Annual Report Sustaining regional Victoria 2009–10 Cover: V/Line Environment Officer Siska Waddington at a native vegetation biosite near Riddells Creek. Contents

About us 02

Letter to the Minister 03

Key partnerships 04

Strategic agenda 05

Chairman’s report 06

CEO’s report 08

Year in review 10

Passenger network map 12

Key results 13

Facts and figures 14

Safety and security 16

Our customers 18

Sustainability, environment and community 21

Environment report 2009–10 23

Our people 27

Operations 29

Fleet 31

Infrastructure 33

Victorian rail network map 35

Financial summary 36

Corporate governance 37

Financial statements 42

Disclosure index 72

Contents 1 About us

V/Line is Australia’s largest regional public transport About this annual report operator, serving a record 13.71 million train and coach This is the annual report of V/Line Corporation (formerly passengers in 2009–10. known as V/Line Passenger Corporation) (VLC) and its Each week we operate more than 1400 train services that wholly owned subsidiary, V/Line Pty Ltd (VLPL) (formerly run between Melbourne and: known as V/Line Passenger Pty Ltd). From 1 July 2010, • Geelong (including South Geelong and Marshall) the name changes to VLC and VLPL occurred to reflect our and Warrnambool increased remit to maintain and provide access to the Victorian regional rail network and our role in freight. • Bacchus Marsh (including Melton), Ballarat and Ararat (as well as Maryborough from 25 July 2010) V/Line complies with two sets of governance requirements – those applying to VLC as a statutory corporation and a • Sunbury, Kyneton and Bendigo, Swan Hill and Echuca state business corporation, and those applying to VLPL • Seymour, Albury / Wodonga and Shepparton as an entity incorporated under the Corporations Act 2001. • Traralgon, Sale and Bairnsdale. As a franchisee, VLPL must also fulfil its contractual Almost 600 coach services each week connect with the obligations under the franchise agreement with the Victorian rail network and serve regional Victorian communities Department of Transport (Director of Public Transport). where trains do not operate. Some coach services also V/Line is responsible to the Victorian Minister for Public run interstate to South Australia, New South Wales and Transport and the state’s Treasurer. Canberra. These coaches are operated by the private sector This report provides a summary of V/Line’s key activities under contract with the Department of Transport. and financial performance for the period 1 July 2009 In addition to being a passenger service operator, V/Line to 30 June 2010. Corporation is a not-for-profit corporation under the State Vision Owned Enterprises Act 1992. As part of this, we also provide Connecting Victorian communities and industry. access to, and maintain, 3770 kilometres of broad gauge rail track used by the passenger and freight rail services. Mission V/Line is also a major employer with a workforce of 1444 To provide value for our customers and community by employees – many of whom live in regional Victoria. delivering safe, reliable, accessible and sustainable passenger and rail freight transport services. Values • Put our customers first • Be honest • Take responsibility • Strive for excellence • Treat people and the environment with respect, with safety being paramount in all we do.

2 V/LINE ANNUAL REPORT 2009–10 Letter to the Minister

16 September 2010

The Hon. Martin Pakula Minister for Public Transport Level 16, 121 Exhibition Street Melbourne VIC 3000

Mr John Lenders Treasurer Level 1, 2 Treasury Place East Melbourne VIC 3002

Dear Ministers It is with pleasure that I present the annual report for V/Line Corporation and V/Line Pty Ltd (V/Line) covering the financial year 1 July 2009 to 30 June 2010. The V/Line business continues to be one of regional Victoria’s success stories, each year attracting more people to use trains and coaches as a better travel alternative to the car. This financial year, a record 13,705,843 passenger trips were made on V/Line services – a massive 89 per cent increase in the five years since 2004–05. Together with the state government, V/Line this year showcased its ability to manage major projects on time and on budget with the successful completion of works to return trains to Maryborough on 25 July 2010. This was the largest V/Line-controlled state project delivered to date, and will hopefully be the first of many. A key reason for the ongoing success of V/Line is the support provided by the state government in recent years, which has seen more than 40 new trains join the fleet, record levels of maintenance and track upgrades, and investment in the skills and training of our staff to ensure that we provide the best possible service to regional Victoria. On behalf of the V/Line team, I’d like to pay tribute to your former colleague Lynne Kosky who resigned from parliament in January this year. As Minister for Public Transport for three years she oversaw the most rapid growth in V/Line patronage in the history of Victorian rail. I and the rest of the V/Line team look forward to continuing that impressive trend with your support and that of the rest of government as we embark on one of the biggest infrastructure projects Australia has ever seen – Regional Rail Link. By delivering additional track space for regional trains throughout metropolitan Melbourne, this landmark project will provide the platform for the next era of growth in rail transport.

Yours faithfully

Frank Tait Chairman

letter to the minister 3 Key partnerships

To ensure our successful operation V/Line partners with • Essential Services Commission (ESC) – a number of businesses and stakeholders. administers the Victorian Rail Access Regime Many of these are also based in regional Victoria. • Independent Transport Safety and Reliability Regulator (ITSRR) – administers rail safety regulation in New South • Assetco Management Pty Ltd, trading as Southern Wales (V/Line operates some broad gauge track in Cross Station Pty Ltd (SCSPL) – manager of southern NSW and will operate on the standard Southern Cross Station gauge in Albury / Wodonga in the future) • Australian Rail Track Corporation (ARTC) – access • Metlink / Viclink – call centre and journey planner provider for the main interstate corridors. V/Line will provider as well as advocate for public transport require access to provide the Albury service after the broad gauge line is converted to standard gauge • Metro Trains Melbourne (Metro or MTM) – operator of Melbourne’s suburban electric trains and access provider • Connex – metropolitan train operator and access provider to the metropolitan network from 30 November 2009 to the metropolitan network until 29 November 2009 (succeeded Connex) • Bombardier – manufacturer and maintainer of our • Transport Ticketing Authority (TTA) – responsible for VLocity train fleet developing the new myki smartcard for Victoria and • Councils – V/Line works with regional municipalities manager of V/Line’s ticket agents to meet the transport needs of their communities • Rail freight operators, including Pacific National • Department of Transport (DOT) and El Zorro – users of the regional network ­ – Public Transport Division (PTD): administers V/Line’s • Victorian Managed Insurance Authority (VMIA) – franchise agreement, regional infrastructure lease, provides the majority of V/Line’s insurance requirements subsidy payments, and V/Line branded coach contracts – Infrastructure Projects Division (IPD): • Victorian Government – the Minister for Public implements government rail projects Transport and the Treasurer ­ – Public Transport Safety Victoria (PTSV): • VicRoads – major partner in our work to improve level administers the rail safety accreditation system crossing safety as the authority for main roads ­ – Freight, Logistics and Marine (FLAM): • VicTrack – owner of rail infrastructure which is leased administers government freight policy to V/Line and other operators either via the Director of • Downer EDI Rail (EDI) – maintained our Public Transport or directly. locomotive-hauled and Sprinter fleets and the V/Line also partners with a wide range of suppliers who VLocity fleet as sub-contractors to Bombardier deliver goods and services essential to our business. up to 30 June 2010

4 V/LINE ANNUAL REPORT 2009–10 Strategic agenda

V/Line’s strategic agenda

V/Line’s objectives

Safety and security Continuously improve safety and security in all aspects of our operations and business.

Retain and grow reputation Be trusted to advance and represent the interest and prosperity of regional Victoria.

Shareholder satisfaction Be recognised by the government as demonstrating and financial responsibility strong governance, efficient operations and financial responsibility.

Grow the business Sustainably grow patronage and freight volumes year-on-year.

‘On-time’ and ‘in-full’ service delivery Improve service delivery year-on-year.

Customer satisfaction Ensure that our reputation for excellent service contributes to customer satisfaction levels that remain the highest among Victorian transport operators and access managers.

Employee satisfaction and wellbeing Be recognised as an employer of choice in the Australian rail industry, with a positively motivated, engaged and skilled workforce.

Community and environmental responsibility Be a trusted representative of regional communities on transport services that link the state and drives sustainable outcomes.

Strategic Agenda 5 Chairman’s report

The announcement in 2008 of the Regional Rail Link project As our data indicates, the global financial crisis impacted was cause for great celebration in my report last year. on public spending and consequently the business saw The $4.3 billion project promises to be one of the biggest a drop in leisure travel in the second half of 2009 as people infrastructure projects Australia has ever seen, constructing in the country cut back on non-essential travel. We saw this up to 50 kilometres of new track and providing regional market bounce back in 2010 as the financial climate settled trains with their own track space in the metropolitan area and people returned to their usual leisure activities. The for the first time. commuter market remains strong as more people realise the The 2009–10 year saw preliminary works begin on Regional thousands of dollars that may be saved each year by leaving Rail Link. At Southern Cross Station the building of two the car at home and travelling by train to work in Melbourne new platforms, 15 and 16, has started as well as design from regional areas. work and public consultation for the Deer Park to Southern To help us meet the demands of growing patronage, we Cross Station route. are fortunate to see the monthly addition of new VLocity But now the hard work begins. Over the next five years, carriages to the V/Line fleet until at least the end of 2011. V/Line will be an alliance partner with the Department of In December 2009 we celebrated the 100th new carriage to Transport, Metro Trains and contractors in this massive roll off the production line since 2005. Premier John Brumby project. Over this time we must also meet the challenge of was in attendance to mark this major milestone for V/Line, not only helping to deliver such a massive project, but to highlighting just how far regional rail has evolved since continue offering the best service we can as we meet the its overhaul with Regional Fast Rail a few years ago. Each demands that come with record patronage. new carriage (built locally by Bombardier, which is based in Dandenong) adds an extra 76 seats to our busy services. With an exciting future to look forward to, this financial year in many ways has been about how we have continued to stay Community and sustainability on course, improve where we can and work incredibly hard The term sustainability has become so familiar that it’s hard to get projects well progressed. to remember a time when our actions were not influenced V/Line continues to expand its fleet thanks to funding by thoughts of the environment. commitments from the state government who recognise the As a public transport operator V/Line is, by default, a importance of good public transport for regional Victorians. business that contributes greatly to Victoria’s sustainability. We continue to maintain and upgrade existing infrastructure It is estimated that V/Line’s trains produce 13 per cent less and work at improving safety for both customers and staff. greenhouse gas emissions per passenger kilometre than Bringing back the Albury / Wodonga line is in our sights, the most greenhouse efficient car. and having just returned passenger services to Maryborough V/Line aims to not only be sustainable by removing cars and Creswick in July 2010 I look forward to seeing the from the road but actively makes a positive contribution community embrace this new service. The future is looking by continuing to reduce waste and consumption. Work very bright for our passengers and staff alike and the V/Line to become a more sustainable operation is ongoing as board is proud to be part of this picture. each part of our business is charged with demonstrating Continuing to break patronage records continual improvement in processes that not only help the environment but also save V/Line (and the Victorian In 2009–10 we again broke the all-time regional rail taxpayer) money. record with 13.71 million passenger trips – a 4.1 per cent increase on last year. This growth is more sustainable than Being ‘sustainable’ doesn’t just mean we focus our attention the massive annual jumps of up to 29 per cent seen in on ‘green’ issues alone. V/Line sustains regional Victoria in previous years on our train and coach services, and it means many ways. Our services provide the vital connections for that while more people than ever before are travelling with tens of thousands of Victorians to work, to travel, shop and V/Line, we are able to better meet seating demands on busy inject tourism dollars into regional towns, to be entertained, peak commuter services. and to interact socially.

6 V/LINE ANNUAL REPORT 2009–10 Through our broader work in the community we also take Expanding the network, it has to be said, is inspiring. on responsibilities and projects to provide meaningful It offers hope to communities who have been without train and sustaining partnerships. The V/Line Life Training services for many years and shows that V/Line continues program provides important information to regional to support government investment in regional Victoria. Victorian teenagers on the dangers of binge drinking, It also tells our staff that we are a progressive business illicit drug use and depression. The feedback we’ve received interested in providing the best possible service we can. from the parents and teenagers who attend the program Farewell and welcome has been overwhelmingly positive – we know that by Lynne Kosky resigned from state parliament and her role as broaching these issues we demystify subjects that have Minister for Public Transport in January 2010. It had been long gone undiscussed for this age group. Last year my pleasure to work with her over the three years she spent approximately 1800 young people attended 25 sessions in this role. She was vital in providing ongoing support across regional Victoria. and funding to V/Line to ensure that we could continue to Our sponsorships of vibrant festivals and events such as the upgrade infrastructure and build more trains. I wish Lynne all Echuca Jazz Festival and Fun4Kids in Warrnambool continue the best in her future endeavours. to provide support for local communities. Using V/Line This year I would like to welcome Martin Pakula who took services to get to special events is only a small part of the on the public transport ministry. He is a strong advocate for picture, with passengers bringing their tourist dollars into public transport users and I look forward to working with local communities and boosting their economies. him as he transforms the network under the government’s We know that an estimated $1.4 million was spent by more $38 billion Victorian Transport Plan. Just six months into the than 11,000 Melbourne tourists who caught a V/Line train to job, he has already played an influential role in the ongoing Ballarat and visited Sovereign Hill, the Queen – The Unseen transformation of our services and I wish him all the best in Archive exhibition at the Art Gallery of Ballarat, Ballarat what can only be described as a challenging job. International Foto Biennale and the Ballarat Begonia Festival. The V/Line team As a business we will continue to work with the state V/Line continues to have the highest customer satisfaction government, regional councils, local business and tourism rating of all the public transport operators in Victoria – this operators to highlight the benefits we can offer our speaks volumes about our staff and the work they do. passengers as well as the good we can do for the local economy and wellbeing of country towns. It’s my seventh year as Chairman and over this time it’s been my pleasure to watch staff and management grow in their The future roles and see them take pride in a business with such a Last year I said our challenge was to keep pace with demand, strong reputation in regional Victoria. We continue to build and, given record patronage once again, this rings true in on our name, not just through our frontline staff who are the 2009–10 year. the friendly and professional face of the business but also The good news is that we have a vision and the business through the hard work that goes on behind the scenes. has been planning for patronage growth and the consequent I would like to thank my fellow board members for their demand this puts on our fleet and infrastructure. efforts in the 2009–10 year. Changes over the past We continue to maintain a healthy relationship with 18 months have resulted in an innovative team and I’d like government who are acutely aware of the challenges we to thank Simon Lane for the time he spent on the board face. Their commitment is evident in the Regional Rail this financial year. Link project and in smaller projects such as the return of If a business is only as good as its people, then I’m confident passenger services to Maryborough. Trains to Maryborough that 2010–11 promises to be yet another successful year. were returned in July 2010 and will provide a much To all the staff and the management team I would like to anticipated and important service to the residents of express my thanks for your outstanding contribution to the Creswick and Maryborough. V/Line is proud to have carried business and I look forward to working closely with the team out the work on the project – upgrading level crossings, in the future. track works and stabling, building a new station and facilities at Creswick, as well as conducting upgrade works at Maryborough Station.

Frank Tait Chairman

Chairman’s report 7 CEO’s report

The 2009–10 year proved to be one of incredible and will be converted to standard gauge when track productivity. Major projects and maintenance programs works are complete. We are also building new stabling, had been delivered or were nearing completion at year’s maintenance and washing facilities in Melbourne for end, another 22 new carriages rolled off the production line, the standard gauge fleet. we maintained the highest customer satisfaction rating Obviously Regional Rail Link is another major project we’re of any public transport operator in Victoria, and internally looking forward to being involved in. As an alliance partner, many of V/Line’s core processes achieved certification to we will be part of the infrastructure planning to ensure that international standards. V/Line’s operational requirements are met. We look forward As V/Line grows in both passenger number and stature, to the many benefits this project will bring to our passengers we continue to build on the reputation we have forged since when it is complete. Regional Fast Rail put us on the map for affordable, efficient While maintaining the existing V/Line infrastructure is not and reliable travel. In fact, a growth this year of 4.1 per cent exactly a glamorous part of the business, it is one of the is an amazing feat at a time of global financial instability. most important jobs we have to ensure the safe and efficient While the reasons people choose to travel with V/Line vary, running of freight and passenger trains. Works have been what the numbers show is that more and more people undertaken all over the state by our track maintenance are making V/Line services their first choice for regional teams in the past year. The stand-out projects were the transport, be it for leisure or for work. upgrade to the $73 million Mildura freight corridor as well Successful project management as the Gippsland line, which will see 80,000 timber sleepers Three years have passed since the buy-back of the regional replaced by late 2010. The government’s $180 million rail freight network from Pacific National. In this time we’ve Regional Rail Freight Network Program will also allow for the developed a strong infrastructure team capable of not just maintenance of key gold and silver lines to make sure the maintaining and upgrading the existing network but tackling core rail freight network continues to operate efficiently. major projects as well. While the Mildura freight works will see travel time improved, I’m particularly proud of the work carried out by the team the $25 million Gippsland project, which started in May to return passenger services to Maryborough and Creswick 2010, will improve reliability for eastern regional passengers. (services were returned on 25 July 2010). Ahead of time Timber sleepers will be replaced with concrete sleepers at and on budget, the project involved building a new passing loops, station pits and level crossings and is a fine station platform and facilities at Creswick, construction example of the government’s commitment to invest in the of a new ticketing office and stabling yards at Maryborough rail network and its future. and level crossing upgrades which will be completed Safety and its challenges throughout 2010–11. Safety is an ongoing challenge for a business carrying Work on the project started in January with reconstruction tens of thousands of people every week. And it’s not just of the track at Creswick. From there, the project milestones passengers and staff we need to consider but drivers, fell into place culminating in the return of 14 weekly our infrastructure maintenance staff and pedestrians passenger services. I joined the Premier John Brumby and crossing our tracks. Public Transport Minister Martin Pakula in Maryborough While perfection is dependent upon everyone doing the right on 24 July 2010 to see more than 1000 people turn up at thing and being safe around railway lines, I am pleased to the station to celebrate the return of services. It was highly announce that this year has been the second consecutive rewarding to see so many people support the new service year of no loss of life on regional Victorian level crossings and it served as a reminder of how important train travel (excluding trespasser incidents) under V/Line’s control. is to regional communities. This is an excellent outcome, but we should never become The North East Rail Revitalisation project will see a major complacent because our train drivers still witness a worrying upgrade of the 200 kilometres of track between Seymour and amount of motorists continuing to take unnecessary risks Albury. The project includes the conversion of rail from broad at crossings by not obeying stop signs or flashing lights or gauge to standard gauge and replacement of timber sleepers driving around boom barriers. with concrete and a new station west of Wodonga, which will Testament to the heartening results, this year we have remove 11 level crossings through the centre of Wodonga. made great inroads in level crossing safety through The track works are being undertaken by the Australian Rail V/Line’s internal level crossing committee, input into the Track Corporation although V/Line has played an important Victorian Government’s upgrade program, and negotiation role in upgrading the trains and maintenance facilities. Three of crossing closures with local councils through our work to locomotives and 15 carriages have now been refurbished meet obligations via the implementation of Safety Interface

8 V/LINE ANNUAL REPORT 2009–10 Agreements (SIAs). I am of the view that there are still The year ahead too many low-use level crossings in regional Victoria that You only have to glance at media coverage over the past could be closed and directed to nearby safer alternatives year and you will see that both metropolitan and regional with minimal inconvenience to motorists, but this can only public transport users have high expectations with regard be achieved with community and local government support. to service delivery, and so they should. Managing passenger Internally, our staff lost-time injury frequency rate within expectations in a growing market provides us with our our control saw a slight increase, at 14.5 per million biggest challenges. hours worked. We saw a specific increase in soft tissue The coming year is about laying the foundations for the next injuries among our staff and we’ll be focusing on improving leg of growth. Maintenance programs will carry on, and new manual handling assessments and practices as a result. VLocity carriages will continue to roll off the production line. Customer incidents within V/Line’s control have seen a We will also be working with the Victorian Government and drop of 29 per cent. Metro Trains to improve regional timetables to allow for extra The V/Line team also put a lot of energy into accreditation services and better pathways in the metropolitan network. this year and as a result the business has the appropriate The myki smartcard ticketing system has now been framework set up to achieve better outcomes, consistent introduced to metropolitan trams, buses and trains, as performance and continuous improvement through the well as V/Line trains within Zone 2. The next year will see ISO quality management system. This has resulted in the roll-out of myki across the rest of the V/Line network and an integrated management system which links quality, this will bring with it challenges around behaviour change environment and occupational health and safety. V/Line’s for both our passengers and frontline staff, but it will also rail safety systems were thoroughly assessed by Public bring eventual benefits in connecting V/Line to metropolitan Transport Safety Victoria and consequently our rail safety services through one ticketing system. accreditation was renewed for the next five years. While performance continues to improve for our VLocity Financial performance fleet (during 2009–10 the units travelled an average Once again, as more people have travelled by train and 94,423 kilometres between faults, which is up from coach, V/Line has become more financially efficient. 83,570 in 2008–09) we also know that having a reliable The subsidy per passenger trip dropped again this year fleet is vital to our performance. to $18.68, from $19.42 last year and $19.88 in 2007–08 The new year sees the appointment of global transport – an ongoing improved return on the taxpayer’s investment. company Bombardier take on responsibility for the Total income for the V/Line business increased by maintenance, repairs and management of the V/Line $10.5 million to $475.8 million. This included a five VLocity fleet and ‘classic fleet’ which includes Sprinters, per cent (or $3.6 million) increase in farebox revenue to locomotives, and locomotive-hauled carriages. The change $72.2 million, and two per cent (or $470,000) increase to Bombardier for the first time brings the maintenance of in franchise subsidies to $256.1 million. V/Line trains under the one banner and will see long-term Revenue from freight access fees continues to be well below maintenance and reliability improvements to our fleet. pre-drought periods as a result of ongoing low harvests and Work to electrify the metropolitan line to Sunbury, continues to not cover the considerable cost of maintaining as well as preliminary track works for RRL, will also begin – the freight rail network. However, a small increase in revenue both exciting projects that will see the public transport from access fees of $663,000 was realised this year to a network transformed. total of $3.4 million. I’d like to thank all our stakeholders for their ongoing Total expenses dropped two per cent (or $9.9 million) to support of V/Line, as well as the board and all V/Line staff $461.6 million as a result of operational efficiencies gained for their hard work and dedication over the past year. across the business, including fuel savings of $3.4 million and reduced road coach costs of $1.6 million. Franchise performance penalties also decreased by $3 million to contribute to this outcome. As a result, V/Line this year reported a $15.9 million net Rob Barnett surplus, although a more neutral position is expected in Chief Executive Officer the coming financial year due to the timing of infrastructure maintenance works and the significant associated cost of procurement.

CEO’s report 9 Year in review

July 09 V/Line partnered with Yarra Trams to remind motorists and pedestrians to take more care around level crossings as part of National Rail Safety Week, which ran from 24 to 31 July. To remind people of the dangers around level crossings a safety tram was launched to carry the safety message in and around Melbourne.

August 09 Kyneton Station became the latest regional train station to have access improved for cyclists with the installation of a new bike cage. The ‘Parkiteer’ cage is managed and supported by Bicycle Victoria, which also has cages at Bacchus Marsh, Ballarat, Bendigo, Geelong, Marshall, Melton, Moe, Morwell and South Geelong train stations. The cages give cyclists a safe and secure place to park their bike when using V/Line trains.

September 09 The need for private landowners to maintain vegetation with the potential to impinge on the rail reserve was demonstrated when a Warrnambool-bound train derailed after hitting three large cypress trees. The trees had fallen from private land during severe storms at Stonyford. Fortunately all 75 people aboard the train escaped serious injury.

October 09 The $4.3 billion Regional Rail Link project reached an important milestone with the appointment of two firms to complete final planning and geotechnical work ahead of major construction beginning in 2010. When finished the project will give V/Line, for the first time, dedicated track for regional trains on the Geelong, Ballarat and Bendigo corridors.

November 09 In partnership with WorkSafe Victoria, V/Line began a campaign to reduce the incidence of slips, trips and falls among employees. Staff were encouraged to display posters and also submit their own ideas about how to improve safety in their own work areas.

December 09 Ballarat marked the first destination for the arrival of V/Line’s 100th VLocity carriage. The 100th carriage followed the introduction of the first VLocity sets to the fleet in 2005 when 80 carriages were ordered. In response to growing patronage the state government ordered 54 more carriages, with up to 20 more V/Line train carriages promised under the Victorian Transport Plan.

10 V/LINE ANNUAL REPORT 2009–10 Year in review

January 10 Minister for Public Transport Lynne Kosky resigned from state parliament and was replaced by Martin Pakula in the portfolio.

February 10 The Echuca Moama Riverboats Jazz Food & Wine Festival was held from 19 to 21 February. V/Line, as a major sponsor, encouraged Melburnians to catch the train to the event. To encourage train travel, a free connecting shuttle bus ran between Echuca Station and the centre of town, and passengers received discounts on accommodation and other items on presentation of a V/Line ticket.

March 10 The roof of Southern Cross Station was damaged on Saturday 6 March when a massive rain and hail storm hit Melbourne and regional Victoria. Heavy plastic sections of the roof which allow light into the station filled with ice and water and broke, sending water onto platforms below. The station was closed for several hours, affecting most services.

April 10 Victorian Premier John Brumby and Public Transport Minister Martin Pakula helped to formally begin works to return passenger rail services to Maryborough. The $50 million project gave Maryborough and Creswick residents 14 weekly services to Ballarat and Melbourne. Works included upgrading up to 13 level crossings to boom barriers and flashing lights between Ballarat and Maryborough, and a new stabling yard at Maryborough Station. Trains returned on 25 July 2010.

May 10 Major work began to replace sleepers on the second track running between Pakenham and Traralgon. Up to 80,000 timber sleepers will be replaced by the end of 2010, resulting in a smoother, more comfortable ride for passengers and reduced ongoing maintenance requirements.

June 10 The first three-car VLocity with new livery and upgraded safety features rolled off the production line. A new headlamp design was incorporated to better warn car users of an approaching train and give train drivers greater vision of the track ahead.

Year in review 11 Passenger network map

Mildura

TO BENDIGO TO SEYMOUR

TO BALLARAT Sunbury Craigieburn Watergardens Robinvale Melton Broadmeadows MELBOURNE Rockbank Essendon METRO Sunshine North Melbourne Footscray Flinders Street Newport Richmond Ouyen Werribee Caulfield Southern Piangil TO GEELONG Cross Clayton Manangatang Station Pinnaroo Dandenong Griffith Berwick Pakenham To Adelaide Swan Hill TO GIPPSLAND Sea Lake Finley Barham Deniliquin Kerang To Sydney Hopetoun Tocumwal Birchip Mulwala To Canberra Cohuna Barmah Corowa Moama Cobram Rutherglen Pyramid Nathalia Yarrawonga Echuca Albury Numurkah Wodonga Warracknabeal To Adelaide Nhill Rochester Kyabram Springhurst Donald Shepparton Stanhope Beechworth Dimboola Wedderburn Wangaratta Elmore Benalla Murtoa Rupanyup St Arnaud Murchison Mt Beauty Horsham Dunolly East Bendigo Bright

Heathcote Mansfield Maryborough Seymour Stawell Castlemaine Mt Buller Avoca Wallan To Narooma & Batemans Bay Halls Gap Kyneton Yea Ararat Daylesford Lancefield Creswick Woodend Whittlesea To Canberra Glenthompson Sunbury Skipton Ballarat Melton To Adelaide Bacchus Hamilton Ringwood Maffra Casterton Marsh Bairnsdale Orbost Cann River Werribee Derrinallum Warragul Mortlake Lara Melbourne (see inset) Dandenong Lakes Entrance Mt Gambier Heywood Geelong Camperdown Sale Lang Lang Traralgon Koroit Terang Korumburra Portland Port Fairy Colac Leongatha Anglesea Anderson Lorne Wonthaggi Yarram Cowes Warrnambool Inverloch Cape Port Campbell Apollo Bay Paterson

Train service

Coach service

12 V/LINE ANNUAL REPORT 2009–10 Key results

Change 2009–10 2008–09

Total customer trips (rail & coach) 4.1% 13,705,843 13,169,432

> Rail passenger trips 4.2% 12,561,850 12,050,176

> Coach passenger trips* 2.2% 1,143,993 1,119,258

Tickets sold 6.3% 5,461,933 5,136,692

Farebox revenue 5.2% $72.2 million $68.6 million

Farebox (% breakdown) 1% 70% full fare 71% full fare

1% 30% concession 29% concession

Subsidy per passenger 3.8% $18.68 $19.42

Short-distance train services 0.6% 61,921 61,882

Long-distance train services 7.3% 10,421 11,238

Fleet:

> VLocity carriages 9.7% 102 93

> Locomotives – 41 41

> Loco-hauled carriages – 138 138

> Sprinters (single-unit) – 21 21

Stations – 82 82

Employees (total head count) 4.5% 1444 1382

* Includes DOT privately marketed coaches.

KEY RESULTS 13 Facts and figures

Customers Change 2009–10 2008–09

Customer satisfaction index (DOT target 68) – trains 74.5 74.8

Customer satisfaction index – coaches 75.4 79.2

No. of customer information enquiries 734,570 781,328

No. of customer feedback cases* 13,681 13,582

No. of on-train consultation sessions with customers – 13 13

Compensation paid to customers for V/Line not meeting on-time targets (complimentary ticket value) $121,278 $112,481

* Includes free travel.

Employees 2009–10 2008–09

Full-time equivalent staff 1424.9 1365.3

Total head count 1444 1382

Training attendance numbers 4503 5312

Training sessions 579 470

Finance 2009–10 2008–09

Total income $475.800 million $465.254 million

Total expenses $461.639 million $471.515 million

Income tax benefit revenue $1.779 million –

Net result $15.940 million ($6.261 million)

14 V/LINE ANNUAL REPORT 2009–10 Facts and figures

Safety Change 2009–10 2008–09 All of V/Line lost-time injury (LTI) rate per million hours worked (within V/Line’s control) 14.5 12.1

Customer incidents within V/Line’s control per million passengers – requiring medical assistance 0.48 0.68

Customer incidents per million passengers – requiring medical assistance 3.26 3.95

Signals passed at danger (SPADS per million km) – human factor 0.73 0.72

Operations Change 2009–10 2008–09 Reliability overall (short & long-distance services, average monthly performance) 98.5% 98.3%

Reliability – short-distance 98.3% 98.1%

Reliability – long-distance 99.5% 99.4%

Punctuality overall outside metro network (short & long-distance services on time to 5 and 10 mins respectively, average monthly performance) 95.6% 95.2%

Punctuality – short-distance on time to 5 minutes 84.9% 85.5%

Punctuality – long-distance on time to 10 minutes 87.0% 87.8%

No. of services run – short-distance 61,921 61,882

No. of services run – long-distance 10,421 11,238

Facts and figures 15 Safety and security

Foundations set for a safe workplace Risk management has become one of the most important Good rail operators make customer safety their priority and frameworks for most businesses in recent years and V/Line V/Line is no different. Equally the business recognises the places a high priority on this activity throughout the business. importance of providing a safe workplace for employees. V/Line’s Enterprise Wide Risk Management framework is based on the Australian Standard (AS4360) and has been This year, on top of other safety achievements at a time reviewed independently via desktop risk documentation of record growth, V/Line dedicated the month of November audits and interviews with staff. 2009 to staff safety, making employees conscious of potential hazards around the workplace. Overall, the Victorian Managed Insurance Authority found V/Line’s existing risk management framework to be Slips, trips and falls continue to rank as the highest cause exemplary, with the business shown to have an engaged, of staff injuries, with most preventable through greater open and risk-aware culture across the V/Line Board, senior vigilance, training and ongoing environmental improvements. management and operational staff. Processes are in place To address the issue, V/Line partnered with WorkSafe Victoria to ensure that corporate planning is risk-based and that all to start an ongoing campaign in the workplace to reduce the pertinent risks in relation to the corporate objectives are incidence of slips, trips and falls among employees. identified and considered. V/Line has been assessed as As we move towards further strengthening our already having a ‘top down’ approach to risk management with strong safety culture, we see staff embrace projects that the CEO promoting a strong and proactive risk-conscious have real benefits for the whole business. One example culture across the organisation. is the implementation of a standard emergency response Safety performance plan across all of V/Line’s regional stations. Internal audits showed that many stations were following different, localised Rapid growth has resulted in more than one million plans that needed to be standardised across all operations passenger trips every month on V/Line trains and coaches. to ensure consistency of approach to safety and to help staff And at a time of record patronage, V/Line must work to who operate across multiple locations better understand ensure that there is no rapid increase in safety incidents on requirements in the event of an emergency. As a result, the our services and at our stations. business now has a standard Emergency Response Plan In 2009–10 the opposite was true, with a slight decline across all stations, with only local contact numbers and in customer incidents within V/Line’s control, with evacuation maps differing from location to location. 0.48 requiring medical assistance per million passengers Integrated management system and compared with 0.68 in 2008–09. Slips, trips and falls still risk management account for most of these incidents, but with our focus to improve access for the elderly and people with special V/Line has put much energy into certifications this year and needs we aim to contain, or continue to reduce, these as a result the business has the appropriate framework set customer incidents. up to achieve better outcomes, consistent performance and continuous improvement. For incidents within V/Line’s control, the staff lost-time injury frequency rate (LTIFR) per million hours worked was 14.5 V/Line achieved ISO 9001 certification (quality management in 2009–10 (12.1 the previous year). Our data shows an system standard), which means that the business has been increase in soft tissue injuries and we will be focusing independently audited and certified to be in conformance on improving manual handling practises in the coming with this standard. The International Organisation for years to improve this result. Standardisation (ISO) shows that formalised business processes are being applied across the business. Because Another key safety performance measure is the number certification is awarded by a third party, it provides of signals passed at danger (SPADs) by trains. As with last important feedback and independent approval of the year, there were no ‘human factor’ SPADs resulting in business’s procedures. train-to-train collisions. Incidents involving human error, at 0.73 per million kilometres in 2009–10 were on par with In 2009–10 V/Line also achieved re-certification for ISO the 2008–09 result of 0.72. 14001 and AS4801. These certifications set core standards for implementing an effective environmental management V/Line is the first operator in Australia to adopt the United system and an occupational health and safety management Kingdom developed risk ranking tool for SPADs. Basically, system respectively. a risk ranking process better tracks performance and is considered a better tool than just reporting SPAD numbers V/Line was audited over 10 days to complete the and the consequences. This tool is designed to help identify re-certification of all three standards. External auditors will mitigations and provides a target for V/Line to reduce risk now assess the business on an annual basis. The business year over year. also achieved re-accreditation for rail safety in December and this means V/Line is accredited for the next five years.

16 V/LINE ANNUAL REPORT 2009–10 Managing a safe rail environment Level crossing compliance and V/Line has introduced a quarterly emergency services upgrade program training program, which is held at our maintenance facility As we meet the challenges of record patronage, we also at Southern Cross Station. The sessions are designed to face the challenge of more vehicles on our roads and more educate emergency service agencies in our rolling stock vehicles using level crossings. and build familiarisation with our emergency response In 2009–10 the number of serious level crossing accidents procedures and engineering information that may be resulting in fatalities (excluding trespasser incidents) remained needed in the event of an emergency. The training sessions at zero for the second consecutive year, which is testament to are scheduled after business hours to ensure that volunteer the hard work of V/Line, the state government, VicTrack and organisations can attend. other agencies in improving safety around level crossings So far, the response has been overwhelming – the first over the past few years. But with almost 2000 level crossings session saw 24 members of the Sunbury Country Fire across Victoria, V/Line must continue to remind motorists of Association participate. The response from Victoria Police, their mutual obligation to act safely around railways. the State Emergency Service and the Metropolitan Fire Progress has been made in level crossing safety through Brigade has also been excellent, with upcoming 2010 V/Line’s internal committees, membership of the State sessions already full. Requests have also been received for Level Crossing Committee, input into the upgrade program, regional training from as far afield as Stawell and Echuca. identification and negotiation of closures with local councils Again this financial year we took part in a simulated crisis and through our work to meet obligations around the exercise to ensure that V/Line continues to comply with the implementation of Safety Interface Agreements (SIAs). Terrorism & Community Protection Act 2003. The business SIAs set out an organisation’s responsibilities – both broadly must participate in an exercise annually that demonstrates across the whole state and specifically at each crossing. our emergency and crisis management plan in action. In In the long term it will help us all take consistent and November 2009, V/Line took part in Exercise Metropolis appropriate action to prevent accidents at level crossings. to test our Security Risk Management Plan. Feedback from V/Line is working with councils and other authorities in the Department of Transport was positive, with no areas of establishing agreements in regional Victoria. improvement established, and as a result V/Line continues A key example of V/Line’s work with other parties to increase to meet compliance. safety around level crossings is at McKillop Street in Geelong. In the interest of improving staff safety, V/Line has started Working with VicRoads, VicTrack, Geelong police and the to install security windows at more than 30 stations with City of Greater Geelong to understand issues surrounding cash handling facilities across the network. The project will this level crossing, a number of interim measures were mitigate the potential for staff assaults and raise the level recommended. They included vegetation management to of staff safety at stations. improve visibility, box marking to define the outline of the Authorised Officers were formally introduced onto V/Line ‘danger area’, enforcement activities as well as exploring the services from January 2009 after trials in the previous use of further traffic light coordination to help reduce the year. These officers have been primarily deployed for staff potential for queuing. The second phase will involve traffic and passenger security and safety, rather than revenue light co-ordination and will be implemented later in 2010. protection. We now have a team of 11 with plans to expand incidents on the regional network the team further in coming years. There were no level crossing accidents in 2009–10. With a grass-roots approach needed from time to time to Stonyford – 12 September 2009 ensure customer safety, Authorised Officers teamed up A V/Line locomotive-hauled train struck fallen trees with local police at Wallan Station in June 2010. Their obstructing the railway line near Camperdown. The train aim was to stop pedestrians from jumping over electronic derailed resulting in injuries to two staff members pedestrian gates to catch their train. The Authorised Officers and passengers. were on site to warn and educate passengers who were endangering their own lives by illegally crossing the tracks Incidents involving V/Line on the while the pedestrian crossing is closed. Working with local metropolitan network: police ensured that this serious safety issue was brought to South Kensington – 15 October 2009 the attention of Wallan passengers to highlight the very real A broken rail caused the derailment and rerailment of a risks involved around train tracks. seven-car VLocity south of the Maribyrnong River Bridge on the metropolitan network. There were no injuries. Incidents involving trespassers are not included.

Safety and security 17 Our customers

Regional rail patronage records were broken for the fifth Marketing regional Victoria consecutive year in 2009–10 with a new benchmark As a regional train and coach operator V/Line of 13.71 million passenger trips across V/Line’s train promotes regional Victoria not only as a great place and coach services. to live, but also to visit. Despite a global economic downturn and a temporary Encouraging more Melburnians to visit the country is softening of the leisure travel market, more Victorians than V/Line’s next significant growth opportunity. While regional ever chose V/Line services over travelling by car throughout Victorians are using trains to get to and from the city in the regions, particularly those who use our trains to record numbers, their metropolitan counterparts have been commute to and from Melbourne. slower to realise the significant improvements made to rail Continuing to break records travel over the past five years. Unlike the previous three financial years when total The myki smartcard ticketing system offers an excellent patronage grew by 10 per cent (2008–09), 23 per cent opportunity to break down the barriers between metropolitan (2007–08) and 29 per cent (2006–07), this year’s growth and regional train travel with a single ticket applicable was a more sustainable 4.1 per cent. This was higher than across the state. From late December 2009, myki began metropolitan growth achieved on trams, trains and buses operation on all Zone 1 and 2 trains (including to and from over the same period. the several Zone 2 stations served by V/Line) to complement Over the past five years, train and coach patronage has the system’s operation on town buses in Geelong, Ballarat, been one of regional Victoria’s success stories, growing Seymour, Bendigo and the Latrobe Valley. from 7.25 million passenger trips in 2004–05 to this year’s V/Line initiated several marketing campaigns during 13.71 million. This 89 per cent increase in such a short time 2009–10 to attract customers from metropolitan Melbourne. is all the more remarkable in its daily execution with new Among the most successful was V/Line’s sponsorship of the VLocity carriages helping V/Line to meet seating demand. Echuca Moama Riverboats Jazz Food & Wine Festival, which Over the next couple of years, it is reasonable to expect a coupled a drawcard event with new VLocity trains as a more doubling of the 2004–05 patronage level, highlighting the comfortable, relaxing alternative to the car. Passengers also increased importance of rail and coach services to regional received discounts on accommodation and at businesses Victorians and the economy. throughout the town. More than 3000 people enjoyed the V/Line train patronage grew 4.2 per cent (or just over weekend of jazz, with V/Line presenting Jazz at Twilight in half a million passenger trips) this year to 12.56 million Echuca’s historic port precinct. Campaspe Shire estimated passenger trips. Coach patronage rose 2.2 per cent to that each visitor contributed an average $390.54 to the local 1.14 million passenger trips (up almost 25,000 trips). economy – money that flows directly to accommodation providers, restaurants and other businesses in town. All train corridors recorded passenger growth in 2009–10, but the strongest increase was on the Gippsland line, with a 7.7 per cent increase to 1.91 million passenger trips. Ballarat line rose 5.1 per cent to 2.82 million passenger trips and the Bendigo line increased by three per cent to 3.15 million. However, the busiest passenger train line in regional Australia is still the Geelong line, up 2.7 per cent to 3.47 million passenger trips.

18 V/LINE ANNUAL REPORT 2009–10 A direct mail booklet and electronic version called The V/Line website also saw several systems improvements The Escape Artists was also sent to 65,000 homes. The during 2009–10 to make the purchase of tickets easier booklet featured special offers for people to catch the online. While tickets still need to be mailed out, the growth train from Melbourne to several regional events and in online sales bodes well for the introduction of myki, festivals, including: with V/Line commuters already demonstrating a strong • The Echuca Moama Riverboats Jazz Food & Wine Festival appetite for avoiding queues at stations by purchasing their ticket online. If online sales were a train station, • The Age Harvest Picnic at Hanging Rock it would be one of V/Line’s busiest, with sales similar to • Queen – the Unseen Archive at the Art Gallery of Ballarat those at Flinders Street Station. • The Jindi Cheese Harvest of Gippsland. General web traffic to the V/Line site was also up 30 per Other regional marketing opportunities that proved cent on 2008–09, with an average of more than 400,000 successful were country horse race meetings, with visitors per month. Melburnians encouraged to travel and stay regionally. Customer consultation and feedback Connecting the country to the city For the past five years, V/Line senior management, including Catching the train from regional areas to Melbourne for the CEO and the executive team, have travelled on peak AFL, soccer, cricket and rugby events continued to be a trains to listen to feedback from customers. This feedback growing market for V/Line. has helped ongoing communication improvements such as The ongoing success of the Geelong Football Club, the V/Line Inform, addressing capacity issues, and assisting only Victorian regional team in the AFL, again translated with customer service training. to large numbers of supporters catching V/Line services Feedback is also received via our frontline staff and to the football in Melbourne. More than 200,000 passenger the call centre. In 2009–10, call centre information trips were made on V/Line football trains during the enquiries were down six per cent (or more than 46,000 2009 AFL season, with around 35 per cent coming from cases) to 734,570. This follows a three per cent drop last Geelong alone. year. As patronage continues to grow, more people are Partnerships were also formed with some of Melbourne’s choosing to get information about V/Line online rather than biggest tourist attractions to give V/Line ticketholders via the telephone. discounts of up to 20 per cent off the entry price to During the year, compensation in the form of complimentary Luna Park, the Melbourne Aquarium, Old Melbourne tickets rose almost eight per cent to a value of $121,278. Gaol and Eureka Skydeck. Promotion of the compensation policy if operational Improving communication performance is not met, along with the patronage increase, is attributed to this modest rise. In 2009–10, V/Line also The launch of V/Line Inform during 2008–09 gave V/Line a continued to support the office of the Public Transport powerful new means to reach registered commuters quickly Ombudsman (PTO) through promotion in customer materials via email and SMS. This has helped better alert passengers and ongoing invitations to accompany V/Line management to planned and unplanned service changes and give people to monthly on-train customer consultations. During the year, more control of their travel plans. the Ombudsman independently reviewed 42 cases V/Line Inform evolved further in late 2009 with live (out of 126 customer contacts with the PTO). Last year, website updates. Web traffic analysis has shown that more 33 cases were reviewed by the PTO. commuters are accessing the V/Line website from mobile Despite the ongoing patronage increases, train customer devices like iPhones while on board services or waiting at satisfaction remained on par with last year’s and is still a train station. Our research has also shown that web traffic the highest of any Victorian transport operator. Customer spikes in the morning before people leave for the train, satisfaction surveys commissioned by the Department of and at about 4pm while many are at work and getting ready Transport scored V/Line services at 74.5 and coach services to leave the office. A new V/Line website will be launched at 75.4 for the year ending 30 June 2010. While coaches in the coming year to better cater for the mobile web market are V/Line branded, they are privately operated under and continue to improve communication and navigation contract to the Department of Transport and remain an area with our customers. in which V/Line will emphasise ongoing customer service improvement in the coming year.

OUR CUSTOMERS 19 v/line train and coach passenger trips

> have increased by 89 percent over five years

04–05: 7.25 million

05–06: 7.64 million 5%

06–07: 9.72 million 27%

07–08: 11.96 million 23%

08–09: 13.17 million 10%

09–10: 13.71 million 4%

* Includes Department of Transport privately marketed coaches.

TRAIN PATRONAGE BY LINE:

geelong bendigo ballarat gippsland seymour† 88.6% over 5 years 138.6% over 5 years 108.9% over 5 years 124.7% over 5 years 23.2% over 5 years

04–05: 1.84 million* 04–05: 1.32 million 04–05: 1.35 million 04–05: 0.85 million 04–05: 0.99 million

05–06: 2.03 million* 05–06: 1.47 million* 05–06: 1.37 million* 05–06: 0.82 million* 05–06: 1.05 million

06–07: 2.57 million 06–07: 2.20 million 06–07: 1.88 million 06–07: 1.05 million 06–07: 1.15 million

07–08: 3.08 million 07–08: 2.78 million 07–08: 2.39 million 07–08: 1.54 million 07–08: 1.21 million

08–09: 3.38 million 08–09: 3.06 million 08–09: 2.68 million 08–09: 1.77 million 08–09: 1.17 million*

09–10: 3.47 million > 2.7% 09–10: 3.15 million > 3.0% 09–10: 2.82 million > 5.1% 09–10: 1.91 million > 7.7% 09–10: 1.22 million > 4.8%

* Periods of major track upgrade works †Craigieburn Station transferred to metro operator in 2008 and Albury line closed due to NERRPS works from Nov 2008

20 V/LINE ANNUAL REPORT 2009–10 Sustainability, environment & community

As patronage increases and more people become With research showing that 96 per cent of children under dependent on V/Line’s services, our obligations to 17 years have tried alcohol – 21 per cent drinking weekly v/line train and coach passenger trips the broader community grow. and one third consuming drink at harmful levels – we know have increased by 89 percent over five years V/Line is now a major part of the regional Victorian there is a need out there for support. Alcohol abuse and economy – a role we don’t take lightly as we continue its effects are not confined to Melbourne. And with V/Line’s to support communities through employment and economic coach and train network covering 3770 kilometres across development. This is evidenced through our sponsorship regional Victoria it’s extremely rewarding for the business of events and festivals across the state, by promoting and staff to be involved with a program that makes a real travel to regional towns and by our ongoing involvement impact in country Victoria. in youth programs. See things differently continues to attract We also strive to preserve and improve the environment in Melburnians to regional Victoria which we operate. This year, new reporting criteria require The 2008–09 year saw V/Line launch the award-winning V/Line to submit additional information on office-based See Things Differently campaign to encourage Melburnians to environmental data. Detailed information on aspects of catch the train to some of country Victoria’s best attractions. energy use, waste production and paper use means keeping This year we continued with the campaign – the aim being environmental issues front of mind for the business and sets to make better use of off-peak V/Line trains with spare out challenges for ongoing improvement in the coming years. capacity to create a sustainable economic contribution Tackling youth issues in regional Victoria to regional Victoria. Exclusive special offers for V/Line Carrying passengers is our bread and butter, but sometimes customers were negotiated with local operators of special it’s what we do outside this part of the business that makes events throughout the 2009–10 year. Seasonal campaigns a real difference to the lives of country Victorians. promoting such events as country racing in spring and Warrnambool’s Fun4Kids in winter enticed Melburnians V/Line continued to run its valuable Life Training sessions into regional Victoria. throughout regional Victoria in 2009–10. Partnering for the first time with beyondblue and the second time with Odyssey Community call to action House, the program once again paved the way in educating Getting people involved in programs to improve their regional Victorian teenagers on the dangers of binge own wellbeing and safety has a positive impact on drinking, illicit drug use, depression and body image. the community. In partnership with the VCFL and Netball Victoria, the V/Line When it comes to theft, one of the biggest challenges is to Life Training program rolled out 25 sessions across more tackle the ‘country town mentality’ where people think that, than 20 regional towns and centres to present sessions on because they live in a country environment, no one is going issues affecting young people in country Victoria. Former to take their valuables. AFL footballer Nathan Thompson again joined the program V/Line teamed with Victoria Police in a bid to reduce the as a presenter along with newcomer, Melbourne Vixen and incidence of theft from cars parked at Geelong Station, with Australian netballer Renae Hallinan, who took the program customers reminded to check their vehicles when parking to netball clubs for the first time. at stations. The ‘Lock It, Remove It, or Lose It’ initiative was prompted after an increase of thefts in the Geelong area and will be targeted at other stations across the state where similar incidences of theft occur.

SUSTAINABILITY, ENVIRONMENT & COMMUNITY 21 Shedding some light on the environment Vegetation Management The 2009–10 year saw the introduction of environmentally Following the derailment of a Warrnambool train at Stonyford friendly LED lights at several V/Line offices and stations. on 12 September 2009, the need for greater control and The lights have been installed in the booking office at South management of vegetation, both inside the V/Line rail Geelong, the waiting room at Melton and rooms at V/Line’s corridor and on private property was highlighted. head office buildings. The train was derailed after three large cypress trees fell Unlike fluorescent lamps, LEDs (or light-emitting diodes) from private property across the tracks during stormy don’t contain mercury and LED tubes produce no UV weather. Fortunately no serious injuries were reported, radiation and little heat. A fluorescent tube typically lasts but the potential seriousness of the incident resulted in for 10,000 to 15,000 hours. The LED lights are reported to a $3.5 million program of works to improve vegetation have 35,000 to 50,000 hours of life. management on rail reserves across Victoria. LED lights can also be easily dimmed. The LED tubes require Trees at risk of falling along passenger rail corridors only 15 watts of power to operate whereas a fluorescent tube were assessed and, where needed, trimmed or cut down requires 36 watts. There are plans to roll out more LED lights in consultation with local councils and the Department across the business in the coming year. of Sustainability and Environment. Work was also As part of a $2.3 million VLocity modification program, lights undertaken along freight rail corridors, particularly around will be progressively changed to LED. level crossings, where signs were changed from Give Way to Stop to increase safety, and line-of-sight improvements Recycling bins were made to crossings in the area. While already in head offices, V/Line is working to install In June 2010, a V/Line advertising campaign began in recycling bins at stations throughout the network in an regional print media – particularly along the Warrnambool attempt to reduce station landfill. corridor – to remind landowners of their responsibilities Recycling bins are already installed at the following to ensure that trees from their properties do not fall into locations: Geelong, Warrnambool, Colac, Ballarat, Swan the rail reserve. Hill, Echuca, Gisborne, Kyneton, Castlemaine, Seymour, Where necessary V/Line is continuing to work with owners Shepparton, Morwell, Warragul and Moe. More recycling and help them identify which trees could pose a risk bins have been purchased and will be progressively rolled to passenger trains. out across the network in the 2010–11 year. Following the advertising and media campaign there was positive feedback from landowners who used their own initiative to trim or cut trees on their own properties that could have posed a threat to safety.

22 V/LINE ANNUAL REPORT 2009–10 Environment report 2009–10

While V/Line provides a service that is environmentally Initiatives undertaken beneficial, we also recognise that our operations have V/Line has taken the following actions at head a significant impact on the environment and there are office to reduce the environmental impacts of its opportunities for improvement. energy consumption: To improve our environmental performance, V/Line • Purchasing Green Power (10 per cent for one head implements an ISO 14001 certified Environmental office location, 20 per cent for the other) Management System (EMS). Objectives, targets and • Trialling LED lighting in one office room an action plan have been developed as a part of this. • Encouraging staff to adopt energy saving behaviours From this reporting period, new reporting criteria (such as turning lights and computers off). established by the Department of Treasury and Finance (Financial Reporting Directive 24C) apply to all Targets Victorian government agencies, including V/Line. Head office to achieve a five per cent reduction in energy These criteria require the tracking of consumption of use per full-time employee (FTE) by June 2011 based resources and greenhouse gas emissions covering our on a 2009 baseline. office-based operations. Comments on Data Quality V/Line’s head office operations occupy three floors within • The data shows electricity use at two of the three two separate buildings. Approximately 13 per cent head office floors (covering 70 per cent of head office of V/Line’s staff are located within head office. The employees). Data for the third head office floor was information in the following sections relates to these not available at the time of preparing this report. head office operations unless otherwise specified. • The data is based on billing information provided Energy by the electricity retailer. Within head office, V/Line uses electricity for lighting and • Due to some gaps in the data the average daily running office equipment. Energy used for heating and use was multiplied across the year to estimate cooling is not included in the information below as it is annual consumption. provided as part of the building tenancy and no V/Line • FTE numbers were assumed to be the same across specific data is available. the two financial years. More comprehensive information on V/Line’s energy use is contained in the Energy Efficiency Opportunities Program report which will be made available on the V/Line website.

Indicator 2009–10 2008–09

Total electricity use (kWh) 285,096 310,980 Percentage of electricity purchased as Green Power 9% 0% Greenhouse gas emissions associated with energy use (t CO2-e) 318 383 Electricity use / FTE (kWh/FTE) 2,227 2,430 % change in electricity use / FTE 8% decrease

ENVIRONMENT REPORT 2009–10 23 Waste Paper General kitchen and office wastes are produced within V/Line recognises that paper use within head office is an V/Line’s head office. Quarterly audits of waste production important environmental issue for the organisation and began in 2010 and hence there is no comparative results to date have indicated that paper use is increasing. data available. It is believed that the increase in paper use between The single waste audit conducted during this reporting 2008–09 and 2009–10 was due to the inclusion of two period estimated that employees dispose of 21 tonnes new, more paper intensive departments in the data. of waste each year (~ 115 kg / FTE / year). The following graph shows the breakdown of waste by destination. Indicator 2009–10 2008–09

Organic waste Total paper use (reams) 4,380 2,666 6% Paper use / FTE Waste to landfill (reams / FTE) 24 21 64% % change in paper use Recycling / FTE 14% increase 30% Recycled content

0% 30% 100%

50% 10% 0% It is estimated that approximately 13 tonnes of 100% 60% 0% greenhouse gas emissions (t CO2-e) are released from the disposal of head office waste to landfill each year. Initiatives undertaken Initiatives undertaken V/Line has taken the following actions in head V/Line has taken the following actions at head office office to reduce the amount of waste sent to landfill. to reduce the environmental impacts associated • Recycling bins are located on all floors. with paper use. • Organic waste are bins located on one floor. • All white A4 office paper purchased is required to have a recycled content of 50 per cent or above. • Staff are encouraged to reduce the amount of waste produced and use correct recycling practices. This has • Staff are encouraged to reduce printing (through included the communication of waste audit results. the use of email and document sharing) and print double-sided. • Toner recycling is in place throughout. Targets Targets Reduce paper consumption by 20 per cent per FTE by June Reduce waste to landfill by five per cent per FTE from head 2011 based on a 2009 baseline. office by June 2011 based on an early 2010 baseline. Comments on Data Quality Comments on Data Quality • Paper use figures include all office paper use – • Waste quantity data is based on a single week not just white A4 paper. of waste auditing (one week per floor). • Paper consumption is reported as A4 reams • The weight disposed of was estimated using (e.g. one A3 ream equals two A4 reams). Sustainability Victoria’s volume to waste conversion tool. • 2008–09 figures do not include paper consumption by the third office floor as they were not fully integrated • Greenhouse gas emissions were estimated for into V/Line’s systems at the time. waste to landfill only using Federal Government emission factors.

24 V/LINE ANNUAL REPORT 2009–10 Water Initiatives undertaken Water is used at V/Line’s head offices for bathroom and V/Line has taken the following actions: kitchen purposes, but as V/Line is a tenant in these • Reduced the number of vehicles available to staff. large office buildings, data on water consumption is not • Assessed environmental performance within available as individual floors are not metered. fleet leases. The taps in V/Line’s head offices are fitted with flow Targets restrictors or aerators and toilets are dual flush. Staff are encouraged to use the dishwashers available and V/Line does not have a specific target for energy use from report water leaks. its fleet but we do have an objective to improve the energy efficiency of all V/Line controlled operations. V/Line has an objective to improve water efficiency at all V/Line controlled operations. Greenhouse Gas Emissions

Transport Greenhouse gas emissions associated with V/Line’s head office operations have been reported in the energy, As a state-wide operator V/Line requires its staff to travel waste and transport sections above. More comprehensive throughout Victoria. Staff are directed where possible to information on V/Line’s energy use is available in the use V/Line’s services to attend regional meetings but a Energy Efficiency Opportunities Program report, which car fleet is available to support head office and regional- will be made available on the V/Line website. based staff. In particular, track maintenance staff require vehicles to do their work. V/Line does not have a specific target on greenhouse gas emissions but aims to reduce its emissions The following information on energy used by vehicles through its energy objectives and targets outlined covers all of V/Line’s operations, not just head office. The in previous sections. decrease in energy use by the vehicle fleet is likely due to a reduction in the number of vehicles available to staff.

Indicator 2009–10 2008–09

Energy Use (GJ)

Petrol 4,190 7,090

Diesel 440

LPG 10 150

Total 4,460 7,240

Greenhouse gas emissions from vehicle fleet (t CO2-e) 323 503

Although V/Line has no data available on how staff commute to work, it is estimated that more than 90 per cent of head office staff travel to work using public transport or by cycling or walking.

V/LINE ENVIRONMENT REPORT 2009–10 25 Environmental issues and accidents

Issues previously reported New incidents V/Line is still addressing three environmental issues, • On 9 July 2009 there was a fuel incident at the Geelong as reported in 2008–09: locomotive depot involving an estimated 81,000 litres • a clean-up notice from the Environment Protection of diesel which discharged into the local sewerage Authority (EPA) issued in May 2008 relating to legacy system. V/Line and its contractor which manages the site contamination at Ararat (before V/Line took over the worked with the EPA and Barwon Water with regard to this regional rail lease in 2007) unauthorised discharge. • a pollution abatement notice issued by the EPA in • On 12 September 2009 a train derailed in the November 2009 relating to discharge into a stormwater Stonyford area after hitting trees that had fallen from drain from the refuelling of trains at Traralgon in a neighbouring property across the track. As a result October 2008 of this derailment it is estimated that approximately 1250 litres of diesel were leaked. V/Line has engaged • an enforceable undertaking entered into voluntarily by a specialist consultant and is working with the EPA to V/Line in July 2009 with the Commonwealth Department reduce and monitor the impacts of this diesel spill. of Environment, Water, Heritage and the Arts relating to the alleged damage of between 23 and 38 endangered spiny rice-flowers within the Mitiamo Rail Reserve Biosite in mid-2007.

Energy Efficiencies Opportunities Program

V/Line’s energy use continues to increase as more capacity While limited in its ability to make large improvements is added to meet continued patronage growth. in energy efficiency due to the long asset life of its rolling V/Line operates a fleet of trains that are all diesel powered. stock, V/Line continues to look for other ways to improve V/Line’s diesel use for train operations in 2009–10 its performance. Lighting is one area that is currently being was 5.5 per cent higher than in 2008–09 as a result of reviewed. LED fluorescent lighting is being trialled at three adding more carriages to existing services to cater for locations under V/Line’s control. These tubes consume less increased patronage. energy than the conventional tubes, have a longer life and do not require the same expensive disposal process. While the year-end figures were still being finalised at the time of printing, the current indication is that V/Line’s Another area that has been reviewed is the fleet of performance per passenger kilometre will again improve maintenance vehicles, both track and road. This review has on the previous year. In that way, as more people switch demonstrated that V/Line already uses the most energy from cars to the train, V/Line is contributing to the energy efficient vehicles in the relevant categories. These are efficiency of the transport system as a whole. usually specialised vehicles, so there are limited alternatives available. V/Line’s procurement process for plant and equipment dictates that environmental impacts must be considered during the purchase process. V/Line’s full Energy Efficiency Opportunities report will be published on the V/Line website.

26 V/LINE ANNUAL REPORT 2009–10 Our people

Greater consistency of V/Line staff workplace agreements As part of the review, 10 per cent of V/Line’s conductors and improved productivity are expected with the were interviewed and not one negative comment was made. consolidation of operational (‘above rail’) and Network Training across the business Services (Regional Network and Access) agreements Programs in 2009–10 included the third Management for the first time since V/Line took over maintenance Development Program. This program provides an opportunity and access of the regional network in 2007. for line managers and team leaders to strengthen and Staff incentives are linked directly to productivity extend their skill and knowledge base and develop new efficiencies in the 2009–12 Enterprise Agreements ways of improving the V/Line business. This year, 15 (including the Rail Operations Agreement and the staff members graduated with the nationally recognised Infrastructure Enterprise Agreement) lodged and qualification – Diploma of Management. V/Line has approved by Fair Work Australia in December 2009. partnered with Swinburne University since 2007 to deliver The agreements were consolidated from three to two, an integrated work-based learning model that has now with Network Services (or the ‘below rail’ part of the resulted in 44 graduates receiving their Diploma. This year business) officially joining the ‘above rail’ operations. also saw the continuation of the Graduate Diploma in Rail Training the workforce for the future Operations and the ongoing delivery of new employee induction programs. Recognising the challenges associated with an ageing workforce, V/Line put in place career development Nine Signal Maintenance Technician apprentices programs to ensure the next generation of drivers, signallers, graduated with the Certificate IV in Rail and Tram Signal train controllers and other infrastructure workers had an Systems which signified the end of their apprenticeship. opportunity to progress their career. As the maintenance regime of the V/Line infrastructure network continues to grow in size and complexity, it is Among these programs was the Internal Trainee Driver important for us to have enough highly qualified staff with Program. For the first time in more than 20 years, the specific work-based competencies to ensure that the applications were invited from staff interested in becoming network runs smoothly. train drivers in mid-2009. The first class of 10 trainees began in November 2009, with the second group of 10 trainees Online training was also introduced to the business beginning their study and training in February this year. during 2009–10. Staff were encouraged to complete an The trainees came from a variety of positions, including Environmental Management program. The purpose of the conductors, station services officers and operations staff. training program was to better educate staff about the impact we, as an operator, have on the environment and The program is a positive initiative as previously staff how staff can contribute to minimise this impact. had limited prospects in becoming a driver. The Internal Driver Trainee Program has helped open up new Employee growth career opportunities. As the number of carriages, services and people Train Services Improvement Project (TSIP) using V/Line trains has grown, so too has the number of employees. Where the Internal Driver Trainee Program has helped in promoting staff to become drivers, another initiative Employee numbers (head count) increased from 1382 in has proved to be successful among conductors and 2008–09 to 1444 this year. V/line welcomed the transition existing train drivers. of staff from Greenstar Parcels and Number One Signal Box. The Train Services Improvement Project (TSIP) invited The creation of a conductors’ pool has been important as conductors and drivers to apply to become managers and it enables V/Line to respond to staffing vacancies in a more supervisors or training and compliance officers. Supervisors timely manner. The return of passenger rail services to become responsible for managing about 30 staff and Maryborough also provided additional opportunities to can provide an easily accessible point of contact for staff V/Line staff. who may want to raise any issues or concerns they have In 2009–10, V/Line launched e-recruitment, an online in their job. system where internal and external applicants could apply The introduction of TSIP followed a 2005 employee opinion for positions online. E-recruitment has helped to streamline survey which found many staff, particularly at an operational the recruitment process, making it more efficient to manage level, were not able to identify who their immediate large numbers of applications. manager and supervisor was. A review of the program in March 2010 found staff to be overwhelmingly happy with the introduction of TSIP.

OUR PEOPLE 27 Becoming a registered training organisation 2009–10 2008–09 In December 2009 V/Line was advised by International Transport Training and Development (ITTD) that from April V/Line skill group As at As at 2010 they will no longer provide driver training within (headcount) 30 June 2010 30 June 2009 Victoria. In view of this we will be conducting driver training Executive 10 9 with our own staff. Operations 72 69 V/Line is negotiating an auspicing arrangement with another registered training organisation who will issue Station staff 252 247 qualifications and statements of attainment. Following Conductors 214 210 the announcement by ITTD, V/Line has begun the process of becoming a registered training organisation Train drivers 346* 328 in Rail Operations. Authorised Officers 6 6

June 2010 Infrastructure maintenance 181 159

Ongoing employees Signals and Employees (headcount) 1388 communications 55 54 Full-time (headcount) 1349 Train controllers 46 42 Part-time (headcount) 39 Network services 63 64 FTE 1375.9 Other staff 199 194 Total 1444 1382 Fixed-term and casual employees * Includes 20 trainee drivers FTE 49

June 2010 June 2009

Fixed-term and Ongoing, fixed-term and Ongoing casual employees casual employees

Employee Employee (headcount) FTE FTE (headcount) FTE Gender > Male 1215 1211 34.5 1205 1198.1 > Female 173 164.9 14.5 175 167.2 Age > Under 25 46 45.7 3 56 55.1 > 25–34 204 201.9 14.4 200 197.9 > 35–44 280 275.8 11.4 298 294.4 > 45–54 530 528.2 11.8 521 517.4 > 55–64 300 296.6 8.4 279 275.1 > Over 64 28 27.7 26 25.4

28 V/LINE ANNUAL REPORT 2009–10 Operations

Train punctuality across regional Victoria improved for the Behind-the-scenes improvements fourth consecutive year in 2009–10, with more V/Line trains Work continued in 2009–10 on the design and trial of our on time in the area under our control. Rail Operations Management System. Development of this While 95.6 per cent of all trains were on time in the country important system first began in 2008 to combine operational sections of track, metropolitan train congestion continued planning of the train fleet, staff and timetabling. to hamper overall performance results. The Melbourne The reduction in manual management of these systems suburban lines – under the control of Connex until will see efficiency improvements that will translate to 29 November 2009 and Metro Trains after that – provided better services for our customers. It is expected that when a challenge to maintaining punctuality with more trains fully operational, any unforeseen changes in rostering or than ever before running to and from the city. fleet availability can be quickly addressed and impacts on The combined punctuality of V/Line trains across both the customers reduced or negated. The system is also expected regional and metropolitan area was 84.9 per cent for short- to make better use of our on-train crew availability by distance trains and 87 per cent for long-distance services – deploying drivers and conductors in a more efficient manner. both down less than one per cent on last year’s outcome. Nature’s challenges With the change of metropolitan rail operators, maintenance Summer 2009–10 will not be remembered for a record- and capital works increased on suburban lines. While this breaking heatwave like January and February 2008, but the has the short-term effect of reducing train speeds during period will be remembered for several storms that posed works and affecting punctuality, the long-term benefits of major operational challenges for V/Line. better infrastructure in Melbourne will be realised by regional On 11 February 2010 a major storm forced the temporary and metropolitan train users alike for years to come. closure of four of five commuter lines due to heavy rain Metro and the state government undertook major upgrades and flooding in Melbourne that damaged signal and track of track and signal infrastructure at Craigieburn, Laverton infrastructure, affecting services to Geelong, Ballarat, and Westall during 2009–10, as well as ongoing concrete Bendigo and Traralgon. Bacchus Marsh Station also recorded re-sleepering and overhead power improvements across almost 100 millimetres of rain in a deluge that lasted the network. 20 minutes. The storm also significantly affected suburban Meeting the demands of growing patronage operator Metro, and with thousands of commuters stranded With metropolitan pathways limited, service numbers in the Melbourne central business district, sourcing coaches remained similar to last year’s with 61,921 short-distance to get people home was difficult. and 10,421 long-distance trains running during the year. It was a credit to V/Line’s infrastructure team that in the New V/Line-dedicated track in the metropolitan area, hours following the storm all commuter lines were again provided by the Regional Rail Link project in coming open for train traffic. The V/Line operational team also years, will bring the next major opportunity to increase managed the major peak hour disruption well, with extra services. Long-distance train numbers will also grow with staff deployed to Southern Cross Station, regular SMS the reintroduction of trains to Maryborough and return of updates issued to subscribed commuters and onboard services to Albury / Wodonga in the new financial year. crews keeping passengers informed of developments. As V/Line’s patronage continues to grow, our fleet has grown to cater for greater seating demand. During 2009–10, nine new VLocity carriages came into operation, providing an extra 684 physical seats on the network. And with each carriage operating four to six services per day, that’s at least 2736 more seats in service than last year. Overall, 7752 physical seats (or an average of 31,000 operational seats per day) have been added to V/Line services since VLocity trains joined the fleet from 2005. At year’s end, 102 VLocity carriages were in operation.

OPERATIONS 29 Major hail storms and flash flooding in the Melbourne The number of days during which hot weather speed CBD on 6 March also presented another operational restrictions (or WOLOs) were in place reduced significantly challenge as Southern Cross Station was evacuated following during 2008–09 due to comparatively cooler conditions. damage to the roof from large hail stones. While the storm These speed restrictions are not unique to V/Line; they was outside the peak period and on a Saturday afternoon, occur across the world as heat causes steel to expand and all five V/Line train lines and most metropolitan lines were warp the tracks. In 2009–10 if the forecast temperature severely disrupted for several hours. Getting coaches to was to exceed rail tolerance levels, coaches were arranged customers at Southern Cross Station proved difficult, with in advance to support rail services and minimise flooded city streets causing traffic gridlock. Again, customer passenger disruption. communication and on-the-ground management at Southern Regional Rail Link Cross Station ensured that passengers could continue their With metropolitan congestion accounting for almost journey through a series of shuttle train arrangements in half of delayed trains within the suburban metropolitan partnership with Metro Trains. train network, V/Line customers are eagerly awaiting At the other end of the extreme weather spectrum, the the $4.3 billion state and federal-funded Regional experiences of the record-breaking heat of 2008 gave V/Line Rail Link project. an opportunity to implement operational changes to make The project, which saw significant work begin in 2009, will trains cooler when they arrived at station platforms in the give regional trains on the Geelong, Ballarat and Bendigo summer. Trains and carriages, particularly the older lines their own dedicated track from the metropolitan N, H and S-Set fleets, were started earlier in the day to give boundary to Southern Cross Station. the air conditioning time to cool the inside.

on-time performance of trains on the regional network up to the metropolitan boundaries*

2009 2008 2009 2008 2010 2009 2010 2009 short distance 81.1% 83.0% pakenham 93.9% 93.4% traralgon

85.5% 85.4% broadmeadows 96.8% 95.8% seymour southern 84.4% 85.5% watergardens 93.8% 93.9% bendigo cross station 89.5% 87.8% sunshine 96.1% 95.0% ballarat

83.1% 85.1% werribee 97.1% 97.0% geelong

long distance 79.5% 81.5% pakenham 94.7% 93.6% bairnsdale

† 91.8% broadmeadows † 96.5% albury / wodonga†

89.6% 88.9% 95.6% 97.0% shepparton southern 94.2% 92.9% watergardens 96.4% 96.3% echuca cross station 82.0% 81.7% 93.3% 92.6% swan hill

94.3% 92.8% sunshine 97.2% 96.2% ararat

85.4% 89.0% werribee 95.5% 96.0% warrnambool

Total journey punctuality Regional area punctuality

* Regional area punctuality for Melbourne-bound trains is calculated before the train enters the metropolitan system. Out-bound train punctuality in the regional area is assessed by deducting its actual variance at the metropolitan boundary from its actual variance at its regional destination. † Train services were replaced with road coaches between Seymour and Albury / Wodonga from November 2008 due to track upgrade works.

30 V/LINE ANNUAL REPORT 2009–10 Fleet

Throughout the year V/Line continued to take delivery New features of new rolling stock while at the same time refurbishing The arrival of brand-new three-carriage VLocities as part older carriages and trains. of the latest delivery schedule will see subtle but important In December 2009 the 100th VLocity carriage, constructed changes made to improve safety. The new carriages will at Bombardier’s Dandenong plant, was launched onto now incorporate the V/Line brand on the front and side the passenger rail network. The launch, at Ballarat Station, of the unit and will also be more closely aligned to the marked an important milestone in what is the pride V/Line colour scheme. of the V/Line fleet. Following driver feedback, new high-intensity discharge (HID) Following unprecedented patronage growth after the lights have been fitted to the front of the train to improve initial delivery of 40 two-car VLocity trains in 2005, the visibility and also allow motorists to better see approaching fleet was expanded to convert 22 of these into three-car trains at level crossings. The lights are so bright they can VLocities. By the end of June 2010, there were 102 VLocity be viewed from up to one kilometre away, and their use is carriages in operation, delivered at the rate of an average restricted to regional areas outside the Melbourne urban of one per month. area. Zebra striping behind the driver doors and new side Bombardier is continuing its work to bring more trains mirrors will also be added to the new fleet. The HID lights to V/Line with the next phase of construction – an order for will also be progressively fitted to the existing VLocity fleet. 32 more carriages (10 three-car VLocity carriages and one A trial is also under way to investigate if selective door two-car) from mid-2010. At the current rate V/Line will technology can be fitted to the V/Line fleet. Booming continue to receive new trains, seats and carriages until patronage has meant V/Line has run longer VLocity train at least the end of 2011 and when finished there will be sets of up to six and seven cars on the Geelong, Ballarat a total of 134 VLocity carriage units in service. and Bendigo corridors. However, in some cases the trains When the final VLocity unit is introduced to the V/Line fleet have become longer than the platforms. Platforms along the 9784 physical seats will have been introduced since 2005. Geelong corridor were lengthened in 2008 to accommodate Importantly the extra seats and carriages not only give added seven-car VLocity trains. capacity to peak and off-peak services, but from August 2010 Upgrading platforms can be expensive and prohibitive where they will allow V/Line to retire one of our oldest carriage infrastructure constraints exist such as the track configuration sets. The S-Set, a five-carriage unit, is one of the oldest and heritage issues. The problem of short platforms has been in the V/Line fleet, with some of the cars between 50 and well addressed throughout Europe, with door sensors and 60 years old. door isolation systems in place so that passengers cannot inadvertently open a door onto an area without a platform. Following international cases, V/Line will trial sensors on VLocity train doors as a possible alternative to lengthening platforms throughout 2010–11.

Vlocities 2009–10 2008–09 Sprinters 2009–10 2008–09 Rolling stock availability Rolling stock availability (% fleet avail) (% fleet avail) > VLocities 89.0% 88.2% > Sprinters 87.4% 88.1% Rolling stock reliability Rolling stock reliability (3-month mean km (3-month mean km between faults) between faults) > VLocities 94,423kms 83,570kms > Sprinters 23,894kms 19,884kms

VLocities sprinters

FLEET 31 A sensor on the outside of the train sends out an infrared Reliability between faults for locomotives and Sprinters light which does one of two things: it either detects that a also improved significantly, with Sprinters increasing from platform is there (transmitting a message to allow the doors 19,884 kilometres between faults in 2008–09 to 23,894 to open) or, detects that no platform is there (transmitting a kilometres in 2009–10. Locomotives increased their message to keep the doors closed). This new technology is reliability from 23,506 kilometres between faults in being developed by Bombardier especially for V/Line. 2008–09 to 30,030 in 2009–10. Renewing the old An expanded reliability program was launched in 2009–10 A $13 million state government program of upgrades to some to improve the number of kilometres travelled between of our oldest rolling stock continued throughout 2009–10. breakdowns in the Sprinter and locomotive fleet. Working These upgrades added new curtains, livery, seat covers with V/Line’s maintenance contractor, a number of issues and carpet to all but one of the Sprinter fleet of 21 vehicles, were identified as being the cause of breakdowns, delays vastly improving comfort for passengers. The last unit will be and cancellations. By changing maintenance practices, and completed later in 2010. conducting a thorough examination it was found that failures in the head end power (HEP) unit of locomotives were causing Of the 138 locomotive-hauled carriages that were in service, delays and cancellations. Altering the wiring, cooling and 96 have now been refurbished, with funding for an additional exhaust system was found to reduce the number of faults. 33 to take place over the coming months. The reliability of locomotive-hauled carriages decreased from Significantly this year, the 15 N-Set carriages forming the 93,052 kilometres travelled between faults in 2008–09 to standard gauge fleet that will run to Wodonga and Albury 91,918 kilometres in 2009–10. not only had the interior overhauled but also had new air-conditioning fitted. By replacing the original units with Expansion of night work new air-conditioners with double the power and capacity, As the VLocity fleet has grown beyond 100 carriages, passenger comfort and carriage reliability was significantly so has the requirement for more space to not only store improved. It is expected that this upgrade can be applied them but also service them. Work to improve maintenance to the remaining N and Z carriages. and storage scheduling at the West Melbourne Depot and Reliability Southern Cross Station has been undertaken as V/Line has taken delivery of new VLocity carriages. With the oldest VLocity units only five years old, their reliability and performance continues to improve. During The introduction of a night shift at the West Melbourne 2009–10 the VLocity units travelled an average 94,423 Depot has helped alleviate pressure on scheduled kilometres between faults (up from 83,570 in 2008–09 maintenance, reduced congestion and also significantly and 75,692 in 2007–08). improved safety. There are now fewer train and carriage movements in the yards at Southern Cross Station as they are readied to be docked into platforms.

Locomotives 2009–10 2008–09 Loco-hauled carriages 2009–10 2008–09 Rolling stock availability Rolling stock availability (% fleet avail) (% fleet avail) > Locomotives 80.75% 82.0% > Loco-hauled carriages 87.4% 88.1% Rolling stock reliability Rolling stock reliability (3-month mean km (3-month mean km between faults) between faults) > Locomotives 30,030kms 23,506kms > Loco-hauled carriages 91,918kms 93,052kms

LOCOMOTIVES LOCO-hauled carriages

32 V/LINE ANNUAL REPORT 2009–10 Infrastructure

Thanks to ongoing support from the state government, Meeting maintenance challenges V/Line continues to build on the massive Regional Fast Rail Varying and steep terrain can present challenges for track upgrades of 2005–06 with ongoing investment into regional maintenance. One example was at Bank Box, on the Ballarat Victorian rail infrastructure. corridor. When Melbourne was hit by an extraordinary Last year, V/Line invested more than $38 million in major hailstorm on 5 March 2010, heavy rain also caused a minor maintenance projects in addition to more than $20 million of rockslide. This section of track passes through a cutting with routine maintenance. This year, an investment of $55 million steep walls of silt, rock and dirt as it climbs out of Bacchus has seen a range of maintenance and rail replacement Marsh towards Ballan. The steep slope, rabbit burrows and projects completed, including the renewal of more than a lack of drainage increased the effect of heavy rain and the 40 level crossings, strengthening of 35 bridges, and slope required significant restoration. A $700,000 program maintenance and replacement of signalling systems. of works to improve the slope formation began in April 2010 The Regional Fast Rail project saw sections of track and was finished a month later. The work involved up to upgraded to a ‘Fast Rail’ standard on the Ballarat, Geelong, three excavators, a dump truck, backhoe and bulldozer in Gippsland and Bendigo corridors, allowing VLocity trains shifting tonnes of rock and dirt to create ‘steps’ or ‘benches’. to run at up to 160 kilometres per hour. In 2008 and 2009 In the event of heavy rain, the landscape now has more work began to replace the remaining timber sleepered stability and the track below will be protected from extreme sections on the Ballarat and Geelong corridors with concrete. weather conditions. Major works moved to the Gippsland line in March 2010, Freight upgrades with a $25 million program to replace up to 80,000 timber During 2009–10, V/Line continued its commitment to sleepers with concrete between Pakenham and Traralgon. maintaining and upgrading the Victorian rail freight network, The program is scheduled to be completed in October of which we are the lessee. 2010. Although more expensive than timber sleepers, For farmers and other businesses rail freight is essential to concrete sleepers carry long-term benefits. Less periodical the efficient transport of goods to port for distribution or maintenance is required, and the sleepers will improve export. The easing of drought conditions during the year reliability and comfort for passengers. As part of the increased the demand for freight transport by rail. Gippsland work, track renewals were completed at Garfield, Since January 2009, V/Line has replaced more than 200,000 Tynong, Nar Nar Goon, Traralgon and Yarragon. Eight level timber sleepers with new timber on freight lines across crossings were also renewed with concrete sleepers and the state, including: road resurfacing works completed. Extensive works were finished at Lardner’s Track to improve line of sight and • 50,000 sleepers between Ouyen and Murrayville safety around level crossings in the area. • 46,000 between Quambatook and Managatang Timber sleepers still in good condition will be reused • 25,000 between Charlton and Sea Lake on parts of the V/Line freight network where traffic is • 24,000 between Warracknabeal and Hopetoun significantly less than on the passenger rail corridors. • 20,000 between Swan Hill and Piangil Routine maintenance also resulted in the upgrade of • 15,000 between Murtoa and Warracknabeal signalling in the Ballarat and Shepparton areas, 40 level crossing renewals and strengthening of 35 bridges. • 14,000 between Korong Vale and Quambatook • 10,000 between Mildura and Yelta.

INFRASTRUCTURE 33 In addition to V/Line’s maintenance and upgrade program, Returning services to Maryborough a separate project has seen $73 million invested (by both In December 2008, Victorian Premier John Brumby state and federal governments) in the Mildura freight line. announced the Victorian Transport Plan – a $38 billion As a result of this upgrade, which was completed in August action plan to deliver more trains, trams and buses, as well 2009, travel times for trains have been significantly reduced as future road and rail investments. between Mildura and the outskirts of Geelong. An integral part of the plan included the pledge to reinstate A new approach to maintenance planning passenger train services to Maryborough, via Ballarat. With almost 1800 kilometres of passenger and Passenger services had been removed more than 15 years 2000 kilometres of freight track, keeping the network ago, meaning significant work was required to bring the track maintained is critical to ensuring that our customers and back to a passenger rail standard. freight get to their destinations. This was the first major infrastructure project managed and During 2009–10, a project was started to analyse the delivered by the V/Line infrastructure team. The project was maintenance needs of all infrastructure, from rail tracks also managed on time and on budget, with works including: to bridges and signalling. Using reliability-centred • the upgrade of train stabling facilities at Maryborough maintenance, over time every single piece of infrastructure Station under V/Line control will be mapped and analysed to better • improved signalling (to be delivered throughout understand the reasons and causes behind faults 2010–11) on the network. • continuing upgrade of up to 13 level crossings Using this data, a better method for maintenance can be between Maryborough and Ballarat with boom gates mapped to not only prevent problems before they occur and flashing lights but also gain a better understanding of how to fix them in the future. The four-stage project is now in its second • the negotiated closure of several private level crossings stage, with a pilot project involving a complete analysis along the corridor and low-use level crossings with of rail track infrastructure. Stages three and four will local councils involve integrating the new data with V/Line’s own asset • extensive platform works, fit-out of a ticketing office, management system before modelling of the rest of the new car parking spaces, upgrade of toilets and CCTV V/Line network takes place. Some of the key benefits installation at Maryborough Station of the program will include the potential to move towards • construction of a new station platform at Creswick, a predictive maintenance regime and improved maintenance with work to begin at Clunes. strategies based on the data. This should produce a more V/Line’s successful delivery of the Maryborough project will reliable railway with a lower operating cost. be used as a case study by the business to bid for future infrastructure tender work, including packages of Victoria’s largest rail infrastructure project, Regional Rail Link.

34 V/LINE ANNUAL REPORT 2009–10 MELBOURNE METRO AREA

Craigieburn

Bendigo Hurstbridge Epping Sydenham Upfield

Broadmeadows St Albans Jacana Glenroy Fawkner Reservoir Oak Park

Strathmore Rosanna Lilydale Ballarat Albi o n Tottenham Yard Flemington Jewell Merri Racecourse Deer Park Clifton Hill Sunshine d Ardeer Newmarket Victoria Park o North l rn ie u Melbourne nd rwel b gwo e Port n b ack Rin Brooklyn n mo enferr l Melbourne no h Gl B Dy yno Ric Cam Spotswood D rth eet Cross tr Kooyong Bayswater Newport No outh S ey S S. Yarra l ern er th v u inders a ley Fl W So t ver Boronia n a Darling Alamein W Mou n Seaholme Williamstown Pier Gle Caulfield Geelong Elsternwick

Huntingdale Belgrave Bentleigh Yelta Brighton Beach Westall Yard

Sandringham Mildura Cheltenham

Dandenong Red Cliffs Mordiallic

Robinvale Lyndhurst Traralgon

Hattah Cranbourne

Stony Point Manangatang Moulamein Ouyen Piangil Mittyack Nyah West Panitya Linga Swan Hill Oaklands Ultima Sea Lake Wakool Deniliquin

Woomelang Hopetoun Kerang Yaapeet Tocumwal Yard South Kerang

Strathmerton Birchip Albury Wycheproof Pyramid Jeparit Echuca Wodonga Bandiana Warracknabeal Dookie Springhurst Diapur Kyabram Korong Vale Dingee Rochester Shepparton Wangaratta Dimboola Adelaide Serviceton Glenrowan Inglewood Toolamba Benalla Murtoa St Arnaud Murchison East Eaglehawk Huntly Horsham Marong Euroa Bendigo Nagambie Dunolly Glenorchy Mangalore Maryborough Seymour Castlemaine Stawell Moolort Tallarook Malmsbury Kyneton Broadford Ararat Clunes Woodend Beaufort Maroona Yard Wallan

Tatyoon Ballan Sunbury Craigeburn Glenthompson Ballarat Diggers Rest Somerton Westmere Hamilton Bacchus Marsh Melton Werribee Bairnsdale Branxholme Berrybank Little River Nar Nar Goon Gheringhap Lara Longwarry North Warragul Heywood Camperdown Inverleigh Pakenham Moe Traralgon Sale Geelong Geelong Drouin Rosedale Trafalgar Dennington Terang Winchelsea Morwell Portland Colac Warrnambool

LEGEND

Passenger and freight services (V/Line broad gauge)

Passenger and freight services (ARTC standard gauge)

Freight only (V/Line broad gauge)

Freight only (V/Line standard gauge)

ARTC (standard gauge) including dual gauge North Geelong – Gheringhap and Geelong grain loop

Metro Trains Melbourne (broad gauge)

Victorian Rail Track Corporation (VicTack)

Note: Map reflects the rail environment at 30 June 2010.

INFRASTRUCTURE 35 Financial summary

V/Line reported a $15.9 million net surplus in 2009–10 A small increase in revenue from access fees of $663,000 as purchasing and contractual efficiencies were achieved was realised this year to a total of $3.4 million. However, during the year. However, the surplus also reflects the revenue from freight access fees continues to be well below timing of infrastructure maintenance works and their pre-drought periods as a result of ongoing low harvests. significant associated costs, with a more neutral forecast As a result of the ongoing low access fees, a significant in the coming financial year. proportion of V/Line’s government subsidy covers the Total income increased by $10.5 million to $475.8 million, considerable cost of maintaining the freight rail network. including a five per cent (or $3.6 million) increase in farebox Franchise and state subsidies rose two per cent (or revenue to $72.2 million. The farebox has risen 46 per cent $470,000) to $256.1 million during the year. from the $49.3 million recorded in 2005–06, almost entirely Total expenses dropped two per cent (or $9.9 million) to due to the rapid rise in patronage as ticket prices were cut by $461.6 million as a result of operational efficiencies gained an average 20 per cent in 2007, CPI increases were applied across the business, including fuel savings of $3.4 million in 2008 and 2009, and fares were frozen during 2009–10. and reduced road coach costs of $1.6 million. Franchise As more people make the switch to public transport, performance penalties of $3 million also decreased to V/Line becomes a more efficient business. A key efficiency contribute to this outcome. However, with a growing new measure is the subsidy per passenger trip, which dropped VLocity fleet and ageing locomotive and Sprinter trains, again this year to $18.68, from $19.42 last year and maintenance costs increased $10.7 million to $69.5 million $19.88 in 2007–08. and repairs increased $4.3 million to $6.8 million.

ENGAGEMENT OF CONSULTANTS PAID OVER $100,000

Supplier/Vendor Description $’000 Corrs Chambers Westgarth Legal advice 849 McCann Erickson Melbourne Marketing services 729 Oakton Services Information Technology Services (BMS services) 307 Barrington Centre Critical incident management and employee assistance program 295 Ernst & Young Taxation and internal audit services 293 Condico Consulting CARS – Centrol Review 248 Worley Parsons Engineering services 103 Vemco Tree assessment and report throughout V/Line Rail 149 Under $100,000 36 consultancies 634

36 V/LINE ANNUAL REPORT 2009–10 Corporate governance

v/line BOARD

Frank Tait – Chairman, since October 2003 Mr Tait is the chair of the boards of both VLC and VLPL. His career spans government as well as the rail transport and defence industries. Along with his role on the V/Line boards, Mr Tait is Director of the Infrastructure Projects Branch within the Department of Transport. He also has a consulting business, advising boards, executive management and entrepreneurs on business strategy, organisational development and recruitment strategies.

david worth – since December 2008 Mr Worth is a Chartered Accountant and an experienced director and adviser in the transport and logistics industry and the property industry. He has had senior executive experience in corporate finance, supply chain management, property development, corporate strategy and IT. He is a director of OnCard International Limited, two property investment funds associated with Marks Henderson Funds Management and several development trusts established by Dacland Management for Sophisticated Investors.

fiona bennett – since December 2008 Ms Bennett is the deputy chair of the boards of VLC and VLPL. She has held senior executive positions in leading listed companies and has experience in commercial and financial management, governance, risk management and audit across a range of industries, including retail, resources, manufacturing and health. She has held a number of government, public and not-for-profit board positions and is currently a director of Alfred Health, Institute of Chartered Accountants in Australia, Legal Services Board, Heide Museum of Modern Art, Boom Logistics Limited and Hills Industries Limited.

michael tilley – since July 2006 Mr Tilley has worked in the accounting and finance industries for more than 40 years and has broad senior advisory and project management experience in all facets of corporate finance. He is the chairman of Terrain Capital. Mr Tilley is also chairman of Lower Murray Water Authority and Free Eyre Limited and a director of Vision Super Pty Ltd, North Queensland Metals Limited and Hawkesbridge Private Equity Limited.

simon lane – December 2009–April 2010 Mr Lane is a director of Rail Advisory Services. He has worked in the rail industry for nearly 30 years and since 1994 has held senior management positions in Victoria, New South Wales and Singapore. Mr Lane resigned as a director of VLC and VLPL effective 30 April 2010.

corporate governance 37 v/line executive

rob barnett CEO Executive team leader, management representative on the V/Line Board, and member of the government’s Victorian Railway Steering Committee on Level Crossings.

geoff arthur tony henwood graham perry ross pedley General Manager Acting General General Manager General Manager Operations Manager Engineering Corporate and Finance Delivery, planning Network Services Rolling stock engineering Corporate and financial and development Provision of access to services, including management services, of our train and freight and passenger maintenance of the including IT, contracts coach services. train operators. current fleet and and procurement. development of new trains.

andrew last jenny kelman laurie foley paul matthews rebecca northeast General Manager General Manager General Manager General Manager Company (Corporation) Infrastructure Human Resources Safety, Security Stakeholder Secretary and Maintenance and Recruitment, training & Environment Relations Legal Coordinator upgrade of rail, signalling and HR services. Incident management Customer relations, Legal services, company / and other infrastructure. Industrial relations and safe-working, marketing and corporation administration. and organisational security, risk and safety business development, development. improvement programs, communications and OH&S, DDA and media, and community environment. relations.

38 V/LINE ANNUAL REPORT 2009–10 V/LINE CORPORATION (VLC) and V/LINE PTY LTD (vlpl) BOARD MEETINGS ATTENDANCE VLC was established on 15 July 2003 as a statutory rail The boards of VLC and VLPL generally hold bi-monthly corporation under the Rail Corporations Act 1996. On meetings and additional meetings as required. 14 October 2008 VLC was also declared a state business V/Line Corporation corporation pursuant to the State Owned Enterprises Act 1992. On 1 July 2010, VLC’s name was changed from V/Line Director no. eligible to attend No. attended Passenger Corporation to V/Line Corporation pursuant to the Mr Frank Tait Transport Integration Act 2010. VLC is the sole shareholder (Chair) 6 6 of the main operating entity, VLPL, formerly known as V/Line Passenger Pty Ltd. Mr Michael Tilley 6 5 In 2003 VLPL entered into a franchise agreement with Ms Fiona Bennett 6 6 the Director of Public Transport (Director), representing the State Government of Victoria, to operate regional rail Mr David Worth 6 6 throughout Victoria. The current franchise agreement Mr Simon Lane 3 1 will expire on 31 December 2012 with the state having a further 12 month option. V/Line Pty Ltd In July 2004, the Director directed VLPL to facilitate the operation of heritage rail (i.e. steam) services on behalf Director no. eligible to attend No. attended of identified rail heritage groups. Mr Frank Tait In April 2007, the Director directed VLPL to execute (Chair) 6 6 documents and operate the regional below-rail business Mr Michael Tilley 6 5 following the state’s buyback of the infrastructure from Pacific National, to facilitate track access for the operation Ms Fiona Bennett 6 6 of both passenger and freight rail services from 7 May 2007. Mr David Worth 6 6 BOARD OF DIRECTORS Mr Simon Lane 3 1 As at 30 June 2010, the boards of VLC and VLPL consisted of the same four non-executive directors, with the board ACCESS TO INFORMATION of the parent entity, VLC, reporting to the Minister for Public Transport and to the Treasurer. Directors of VLC and VLPL are allowed full access to information required in order to discharge their Each board has established protocols and procedures to responsibilities. Directors of both entities may obtain ensure that corporate governance is maintained at the independent professional advice on matters arising in highest levels and that the strategic direction and overall the course of board duties. The board of VLC receives performance of the respective business entities can be written reports from the CEO of VLC at each board meeting developed and monitored diligently. The board of VLPL has on compliance by VLPL of its on-going obligations under also delegated certain of their functions to board committees ministerial directions. Directors also have access to senior which focus on relevant important areas of operations. managers and/or officers of the entity on whose board they Further details regarding these board committees are set serve and, on request, to documents held by the entity. out later in this section.

corporate governance 39 INDEMNIFICATION OF OFFICERS The Audit and Commercial Risk Committee VLC and VLPL have entered separately into deeds of • The function of the committee is to assist the board to indemnity and access with each current and former oversee the financial and commercial risk management director and the corporation/company secretary. Before framework, including to review and monitor accounting its deregistration on 4 February 2008, Victorian Rail policies and practices, and to evaluate and develop Heritage Operations Pty Limited (VRHO) entered into a financial and commercial risk management systems. deed of indemnity and access with its sole director, Mr Rob • Members as at 30 June 2010: Michael Tilley (Chair) Barnett. These deeds of VLC, VLPL and VRHO provide for and Fiona Bennett. indemnification against liabilities arising from the conduct • Number of meetings held during the year: four. of the business or from the discharge of directors’ and officers’ duties (other than any liability relating to a wilful The Safety, Security and Environment Committee: breach of duty or trust) and the maintenance of directors’ • The function of the committee is to assist the board and officers’ insurance. These deeds remain operational in discharging its obligations in relation to V/Line’s in respect of the current directors and secretary of VLC health, safety, security and environment practices and and VLPL, and also the following former directors of VLC in providing an overview mechanism for examining the and VLPL: Mr Simon Lane; Ms Catherine Scott; Ms Alice management of operational risk management in V/Line. Williams; Ms Meredith Doig; Mr Andrew Neal and Mr Colin • Members as at 30 June 2010: David Worth (Chair) Nicol, former director of VRHO; Mr Rob Barnett and former and Frank Tait. corporation/company secretaries; Mr Anthony Day and • Number of meetings held during the year: four. Mr David Chapman-Kelly. CORPORATE PLAN During the financial year, VLPL insured all directors and officers of VLC and VLPL against certain liabilities incurred In accordance with the Rail Corporations Act and from by them in that capacity. In accordance with normal 1 July 2010 the Transport Integration Act, VLC prepared its commercial practices, the terms of the insurance contract corporate plan, including its statement of corporate intent. prohibit disclosure of details of the nature of the liabilities The corporate plan is prepared annually and covers a three- covered by the insurance contract and the amount of the year period starting from the current financial year. premium paid under the contract. MINISTERIAL DIRECTIONS BOARD COMMITTEES VLC received no ministerial directions for the period The board of VLPL has established three board committees: ending 30 June 2010. the Remuneration; Audit and Commercial Risk; and Safety, FREEDOM OF INFORMATION Security and Environment committees. VLC is subject to the provisions of the Freedom of The Remuneration Committee Information Act 1982. For the year ended 30 June 2010, • The function of the committee includes assisting VLPC received eight requests for access to information. the board in the appointment, review and succession Of these requests seven were from Members of Parliament of the Chief Executive Officer and reviewing remuneration and one was from a member of the public. policy of staff. BUILDING ACT 1993 • Members as at 30 June 2010: Fiona Bennett (Chair) It is VLPL’s policy to ensure that new buildings and works to and Frank Tait. existing buildings carried out for and on its behalf comply • Number of meetings held during the year: two. with the Building Act 1993. NATIONAL COMPETITION POLICY VLC continues to comply with the requirements of the National Competition Policy.

40 V/LINE ANNUAL REPORT 2009–10 WHISTLEBLOWERS PROTECTION ACT VLC and VLPL are subject to the provisions of the VICTORIAN GOVERNMENT RISK MANAGEMENT Whistleblowers Protection Act 2001. In the past year, VLPL FRAMEWORK ATTESTATION investigated a public interest disclosure that was referred by I, Frank Tait, certify that V/Line Passenger Corporation the Ombudsman Victoria under Part 4 of the Whistleblowers through its wholly owned subsidiary and operating Protection Act. The disclosure related to allegations that company, V/Line Passenger Pty Ltd, has risk cash was received from the sale of scrap metal which was management processes in place consistent with the not recorded in the VLPL accounting system but used for Australian / New Zealand Risk Management Standard staff-related expenses as had been the practice for this part AS/NZS 4360 and an internal control system is in of the business under its prior ownership. The investigation place that enables the executive to understand, concluded that cash payments from the sale of scrap metal manage and satisfactorily control risk exposures. were not part of the formal accounts receivable process. The board verifies that this assurance and the risk As part of the Ombudsman’s recommendations VLPL has profiles of V/Line Passenger Corporation and V/Line sought legal advice and has strengthened its processes Passenger Pty Ltd have been critically reviewed regarding the collection of scrap metal and its cash handling within the last 12 months. processes generally, including that such payments are only to be made by cheque. IMPLEMENTATION OF THE VICTORIAN INDUSTRY PARTICIPATION POLICY (VIPP) VLPL entered into six contracts for the year ended 30 June Frank Tait 2010 to which VIPP thresholds applied and VIPP Chairman compliance was undertaken. VLC’s and VLPL’s standard 30 June 2010 tendering procedures include compliance with VIPP as and when required. RISK MANAGEMENT A process is in place for VLPL and VLC to meet their obligations under the Victorian Managed Insurance Authority Act 1996. The board of VLPL, as the significant operating entity, considers risk management issues regularly as part of its bi-monthly board meetings, through the activities of both the Safety, Security and Environment Committee and the Audit and Commercial Risk Committee, as well as through a robust internal audit process known as the enterprise wide risk management system. VLPL also has in place other policies and management systems to ensure that operational and compliance matters are efficiently and effectively addressed. VLPL has a Management System Manual, which provides a comprehensive overview of these policies and management systems, including the enterprise- wide risk management system, legislative compliance policies, an environment management system, and an audit framework for safety, security and environmental matters.

corporate governance 41 Financial statements

Statutory Statement

We certify that the attached financial statements for V/Line Passenger Corporation and its subsidiary have been prepared in accordance with Standing Direction 4.2 of the Financial Management Act 1994, applicable financial reporting directions, Australian Accounting Standards and other mandatory professional reporting requirements. We further state that, in our opinion, the information set out in the Consolidated Comprehensive Operating Statement, Consolidated Balance Sheet, Consolidated Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Financial Statements presents fairly the financial transactions during the year ended 30 June 2010 and the financial position of the consolidated entity at this date. We are not aware of any circumstance that would render any particulars included in the financial statements to be misleading or inaccurate. The accountable officer and the chief financial accounting officer have, within the past 12 months, made formal statements to the board that: • the Corporation’s financial reports present fairly, in all material respects, the Corporation’s financial position and operational results in accordance with the requirements of the Financial Management Act 1994, including the Directions • the financial report is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the board • the Corporation’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects. We authorise the attached financial statements for issue on 12 August 2010.

Frank Tait, Chairman Michael D Tilley, Director

Rob Barnett, Chief Executive Officer Ross Pedley, General Manager – Corporate & Finance

42 V/LINE ANNUAL REPORT 2009–10 Consolidated Comprehensive Operating Statement for the financial year ended 30 June 2010

Notes 2010 2009 $’000 $’000 Income from transactions Revenue 2(a) 376,543 371,725 Other income 2(b) 99,257 93,529 Total income from transactions 475,800 465,254

Expenses from transactions Operational expenses 3(a) 252,367 249,908 Depreciation 3(b) 19,027 18,961 Administrative expenses 54,911 56,673 Selling expenses 2,159 2,188 Marketing and communication 3,920 3,684 Customer service expenses 3,082 3,434 Project expenses 34,718 20,694 Infrastructure maintenance 58,431 82,624 Trains provided free of charge 1(i) 33,024 33,349 Total expenses from transactions 461,639 471,515

Net result before income tax expense 14,161 (6,261) Income tax benefit revenue 4 1,779 – Net Result for the period 13 15,940 (6,261)

Other economic flows – Other non-owner changes in equity Movement in asset revaluation reserve (net of tax of $4,188) 9,772 – Total other economic flows – Other non-owner changes in equity 9,772 –

Comprehensive result for the period 25,712 (6,261)

The above Consolidated Comprehensive Operating Statement should be read in conjunction with the accompanying notes.

FINANCIAL STATEMENTS 43 Consolidated Balance Sheet as at 30 June 2010

Notes 2010 2009 $’000 $’000 ASSETS Financial assets Cash and cash equivalents 5 9,137 2,785 Receivables 6 25,581 24,354 Total financial assets 34,718 27,139 Non-financial assets Inventories 7 7,046 4,772 Property, plant and equipment 8 154,538 137,073 Other non-financial assets 9 874 684 Total non-financial assets 162,458 142,529 Total assets 197,176 169,668

LIABILITIES Payables 1(q),11 52,545 55,718 Short-term provisions 1(s),12 53,374 51,276 Long-term provisions 1(s),12 4,188 3,726 Deferred tax liabilities 4 2,409 – Total liabilities 112,516 110,720 Net assets 84,660 58,948

EQUITY Accumulated losses 13 (30,025) (45,965) Asset revaluation reserve 13 114,685 104,913 Total equity 84,660 58,948

Commitments for expenditure 21 348,869 25,879 Contingent assets and liabilities 23 – –

The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.

44 V/LINE ANNUAL REPORT 2009–10 Consolidated Statement of Changes in Equity for the financial year ended 30 June 2010

N notes Equity at Total equity at 1 July 2009 comprehensive 30 June 2010 result $’000 $’000 $’000 2010 Accumulated surplus/(deficit) (45,965) 15,940 (30,025) Asset revaluation reserve 104,913 9,772 114,685 Total equity at end of the financial year 58,948 25,712 84,660

N notes Equity at Total equity at 1 July 2008 comprehensive 30 June 2009 result $’000 $’000 $’000 2009 Accumulated surplus/(deficit) (39,704) (6,261) (45,965) Asset revaluation reserve 104,913 – 104,913 Total equity at end of the financial year 65,209 (6,261) 58,948

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

Consolidated Cash Flow Statement for the financial year ended 30 June 2010

Notes 2010 2009 $’000 $’000 Cash flows from operating activities Receipts from government (GST inclusive) 394,050 377,128 Receipts from other entities (GST inclusive) 97,282 101,815 Payments to suppliers and employees (GST inclusive) (450,730) (448,823) GST payments to the Australian Taxation Office (12,308) (9,453) Interest received 590 307 Net cash flows from (used in) operating activities 15 28,884 20,974

Cash flows from investing activities Payment for plant and equipment (22,532) (20,853) Net cash flows from (used in) investing activities (22,532) (20,853) Net increase/(decrease) in cash and cash equivalents 6,352 121

Cash and cash equivalents at the beginning of the financial year 2,785 2,664 Cash and cash equivalents at the end of the financial year 5 9,137 2,785

The above Consolidated Cash Flow Statement should be read in conjunction with the accompanying notes.

FINANCIAL STATEMENTS 45 Notes to the Financial Statements

Note 1 Summary of significant accounting policies Note 1 Note 2 Income Summary of significant accounting policies Note 3 Operational expenses These annual financial statements represent the audited Note 4 Income tax general purpose financial statements for V/Line Passenger Note 5 Cash and cash equivalents Corporation which is a Victorian statutory corporation Note 6 Receivables established in Australia under the Rail Corporations Act 1996. Note 7 Inventories Its principal address is: Note 8 Property, plant and equipment V/Line Passenger Corporation Note 9 Other non-financial assets Level 23, 570 Bourke Street Note 10 Investments Melbourne VIC 3000 Note 11 Payables The auditor’s independence declaration can be found at the Note 12 Provisions back of the annual report. Note 13 Equity (a) Statement of compliance Note 14 Financial instruments The financial statements have been prepared in accordance with Note 15 Cash flow information the Financial Management Act 1994 and applicable Australian Note 16 Responsible persons Accounting Standards, including interpretations (AASs). Note 17 Remuneration of directors The annual financial statements were authorised for issue and accountable officer by the board on 12 August 2010. Note 18 Remuneration of executives Note 19 Remuneration of auditors (b) Basis of accounting preparation and measurement Note 20 Related party disclosures The accrual basis of accounting has been applied in the Note 21 Operating leases and expenditure commitments preparation of these financial statements whereby assets, Note 22 Employee benefits and superannuation liabilities, equity, income and expenses are recognised in commitments the reporting period to which they relate, regardless of when cash is received or paid. Note 23 Contingent assets and liabilities Note 24 Subsequent events The financial statements have been prepared in accordance Note 25 Economic dependency with the historical cost convention except for certain non- current physical assets which, subsequent to acquisition, are Note 26 Dividends measured at a revalued amount being their fair value at the Note 27 Correction of prior period error date of the revaluation less any subsequent accumulated depreciation and subsequent impairment losses. Revaluations are conducted with sufficient regularity to ensure that carrying amounts do not materially differ from fair value. Historical cost is based on the fair values of the consideration given in exchange for assets. Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported. The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2010 and the comparative information presented for the year ended 30 June 2009. This financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars ($000s) unless otherwise stated.

46 V/LINE ANNUAL REPORT 2009–10 Notes to the Financial Statements

(c) Principles of consolidation of controlled entities The financial report comprises the consolidated financial statements of V/Line Passenger Corporation and its subsidiary V/Line Passenger Pty Ltd. The effects of all transactions between entities in the consolidated entity are eliminated in full. Where control of an entity is obtained during a financial year, its results are included in the Consolidated Comprehensive Operating Statement from the date on which control commences. Where control of an entity ceases during a financial year its results are included for that part of the year during which control exists. V/Line Passenger Corporation is represented by: Investment in subsidiary $1 Contributed equity $1 The Corporation has no other assets or liabilities. Given the immaterial nature of the investment by the parent entity it has not been reported separately. The controlled entities consolidated within the V/Line Passenger Corporation group are:

Name Country of incorporation equity interest 2010 2009 $’000 $’000 V/Line Passenger Pty Ltd Australia 100% – –

(d) Not for profit The Director of Public Transport acknowledges and agrees The board is of the view that the consolidated entity qualifies that, for the benefit of the directors of the consolidated entity as a not-for-profit entity since the primary obligation of and without limiting the level of financial support, the Corporation is the delivery of subsidised public the Director of Public Transport has agreed to provide the transportation services to regional Victoria. The entity has consolidated entity funding to a level sufficient for it to signed a franchise agreement with the Director of Public comply with the solvency requirements under the Transport which determines the services that the Corporation Corporations Act 2001. provides and the payments received for those services. The Director of Public Transport has also agreed that, while Hence, the entity’s funding is based on achieving a small the consolidated entity is under state ownership, the loss before interest, depreciation and tax and neither the Department of Transport will meet all of the consolidated mission nor corporate strategies of the Corporation reflect entity’s employee entitlements as and when those amounts achieving profit. The entity has been deemed to have a fall due in the event the consolidated entity is not able to not-for-profit status and accordingly complies with meet these financial obligations. accounting standards set for not-for-profit entities. The financial report does not include any adjustments (e) Going concern relating to the recoverability and classification of recorded Notwithstanding the deficiency in net current assets of asset amounts, nor to the amounts and classification of ($63.3 million) (2009: $74.4 million) this financial report liabilities that may be necessary should the consolidated has been prepared on a going concern basis. The entity not continue as a going concern. consolidated entity is subsidised by its ultimate parent Refer to note 25 for further details of the consolidated entity, the State Government of Victoria, pursuant to a entity’s economic dependency on the State Government franchise agreement with the Director of Public Transport. of Victoria. The funding requirements for the year ended 30 June 2011 (f) Comparatives have been agreed by the Director of Public Transport under an approved budget allocation pursuant to the franchise When the presentation or classification of items in the agreement. The franchise agreement contains provisions for financial report is amended, comparative amounts have the company’s funding requirements to be met by the State been reclassified unless the reclassification is impractical. Government of Victoria throughout the franchise period.

FINANCIAL STATEMENTS 47 Notes to the Financial Statements

(g) National Tax Equivalent Regime (NTER) (h) Goods and Services Tax By direction of the Treasurer of Victoria, under the State Owned Income, expenses and assets are recognised net of the Enterprise Act 1992, the consolidated entity entered into the amount of associated GST unless the GST incurred is not NTER on 1 October 2003. Any NTER expense payable is recoverable from the taxation authority in which case it is calculated on operating profit or loss adjusted for temporary recognised as part of the cost of acquisition of the asset or differences between NTER income and accounting income. as part of the expense. Deferred tax is accounted for using the balance sheet liability Receivables and payables are stated inclusive of the amount of method in respect of temporary differences arising between GST receivable or payable. The net amount of GST recoverable the tax bases of assets and liabilities and their carrying from, or payable to, the taxation authority is included with amounts in the financial statements. No deferred income tax other receivables or payables in the balance sheet. will be recognised from the initial recognition of an asset or Cash flows are presented on a gross basis. The GST liability, excluding a business combination, where there is components of cash flows arising from investing or financing no effect on accounting or taxable profit or loss. activities which are recoverable from, or payable to, the Deferred tax is calculated at the tax rates that are expected taxation authority, are presented as operating cash flows. to apply to the period when the asset is realised or liability (i) Revenue is settled. Deferred tax is credited in the Comprehensive Operating Statement except where it relates to items that Revenue is recognised and measured at the fair value may be credited directly to equity, in which case the deferred of the consideration received or receivable to the extent tax is adjusted directly against equity. it is probable that the economic benefits will flow to the Corporation and that it can be reliably measured. Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against Ticket Sales which deductible temporary differences can be utilised. Farebox revenue is recognised when the passenger services The amount of benefits brought to account or which may are provided. Revenue from tickets that relate to passenger be realised in the future is based on the assumption that trips to be taken after the reporting date are deferred and no adverse change will occur in income taxation legislation recognised as a liability. and the anticipation that the economic entity will derive Contributions sufficient future assessable income to enable the benefit to The State Government of Victoria provides subsidies that be realised and comply with the conditions of deductibility are recognised as revenue when they are controlled by the imposed by the law. Corporation, which is generally upon receipt of the subsidy. V/Line and its wholly owned Australian subsidiary have formed an income tax consolidated group under the income Value in Kind tax consolidation regime. Under existing arrangements with Use of VLocity diesel multiple unit trains are leased or the administrator of the national tax equivalent regime, owned by Rolling Stock Holdings Pty Ltd and received free V/Line Passenger Pty Ltd is the entity which has income tax of charge (“Value in Kind”;“VIK”). The VIK measurement is returns and related compliance obligations imposed upon based on the value of the lease payments or the notional it. Each entity in the group recognises its own current and lease value based on the capital cost per unit of rolling stock deferred tax liabilities. The current tax liability of each purchased outright. member of the group is the responsibility of each member of (j) Cash and cash equivalents the group. The group notified the Australian Taxation Office that it had formed an income tax consolidated group to apply Cash and cash equivalents comprise cash on hand and cash from 1 October 2003. The tax consolidated group has at bank, deposits at call and highly liquid investments with entered a tax sharing agreement whereby each corporation an original maturity of three months or less, which are held in the group contributes to the income tax payable in for the purpose of meeting short-term cash commitments proportion to their contribution to profit before tax. rather than for investment purposes, and which are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

48 V/LINE ANNUAL REPORT 2009–10 Notes to the Financial Statements

(k) Trade and other receivables Revaluation increments or decrements are accounted Trade and other receivables representing passenger, for as follows. inter-operator and other revenues receivable are carried – Net revaluation increments are credited directly against at nominal amounts due less any allowance for impairment. the asset revaluation reserve, except where the net A provision for impairment is recognised when collection increment reverses a net revaluation decrement previously of the full amount is no longer probable (> 90 days). For recognised as an expense in net profit or loss/result in that trade receivables, normal terms are 30 days and 7 days same class of assets. Where the exception applies, the for agency accounts. revaluation increment is recognised as revenue in net profit Receivables from related parties consist predominantly or loss/result. of amounts owing from the Department of Transport and – Net revaluation decrements are recognised as an expense are carried at nominal value due to their short-term nature. in net profit or loss/result, except where a credit balance There is no interest charged on related party receivables. exists in the asset revaluation reserve in that same class (l) Inventories of assets. Where the exception applies the net revaluation decrement grossed up for any related recognised current V/Line has a contract with the supplier for the supply of tax and deferred tax is debited directly to the asset spare parts which are to be made available upon request. revaluation reserve. This practice is considered by industry to be best practice as it has the lowest storage costs. The cost of these spare Revaluation increments and revaluation decrements relating parts is based on the first-in, first-out principle. to individual assets within an asset class are offset against one another within that asset class and are not offset in (m) Investment in subsidiaries respect of assets in different classes. Investments in subsidiaries are carried at cost. (ii) Depreciation of property, plant and equipment (n) Property, plant and equipment Depreciation is calculated on a straight-line basis over the Rolling stock is measured at fair value and all other estimated useful life of the assets, including rolling stock non-current assets are measured at cost less any and buildings. The rolling stock fleet comprises diesel accumulated depreciation and impairment losses. electric locomotives, carriages, diesel multiple units Revaluations are assessed annually and supplemented (known as sprinters) and vans. by independent assessments every three or four years. Repairs and maintenance work on rolling stock are Revaluations are conducted in accordance with AASB 116 scheduled in accordance with V/Line’s rolling stock Property, Plant and Equipment and FRD 103D Non-Current management plan and rail safety management standards. Physical Assets. Scheduled maintenance examinations on rolling stock (i) Valuation of rolling stock and rotables are determined at set intervals depending on the type of rolling stock. V/Line Passenger Pty Ltd undertook an independent revaluation of its rolling stock as at 30 June 2010. The 2010 The refurbishment program included in the rolling stock valuation was performed by rolling stock specialists and management plan includes major examinations and reviewed by Valuer General Victoria. Due to the specialised overhauls of rolling stock. The consolidated entity treats nature of the assets, V/Line has adopted depreciated these examinations as significant upgrades, which replacement cost as the valuation basis for its rolling extend the useful life of the rolling stock. Included in the stock. This approach is in accordance with the requirements refurbishment program is the replacement of major units of AASB 116 and FRD 103D, which states that the net such as traction and locomotive motors, generators, recoverable test does not apply to a not-for-profit entity since wheel sets and bogies. These items are capitalised and there is no dependence on its assets abilities to generate depreciated over their useful life. All other maintenance net cash inflows. examinations and minor work are treated as repairs and maintenance and expensed when incurred.

FINANCIAL STATEMENTS 49 Notes to the Financial Statements

(iii) Estimated useful lives of property, plant and equipment (p) Impairment of assets The estimated useful lives for the different asset classes for At each reporting date, the group reviews the carrying both current and prior years are set out below. amounts of its tangible assets to determine whether there is any indication that those assets have suffered Plant and equipment 3 to 10 years an impairment loss. If any such indication exists, the Rolling stock 4 to 17 years recoverable amount of the asset, being the higher of Leasehold improvements 3 to 10 years the asset’s fair value less costs to sell and depreciated Rolling stock – capitalised improvements 4 to 17 years replacement cost, is compared to the asset’s carrying amount. The assets’ residual values, useful lives and depreciation Any excess of the asset’s carrying amount over its methods are reviewed, and adjusted if appropriate, at each recoverable amount is recognised as an expense in the financial year end. comprehensive operating statement, unless the relevant asset is carried at fair value, in which case the impairment loss (iv) Leasehold improvements is accounted for by reducing the asset revaluation reserve. The cost of improvements to leasehold properties is amortised over the unexpired period of the lease or the estimated useful (q) Payables life of the improvement, whichever is the shorter. Payables consist predominantly of trade creditors and other sundry liabilities. (o) Leased assets (i) Finance leases Trade creditors represent liabilities for goods and services provided to the consolidated entity prior to the end of the Leases of property, plant and equipment are classified financial year and which are unpaid. These amounts are as finance leases whenever the terms of the lease transfer brought to account when the obligation to make future substantially all the risks and benefits of ownership to the payments in respect of the purchase of the goods and lessee. All other leases are classified as operating leases. services arises. The entity does not have any finance leases. Other liabilities included in payables mainly consist of (ii) Operating leases unearned/prepaid income, goods and services tax and Lease payments for operating leases, where substantially payroll related payables. all the risks and benefits of ownership remain with the lessor, are recognised as an expense in the comprehensive operating All payables are initially recognised at fair value plus statement in the periods in which they are incurred. transaction costs and subsequently carried at their nominal amount due to their short term nature. (iii) Lease incentives (r) Employee benefits In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a Provisions are made for employee benefits accumulated liability. The aggregate benefits of incentives are recognised as a result of employees rendering services up to the as a reduction of rental expense on a straight-line basis, reporting date. These benefits include annual leave and except where another systematic basis is more long service leave. representative of the time pattern in which economic Liabilities arising in respect of wages and salaries, annual benefits from the leased asset are consumed. leave and any other employee benefits expected to be settled within 12 months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled, including related on-costs.

50 V/LINE ANNUAL REPORT 2009–10 Notes to the Financial Statements

Long service leave liabilities are measured at the present (v) Significant accounting estimates and judgments value of the estimated future cash outflows to be made Management evaluate estimates and judgments in respect of services provided by employees up to the incorporated into the financial report based on historical reporting date, including related on-costs. In determining knowledge and best available current information. Estimates the present value of future cash outflows, the interest rates assume a reasonable expectation of future events and are relating to government-guaranteed securities are used, based on current trends and economic data, obtained both which have terms to maturity approximating the terms of externally and within the group. the related liability. Outlined below are the critical estimates and judgements Employee benefit expenses arising in respect of salaries that are made by management in the process of applying and wages, annual leave, long service leave, other leave the entity’s accounting policies and that have the most benefits and other employee benefits are charged against significant effect on the amounts recognised in the the comprehensive operating statement. financial statements. The contributions made to superannuation funds by the (i) Impairment consolidated entity are charged against the comprehensive The group assesses impairment at each reporting date operating statement when due. by evaluating conditions specific to the group that may lead (s) Provisions to an impairment of assets. Where an impairment trigger Provisions are recognised when the entity has a present exists, the recoverable amount of the asset is determined. obligation, the future sacrifice of economic benefits is probable, Depreciated replacement cost calculations performed and the amount of the provision can be measured reliably. in assessing recoverable amounts incorporate a number of key estimates. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation (ii) Allowance for impairment loss on trade receivables at reporting date, taking into account the risks and There was a $580,051 increase to the provision for doubtful uncertainties surrounding the obligation. Where a provision debts in 2009–10 based on a detailed analysis of the is measured using the cash flows estimated to settle the recoverability of individual accounts. present obligation, its carrying amount is the present value (iii)Timing of employment provisions of those cash flows using market yields at the reporting date on national government bonds with terms to maturity that All employment provisions are classified according to match, as close as possible, the estimated future cash flows. whether the entity has an unconditional right to defer settlement beyond 12 months. (t) Commitments (iv) Useful lives of property, plant and equipment Commitments are disclosed at their nominal value and inclusive of the goods and services tax (GST) payable. Property, plant and equipment useful lives are reviewed on an annual basis to ensure that their contribution is (u) Contingent assets and contingent liabilities realistically based on their useful economic life. Contingent assets and contingent liabilities are not recognised (w) New accounting standards and interpretations in the consolidated balance sheet but are disclosed by way of a note and, if quantifiable, are measured at nominal value. Certain new accounting standards and interpretations Contingent assets and contingent liabilities are presented have been published that are not mandatory for the inclusive of GST receivable or payable respectively. reporting period ending 30 June 2010. As at 30 June 2010, the following standards and interpretations had been issued but were not mandatory for the financial year ending 30 June 2010. V/Line has not adopted, and does not intend to adopt, these standards early.

FINANCIAL STATEMENTS 51 Notes to the Financial Statements

Standard/Interpretation Summary Applicable for Impact on financial annual reporting statements periods beginning on or after AASB 9 Financial Instruments This Standard simplifies requirements Beginning Detail of impact is still and AASB 2009–11 Amendments for the classification and measurement 1 Jan 2013. being assessed. to Australian Accounting of financial assets. The Standard is not Standards arising from AASB 9. applicable until 1 January 2013 but is available for early adoption.

AASB 2009–5 Further In May 2009, the AASB issued a number Beginning Impact expected to Amendments to Australian of improvements to existing Australian 1 Jan 2010. be insignificant. Accounting Standards arising from Accounting Standards. the Annual Improvements Project Some amendments will result in [AASB 5, 8, 101, 107, 117, 118, accounting changes for presentation, 136 and 139]. recognition or measurement purposes, while other amendments will relate to terminology and editorial changes.

AASB 2009–8 Amendments to The amendments clarify the scope Beginning Not applicable. Australian Accounting Standards of AASB 2. 1 Jan 2010. – Group Cash-Settled Share-Based Payment Transactions [AASB 2].

AASB 2009–10 Amendments to The Standard makes amendments to Beginning Not applicable. Australian Accounting Standards AASB 132, stating that rights issues 1 Feb 2010. – Classification of Rights Issues must now be classed as equity rather [AASB 132]. than derivative liabilities.

AASB 2009–12 Amendments to This Standard amends AASB 8 to Beginning Not applicable. Australian Accounting Standards require an entity to exercise judgement 1 Jan 2011. [AASB 5, 8, 108, 110, 112, 119, in assessing whether a government 133, 137, 139, 1023 and 1031 and entities known to be under control and Interpretations 2, 4, 16, 1039 of that government are considered a and 1052]. single customer for purposes of certain operating segment disclosures. This Standard also makes numerous editorial amendments to other AASs.

AASB 2009–13 Amendments to Consequential amendment to Beginning Not applicable. Australian Accounting Standards AASB 1 arising from the publication 1 Jul 2010. arising from Interpretation 19 of Interpretation 19. [AASB 1].

52 V/LINE ANNUAL REPORT 2009–10 Notes to the Financial Statements

Standard/Interpretation Summary Applicable for Impact on financial annual reporting statements periods beginning on or after AASB 2009–14 Amendments Amendment to Interpretation 14 arising Beginning Not applicable. to Australian Interpretation- from the issuance of prepayments of a 1 Jan 2011. Prepayments of a Minimum minimum funding requirement. Funding Requirement [AASB Interpretation 14].

AASB 124 Related Party Government related entities have been Beginning Detail of impact is still Disclosures. granted partial exemption with certain 1 Jan 2011. being assessed. disclosure requirements.

AASB 1053 Application of This Standard establishes a differential Beginning Detail of impact is still Different Tiers of Australian financial reporting framework consisting 1 Jul 2013. being assessed. Accounting Standards. of two tiers of reporting requirements for preparing general purpose financial statements.

AASB 2010–2 Amendments to This Standard makes amendments to Beginning Does not Australian Accounting Standards many Australian Accounting Standards, 1 Jul 2013. affect financial arising from Reduced Disclosure including Interpretations, to introduce measurement or Requirements. reduced disclosure requirements. recognition, so is not expected to have any impact on financial result or position. May reduce some note disclosures in financial statements.

AASB Interpretation 19 This Standard provides guidance Beginning Not applicable. Extinguishing Financial Liabilities to assist an entity in accounting for 1 July 2010. with Equity Instruments. transactions that involve extinguishing a liability fully or partially by issuing equity instruments to a creditor.

FINANCIAL STATEMENTS 53 Notes to the Financial Statements

2010 2009 $’000 $’000

Note 2 Income (a) Revenue Farebox revenue 72,218 68,648 Inter-operator income 1,038 1,086 Franchise subsidy 244,370 234,000 State subsidy 11,700 21,600 Access charges 3,371 2,708 Other income 10,822 10,334 Trains received free of charge 33,024 33,349 376,543 371,725

(b) Other income Interest – other persons/corporation 590 307 Government project reimbursement revenue 86,425 92,779 Capital transfer reallocation 12,242 (554) Other Income – 997 99,257 93,529 Total income 475,800 465,254

Note 3(a) Operational expenses Franchise performance penalty 146 3,242 Other direct costs 5,200 15,981 Fleet maintenance 69,521 58,866 Fuel costs 20,913 24,398 Road coach services 5,172 6,760 Access charges 16,723 17,062 Repairs & maintenance 6,809 2,469 124,484 128,778

Direct labour costs Salaries and wages 108,549 100,779 Superannuation 10,618 8,948 Annual leave and long service leave expense 2,560 5,784 Other on-costs (fringe benefits tax, payroll tax and work cover levy) 6,156 5,619 127,883 121,130 Total operational expenses 252,367 249,908

(b) Depreciation of non-current assets Depreciation of non-current assets Plant and equipment 1,478 3,729 Leasehold improvements 394 348 Rolling stock 12,515 12,519 Rolling stock – capitalised improvements 4,640 2,365 19,027 18,961

54 V/LINE ANNUAL REPORT 2009–10 Notes to the Financial Statements

2010 2009 $’000 $’000

Note 4 Income tax (a) Income tax expense/(revenue) Accounting profit/(loss) before income tax 14,161 (6,261) Prima facie tax payable on profit from ordinary activities before income tax at 30% (2009: 30%) 4,248 (1,878) Tax expense relating to non-temporary differences 1 2 4,249 (1,876)

Deferred tax expense relating to reversal of temporary differences 1,052 (147) Recognition of carry forward losses previously not recognised (7,080) 2,023 Income tax expense/(revenue) (1,779) –

The component of tax expense (revenue) comprises: Current tax – – Deferred tax (1,779) – (1,779) –

(b) Deferred tax liability Gross deferred tax assets – temporary differences

Carry forward tax losses 21,893 27,194 Accruals 190 211 Provision for employee entitlements 16,929 16,079 Other provisions 1,307 913 Total deferred tax assets 40,319 44,397

Deferred tax liability Accelerated depreciation for taxation purposes 42,634 35,786 Other 94 48 Total deferred tax liability 42,728 35,834

Deferred tax liability recognised for the year ended 30 June 2010 Equity – tax effect of asset revaluation 4,188 Income tax benefit expense (1,779) Aggregate deferred tax liability 2,409

The corporation has for the year ended 30 June 2010 carry-forward income tax losses of $72.977m representing a net deferred tax asset of $21.893m. The total carried forward loss and deferred tax assets due to timing differences is $40.319m. The total deferred tax liability is $42.728m, which gives rise to an aggregate net deferred tax liability. An aggregate deferred tax liability has arisen due to an increase in the accounting carrying value of rolling stock as a result of a revaluation. Hence, $4.188m due to the asset revaluation has been booked to equity and a net deferred tax liability of $2.409m has been brought to account in the financial statements.

FINANCIAL STATEMENTS 55 Notes to the Financial Statements

2010 2009 $’000 $’000

Note 5 Cash and cash equivalents Cash at bank 9,127 2,708 Cash on hand 10 77 9,137 2,785

Note 6 Receivables Trade receivables 25,007 22,377 Less: provision for impairment (654) (73) 24,353 22,304 Fuel rebate receivables 898 1,634 Other receivables 330 416 25,581 24,354

Related party receivables Trade receivables include the following receivables from related parties: – Department of Transport 20,063 18,673 – Other related parties 55 15 20,118 18,688

Terms and conditions relating to the above financial instruments: Credit sales are on 30 day terms. Details of the terms and conditions of related parties’ receivables are set out in Note 20. (a) Ageing analysis of contractual receivables Please refer to Table 1 in Note 14 for the ageing analysis of contractual receivables. (b) Nature and extent of risk arising from contractual receivables Please refer to Note 14 for the nature and extent of risks arising from contractual receivables.

2010 2009 $’000 $’000

Note 7 Inventories Spares and materials at cost 7,046 4,772

56 V/LINE ANNUAL REPORT 2009–10 Notes to the Financial Statements

2010 2009 $’000 $’000

Note 8 Property, plant and equipment Plant and equipment At cost 30,216 29,727 Accumulated depreciation (25,535) (24,068) 4,681 5,659 Rolling stock At independent valuation – 30 June 2010 136,017 114,116 Accumulated depreciation – (15,665) Impairment – – 136,017 98,451 Leasehold improvements At cost 5,198 5,095 Accumulated amortisation (1,843) (1,449) 3,355 3,646 Rolling stock – capitalised improvements At cost – 16,355 Accumulated depreciation – (2,518) – 13,837 Capital works in progress 10,485 15,480 Total property, plant and equipment 154,538 137,073

Valuation of rolling stock An independent valuation of all rolling stock was conducted by rolling stock specialists with an effective date of 30 June 2010. As the market for the rolling stock lacks sufficient depth due to the specialised nature of the assets and the small population and volume traded, other indirect methods have been used. The depreciated replacement cost method has been used as the primary method of valuation and has provided a fair value for the V/Line Passenger Pty Ltd rolling stock fleet as at 30 June 2010 of $136m.

FINANCIAL STATEMENTS 57 Notes to the Financial Statements

Note 8 Property, plant and equipment continued Movement in carrying amounts The movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the year is as follows. 2010 2009 $’000 $’000 Plant and equipment Carrying amount at beginning of year 5,659 4,441 Additions 500 4,939 Disposals (11) (2) Depreciation expense (1,467) (3,719) Carrying amount at end of year 4,681 5,659 Rolling stock at valuation Carrying amount at beginning of year 98,451 110,970 Additions – – Impairment – – Disposals – – Depreciation expense (12,515) (12,519) Revaluation transfer from rolling stock at cost – capitalised improvements and capital works in progress 36,121 – Revaluation increment/(decrement) 13,960 – Carrying amount at end of year 136,017 98,451 Leasehold improvements Carrying amount at beginning of year 3,646 2,750 Additions 103 1,244 Depreciation expense (394) (348) Carrying amount at end of year 3,355 3,646 Rolling stock at cost – capitalised improvements Carrying amount at beginning of year 13,837 3,374 Additions 10,410 12,828 Disposals – – Depreciation expense (4,640) (2,365) Revaluation transfer to rolling stock at valuation (19,607) – Carrying amount at end of year – 13,837 Capital works in progress Carrying amount at beginning of year 15,480 21,767 Additions 12,052 7,743 Revaluation transfer to rolling stock at valuation (16,514) – Transfers to fixed assets (533) (5,715) Reversals from fixed assets (project expenses capitalised by VicTrack) – (8,315) Carrying amount at end of year 10,485 15,480

58 V/LINE ANNUAL REPORT 2009–10 Notes to the Financial Statements

2010 2009 $’000 $’000 Total property, plant and equipment Carrying amount at beginning of year 137,073 143,302 Additions 23,065 26,754 Disposals (11) (2) Depreciation expense (19,016) (18,951) Transfers to fixed assets (533) (5,715) Reversal from fixed assets (project expenses capitalised by VicTrack) – (8,315) Impairment – – Rolling stock revaluation net increment/(decrement) 13,960 – Carrying amount at end of year 154,538 137,073

Note 9 Other non-financial assets Prepayments 874 684

Note 10 Investments V/Line Passenger Corporation does not own any investments, with the exception of controlled ownership of V/Line Passenger Pty Ltd as detailed in Note 1(c).

Note 11 Payables Trade payables 19,958 32,887 Accruals 23,975 15,281 Deferred income 902 932 Other payables 7,710 6,618 Total Payables 52,545 55,718

Amounts payable to related parties are as follows: Other related parties 3,184 2,601 3,184 2,601

Note 12 Provisions Short-term provisions Employee benefits 52,244 49,871 Other provisions (employee related) 1,130 1,405 53,374 51,276 Movement in other provisions: Opening balance 1,405 1,367 Additional provisions raised during the year – 53 Amounts used (275) (15) Closing balance 1,130 1,405

Long-term provisions Employee benefits 4,188 3,726 4,188 3,726

FINANCIAL STATEMENTS 59 Notes to the Financial Statements

2010 2009 $’000 $’000

Note 13 Equity Accumulated Losses Balance at the beginning of the year (45,965) (39,704) Net profit/(loss) 15,940 (6,261) Balance at the end of the year (30,025) (45,965) Asset revaluation reserve Balance at the beginning of the year 104,913 104,913 Revaluation increment/(decrement) (net of tax effect of $4,188) 9,772 – Balance at the end of the year 114,685 104,913

Note 14 Financial instruments (a) Financial risk management, objectives and policies The Corporation’s financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments, accounts receivable and payable, loans to and from subsidiaries, and leases. The main purpose of non-derivative financial instruments is to raise finance for group operations. The group does not have any derivative instruments as at 30 June 2010. A finance committee consisting of senior executives of the group meet on a regular basis to consider currency and interest rate exposure and to evaluate treasury management strategies in the context of the most recent economic conditions and forecasts. The main risks the Corporation is exposed to through its financial instruments are interest rate risk, liquidity risk and credit risk.

Interest rate risk As at 30 June 2010 the Corporation had no debt. Although cash holdings are subject to interest rate risk, such holdings are not material. Liquidity risk Liquidity risk is the risk that the Corporation would be unable to meet its financial obligations as and when they fall due. The Corporation manages liquidity risk by closely monitoring forecast cash flows to ensure that adequate funding is maintained at all times. Please also refer notes 1(e) and 25 for additional commentary. The Director of Public Transport has agreed to provide the consolidated entity funding to a level sufficient for it to comply with the solvency requirements under the Corporations Act 2001.

Credit risk The Corporation’s exposure to credit risk arises from the potential default of a counter party on their contractual obligations resulting in financial loss to the Corporation. Credit risk associated with the Corporation’s financial assets is minimal as the main debtor is the Victorian Government. For debtors other than government, the Corporation’s policy is to transact with entities that have high credit ratings and to obtain sufficient collateral or credit enhancements where appropriate. In addition, the Corporation does not engage in hedging for its contractual financial assets and mainly obtains contractual financial assets that are on fixed interest, except for cash assets, which are mainly cash at bank. Provision of impairment for contractual financial assets is calculated based on past experience and on current and expected changes in client credit ratings. Credit risk in trade receivables is also managed by enforcing disclosed payment terms and ensuring that debt collection policies and procedures are followed at all times.

60 V/LINE ANNUAL REPORT 2009–10 Notes to the Financial Statements

(b) Net fair values The carrying amount of financial assets recorded in the balance sheet, net of any allowances for losses, represents the Corporation’s maximum exposure to credit risk without taking into account the value of any collateral or other security obtained. The carrying amounts of financial assets and financial liabilities approximate their fair values and are shown below.

2010 2009 $’000 $’000 Financial assets Cash and cash equivalents 9,137 2,785 Trade and other receivables 25,581 24,354 34,718 27,139 Financial Liabilities Trade and other payables (52,545) (55,718) Net financial assets (17,827) (28,579)

Table 1: Ageing Analysis of contractual financial assets Past due but not impaired Impaired 2010 Carrying Not past due Less than 1–3 3 months – 1–5 financial Amount and not 1 month months 1 year years assets impaired (i) Receivables: Trade receivables 25,007 23,219 915 93 126 – 654 Total 25,007 23,219 915 93 126 – 654 2009 (i) Receivables: Trade receivables 22,377 21,186 831 129 158 – 73 Total 22,377 21,186 831 129 158 – 73

Price risk The Corporation is not exposed to any material commodity price risk. Market risk The Corporation’s exposure to market risk sensitivities at balance date is not considered to be material. Foreign currency risk The Corporation is not exposed to fluctuations in foreign currencies.

FINANCIAL STATEMENTS 61 Notes to the Financial Statements

2010 2009 $’000 $’000

Note 15 Cash flow information a) Reconciliation of operating profit/(loss) after tax to net cash flows from operations Operating profit/(loss) after tax 15,940 (6,261) Non-cash flows in profit/(loss) Depreciation 19,027 18,961 Assets capitalised by VicTrack – 8,315 Tax expense/(benefit) (1,779) – Change in operating assets and liabilities (Increase)/decrease in trade and other receivables (1,227) (2,976) (Increase)/decrease in inventories (2,274) 524 (Increase)/decrease in prepayments (190) (354) (Decrease)/increase in trade and other payables (3,173) (3,019) (Decrease)/increase in employee benefits 2,560 5,784 Net cash from/(used in) operating activities 28,884 20,974 (b) Reconciliation of cash Cash balance comprises: – Cash at bank 9,127 2,708 – Cash on hand 10 77 9,137 2,785

Note 16 Responsible Persons In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994, the following disclosures are made regarding responsible persons for the reporting period. Responsible persons at any time during the financial year were as follows. Responsible ministers: Minister for Public Transport The Hon. Lynne Kosky MP 1 Jul 2009 to 18 Jan 2010 Minister for Public Transport The Hon. Martin Pakula MLC 20 Jan 2010 to 30 Jun 2010 Treasurer Mr John Lenders MLC 1 Jul 2009 to 30 Jun 2010 Accountable officer: The person who held the position of accountable officer during the year ended 30 June 2010 was: Chief Executive Officer Mr R J Barnett 1 Jul 2009 to 30 Jun 2010 Directors of the board: The directors of the parent entity during the year ended 30 June 2010 were; Mr Frank A. Tait Mr Michael D. Tilley Ms Fiona Bennett Mr David Worth Mr Simon Lane (Appointed 1 December 2009, Resigned 30 April 2010) All directors listed above are directors of V/Line Passenger Pty Ltd, which forms part of the consolidated entity.

62 V/LINE ANNUAL REPORT 2009–10 Notes to the Financial Statements

2010 2009 $’000 $’000

Note 17 Remuneration of Directors and Accountable Officer Income paid or payable, or otherwise made available, in respect of the financial year to all directors and the accountable officer, directly or indirectly, from the entity or any related party. 530 520 The number of directors and the accountable officer whose income (including superannuation contribution) falls within the following bands: $10,000–$19,999 1 2 $20,000–$29,999 3 2 $30,000–$39,999 – – $40,000–$49,999 – – $50,000–$59,999 1 – $60,000–$69,999 – 1 $330,000–$339,999 – – $340,000–$349,999 – – $350,000–$359,999 – – $360,000–$369,999 – 1 $370,000–$379,999 1 – 6 6

Note 18 Remuneration of executives The number of executive officers, other than the accountable officer and Directors, and their total remuneration during the reporting period is shown in the table below in their relevant income bands. Base remuneration is exclusive of bonus payments, long service leave payments, redundancy payments and retirement benefits.

Total remuneration Base remuneration 2010 2009 2010 2009 $100,000–$109,999 1 1 – 1 $110,000–$119,999 – – – – $120,000–$129,999 – – 1 – $130,000–$139,999 1 – 2 – $140,000–$149,999 – – – – $150,000–$159,999 1 – 1 2 $160,000–$169,999 1 – – 1 $170,000–$179,999 – 2 – – $180,000–$189,999 – 1 1 1 $190,000–$199,999 – – 1 2 $200,000–$209,999 1 – 1 1 $210,000–$219,999 – 1 – – $220,000–$229,999 – 2 – 1 $230,000–$239,999 2 1 1 – $240,000–$249,999 1 1 – – $250,000–$259,999 1 – – – Total numbers 9 9 8 9 Total amount 1,733,340 1,792,484 1,366,824 1,611,072

FINANCIAL STATEMENTS 63 Notes to the Financial Statements

2010 2009 $’000 $’000

Note 19 Remuneration of auditors Amounts received or due and receivable by the auditors: – audit of the financial statements 86 82 – other services – – 86 82

Note 20 Related party disclosures Related party Nature of transaction Terms and conditions 2010 2009 $ $ Payments to related parties Metlink Victoria Pty Ltd Provision of services for The entity was charged 2,836,001 3,160,733 V/Line customers to access services on a cost suburban network. basis only. VicTrack Access Provision of communication Normal commercial 9,156,681 10,820,985 services. terms and conditions. Southern Cross Rental payments. Normal commercial – 1,116,336 Station Authority terms and conditions. Department of Transport Miscellaneous payments In accordance with the 145,532 3,241,608 made under the franchise franchise agreement. agreement. Transport Ticketing Reimbursement of In accordance with 194,013 80,169 Authority accounts receivable agreement between staff salary and wages. the parties.

Receipts from related parties Department of Transport Provides funding to the In accordance with the 256,070,000 255,600,000 Corporation. franchise agreement. VicTrack Access Management fee for rent In accordance with 23,666 – collection. agreement. VicTrack Access Network access charges. In accordance with 219,748 474,338 agreement. The parent company did not have any related party transactions within the wholly owned group.

64 V/LINE ANNUAL REPORT 2009–10 Notes to the Financial Statements

Note 21 Operating leases and expenditure commitments Operating lease commitments Operating lease commitments primarily relate to the lease of tool of trade vehicles. There are also commercial lease agreements in relation to tenancy at 570 Bourke Street and 628 Bourke Street, Melbourne. The leases expire in 2014 and 2015 respectively and include fixed rate increases of between 3 per cent and 5 per cent or market rent reviews at dates specified in the agreements. Commitments for minimum contractual payments in relation to non-cancellable operating leases are payable as follows.

2010 2009 $’000 $’000 Within one year 4,888 4,523 Later than one year but not later than 5 years 10,860 12,919 Later than 5 years – 1,059 15,748 18,501

Expenditure commitments Expenditure commitments primarily relate to the maintenance of all rolling stock and access charges associated with the metropolitan and regional network. Commitments in relation to operating expenditure are shown below. Within one year 132,755 25,573 Later than one year but not later than 5 years 216,114 306 Later than 5 years – – 348,869 25,879

FINANCIAL STATEMENTS 65 Notes to the Financial Statements

Note 22 Employee benefits and superannuation commitments (a) Employee benefits The aggregate employee benefit liability is comprised of: 2010 2009 $’000 $’000 Accrued wages, salaries and on-costs 4,167 4,060 Short term provisions (current) 53,374 51,276 Long term provisions (non-current) 4,188 3,726 61,729 59,062

(b) Superannuation Prior to the original franchise agreement, the majority of the consolidated entity’s staff were members of Emergency Services & State Super (ESSS) (formally Government Superannuation Office) funds. The state-organised funds include the Revised Scheme, New Scheme and the Transport Superannuation Fund, which are all defined benefits schemes. These schemes are ‘master funds’ comprising a large number of participating members, are therefore not controlled by the consolidated entity. With effect from 29 August 1999, employees were given the opportunity to remain in the ESSS funds or to change to either V/Line’s default superannuation fund (VicSuper) or a superannuation fund of the employee’s choice under the Choice of Fund legislation. These funds are accumulation funds. The consolidated entity has not recognised any unfunded superannuation liabilities as the state government has guaranteed to undertake this liability from the commencement of the original franchise in 1999. Any unfunded liabilities that may arise subsequent to the new franchise are calculated annually by ESSS and paid by V/Line at the end of the financial year.

(c) Superannuation schemes contributions and liabilities Contribution Contribution Contribution Contribution for the year for the year outstanding outstanding at year end at year end 2010 2009 2010 2009 ($’000) ($’000) ($’000) ($’000) Total superannuation contributions 12,261 10,388 1,426 1,230

66 V/LINE ANNUAL REPORT 2009–10 Notes to the Financial Statements

Note 23 Contingent assets and contingent liabilities Prior to 30 June 2010 there had been a number of incidents involving rolling stock and either motor vehicles or trucks at level crossings in Victoria. As a result of these incidents, rolling stock has sustained damage that has necessitated or will necessitate repairs as well as other operational costs incurred from the incidents in question. V/Line is pursuing the owners and/or operators of the vehicles in question (either in person or through their insurers) for the costs of the repairs and other expenses incurred. The amount of contingent assets in relation to these incidents is uncertain. In addition, there may be contingent liabilities in relation to these incidents. On 28 May 2008, the EPA issued V/Line with a clean-up notice in relation to contamination on railway land at Ararat that is adjacent to a former gasworks site which is being remediated. A clean-up plan is currently being finalised for the site, with costs estimated to be less than $1 million. V/Line as the occupier of the land and the recipient of the notice is managing the remediation. However, as the contamination pre-dates V/Line’s lease, V/Line expects to recover these expenses from the Director of Public Transport under the terms of its regional infrastructure lease. On 18 November 2008 the EPA issued V/Line with a pollution abatement notice in relation to discharge into a stormwater drain from the refuelling of trains at Traralgon. V/Line identified a fuelling defect in some of its rolling stock. A modification program has been undertaken and the practicality of further modifications is being assessed. V/Line is seeking to recover costs from the manufacturer. As a result of an independent environmental audit, V/Line expects to be required to undertake a soil, surface water and ground water monitoring program for at least the next two years at a cost of approximately $20,000 per annum. Note 24 Subsequent events There are no events subsequent to balance date. Note 25 Economic dependency The consolidated entity provides public transport services to rural and regional Victoria and is also responsible for the management and maintenance of the rail network. The provision of these services is subsidised by the State Government of Victoria. Without the provision of that subsidy the consolidated entity could not continue as a going concern. The subsidy requirements for the year ending 30 June 2011 have been approved by the state. The consolidated entity’s three year business plan has also been approved by the Director of Public Transport pursuant to the franchise agreement. Note 26 Dividends No dividends were paid, declared or recommended during the year or subsequent to the year end.

FINANCIAL STATEMENTS 67 Notes to the Financial Statements

Note 27 Correction of prior period error Short-term provisions in the 2008 financial year were understated by $2.343m due to the non-recognition of public holiday credits for employees. Comparatives for 2009 have been restated as if this error had not occurred. A summary of the line items affected, and the adjustment made, is shown below.

2009 Adjustment 2009 as reported restatement ($’000) ($’000) ($’000) Consolidated Comprehensive Operating Statement Net result for the period (6,422) 161 (6,261) Comprehensive result for the period (6,422) 161 (6,261)

Consolidated Balance Sheet Liabilities Short-term provisions 48,933 2,343 51,276 Equity Accumulated losses (43,622) (2,343) (45,965) Consolidated Statement of Changes in Equity Accumulated surplus/(deficit) 1 July 2008 (37,200) (2,504) (39,704)

68 V/LINE ANNUAL REPORT 2009–10 Independent auditor’s report

Independent auditor’s report 69 70 V/LINE ANNUAL REPORT 2009–10 71 Disclosure index

The annual report of the V/Line Corporation is prepared in accordance with all relevant Victorian legislation. This index has been prepared to identify compliance with statutory disclosure requirements. MINISTERIAL DIRECTIONS

Report of Operations FRD 30 Requirements for the design and print of annual reports Throughout

Charter and purpose FRD 22B Manner of establishment and the relevant Ministers 2, 3, 39, 62 FRD 22B Objectives, functions, powers and duties 2, 5, 13-15, 39 FRD 22B Nature and range of services provided 2-15

Management and structure FRD 22B Organisational structure 38

Financial and other information FRD 29 Workforce data disclosures 27-28 FRD 22B Occupational health and safety 15-17 FRD 15B Executive officer disclosures 38, 63 FRD 21A Responsible person and executive officer disclosures in the Financial Report 62-63 FRD 22B Summary of the financial results for the year 14, 36 FRD 22B Significant changes in financial position during the year 36 FRD 22B Major changes or factors affecting performance 6-9 FRD 22B Subsequent events 67 FRD 22B Application and operation of Freedom of Information Act 1982 40 FRD 22B Compliance with building and maintenance provisions of Building Act 1993 40 FRD 25 Victorian Industry Participation Policy disclosures 41 FRD 22B Statement on National Competition Policy 40 FRD 22B Application and operation of the Whistleblowers Protection Act 2001 41 FRD 22B Details of consultancies over $100,000 36 FRD 22B Details of consultancies under $100,000 36 FRD 12A Disclosure of major contracts N/A FRD 24C Reporting of office-based environmental impacts 21-26 FRD 22B Statement of availability of other information Back cover FRD 10 Disclosure index 72 FRD 22B Summary of environmental performance 21-26

Financial Statements Financial statements required under Part 7 of the FMA SD 4.2(f) Financial report 42-68 SD 4.2(b) Operating statement 42 SD 4.2(b) Balance sheet 44 SD 4.2(a) Statement of changes in equity 45 SD 4.2(b) Cash flow statement 45 SD 4.2(c) Accountable officer’s declaration 42 SD 4.2(c) Compliance with Australian accounting standards and other authoritative pronouncements 46 SD 4.2(c) Compliance with Ministerial directions 40 SD 4.2(d) Rounding of amounts 46 SD 4.5.5 Risk management compliance attestation 41 LEGISLATION

Freedom of Information Act 1982 40 Whistleblowers Protection Act 2001 41 Victorian Industry Participation Policy Act 2003 41 Building Act 1993 40 Financial Management Act 1994 42, 69-70 Audit Act 1994 69-70

72 V/LINE ANNUAL REPORT 2009–10 Project Team Clare Steele, Daniel Moloney, James Kelly, Violeta Zammit Design Nuttshell Graphics Print Impact Digital At V/Line we work to reduce our footprint where we can. In the interests of sustainability, this report has been printed using waterless technology on Australian-made recycled paper. To help reduce paper usage, this report may be viewed online at vline.com.au V/LINE PTY LTD ABN 29 087 425 269 GPO Box 5343 Melbourne VIC 3001

HEAD OFFICE/ADMINISTRATION Level 23, 570 Bourke Street Melbourne VIC 3000 Telephone (03) 9619 5900 Facsimile (03) 9619 5000 vline.com.au

CUSTOMER INFORMATION, RESERVATIONS AND SALES Telephone 136 196

CUSTOMER FEEDBACK Freecall 1800 800 120

All information correct at time of printing, September 2010.