006-07
The number of employees whose remuneration
falls within the following remuneration bands were:
No. of No. of Remuneration Band $ Employees Employees 100,000 - 109,999 16 7 110,000 - 119,999 4 7 120,000 - 129,999 3 3 130,000 - 139,999 4 3 140,000 - 149,999 1 - 160,000 - 169,999 1 - 170,000 - 179,999 2 1 190,000 - 199,999 - 1 240,000 - 249,999 - 1 250,000 - 259,999 1 - 280,000 - 289,999 - 1
32 24
The table includes: all employees who received remuneration of $100,000 or more during the year. Remuneration of employees reflects all costs of employment including salaries and wages, superannuation contributions, fringe benefits tax and any other salary sacrifice benefits. a TVSP payment in 2006 (included in $280,000 - $289,999 band).
Note 13 - Key management personnel
(a) Board Members
The following persons held the position of board member during the financial year: Ms V Hickey Mr K Benger Ms F Magill Ms L Kosmala Mr R Jowett
Page 73 TransAdelaide Annual Report 2006-07
(b) Other key management personnel
The following persons also held authority and responsibility for planning, directing and controlling the activities of TransAdelaide, directly or indirectly during the financial year:
Bill Watson General Manager Suzanne Ridding Executive Manager - Corporate Services Vi Nguyen Executive Manager - Infrastructure Fiona Kidd Executive Manager - Organisational Development Randall Barry Executive Manager - Planning & Development Valdis Evele Executive Manager - Rail Systems James Hall Executive Manager - Trams Dean Phillips Acting Executive Manager – Rollingstock
(c) Key management personnel compensation
Key management personnel compensation for the years ended 30 June 2006 and 2007 is set out below:
The key management personnel are the board members and the senior management team (including the General Manager) who have responsibility for the strategic direction and management of TransAdelaide. 2007 2006 $'000 $'000 Short-term employee benefits 1 301 1 250
(d) Remuneration of board members The number of board members whose remuneration received or receivable falls within the following bands: No. of No. of Remuneration Band $ Employees Employees
$20,000 - $29,999 3 3 $30,000 - $39,999 1 1 $40,000 - $49,999 1 1 5 5
The total remuneration received and receivable by those board members was $138,000 (2006 - $139,000) which includes fringe benefits and superannuation contributions.
Amounts paid to a superannuation plan for board members was $44,000 (2006 $31,000)
Page 74 TransAdelaide Annual Report 2006-07
In accordance with the Department of the Premier and Cabinet Circular No. 016, government employees did not receive any remuneration for board duties during the financial year.
Unless otherwise disclosed, transactions between members are on conditions no more favourable than those that it is reasonable to expect the entity would have adopted if dealing with the related party at arm's length in the same circumstances.
Remuneration of committee members
The following board members were also committee members on the TransAdelaide Audit and Risk Committee:
Ms V Hickey Mr K Benger Ms F Magill
No remuneration was received or receivable by board members for being on this committee.
Board members V Hickey and K Benger were also on the board of Transit Plus Pty Ltd in which TransAdelaide has a 50% interest. Board fees relating to these positions are paid to the board members by TransAdelaide and are included in the remuneration above.
Note 14 - Related party disclosures TransAdelaide is controlled by the SA Government. Transactions and balances between TransAdelaide and related parties (other SA Government controlled entities) are disclosed in the notes accompanying the financial statements where applicable.
TransAdelaide has a 50% interest in a joint venture entity Transit Plus Pty Ltd. TransAdelaide received an annual management fee of $126,000 (2006 $126,000) and profit distributions from the joint venture entity of $942,000 (2006 $972,000).
Page 75 TransAdelaide Annual Report 2006-07
Note 15 - Supplies and services 2007 2006 $'000 $'000 Supplies and services provided by entities external to the SA Government Security 1 489 1 504 Rollingstock maintenance 9 988 9 676 Rollingstock fuel & power 9 453 9 869 Other supplies and services 17 838 13 885
Total supplies and services - Non SA Government entities 38 768 34 934
Supplies and services provided by entities within SA Government Accommodation and telecommunication 1 957 2 118 Audit fee 165 155 Legal costs 32 40 Accreditation fees 81 62 Vehicle leasing and fuel costs 527 831 Insurance 604 727 Security 409 430 Other supplies and services 6 581 884
Total supplies and services - SA Government entities 4 356 5 247
Total supplies and services 6 43 124 40 181
Consultants The number and dollar amount of consultancies paid / payable (included in supplies and services expense) that fell within the following bands:
2007 2006 No. $'000 No. $'000 Below $10,000 3 18 5 24 Between $10,000 and $50,000 1 14 4 103
Above $50,000 1 81 - -
Total paid / payable to the consultants engaged 113 127
Page 76 TransAdelaide Annual Report 2006-07
2007 2006 $'000 $'000 Auditor's Remuneration Audit fees paid / payable to the Auditor-General's Department 165 155
165 155 Other Services No other services were provided by the Auditor-General’s Department.
Note 16 - Depreciation and amortisation expense 2007 2006 $'000 $'000 Depreciation Rollingstock 8 125 9 801 Permanent way 7 578 7 216 Buildings 2 673 2 672 Other property, plant and equipment 1 332 1 251
19 708 20 940 Amortisation Intangible assets 98 183
98 183
Total depreciation and amortisation 19 806 21 123
Note 17 - Finance Costs 2007 2006 $'000 $'000 Interest on borrowings 4 922 5 381 Treasury guarantee fee 489 575
Finance costs - SA Government 5 411 5 956
Total finance costs 5 411 5 956
Page 77 TransAdelaide Annual Report 2006-07
Note 18 - Other expenses 2007 2006 $'000 $'000 Other expenses paid / payable to entities external to the SA Government Net Bad and Doubtful Debts - (20) Write down of inventories to net realisable value 37 - Property, plant and equipment write offs * 1 584 -
Restated total other expenses - Non SA Government entities 1 621 (20)
Restated total other expenses 1 621 (20)
* A capital work in progress write off adjustment for $1.584m was made to reflect the discontinuation of a bi-directional signalling project on the Noarlunga Centre railway line. This project was discontinued following the approval for a major upgrade of this railway line in future years excluding bi-directional signalling.
Correction of errors Due to an error in estimation of the amount of income receivable from appropriations for the year ended 30 June 2005, income was overstated by $806,000 in 2004-05. This error had the effect of overstating receivables as at 30 June 2005 and understating the net cost of providing services by $806,000 in 2004-05 and overstating retained earnings by $806,000 as at 30 June 2005.
This receivable was then fully provided for in 2005-06. This had the effect of overstating other expenses by $806,000 and understating the net costs of providing services by $806,000 in 2005-06 and understating retained earnings by $806,000 as at 30 June 2006.
This error has been corrected by restating each of the affected financial statement line items for the prior year.
Page 78 TransAdelaide Annual Report 2006-07
Note 19 - Income tax equivalent expense 2007 2006 $'000 $'000 Profit (loss) before income tax expense 1 614 16 157 Prima facie tax (if profit) thereon at 30% (484) (4 457) Tax exempt revenue items - 4 457
Income tax equivalent expense - SA Government (484) -
Change in taxation policy Adjustment to deferred tax balance sheet items as a result of Policy change - (10 531)
Total change in taxation policy - (10 531)
Policy change On 23 August 2005, the Treasurer approved amendments to TI22 "Tax and Tax Equivalents Applicable to Government Businesses". These amendments included the requirement for TransAdelaide to use the Accounting Profits Model to calculate the income tax equivalent expense from 1 July 2005.
As a result, the tax related assets identified in the Balance Sheet as at 30 June 2005 were not able to be realised and were written off in the 2005-06 financial year as part of the income tax equivalent expense calculation.
Note 20 - Cash and cash equivalents 2007 2006 $'000 $'000 Cash at bank 20 634 22 071 Imprest account/cash on hand 36 35 20 670 22 106 Interest rate risk Cash on hand is non-interest bearing. Deposits at call and with Treasurer earn a floating interest rate, based on daily bank deposit rates. The carrying amount of cash and cash equivalents represents fair value.
Page 79 TransAdelaide Annual Report 2006-07
Note 21 - Receivables 2007 2006 $'000 $'000 Current Gross accrued income 2 001 2 664 Less: Provision for doubtful debts (4) (182) Tax equivalent refund 210 - Prepayments 186 68
Total receivables 18 2 393 2 550
Receivables from SA Government entities Accrued income 537 711 Tax equivalent refund 210 - Prepayments 34 11
Total receivables from SA Government entities 781 722
Receivables from Non SA Government entities Accrued income 1 464 1 953 Less: Provision for doubtful debts (4) (182) Prepayments 152 57 GST receivable - -
Total receivables from Non SA Government entities 1 612 1 828
Total receivables 2 393 2 550
The total receivable figure does not include 'non-current receivables' as TransAdelaide does not have any receivables that meet the definition of non-current. Any 'non current receivables' would be disclosed in this note.
Provision for doubtful debts The provision for doubtful debts is recognised when there is objective evidence that a receivable is impaired. An allowance for impairment loss has been recognised in 'other expenses' in the Income Statement for specific debtors and debtors assessed on a collective basis for which such evidence exists.
Page 80 TransAdelaide Annual Report 2006-07
2007 2006 Movements in the provision for doubtful debts: $'000 $'000 Carrying amount at the beginning of the period 182 202 Amounts written off (20) (20) Reduction in provision for amounts recovered (158) - Carrying amount at the end of the period 18 4 182
Interest rate and credit risk Receivables are raised for all goods and services provided for which payment has not been received. Receivables are normally settled within 30 days. Trade receivables, prepayments and accrued revenues are non-interest bearing. Other than recognised in the provision for doubtful debts, it is not anticipated that counterparties will fail to discharge their obligations. The carrying amount of receivables approximates fair value due to being receivable on demand. There is no concentration of credit risk.
Bad and doubtful debts TransAdelaide has recognised a bad and doubtful debt expense of $0 (2006 $20,000) in the Income Statement.
Note 22 - Inventories 2007 2006 $'000 $'000
Stores inventories 4,886 4,309
Net Stores Inventories 4,886 4,309
Note 23 - Property, plant and equipment 2007 2006 $'000 $'000 Rollingstock Railcars Spare parts and associated equipment at Fair Value 5 184 5 229 Less: Accumulated depreciation 2 182 2 033 Railcar equipment at Fair Value 3 002 3 196
Railcars at Fair Value 1 970 - At independent valuation 1 July 2004 402 500 402 500 Less: Accumulated depreciation 214 581 207 029 Railcars at Valuation 189 889 195 471
Total Railcars 192 891 198 667
Page 81 TransAdelaide Annual Report 2006-07
2007 2006 Tramcars $’000 $’000 Spare parts at Fair Value 79 79 Less: Accumulated depreciation 33 29 Tramcar spares at fair value 46 50
Tramcars at Fair Value 243 243 At independent valuation 1 July 2004 17 375 48 525 Less: Accumulated depreciation 14 632 45 314 Tramcars at valuation 2 986 3 454
Total Tramcars 3 032 3 504
Total Rollingstock 195 923 202 171
Land and Buildings Freehold Land: At Fair Value 1 388 1 370 At independent valuation 1 July 2004 131 432 131 450 Total land 132 820 132 820
Buildings: At Fair Value 7 819 2 670 At Independent Valuation 1 July 2004 183 439 183 642 Less: Accumulated depreciation 101 735 99 080 Total buildings 89 523 87 232
Total land and buildings 222 343 220 052
Permanent Way At Fair Value 27 621 18 858 At Independent Valuation 1 July 2004 376 866 383 939 Less: Accumulated depreciation 204 517 202 633 Total permanent way 199 970 200 164
Other Property, Plant and Equipment At Fair Value 19 722 19 831 Less: Accumulated depreciation 11 349 12 937 Total other property, plant & equipment 8 373 6 894
Page 82 TransAdelaide Annual Report 2006-07
2007 2006 Assets Under Construction $’000 $’000 Rollingstock: - Railcars 1 857 327 Land and buildings 4 885 2 089 Permanent way 4 718 5 365 Other property, plant & equipment 694 3 399
Total assets under construction 12 154 11 180
Total property, plant & equipment 638 763 640 461
Carrying amounts of property, plant and equipment that would have been recognised if these assets were stated at Cost Rollingstock 91 383 94 827 Land and buildings 70 578 67 817 Permanent way 97 425 94 054 Other property, plant & equipment 8 613 7 204
Total property, plant & equipment at Cost 267 999 263 902
All major non-current assets are revalued every five years on an existing use, fair value basis in the financial statements at the revalued amounts.
The most recent independent valuation was undertaken by Valuations Chambers during 2004-05 financial year and included the major asset classes being trams, trains, land, buildings and permanent way.
In accordance with South Australian State Treasurer's Accounting Policy Framework, TransAdelaide has assessed that assets recorded at cost reflect fair value where such assets have not been independently revalued.
There were no indications of impairment of property, plant and equipment, infrastructure and intangible assets at 30 June 2007.
Note 24 - Investment property 2007 2006 $'000 $'000 Opening balance at fair value 11 074 11 074 Less Disposals (1 010) - Net gain (loss) from fair value adjustment 258 -
Restated closing balance at fair value 10 322 11 074
Page 83 TransAdelaide Annual Report 2006-07
Valuation basis Investment properties are measured at fair value, being the amounts for which the properties could be exchanged between willing parties in an arms length transaction, based on current prices in an active market for similar property. A valuation was performed by Valuation Chambers in the 2004-05 financial year. During the year a further revaluation was conducted of the disused railway corridor land located between Dry Creek and Pooraka resulting in an increment based on the Valuer General's valuation. One parcel of land in the corridor was subsequently sold.
Correction of errors Vacant land assets with a fair value of $0.496m were omitted from the Investment Property assets in 2005-06. This had the effect of understating Investment Property and Retained Earnings by this value as at 30 June 2006.
Note 25 - Intangible assets 2007 2006 $'000 $'000 Computer Software Internally developed computer software 87 51 Less Accumulated amortisation (49) (23) Other computer software 1 185 1 084 Less: Accumulated amortisation (1 067) (998)
Total Intangible assets 156 114
Note 26 - Investments accounted for using the equity method Ownership Interest Joint Venture Transitplus Pty Ltd 50% 50% Investment in Related Entities Transitplus Pty Ltd 200 200
200 200 Principal Activities Transitplus Pty Ltd - Provision of bus services
Investment in Transitplus Pty Ltd Carrying amount at 1 July 200 200 Share of net profit 942 972 Less distributions received or receivable (942) (972)
Carrying amount at 30 June 200 200 For reasons of commercial sensitivity TransAdelaide is unable to provide any further financial information on Transitplus Pty Ltd
Page 84 TransAdelaide Annual Report 2006-07
Note 27 - Reconciliation of asset carrying amounts
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Plant & Plant TotalNon- Equipment Investment Other PP&E Construction Rolling-stock Assets Assets Under current Assets current TotalProperty, Permanent Way PropertyAssets LandBuildings& IntangibleAssets
Carrying amount at beginning of year 202 171 220 052 200 164 6 894 11 180 640 461 10 578 114 651 153 Transfers - - Restatement for Error - 496 496 Change in accounting policy - - Restated carrying amount at beginning of year 202 171 220 052 200 164 6 894 11 180 640 461 11 074 114 651 649 Additions - 18 - 836 19 147 20 001 20 001 WIP Write Offs (1 584) (1 584) (1 584) Disposals (95) (48) (86) (7) (236) (1 010) (1 246) Transfers 1 972 4 994 7 470 1 982 (16 558) (140) - 140 - Transfers to inventory (31) (31) (31) Revaluation increment (decrement) - 258 258 Depreciation (8 125) (2 673) (7 578) (1 332) (19 708) (98) (19 806) Carrying amount at end of year 195 923 222 343 199 970 8 373 12 154 638 763 10 322 156 649 241
New assets resulting from completed Assets Under Construction have been treated as transfers.
Page 85 TransAdelaide Annual Report 2006-07
Note 28 - Payables 2007 2006 $'000 $'000 Current: Creditors 4 640 1 949 Accrued expenses 4 588 4 887 Accrued employment on-costs 698 635 GST payable 36 3 502
9 962 10 973 Expected to be paid more than 12 months after reporting date Employment on-costs 922 1 431
Total current payables 10 884 12 404
Payables to SA Government entities Creditors 544 529 Accrued expenses 831 906 Employment on-costs 1 620 2 066
Total payables to SA Government entities 2 995 3 501
Payables to Non SA Government entities Creditors 4 096 1 420 Accrued expenses 3 757 3 981 GST payable 36 3 502
Total payables to Non SA Government entities 7 889 8 903
Total payables 10 884 12 404
Interest rate and credit risk Creditors and accruals are raised for all amounts billed but unpaid. Sundry creditors are normally settled within 30 days. Employment on-costs are settled when the respective employee benefit that they relate to is discharged. All payables are non- interest bearing. The carrying amount of payables represents fair value due to the amount being payable on demand.
Page 86 TransAdelaide Annual Report 2006-07
Note 29 - Borrowings 2007 2006 $'000 $'000 Non-current: Borrowings from SA Government 75,205 75,205
Total borrowings 75,205 75,205 Borrowings are recognised at cost and have no maturity date. The interest rate is determined by the Treasurer. The rate was 6.50% in 2007 (7.00% in 2006).
Note 30 - Employee benefits 2007 2006 $'000 $'000 Current: Annual leave 3 021 3 093 Long service leave 903 976 Block book off 783 728 Retiring and death gratuity 19 198
Total current employee benefits provisions 4 726 4 995 Accrued wages and salaries 1 213 1 132
5 939 6 127 Expected to be paid more than 12 months after reporting date Annual leave 1 604 1 519 Retiring and death gratuity 84 -
Total short-term employee benefits 7 627 7 646
Non-current: Long service leave 11 094 10 531
Total long-term employee benefits 11 094 10 531
Total employee benefits 18 721 18 177
Employee benefits as above 18 721 18 177 Plus: related on-costs included in current payables 1 620 2 066
Aggregate employee benefits plus related on- costs 20 341 20 243
Page 87 TransAdelaide Annual Report 2006-07
Based on an actuarial assessment performed by the Department of Treasury and Finance, the benchmark for the measurement of the long service leave liability has been revised from 7 to 6.5 years.
Note 31 - Provisions 2007 2006 $'000 $'000 Current: Workers compensation claims 1 399 1 470 Third party accident damage 975 996 Railcar maintenance debt 281 371
Total short-term provisions 2 655 2 837
Non-current: Workers compensation claims 7 785 7 866 Third party accident damage 2 735 2 685
Total long-term provisions 10 520 10 551
Total: Workers compensation claims 9 184 9 336 Third party accident damage 3 710 3 681 Railcar maintenance debt 281 371
Total provisions 13 175 13 388
Page 88 TransAdelaide Annual Report 2006-07
Note 31(a) - Reconciliation of Provisions movements
Third Workers Party Railcar Comp. Accident Maint. Claims Damage Debt Total $'000 $'000 $'000 $'000
Carrying amount at 1 July 2006 9 336 3 681 371 13 388
Recognised expense in 2006-07 1 027 144 - 1 171 less Net Provisions used during the year (1 179) (115) (90) (1 384)
Movement (152) 29 (90) (213)
Carrying amount at 30 June 2007 9 184 3 710 281 13 175 Workers Compensation This liability reflects unsettled workers compensation claims. The workers compensation provision is based on an actuarial assessment of outstanding claims by Brett & Watson Pty Ltd at 30 June 2007.
Third Party Accident Damage This liability reflects TransAdelaide's partial self insurance for this operational risk. The third party accident damage provision is based on an actuarial assessment of outstanding claims performed by Brett & Watson Pty Ltd as at 30 June 2007. TransAdelaide has reinsurance for claims exceeding $2.1 million for claims prior to 1 July 1997 and exceeding $1 million for claims since 1 July 1997.
Railcar Maintenance Debt This liability relates to work being performed by Bombardier Transportation Ltd on the 2000 and 3000 class bogies for which, under the Railcar maintenance and service contract, TransAdelaide has agreed to pay a portion. This work is due to be finalised this year.
Note 32 - Other liabilities 2007 2006 $'000 $'000 Current: Revenue received for future services from entities within SA Government 207 357 from entities external to the SA Government 64 62
Total current other liabilities 271 419
Page 89 TransAdelaide Annual Report 2006-07
Note 33 - Government Grants 2007 2006 $'000 $'000 Non-Current: Capital grants from entities within SA Government Grants received 9 726 6 973 Less: Accumulated amortisation (991) (317)
Total government grants 8 735 6 656
The accounting policies adopted and the description of government grants received by TransAdelaide, including the conditions attached to the grants, have been disclosed in note 2.
2007 2006 Movement in government grants $'000 $'000 Carrying amount at beginning of year 6 656 11 460 Additional capital grants received 2 753 20 060 Amortisation (521) (24 864) Written back on disposal of asset (153) -
Carrying amount at end of year 8 735 6 656
In accordance with AASB 120, government grants received for capital expenditure are amortised over the life of the resulting asset. During the current financial year TransAdelaide received such grants for work performed on the Marion Oaklands Transport Interchange projects and various security and safety upgrades.
Note 34 - Reserves 2007 2006 $'000 $'000
Asset revaluation reserve 469 278 474 510
Movements during the year Opening balance 474 510 464 730 Changes in accounting policy - 17 906
Restated opening balance 474 510 482 636
Page 90 TransAdelaide Annual Report 2006-07
2007 2006 $’000 $’000 Revaluation increment on non-current assets: Land and buildings - - Infrastructure - (61) Rollingstock - -
Transferred to retained profits amounts realised on disposal of: Land and buildings (5) (320) Infrastructure (485) (6 713) Rollingstock (4 742) (1 032)
Restated reserves as at end of year 469 278 474 510
Nature and purpose of reserves The asset revaluation reserve includes the net revaluation increments (decrements) arising from the revaluation of non-current assets in accordance with AASB 116. Asset decrements are expensed where no previous revaluation reserve increment exists for that asset.
Upon disposal of revalued assets, any related revaluation increment standing to the credit of the asset revaluation reserve is transferred to retained profits.
Note 35 - Commitments Capital Commitments Capital expenditure contracted for at the reporting date but not recognised as liabilities in the financial report, are payable as follows:
2007 2006 $'000 $'000 Within one year 1 056 1 953
Total capital commitments 1 056 1 953
Net capital expenditure incurred 20 001 31 263
TransAdelaide's capital commitments are for the upgrading of railway stations, pedestrian crossings, railway lines and for the implementation of security improvements throughout the suburban railway network.
Page 91 TransAdelaide Annual Report 2006-07
Remuneration commitments Commitments for the payment of salaries and other remuneration under fixed term employment contracts in existence at the reporting date but not recognised as liabilities are payable as follows:
2007 2006 $'000 $'000 Within one year 1 699 927 Later than one year but not later than five years 1 160 869
Total remuneration commitments 2 859 1 796
Amounts disclosed include commitments arising from executive and other service contracts. TransAdelaide does not offer remuneration contracts greater than 5 years.
Operating lease commitments Commitments in relation to operating leases contracted for at the reporting date but not recognised as liabilities are payable as follows:
2007 2006 $'000 $'000 Not later than one year 501 606 Later than one year but not later than five years 365 477
Total operating lease commitments 866 1 083
Operating lease expenses paid 1 966 2 198
TransAdelaide leases property under operating leases expiring from one month to four years. The leases generally provide TransAdelaide with a right of renewal at which time all terms are negotiated. Contingent rental payments are based upon either movements in the Consumer Price Index or operating criteria.
Note 36 - Contingent assets and contingent liabilities TransAdelaide has a contingent liability in relation to the warranty of AUSTRICS products sold and provision of annual support of the same. The life of various elements of the indemnities vary between two and seven years from when AUSTRICS was sold in 2004-05. As at balance date, this could not be reliably measured.
TransAdelaide has fifty 3000/3100 class railcars subject to a cross border lease which expires in April 2023. Encumbrances exist within this agreement which gives rise to financial consequences in the event of loss or destruction of these leased railcar assets. The South Australian Financing Authority monitor the majority of foregoing obligations. To balance date, no event has occurred which would give rise to the encumbrances/consquences.
Page 92 TransAdelaide Annual Report 2006-07
Note 37 - Reconciliation of cash and cash equivalents 2007 2006 $'000 $'000 (a) Reconciliation of Cash
Cash as at 30 June 20 670 22 106
(b) Reconciliation of Net Cash provided by Operating Activities to Net Profit (Loss) from Ordinary Activities after related income tax expense Net profit (loss) 1 130 16 157
Add (less) non-cash items Depreciation 19 708 20 939 Amortisation 98 184 (Gain) loss on disposal of assets (376) 891 Amortisation of grant funding (521) (305) Write-back of unamortised capital grants on disposal of underlying assets (153) (9 844) Write-off of income tax related balances - 10 531 Write-off of work in progress project 1 584 - Revaluation (increments) decrements (258) (496)
Net Cash provided by operating activities before change in assets and liabilities 21 212 38 057
Movements in: Receivables 157 8 037 Stores inventories (577) 369 Payables (1 656) (254) Interest payable (23) (37) Employee benefits provisions 544 1 358 Other provisions (215) (1 599) Other liabilities 2 604 5 106
Net Cash Provided by Operating Activities after related income tax equivalent expense 22 046 51 037
The effective interest rate on cash deposits held throughout the year was 6.45%.
Page 93 TransAdelaide Annual Report 2006-07
Note 38 - After balance date events There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of TransAdelaide, to affect significantly the operations of TransAdelaide, the results of those operations, or the state of affairs of TransAdelaide in future financial years.
Page 94 TransAdelaide Annual Report 2006-07
Minister for Transport Certification of the Financial Report
In our opinion,
1. the financial statements are in accordance with the accounts and records of TransAdelaide and give an accurate indication of the financial transactions of TransAdelaide for the financial year ended 30 June 2007;
2. the financial statements present fairly, in accordance with the Treasurer’s Instructions promulgated under the provisions of the Public Finance and Audit Act 1987, applicable Accounting Standards and other mandatory professional reporting requirements in Australia, the financial position of the entity as at the reporting date and the result of its operations and its cash flows for the financial year ended 30 June 2007; and
3. internal controls over financial reporting have been effective throughout the reporting period.
Bill Watson Suzanne Ridding General Manager Chief Financial Officer
Virginia Hickey Kevin Benger Director Director
Page 95 TransAdelaide Annual Report 2006-07
Independent Auditor’s Report
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