ANNUAL REPORT 2014
CONTENTS
Governance 4 The Chairman’s Report 6 The CEO’s Report 7 Highlights 2013-14 9 Our Partners 11 Financial Overview 12 Financial Statements 13 Administrative Reporting Requirements 47 Disclosure Index 50
ANNUAL REPORT 2014 3 GOVERNANCE
Establishment • To be responsible for proper financial management of the National Tennis Centre and Olympic Park. The Melbourne and Olympic Parks Trust (MOPT) was established • To provide for the planning, development, promotion, on 5 October 1995 pursuant to the provisions of the Melbourne management, operation and use of other sports, recreation and Olympic Parks Act 1985 (as amended). It was created by and entertainment facilities and services in Victoria. the merger of the National Tennis Centre Trust (established 13 November 1985) and the Olympic Park Committee of • To provide for the development, promotion, management, Management (formed originally in 1909). The Act is jointly operation and use of facilities and services for the parking administered by both the Premier of Victoria, the Honourable of vehicles and other necessary services to be used in Denis Napthine, and the Minister for Sport and Recreation, the conjunction with any of the facilities operated or managed by Honourable Damian Drum. the Trust. • To provide for the management of Gosch’s Paddock by the The Melbourne and Olympic Parks Act 1985 Trust as a committee of management under the Crown Lands (Reserves) Act 1978. The Purpose of the Act: The purposes of the Act as outlined in section 3 are: Melbourne & Olympic Parks’ Formula for Success • To create a Melbourne and Olympic Parks Trust to administer the National Tennis Centre, Olympic Park and certain other Purpose land and facilities for the purposes of tennis, other sports, Melbourne & Olympic Parks – a world class business delivering recreation and entertainment. world class experiences. • To provide for the management and operation of the National Our Goals Tennis Centre and Olympic Park. In the context of an expanding precinct and substantial new • To provide for the use and promotion of the National Tennis infrastructure investment, we must: Centre and Olympic Park. 1. Maintain our financial sustainability. • To provide for the development, promotion, management, 2. Increase benefits to the people of Victoria. operation and use of sports, recreation and entertainment facilities and services in Victoria in addition to those at the 3. Ensure the customer experience is at the heart of everything National Tennis Centre and Olympic Park. we do. Under the Act, the Trust has the following primary functions: 4. Grow our utilisation by expanding into new markets. • To accept appointment and act as a committee of 5. Transform our business processes to deliver increasingly cost management of Crown lands. effective services. • To be responsible for the care, improvement, use and 6. Build an Achievement Culture - develop leaders who promotion of the National Tennis Centre and Olympic consistently achieve outstanding results and help others Park as facilities for tennis, other sports, recreation and achieve. entertainment. • To operate the National Tennis Centre and Olympic Park efficiently and effectively to obtain the best possible use of the facilities. • To provide planning for the operation of the National Tennis Centre and Olympic Park, which is coordinated between the two facilities.
4 MELBOURNE & OLYMPIC PARKS TRUST GOVERNANCE
TRUSTEES
Russell Caplan (Chairman) Sharelle McMahon Geoffrey Pollard AM David Stobart (from 13 May 2014) (to 25 October 2013) Deborah Beale Scott Tanner Diana Nicholson Kenneth Roche AO Steve Healy (from 19 November 2013) Ray Smith
EXECUTIVE TEAM (AS AT 30 JUNE 2014)
Brian Morris – Chief Executive Officer Travis Mardling – Chief Financial Officer Russell Fakira – Director of People & Operations Shane Mates – General Manager AAMI Park Greg George – Director of Commercial & Strategy Geoff McDonald – Director of Infrastructure (from 24 February 2014) Enna Giampiccolo – Corporate Communications Manager
Statement of Corporate Governance Finance Audit and Risk Committee Procedures have been established at the Trust and executive The Trust has established a Finance Audit and Risk Committee to management level, which are designed to safeguard the assets advise the Trust in relation to matters falling into the broad areas of: and interests of the Trust and to ensure integrity of reporting. • financial reporting, accounting policies and internal controls The Trust acknowledges the need for and continued maintenance of the highest standards of corporate governance practice and • risk management ethical conduct by all Trustees and employees of the Trust. • governance, and • funding. Remuneration Committee The Committee meets monthly or more often as required and The Trust has established a Remuneration Committee to govern makes recommendations to the Trust on specific issues. the Trust’s policy and practise for executive remuneration and to determine the individual remuneration packages for its The Members of the Committee during the year ended 30 June executive staff. The Committee meets as required and makes 2014 were: recommendations to the Trust on specific issues. The members of the Committee during the year ended 30 June 2014 were: Ray Smith (Chair) Diana Nicholson Deborah Beale Kenneth Roche Russell Caplan Russell Caplan Diana Nicholson Kenneth Roche All Finance Audit and Risk Committee members are independent Ray Smith from management.
Strategic Planning Committee
The Trust’s Strategic Planning Committee is established to provide expert advice to assist the Trust to discharge its strategic planning responsibilities. The Members of the Committee during the year ended 30 June 2014 were: Russell Caplan Ray Smith Deborah Beale Scott Tanner
ANNUAL REPORT 2014 5 THE CHAIRMAN’S REPORT
The Melbourne & Olympic Parks precinct continues to serve Zealand Warriors this year set a Stadium NRL attendance record of our patrons and our stakeholders well, while at the same time 28,716 patrons. The annual Melbourne Derby between Melbourne progressively delivering world class new and expanded facilities Victory and Melbourne City (previously Melbourne Heart) in in a comprehensive redevelopment set out in the Melbourne Park March entertained over 25,000 fans. And Bruce Springsteen’s Master Plan. The Trust again produced strong financial results in two concerts attracted over 60,000 devotees, with the 8 February FY2014, reporting a net profit of $3.596 million, notwithstanding a concert setting an AAMI Park attendance record of 31,847. Next 24 % increase in depreciation. January, AAMI Park will host the opening game of FIFA’s Asian Cup, the biggest football tournament ever played in Australia and Our earnings are reinvested into the precinct, assisting us to seven games will be played in the stadium over two weeks. operate and maintain it at a level that enhances its reputation in Melbourne and around the world. Looking to the future, the major The stalwart of the precinct, Rod Laver Arena, set a new investment in necessary but non-revenue earning infrastructure benchmark for versatility and utilisation in October, when it will increase depreciation further and place pressure on the hosted a record 26 events for the month. This followed another Trust’s earnings. The Business Plan outlines avenues being remarkable run of 18 P!nk concerts over July and August. As a pursued by Management to sustain the Trust’s financial strength. testament to its continuing strong performance, Rod Laver Arena won the Billboard Touring Award for the P!ink tour and in 2013 was Stage 1 of the Master Plan will draw to a close with the opening the second highest grossing concert venue in the world, behind of the new Margaret Court Arena in time for the 2015 Australian London’s O2 Arena. Open. This stunning venue will make the Australian Open the only Grand Slam tournament boasting three feature courts Following redevelopment of the Olympic Park oval last year, with operable roofs. It will enhance our suite of sport and construction has started on a new Community Centre at Olympic entertainment facilities available for use year-round. The complex Park. The centre will be operated by Collingwood Football Club and reconstruction of Margaret Court Arena over a three-year period will provide new public amenities and change rooms, a health and has been tightly managed, with the arena being available each wellness centre and a new precinct café. As a part of the ongoing year for the Australian Open. Hats off to Major Projects Victoria enhancement of Melbourne & Olympic Parks, these facilities and all who have contributed. will provide greater recreational opportunities for the public, for schools and for sporting and community groups. In January, the Victorian Government announced further funding of $338 million towards Stage 2 of the Melbourne Park redevelopment, I would like to express my thanks to the Premier of Victoria, of which M&OP will contribute $40 million. This stage of the Master the Honourable Dr Denis Napthine, the Minister for Sport and Plan will include much-needed upgrades to Rod Laver Arena and Recreation and Veterans’ Affairs, the Honourable Damian Drum, the Australian Open player facilities which are now more than 26 his predecessor, the Honourable Hugh Delahunty and the Victorian years old, a new administration and Australian Open media centre, Government, for their ongoing support for the work of the Trust. and a new entrance and footbridge connecting Melbourne Park with I would like to record the Trust’s deep appreciation to CEO Birrarung Marr, Flinders Street Station and the CBD. Brian Morris and all of the team at M&OP for their expertise The 2014 Australian Open was again a great success, attended and their commitment. It is difficult to manage a fundamental by 640,454 patrons notwithstanding the extreme heat of the redevelopment of the precinct while at the same time not missing first week and producing first-time winners in the Men’s and a beat in hosting world class events. They do it brilliantly and the Women’s Singles competitions. Both Tennis Australia and deserve our thanks. M&OP staff deserve congratulations for conducting yet another Finally, thanks to my fellow Trustees for your contribution wonderful tournament and ensuring the safety, comfort and and support and, in particular, thanks to Geoff Pollard AM who enjoyment of all attendees. completed his term as a Trustee in the last year. Geoff, you have All the facilities in the precinct continue to be well used. made an outstanding contribution to this precinct. Hisense Arena is our centre for indoor sports and the home of In accordance with the Financial Management Act 1994, I am the Melbourne Vixens netball team and the Melbourne United pleased to present the Report of Operations for the Melbourne and (previously Melbourne Tigers) basketball team. The Vixens had Olympic Parks Trust for the year ending 30 June 2014. an outstanding season, winning the ANZ Championship, beating the Queensland Firebirds in front of a record crowd of over 9000 at Hisense Arena. We have been delighted to see Vixens’ ever-increasing game attendances throughout the season, as they have captured the imagination of thousands of players and supporters. AAMI Park is an integral part of Melbourne’s sporting landscape and again demonstrated its versatility and its excellence. The Russell Caplan annual ANZAC Day clash between Melbourne Storm and the New
6 MELBOURNE & OLYMPIC PARKS TRUST THE CEO’S REPORT
Delivering significant infrastructure projects while maintaining Hisense Arena a full events calendar and an operational precinct has meant In total, Hisense Arena attracted 202,667 patrons to 48 event that the past year has been a busy and challenging one for our days, fractionally down on 2012/13. stakeholders and staff. Netball again proved the major drawcard; improved crowds urged Overall Performance on the Melbourne Vixens during the 2014 ANZ Championship The Trust continued to report a positive result with a net profit season, with their Semi and Grand Final wins taking place on after depreciation of $3.596 million. Depreciation year-on-year their home court. To see one of our tenant clubs achieve the has increased by 24% as the new National Tennis Centre and other ultimate success is always a source of pride for Melbourne and Stage 1 developments are handed over to the Trust. Operating the precinct. profit improved by 25% over the prior year on the back of strong The Melbourne Tigers – now Melbourne United – also drew good concert, Australian Open and sports attendances. Costs were well crowds at Hisense Arena, the team also enjoying a better season managed which contributed to a strong earnings growth. on-court in making the NBL finals. The precinct total of 177 event days was up on the prior year due In May, the arena hosted a new major national sporting event in to increased concerts and sporting event days. As a result overall the Australian Gymnastics Championships. We look forward to ticket sales amounted to $159,095,852, an increase of 3.7% over supporting Gymnastics Australia in future with Hisense Arena now the prior year. the sport’s major event home. Australian Open Meanwhile, other forms of entertainment showcased the arena’s The extreme heat of the first week had an impact on the 2014 versatility: electronic dance music events, concerts, Disney on Australian Open attendance (640,454) which was slightly down Ice, Dancesports and of course the Australian Open, all amounting on the previous year. The event still produced strong attendances to a diverse content mix. and financial results with attendances of 63,595 setting a new AAMI Park first-day record and another near-record crowd of 80,219 attended the middle Saturday. The middle Saturday is currently at capacity A total of 51 event days drew 674,059 patrons to AAMI Park in with tickets in key categories being sold out well in advance. a year where the stadium reached the 200 event milestone (in June). These events included two Bruce Springsteen concerts Improvements to the precinct continue as part of the Master Plan which attracted crowds of more than 60,000. developments to ensure these include new and upgraded patron amenities. A range of new food and beverage options have also A standout event was again the annual ANZAC Day clash between added to the overall customer experience, as did the impressive Melbourne Storm and the New Zealand Warriors, the game’s new-look Margaret Court Arena currently in its final development prominent status on the Melbourne sporting calendar reiterated stage. by a record NRL crowd at the stadium. The strength of football in Australia was evident at the national Rod Laver Arena league level, with the Hyundai A-League continuing to garner great In total Rod Laver Arena attracted 914,387 patrons to 78 event support. Co-tenants Melbourne Heart and Melbourne Victory once days, which was an increase of 24 events on the previous year. again broke the 25,000 mark for the Melbourne Derby. With the P!nk was undoubtedly the standout performer, creating worldwide former’s rebranding as Melbourne City FC next season and the headlines with an astonishing 18 concerts, one better than her boost provided by the involvement of English Premier League 2009 record breaking tour. One Direction (8 shows), Michael power club Manchester City, an added layer of anticipation is Jackson the Immortal World Tour (7 shows) and Nitro Circus, building as the 2014/15 season draws near. Beyonce and Michael Bublé (4 shows) were other acts that As the stadium gears up to host seven international matches in particularly captured the public’s attention and patronage. the upcoming AFC Asian Cup in January, Melbourne’s home of With Stage 2 of the Melbourne Park Master Plan having been football was also pleased to host matches at the community level announced during the Australian Open, Rod Laver Arena will now with the Victorian Premier League Grand Final again taking place be undergoing some welcome refurbishments to ensure the venue at AAMI Park. remains in the top echelon of multi-purpose arenas worldwide. As the Melbourne Rebels work towards more consistency on the These activities will, of course, bring their own challenges as we field, core support for the Super Rugby club remained solid. undertake an extensive staged upgrade plan in a fully operating arena.
ANNUAL REPORT 2014 7 THE CEO’S REPORT
Community Activities Health & Safety The Trust continues its involvement in the Melbourne Open House Health and Safety continues to be a high focus of the organisation. initiative and this year the National Tennis Centre and Westpac Overall our Health and Safety programs continue to produce Centre were part of the city’s significant buildings open for public results with a reduction reported in days lost to injury. The Trust inspection. Visitors also got the opportunity to inspect the Tennis also underwent its three year re-certification of its Health and Centre and key venues through tours of the precinct operated by Safety System to the Australian Standard AS4801. Tennis Australia. People & Culture Melbourne & Olympic Parks continues to strengthen its Melbourne & Olympic Parks operates with a small core of relationship with its charity partner Alkira, delivering programs in permanent staff numbering around 90 employees. Melbourne support of the community. & Olympic Parks relies significantly on casual and contractor Capital Projects & Infrastructure teams to successfully deliver events, with a workforce of more than 4000 required to deliver the Australian Open. Extensive The Trust currently has assets under management of $1.3 billion, work has been carried out during this year to ensure staff are requiring an intensive maintenance and improvement regime. adequately trained so that we continue to build our capability as More than $24.8 million was invested directly by the Trust in the operations of the Trust expand. capital works to improve and upgrade facilities and infrastructure during the year. Finally, I would like to thank the Chairman of the Trust, Russell Caplan and the Trustees, Dr Peter Hertan at Sport and Recreation Some significant projects initiated by the Trust during the year were: Victoria, Tim Bamford at Major Projects Victoria, and their • Refurbishment of the Rod Laver Arena concourse and public respective teams, for their support during the year. A special amenities thanks to the Melbourne & Olympic Parks team who has continued to deliver exceptional events and service during a • Upgrades to the Hisense Arena amenities and court area period of significant change. • AAMI Park pitch replacement • Expansion of the Davis Cup Room in Rod Laver Arena. The construction of Margaret Court Arena and its interface with Rod Laver Arena and the rest of the precinct require a close working relationship with the project managers (Major Projects Victoria) and Lend Lease Construction. No events were lost or Brian Morris impacted by the extensive works carried out. All areas required for the delivery of the 2014 Australian Open were delivered on time. With the awarding of funding for Stage 2 of the Melbourne Park Master Plan, design and planning work is well underway for the new Administration and Media Building to be built to the north of the current Function Centre. Construction is due to start early in 2015.
Gosch’s Paddock Gosch’s Paddock continues to be used for training by Melbourne Football Club, Melbourne Victory and Melbourne Storm, as well as a variety of other organisations. Its fields and surrounds are open for public use when not used for formal training. Annual renovations were carried out on all the pitches to ensure that they are maintained to a high standard. Except for the small areas under maintenance, Gosch’s Paddock was not closed to the public during the year.
8 MELBOURNE & OLYMPIC PARKS TRUST HIGHLIGHTS 2013-2014
Events
Rod Laver Arena Queens of the Stone Age and Planet Shakers conference 2014 Australian Open 2014 Nine Inch Nails 2014 Australian Gymnastics P!nk Lionel Richie and John Farnham Championships WWE 2013 Toby Keith Armin Van Buuren Jehovah’s Witness Convention 2013 John Mayer 2014 ANZ Championship Semi Final The Footy Show Grand Final Edition 2013 Jason Derulo 2014 ANZ Championship Grand Final Rihanna Michael Buble Melbourne Vixens – ANZ Championship (6 home games) One Direction Arctic Monkeys Jeff Dunham Melbourne Tigers/United – NBL Alan Jackson (5 home games) Ricky Martin Nitro Circus Australia v New Zealand Keith Urban AAMI Park International Test Match Melbourne Heart – Hyundai A-League Cirque du Soleil – Michael Jackson; the Hisense Arena (13 home games) Immortal World Tour Disney on Ice Presents Princesses and Melbourne Rebels – Super Rugby Andre` Rieu Heroes (9 home games) Beyonce Victorian State School Spectacular 2013 Melbourne Storm – NRL Eros Ramazzotti 2013 Phoenix Satellite Miss Chinese (12 home games and 1 final) Cosmos Pageant Leonard Cohen Melbourne Victory – Hyundai A-League Beautiful Woman Conference 2013 (8 home games) Michael McIntyre Australian Dancesport Melbourne Victory – AFC Asian Justin Bieber Championship 2013 Champions League (1 home game) Muse Dash Berlin Victoria Maidens – Legends Football Alicia Keys Thirty Seconds to Mars League (2 home games) Dolly Parton XFactor Auditions 2014 Bruce Springsteen (2 concerts) Bruno Mars
Key Statistics
2013/14 2012/13 Number of contracted days - Melbourne Park 213 190 Number of contracted days - AAMI Park 58 45 Number of contracted days - Melbourne Park Function Centre 159 164 Rod Laver Arena event ticketed attendance 914,387 543,220 Hisense Arena event ticketed attendance 202,667 265,923 AAMI Park event ticketed attendance 674,059 630,929 Melbourne Park Function Centre patrons 89,532 60,547 Attendance at Australian Open 640,454 684,457 Number of website visitors (all MOPT sites) 1,086,694 768,036
ANNUAL REPORT 2014 9 HIGHLIGHTS 2013-2014
Major Capital Expenditure
Expenditure type Amount Details
Melbourne Park $5.6 million Includes upgrades to tennis facilities, including change rooms and the Player Café and Davis Cup room refurbishment. Rod Laver Arena $5.6 million Includes upgrades to the concourse and amenities, corporate suites and replacement of the chiller plant. Margaret Court Arena $4.7 million Margaret Court Arena food and beverage outlet works. Equipment and Technology $3.8 million Includes the installation of new automated car parking system, utility metering, upgrade of the CCTV system, horticulture machinery and catering equipment. Hisense Arena $3.3 million Includes the rebuild of the tennis court and upgrades to the concourse and amenities, change room facilities and modifications to the loading dock to improve access management. Olympic Park Precinct $1.8 million Includes modifications to building layout and access management infrastructure at AAMI Park, Olympic Park car park works and Gosch’s Paddock sprinkler upgrade. TOTAL $24.8 Million
Note: The ongoing Melbourne Park redevelopment continues to be managed and undertaken by Major Projects Victoria.
10 MELBOURNE & OLYMPIC PARKS TRUST OUR PARTNERS
The Trust would like to thank the following organisations for their support over the past year
Tenants Venue Partners Calibre Feasts AAMI Collingwood Football Club ACG Imaging @ Olympic Park Capricorn Stages and Rigging Melbourne Football Club Delaware North Companies Australia Melbourne Storm Hisense Australia Melbourne Victory Michael O’Brien Catering Olympic Park Sports Medicine Centre Microhire Tennis Australia Ticketek Tennis Victoria Tennis Australia Victorian Olympic Council Victorian Rugby Union Regular Arena Hirers Chugg Entertainment Suppliers Dainty Consolidated Entertainment Coca-Cola Amatil Feld Entertainment Diageo Australia Frontier Touring Carlton & United Breweries Live Nation Australasia Heineken Lion Australia Melbourne United (Previously known as Melbourne Tigers) Lion Drinks and Dairy Melbourne Vixens Mondelez Nine Live Peters Patties Foods Limited AAMI Park Clubs Pernod Ricard Australia Melbourne City (Previously known as Melbourne Heart) Treasury Wine Estates Melbourne Rebels Melbourne Storm Melbourne Victory
ANNUAL REPORT 2014 11 FINANCIAL OVERVIEW
The financial statements in this report relate to the activities of Melbourne and Olympic Parks Trust for the year ended 30 June 2014. The net result for 2014 was a profit of $3.596 million (2013: $2.952 million). In the 2013/14 year the Trust received grants from the Victorian Government totalling $85.330 million, all of which was treated as contributed capital (2013: $114.380 million). The grants in 2014 were further contributions towards the redevelopment of the Melbourne Park precinct (2013: grants towards the redevelopment of the Melbourne Park precinct). Total income for 2013/14 was $92.557 million, (2013: $77.921 million). Income related to the sales of goods and services increased by 18.3% which was primarily due to an increase in the number of arena event days held across the precinct, which has increased overall by 22 event days (21%) when compared with the previous year. This increase in event days had a significant impact on M&OP’s primary revenue stream, venue hire, and also affected secondary revenue streams including ticketing, catering, merchandise and Superbox sales. The significant factors in reaching M&OP’s income for 2013/14 were: • The successful delivery of the Australian Open, with strong yields compared to the prior year despite adverse weather conditions affecting attendances; • Rod Laver Arena hosting 78 event days including a record run of 18 shows by P!nk, with many other high quality international artists performing during the year. This resulted in strong event yields with 44% more event days than the previous year and an associated 72% increase in event related income; • Hisense Arena hosting 48 event days, which is only 4% less than the previous year, despite being unavailable for four months for tennis court works. Event related income decreased by 25% compared to the previous year which is due primarily to the current year hosting the Australian Gymnastics Championships which was a low yielding event; • AAMI Park hosting 51 event days, which was 13% more than the previous year. In addition to being the home of the Melbourne Storm (rugby league), Melbourne Rebels (rugby union), Melbourne Victory and Melbourne Heart (football), AAMI Park also hosted notable events including Bruce Springsteen (two shows), a Melbourne Storm Final and an AFC Champions League match between Melbourne Victory and Yokohama F. Marinos; • Melbourne Park Function Centre function days increased by 13% , which has resulted in income being 16% higher than the previous year; • The Trust made a $3 million financial transfer to government (2013: $2.5 million). This transfer is used to support Government’s sport and recreation programs. Total expenditure in 2014 was $88.987 million, (2013: $74.944 million). This increase in expenditure is in line with the increase in event related revenue. Property, Plant and Equipment (less accumulated depreciation) increased by $86.667 million compared to last year, primarily due to the Melbourne Park redevelopment construction costs.
12 MELBOURNE & OLYMPIC PARKS TRUST MELBOURNE & OLYMPIC PARKS TRUST
FINANCIAL STATEMENTS
Comprehensive Operating Statement Balance Sheet Statement of Changes in Equity Cash Flow Statement Financial Year Ended 30 June 2014
ANNUAL REPORT 2014 13 COMPREHENSIVE OPERATING STATEMENT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 2014 2013 $’000 $’000
CONTINUING OPERATIONS
INCOME FROM TRANSACTIONS Sales of goods and services (i) (2a) 88,928 75,174 Interest (2b) 1,708 1,588 Grants (2c) 8 79 Other Income (2d) 1,913 1,080 TOTAL INCOME FROM TRANSACTIONS 92,557 77,921
EXPENSES FROM TRANSACTIONS Cost of goods sold/distributed (i) (3a) 14,946 13,532 Purchase of services (3b) 19,572 15,312 Employee expenses (3c) 18,240 16,215 Depreciation (7) 27,334 22,100 Other operating expenses (3d) 5,895 5,285 Government Financial Transfer (3e) 3,000 2,500 TOTAL EXPENSES FROM TRANSACTIONS 88,987 74,944
NET RESULT FROM TRANSACTIONS (NET OPERATING BALANCE) 3,570 2,977
Other economic flows included in net result Net gain/(loss) on non-financial assets (4a) 5 53 Net gain/(loss) arising from revaluation of long service liability (4b) 21 (78) Total other economic flows included in net result 26 (25)
Net result 3,596 2,952
OTHER ECONOMIC FLOWS - OTHER COMPREHENSIVE INCOME Items that will not be reclassified to the net result Changes in physical asset revaluation surplus (7) - - Total other economic flows - other comprehensive income - -
Comprehensive result 3,596 2,952
The above comprehensive operating statement should be read in conjunction with the accompanying notes. (i) A reclassification in Sales of goods and services and Cost of goods/sold distributed relating to the treatment of catering income which attracts a rights fee has occurred. The previous treatment reported the grossed up catering sales figure which included the rights fee.
14 MELBOURNE & OLYMPIC PARKS TRUST BALANCE SHEET FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 2014 2013 $’000 $’000
ASSETS
FINANCIAL ASSETS Cash and cash equivalents (5) 103,150 113,603 Receivables (6) 2,774 2,158 TOTAL FINANCIAL ASSETS 105,924 115,761
NON-FINANCIAL ASSETS Property, plant and equipment and intangible assets (7) 1,293,050 1,206,373 Other (8) 301 200 TOTAL NON-FINANCIAL ASSETS 1,293,351 1,206,573
TOTAL ASSETS 1,399,275 1,322,334
LIABILITIES Payables (9) 12,471 8,040 Provisions (10) 2,909 2,691 Other (11) 54,831 71,465 TOTAL LIABILITIES 70,210 82,196
NET ASSETS 1,329,064 1,240,138
EQUITY Accumulated surplus/(deficit) 202,795 199,199 Reserves 314,675 314,675 Contributed capital 811,594 726,264 NET WORTH 1,329,064 1,240,138
Commitments for expenditure (13) Contingent assets and contingent liabilities (14/15)
The above balance sheet should be read in conjunction with the accompanying notes.
ANNUAL REPORT 2014 15 STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE Physical Asset Accumulated Contributions Total Revaluation Surplus By Owner $’000 Surplus $’000 $’000 $’000
Balance at 30 June 2012 314,675 196,247 611,884 1,122,806
Net Result for the Year 2,952 2,952
Transactions with owners in their 114,380 114,380 capacity as owners
Revaluation of Assets (7) - -
Balance at 30 June 2013 314,675 199,199 726,264 1,240,138
Net Result for the Year 3,596 3,596
Transactions with owners in their (7) 85,330 85,330 capacity as owners
Balance at 30 June 2014 314,675 202,795 811,594 1,329,064
The above statement of changes in equity should be read in conjunction with the accompanying notes.
16 MELBOURNE & OLYMPIC PARKS TRUST CASH FLOW STATEMENT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 2014 2013 $’000 $’000
CASH FLOWS FROM OPERATING ACTIVITIES
RECEIPTS Receipts from customers 86,444 86,656 Customer receipts on behalf of suppliers (1d) 180,818 152,773 Interest received 1,708 1,588 Goods and Services Tax received from the ATO 5,313 13,617 Other Receipts 1,921 1,159 TOTAL RECEIPTS FROM OPERATING ACTIVITIES 276,203 255,793
PAYMENTS Payments to suppliers and employees (53,838) (56,291) Payments to suppliers on behalf of customers (1d) (195,684) (117,112) Goods and Services Tax paid to the ATO (9,209) (8,972) Payments to Government (financial transfer) (3,000) (2,500) TOTAL PAYMENTS FROM OPERATING ACTIVITIES (261,731) (184,874)
NET CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES (17b) 14,473 70,918
CASH FLOWS FROM INVESTING ACTIVITIES Payments for non-financial assets (110,261) (133,947) Receipts on sale of non-financial assets 5 58
NET CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES (110,256) (133,889)
CASH FLOWS FROM FINANCING ACTIVITIES Receipts from Government (capital) 85,330 114,380
NET CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES 85,330 114,380
Net increase/(decrease) in cash and cash equivalents (10,453) 51,409
Cash and cash equivalents at the beginning of the financial year 113,603 62,194
CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR (17a) 103,150 113,603
The above cash flow statement should be read in conjunction with the accompanying notes.
ANNUAL REPORT 2014 17 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES • Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities; (a) Statement of Compliance • Level 2 – Valuation techniques for which the lowest level This general-purpose financial report has been prepared on an input that is significant to the fair value measurement is accrual basis in accordance with the Financial Management Act directly or indirectly observable; and 1994 (FMA), applicable Australian Accounting Standards (AAS), • Level 3 – Valuation techniques for which the lowest level which includes the Australian accounting standards issued by input that is significant to the fair value measurement is the Australian Accounting Standards Board (AASB). In particular, unobservable. they are presented in a manner consistent with the requirements of AASB 1049 Whole of Government and General Government For the purpose of fair value disclosures, the Trust has Sector Financial Reporting. determined classes of assets and liabilities based on the nature, characteristics and risks of the asset or liability and the level of Accounting policies are selected and applied in a manner which the fair value hierarchy as explained above. ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the In addition, the Trust determines whether transfers have occurred substance of the underlying transactions or other events is reported. between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value To gain a better understanding of the terminology used in this measurement as a whole) at the end of each reporting period. report, a glossary of terms and style conventions can be found in Note 23. The Valuer-General Victoria (VGV) is the Trust’s independent valuation agency. VGV has utilised the services of Napier & (b) Basis of accounting preparation and measurement Blakeley, a third party valurer to determine fair value of the The accrual basis of accounting has been applied in the Trust’s assets. preparation of these financial statements whereby assets, liabilities, equity, income and expenses are recognised in the The Trust, in conjunction with VGV (and Napier & Blakely), monitors reporting period to which they relate, regardless of when cash is changes in the fair value of each asset and liability through relevant received or paid. data sources to determine whether revaluation is required.
Judgements, estimates and assumptions are required to be These financial statements are presented in Australian dollars, made about the carrying values of assets and liabilities that the functional and presentation currency of the Trust. are not readily apparent from other sources. The estimates and associated assumptions are based on professional judgements Accounting policies are selected and applied in a manner which derived from historical experience and various other factors that ensures that the resulting financial information satisfies the are believed to be reasonable under the circumstances. Actual concepts of relevance and reliability, thereby ensuring that the results may differ from these estimates. substance of the underlying transactions or other events is reported.
The estimates and underlying assumptions are reviewed on an The accounting policies set out below have been applied in ongoing basis. Revisions to accounting estimates are recognised preparing the financial statements for the year ended 30 June in the period in which the estimate is revised if the revision 2014 and the comparative information presented for the year affects only that period or in the period of the revision, and future ended 30 June 2013. periods if the revision affects both current and future periods. Judgements and assumptions made by management in the (c) Reporting Entity application of AASs that have significant effects on the financial The financial statements cover the Trust as an individual statements and estimates relate to: reporting entity. The Trust is a government agency of the State of • the fair value of land, buildings, infrastructure, plant and Victoria, established pursuant to the provisions of the Melbourne equipment, (refer to Note 1(j)); and and Olympic Parks Act 1985. Its principal address is: • actuarial assumptions for employee benefit provisions based on likely tenure of existing staff, patterns of leave Melbourne and Olympic Parks Trust claims, future salary movements and future discount rates Batman Avenue (refer to Note 1(k)). Melbourne VIC 3001
Consistent with AASB 13 Fair Value Management, Melbourne (d) Scope and presentations of financial statements and Olympic Parks Trust (the Trust) determines the policies and Comprehensive operating statement procedures for recurring fair value measurements for property, The comprehensive operating statement comprises three plant and equipment, in accordance with the requirements of components, being ‘net result from transactions’ (or termed as AASB 13 and the relevant Financial Reporting Directions. ‘net operating balance’), ‘other economic flows included in net result’, as well as ‘other economic flows – other comprehensive All assets and liabilities for which fair value is measured or income’. The sum of the former two, together with the net result disclosed in the financial statements are categorised within the from discontinued operations, represents the net result. fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: The net result is equivalent to profit or loss derived in accordance with AASs.
18 MELBOURNE & OLYMPIC PARKS TRUST NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
This classification is consistent with the whole of government including AASB 7 Financial Instruments: Disclosures. The reporting format and is allowed under AASB 101 Presentation of disclosure requirements of AASB 13 apply prospectively and need Financial Statements. not be applied in comparative information before first application. Consequently, the 2012-13 comparatives of these disclosures Refer to Note 23 Glossary for the definitions of ‘net result from have not been provided, except for financial instruments, of which transactions, ‘other economic flows included in net result’ and the fair value disclosures are required under AASB 7 Financial ‘other economic flows – other comprehensive income’. Instruments: Disclosures.
Balance sheet AASB 119 Employee benefits Assets and liabilities are presented in liquidity order with assets In 2013-14, the Trust has applied AASB 119 Employee benefits aggregated into, financial assets and non-financial assets. (September 2011, as amended) and the related consequential Current and non-current assets and liabilities (those expected to amendments for the first time. be recovered or settled beyond 12 months) are disclosed in the notes, where relevant. The revised AASB 119 changes the accounting for defined benefit plans and termination benefits. The most significant Cash flow statement change relates to the accounting for changes in defined benefit Cash flows are classified according to whether or not they obligation and plan assets. As the current accounting policy is arise from operating activities, investing activities, or financing for the Department of Treasury and Finance to recognise and activities. This classification is consistent with requirements disclose the State’s defined benefit liabilities in its financial under AASB 107 Statement of cash flows. statements, changes in defined benefit obligations and plan assets will have limited impact on the Trust. For cash flow statement presentation purposes, cash and cash equivalents include bank overdrafts, which are included as The revised standard also changes the definition of short term current borrowings on the balance sheet. employee benefits. These were previously benefits that were expected to be settled within twelve months after the end of Customer receipts on behalf of suppliers and Payments to the reporting period in which the employees render the related suppliers on behalf of customers represents cash received for service, however, short term employee benefits are now defined event ticket sales which is held at bank from the time tickets are as benefits expected to be settled wholly within twelve months purchased and paid out to the hirer after the event has taken place. after the end of the reporting period in which the employees render the related service. As a result, accrued annual leave Statement of changes in equity balances which were previously classified by the Trust as short The statement of changes in equity presents reconciliations of term employee benefits no longer meet this definition and are non-owner and owner changes in equity from opening balance now classified as long term employee benefits. This has resulted at the beginning of the reporting period to the closing balance in a change of measurement for the annual leave provision from at the end of the reporting period. It also shows separately an undiscounted to discounted basis. changes due to amounts recognised in the ‘Comprehensive result’ and amounts recognised in ‘Other economic flows – other Comparative amounts for 2012‑13 and the related amounts as at movements in equity’ related to ‘Transactions with owner in its 1 July 2012 have been restated in accordance with the relevant capacity as owner’. transitional provisions set out in AASB 119. The impact is as follows: Impact on comprehensive result (e) Changes in accounting policies Subsequent to the 2012-13 reporting period, the following new ($ thousand) and revised Standards have been adopted in the current period 2012‑13 with their financial impact detailed as below. Decrease in employee expense $50 AASB 13 Fair Value Measurement AASB 13 establishes a single source of guidance for all fair value measurements. AASB 13 does not change when an entity is Impacts on liabilities and equity required to use fair value, but rather provides guidance on how to measure fair value under Australian Accounting Standards when ($ thousand) fair value is required or permitted. The entity has considered the As at 30 Jun 2013 As at 30 specific requirements relating to highest and best use, valuation AASB 119 as previously Jun 2013 premise, and principal (or most advantageous) market. The adjustments methods, assumptions, processes and procedures for determining reported (restated) fair value were revisited and adjusted where applicable. In light of Current Employee 747 (50) 697 AASB 13, the entity has reviewed the fair value principles as well Benefit Provision – as its current valuation methodologies in assessing the fair value, Annual Leave and the assessment has not materially changed the fair values recognised. However, AASB 13 has predominantly impacted the Accumulated 199,149 50 199,199 disclosures of the entity. It requires specific disclosures about surplus fair value measurements and disclosures of fair values, some of which replace existing disclosure requirements in other standards,
ANNUAL REPORT 2014 19 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
(f) Events after reporting date (i) Expenses Assets, liabilities, income or expenses arise from past Payments to third parties are recognised as an expense in the transactions or other past events. Where the transactions reporting period in which they are paid or are payable. result from an agreement between the Trust and other parties, the transactions are only recognised when the agreement is Employee benefits irrevocable at or before the end of the reporting period. Refer to the section in Note 1 (k) regarding employee benefits. These expenses include all costs related to employment (other Adjustments are made to amounts recognised in the financial than superannuation which is accounted for separately) statements for events which occur after the reporting period and including wages and salaries, fringe benefits tax, leave before the date the financial statements are authorised for issue, entitlements, redundancy payments and WorkCover premiums. where those events provide information about conditions which existed in the reporting period. Note disclosure is made about Details of the funds which the Trust made superannuation events between the end of the reporting period and the date the contributions to during the year are disclosed in Note 21. financial statements are authorised for issue where the events relate to conditions which arose after the end of the reporting Depreciation period and which may have a material impact on the results of In compliance with Australian Accounting Standard AASB116, subsequent reporting periods. depreciation has been charged on all fixed assets and capital works developments, with the exception of Land. The provisions (g) Goods and services tax (GST) for depreciation are made using the straight-line method, at Income, expenses and assets are recognised net of the amount rates appropriate to the estimated useful life to the Trust of each of associated GST, unless the GST incurred is not recoverable individual asset. Estimates of the remaining useful lives for from the taxation authority. In this case it is recognised as part of all assets are reviewed annually and range from greater than the cost of acquisition of the asset or as part of the expense. zero up to one hundred and ten years. The Trust’s policy is to capitalise assets valued over $1,000, whilst assets of less than Receivables and payables are stated inclusive of the amount of $1,000 in value are expensed immediately. GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other The following are typical estimated useful lives for different asset receivables or payables in the balance sheet. classes for both current and prior years:
Cash flows are presented on a gross basis. The GST components Asset Class Useful Life of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are Buildings 50 - 110 years presented as operating cash flows. Property Plant & Eqipment 5 - 60 years Motor Vehicles 5 years (h) Revenue Revenue is measured at the fair value of the consideration Intangible Assets 5 years received or receivable. Amounts disclosed as revenue are net of returns, trade allowances and duties and taxes. Impairment of assets All of the Trust’s assets are assessed annually for indications of Revenue from sale of goods and services impairment. Revenue from the sale of goods and services is recognised upon delivery of the goods and services to the customer and when the If there is an indication of impairment, the assets concerned are Trust gains control of the underlying assets. tested as to whether their carrying value exceeds their possible recoverable amount. Where an asset’s carrying value exceeds its Grants recoverable amount, the difference is written off by a charge to Grants from third parties are recognised as income in the the comprehensive operating statement except to the extent that reporting period in which the Trust gains control over the the write-down can be debited to an asset revaluation reserve contribution. amount applicable to that class of asset.
Interest revenue It is deemed that, in the event of the loss of an asset, the future Interest income is recognised on a time proportionate basis that economic benefits arising from the use of the asset will be takes into account the effective yield on the financial asset. replaced unless a specific decision to the contrary has been made. The recoverable amount of most major assets is measured Other income at the higher of the depreciated replacement cost and fair value Sinking fund income is recognised as income in the reporting less costs to sell. The depreciated replacement cost is the period in which the Trust gains control over the underlying current replacement cost of an asset less, where applicable, assets. accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic Any gain or loss on disposal of non-current assets is recognised benefits of the asset. at the date control of the asset is passed to the buyer and is determined after deducting from the proceeds the carrying value of the asset at that time.
20 MELBOURNE & OLYMPIC PARKS TRUST NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
Supplies and services Revaluation decreases are recognised immediately as expenses Supplies and services are recognised as an expense in the in the net result, except that, to the extent that a credit reporting period in which they are incurred. balance exists in the revaluation reserve in respect of the same class of assets, they are debited to the revaluation reserve. (j) Assets All assets controlled by the Trust are reported in the balance sheet. Revaluation increases and revaluation decreases relating to individual assets within a class of property, plant and equipment Cash and deposits are offset against one another within that class but are not Cash and deposits, including cash equivalents, comprise cash offset in respect of assets in different classes. on hand and cash at bank, deposits at call and those highly liquid investments with an original maturity of three months or (k) Liabilities less, which are held for the purpose of meeting short term cash Payables commitments rather than for investment purposes, and which are readily convertible to known amounts of cash and are subject Payables consist of: to an insignificant risk of changes in value. • contractual payables, such as accounts payable, and unearned income including deferred income from Receivables concession notes. Accounts payable represent liabilities Receivables consist of: for goods and services provided to the Trust prior to the • statutory receivables, which include predominantly end of the financial year that are unpaid, and arise when amounts owing from the Victorian Government and GST the Trust becomes obliged to make future payments in input tax credits recoverable; and respect of the purchase of those goods and services; and • contractual receivables, which include mainly debtors in • statutory payables, such as goods and services tax and relation to goods and services and accrued investment fringe benefits tax payables. income. Provisions Receivables that are contractual are classified as financial Provisions are recognised when the Trust has a present instruments. Statutory receivables are not classified as financial obligation, the future sacrifice of economic benefits is probable instruments. and the amount of the provision can be measured reliably.
Receivables are recognised initially at fair value and The amount recognised as a provision is the best estimate of subsequently measured at amortised cost, using the effective the consideration required to settle the present obligation at interest method, less an allowance for impairment. reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using A provision for doubtful receivables is made when there is the cash flows estimated to settle the present obligation, its objective evidence that the debts will not be collected. Bad debts carrying amount is the present value of those cash flows, using are written off when identified. a discount rate that reflects the time value of money and risks specific to the provision. Property, plant and equipment Land, buildings and plant and equipment are recognised initially Employee Benefits at cost and subsequently measured at fair value less accumulated depreciation and impairment. (i) Wages, Salaries and Annual Leave
Revaluations of Non-Current Physical Assets Liabilities for wages and salaries, including non- Non-current physical assets measured at fair value are revalued monetary benefits and annual leave are recognised in in accordance with FRD 103D issued by the Minister for Finance. the provision for employee benefits as ‘current liabilities’ A full revaluation occurs at least every five years, based on because the Trust does not have an unconditional right the asset’s government purpose classification, but may occur to defer settlements of these liabilities. more frequently if fair value assessments indicate material changes in values. Independent valuers are used to conduct Depending on the expectation of the timing of the these scheduled revaluations and any interim revaluations are settlement, liabilities for wages and salaries and annual determined in accordance with the requirements of the FRDs. leave are measured at: • Undiscounted value – if the Trust expects to Revaluation increases or decreases arise from differences wholly settle within 12 months; or between an asset’s carrying value and fair value. • Present Value – if the Trust does not expect to wholly settle within 12 months. Revaluation increases are credited directly to equity in the revaluation reserve, except that, to the extent that an increment reverses a revaluation decrement in respect of that class of asset previously recognised as an expense in the net result, the increment is recognised as income in determining the net result.
ANNUAL REPORT 2014 21 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
(ii) Long Service Leave Benefits falling due more than 12 months after balance sheet date are discounted to present value. A liability for long service leave is recognised, and is measured as the present value of expected future Employee Benefit On-costs payments to be made in respect of services provided Employee benefits on-costs (payroll tax, workers by employees up to the reporting date. Consideration compensation, superannuation, annual leave and LSL is given to expected future wage and salary levels, accrued while on LSL taken in service) are recognised experience of employee departures and period of and included when determining employee benefit service. All unconditional vested long service leave liabilities. representing 7 years or greater of continuous service is disclosed in accordance with AASB 101, as a current (l) Income taxes liability. Expected future payments are measured at The Australian Taxation Office has deemed the Trust to be a nominal value where a component of this current is “Public Authority” within the terms of Section 50-25 of the expected to fall due within 12 months after the end of Income Tax Assessment Act 1997 and therefore any income the period and discounted where the Trust does not shall be exempt from income tax. The Trust is not subject to the expect to settle a component of this liability within 12 National Tax Equivalent Regime. No provisions for income taxes months. Discount rates are based on interest rates on payable have been raised. national Government guaranteed securities with terms to maturity that match, as closely as possible, the (m) Contingent assets and contingent liabilities estimated future cash outflows. Contingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of a note Liability for long service leave (LSL) is recognised in the and, if quantifiable, are measured at nominal value. provision for employee benefits. (n) Cash flow statement • Current liability unconditional LSL (representing For the purposes of the cash flow statement, cash comprises seven or more years of continuous service for staff) petty cash, cash floats, deposits in bank accounts, cash at bank is disclosed as a current liability even where the (ticket sales for future events) and short-term deposits. Trust does not expect to settle the liability within 12 months because it will not have the unconditional (o) Rounding of Amounts right to defer the settlement of the entitlement Amounts in the financial statements have been rounded to the should an employee take leave within 12 months. nearest $1 000, unless otherwise stated.
The components of this current LSL liability are (p) Contributed Capital measured at: Transfers from the Department of Transport, Planning and Local – Present value – component that the Trust does not Infrastructure (DTPLI) that are in the nature of contributions or expect to settle within 12 months; and distributions of capital have also been designated as contributed – Nominal value – component that the Trust expects to capital. Other transfers that are in the nature of contributions settle within 12 months. or distributions have also been designated as contributions by owners. • Non-current liability – conditional LSL (representing less than seven years of continuous service for (q) Intangible Assets staff) is disclosed as a non-current liability. There is Intangible assets represent identifiable non-monetary assets an unconditional right to defer the settlement of the without physical substance. Intangible assets are recognised entitlement until the employee has completed the at cost. Cost incurred subsequent to initial acquisition are requisite years of service. capitalised when it is expected that additional future economic benefits will flow to the Trust. This non-current LSL liability is measured at present value. (r) Leased Assets All leased assets are classified as operating leases. (iii) Termination benefits Operating lease payments, including any contingent rentals, Termination benefits are payable when employment is are recognised as an expense in the comprehensive operating terminated before the normal retirement date, or when statement on a straight‑line basis over the lease term, except an employee accepts voluntary redundancy in exchange where another systematic basis is more representative of the for these benefits. The Trust recognises termination time pattern of the benefits derived from the use of the leased benefits when it is demonstrably committed to either asset. The leased asset is not recognised in the balance sheet. terminating the employment of current employees according to a detailed formal plan without possibility of (s) Commitments withdrawal or providing termination benefits as a result Commitments for future expenditure include operating and of an offer made to encourage voluntary redundancy. capital commitments arising from contracts. These commitments
22 MELBOURNE & OLYMPIC PARKS TRUST NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014 are disclosed by way of a note (refer to Note 13 Commitments for expenditure) at their nominal value and inclusive of the GST payable. In addition, where it is considered appropriate and provides additional relevant information to users, the net present values of significant individual projects are stated. These future expenditures cease to be disclosed as commitments once the related liabilities are recognised in the balance sheet.
(t) Australian Accounting Standards issued that are not yet effective Certain new AASs have been published that are not mandatory for the 30 June 2014 reporting period. DTF assesses the impact of these new standards and advises the Trust of their applicability and early adoption where applicable.
As at 30 June 2014, the following standard and interpretation had been issued but was not mandatory for the financial year ending 30 June 2014. The Trust has not early adopted this standard.
Standard/Interpretation Summary Applicable Impact on public for annual sector entity financial reporting periods statements beginning on
AASB 9 Financial instruments This standard simplifies requirements for Beginning Detail of impact is still the classification and measurement of 1 Jan 2017 being assessed. financial assets resulting from Phase 1 of the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement (AASB 139 Financial Instruments: Recognition and Measurement).
There are a number of non-mandatory standards at 30 June 2014 not listed which have been assessed to have minimal or no impact to the Trust.
2. INCOME FROM TRANSACTIONS
2014 2013 $’000 $’000
(a) Sales of goods and services Sale of goods 11,869 10,762 Rendering of services 67,889 56,290 Royalties 9,170 8,122 88,928 75,174
(b) Interest Interest on bank deposits 1,708 1,588 1,708 1,588
(c) Grants Other public bodies 8 79 8 79
(d) Other income Delaware North Australia Sinking Fund 443 403 Delaware North Australia Capital Contribution 930 155 Tennis Australia Special Purpose Account 540 522 1,913 1,080
ANNUAL REPORT 2014 23 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
3. EXPENSES FROM TRANSACTIONS
2014 2013 $’000 $’000
(a) Cost of goods/sold distributed Venue Hire 2,733 2,184 Catering 10,490 9,749 Other 1,723 1,599 14,946 13,532
(b) Purchase of services Administration 4,951 3,695 Event Contractors 8,568 6,098 Utilities 2,619 2,630 Other 3,434 2,889 19,572 15,312
(c) Employee expenses Defined contribution superannuation expense 1,347 1,257 Termination benefits 73 64 Salaries, wages and long service leave 16,820 14,894 18,240 16,215
(d) Other operating expenses Maintenance 4,634 4,156 Operating lease expenses 206 208 Purchase of supplies and consumables 967 856 Bad debts from transactions - 4 Other 88 61 5,895 5,285
(e) Government Financial Transfers Payment to Government for support of sport and recreation programs 3,000 2,500 3,000 2,500
24 MELBOURNE & OLYMPIC PARKS TRUST NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
4. OTHER ECONOMIC FLOWS INCLUDED IN NET RESULT
2014 2013 $’000 $’000
(a) Net gain/(loss) on non-financial assets Net gain/(loss) on disposal of property plant and equipment 5 53 (including intangible assets) 5 53
(b) Net gain/(loss) arising from revaluation of long service liability Net gain/(loss) arising from revaluation of long service liability 21 (78) 21 (78)
5. CASH AND CASH EQUIVALENTS 2014 2013 $’000 $’000
Cash floats held 78 76 Cash at bank 11,321 8,816 Term deposits 47,000 45,500 Bank deposits (restricted use) 1,779 1,373 Cash at bank (ticket sales for future events - not available for use) 42,972 57,838 Total Cash and cash equivalents 103,150 113,603
6. RECEIVABLES
2014 2013 $’000 $’000
Current Contractual Other receivables (ii) 1,959 2,041 1,959 2,041 Statutory Amount owing from Victorian Government (i) 52 28 Taxes Recoverable 768 94 Provision for doubtful debts (iii) (5) (5) 815 117
Total current receivables 2,774 2,158
(i) The amounts receivable from the Victorian Government represent monies owing from Victorian Government Departments/Agencies relating to contributions towards capital projects, tenancies and redevelopment costs. (ii) Receivables are carried at nominal amounts due. The average credit period on settling of monies owed is 7 days. No interest is charged on other receivables for outstanding balances. (iii) A provision has been made for amounts where collection is considered no longer probable, determined by reference to issues relating to individual accounts.
ANNUAL REPORT 2014 25 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
2014 2013 $’000 $’000
(a) Movement in the allowance for doubtful debts
Balance at beginning of financial year 5 5 Balance at end of financial year 5 5
(b) Ageing analysis of receivables Please refer to Table 16.2 in Note 16 for ageing analysis of receivables.
(c) Nature and extent of risk arising from receivables Please refer to Note 16 for the nature and extent of credit risk arising from receivables.
7. PROPERTY, PLANT, EQUIPMENT AND INTANGIBLE ASSETS
2014 2013 $’000 $’000
Land at fair value 2012 (i) 387,600 387,600 387,600 387,600
Buildings and improvements at revaluation 2012 (ii) 458,158 458,158 Buildings at fair value 113,442 132,388 Less accumulated depreciation (27,582) (14,044) Written down value 544,018 576,502
Plant and equipment at revaluation 2012 (ii) 93,074 93,074 Plant and equipment at fair value 86,668 20,149 Less accumulated depreciation (28,248) (14,828) Written down value 151,494 98,395
Work in progress 209,369 143,215 209,369 143,215
Total property, plant and equipment 1,348,310 1,234,584 Less accumulated depreciation (55,830) (28,872) Written down value 1,292,480 1,205,712
Intangible Assets 1,532 1,424 Less accumulated amortisation (962) (763) Written down value 570 661
Written down value property, plant, equipment and intangible assets 1,293,050 1,206,373
26 MELBOURNE & OLYMPIC PARKS TRUST NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
RECONCILIATIONS Classification by ‘Public safety and environment’ purpose group – Movements in carrying amounts
Land Buildings Plant & Intangibles Work in Total Equipment Progress $’000 $’000 $’000 $’000 $’000 $’000 Year ended 30 June 2014 Carrying amount at start of year 387,600 576,502 98,395 661 143,215 1,206,373 Additions - - 1,920 47 112,045 114,012 Transfers - (18,946) 64,777 61 (45,891) - Disposals ------Revaluations/Impairments ------Depreciation Expense - (13,538) (13,597) - - (27,135) Amortisation Expense - - - (199) - (199) Carrying amount at end of year (iii) 387,600 544,018 151,494 570 209,369 1,293,050
Land Buildings Plant & Intangibles Work in Total Equipment Progress $’000 $’000 $’000 $’000 $’000 $’000 Year ended 30 June 2013 Carrying amount at start of year 387,600 458,212 101,943 304 150,428 1,098,488 Additions - - 968 - 129,021 129,989 Transfers - 132,330 3,378 526 (136,234) - Disposals - - (5) - - (5) Revaluations/Impairments ------Depreciation Expense - (14,040) (7,891) - - (21,931) Amortisation Expense - - - (169) - (169) Carrying amount at end of year (iii) 387,600 576,502 98,395 661 143,215 1,206,373
(i) Land at fair value June 30 2012 Land was last independently revalued at June 30 2012 as required by the Financial Management Act 1994 and was conducted by the Valuer-General Victoria. Due to restrictions on the usage of the land, a notional discount of 40% known as ‘Community Service Obligation’ has been applied to the Unrestricted Land Value. (ii) Buildings and Improvements and Plant and Equipment at revaluation 2012 Buildings, Plant & Equipment was last independently revalued at June 30 2012 as required by the Financial Management Act 1994 and was conducted by Napier & Blakeley on behalf of the Valuer-General Victoria who have provided replacement cost and depreciated replacement cost on the inspected properties (Rod Laver Arena and surrounding grounds, Hisense Arena, AAMI Park and Westpac Centre). Works in Progress relating to the redevelopment have not been included in the revaluation. (iii) Carrying amount at end of year Work in Progress at June 30 2014 includes $184.5m relating to Stage 1 of the Melbourne Park Redevelopment (Margaret Court Arena redevelopment), which is due for completion in 2015.
ANNUAL REPORT 2014 27 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
Fair Value Measurement Hierarchy for Assets at 30 June 2014
Carrying amount Fair Value Measurement at end of reporting period using: as at 30 June 2014 Level 1 Level 2 Level 3 $’000 $’000 $’000 $’000 Land at fair value Specialised land 387,600 - - 387,600 Total of land at fair value 387,600 - - 387,600 Buildings at fair value Specialised buildings 544,018 - - 544,018 Total of buildings at fair value 544,018 - - 544,018 Plant, equipment and vehicles at fair value Vehicles 349 - - 349 Plant and equipment 151,145 - - 151,145 Total of plant, equipment and vehicles at fair value 151,494 - - 151,494
28 MELBOURNE & OLYMPIC PARKS TRUST NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
Description of significant unobservable inputs to Level 3 valuations
Valuation Technique Significant Range Sensitivity of fair value unobservable inputs (weighted average) measurement to changes in significant unobservable inputs
Land Market Value adjusted - land price per square $1,600 /m² A significant increase or decrease in for community service metre 30 - 50% (40%) the CSO adjustment would result in a obligation (CSO) - CSO obligation” significantly lower (higher) fair value
Rod Laver Arena Depreciated - useful lives of structure / 50 - 70 years A significant increase or decrease in the replacement cost shell / building fabric, site (60 years) estimated useful life of the asset would / Melbourne Park engineering services & result in a significantly higher or lower central plant, fit-outs and valuation trunk reticulated building systems. - replacement cost per $2,300 - $2,500 / m² A significant increase or decrease in m² and per unit of plant. ($2,430) direct cost per square metre adjustment This reflects the cost of would result in a significantly higher or replacing Rod Laver Arena/ lower fair value. Melbourne Park to its current condition taking into account its age (26 years).
Hisense Arena Depreciated - useful lives of structure / 50 - 70 years (60 A significant increase or decrease in the replacement cost shell / building fabric, site years) estimated useful life of the asset would engineering services & result in a significantly higher or lower central plant, fit-outs and valuation trunk reticulated building systems. - replacement cost per $3,800 - $4,200 / m² A significant increase or decrease in m² and per unit of plant. ($4,000) direct cost per square metre adjustment This reflects the cost of would result in a significantly higher or replacing Hisense Arena to lower fair value. its current condition taking into account its age (14 years).
AAMI Park Depreciated - useful lives of structure / 60 - 80 years A significant increase or decrease in the replacement cost shell / building fabric, site (70 years) estimated useful life of the asset would engineering services & result in a significantly higher or lower central plant, fit-outs and valuation trunk reticulated building systems. - replacement cost per $4,800 - $5,300 / m² A significant increase or decrease in m² and per unit of plant. ($5,100) direct cost per square metre adjustment This reflects the cost of would result in a significantly higher or replacing AAMI Park to its lower fair value. current condition taking into account its age (4 years).
Westpac Centre Depreciated - useful lives of structure / 90 - 110 years A significant increase or decrease in the replacement cost shell / building fabric, site (100 years) estimated useful life of the asset would engineering services & result in a significantly higher or lower central plant, fit-outs and valuation trunk reticulated building systems. - replacement cost per $2,000 - $2,500 / m² A significant increase or decrease in m² and per unit of plant. ($2,300) direct cost per square metre adjustment This reflects the cost of would result in a significantly higher or replacing the Westpac lower fair value. Centre to its current condition taking into account its age (58 years).
ANNUAL REPORT 2014 29 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
8. OTHER ASSETS 2014 2013 $’000 $’000
Current Prepayments 301 200 301 200 9. PAYABLES
2014 2013 $’000 $’000
Current Contractual Trade creditors (i) 6 52 Other payables 1,189 1,545 Accrued expenses 11,211 6,396 12,406 7,993 Statutory Taxes payable 65 47
Total current payables 12,471 8,040
(i) The average credit period is 30 days. No interest is charged on other payables for the first 30 days from the date of invoice. Payables are generally paid within the payment period thereby avoiding any interest charges that may be incurred on late payments.
(a) Maturity analysis of payables Please refer to Table 16.4 in Note 16 for the aging analysis of payables.
(b) Nature and extent of risk arising from payables Please refer to Note 16 for the nature and extent of risks arising from payables.
30 MELBOURNE & OLYMPIC PARKS TRUST NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
10. PROVISIONS 2014 2013 $’000 $’000
Current provisions Employee benefits
Annual Leave Unconditional and expected to be settled within 12 months (i) 279 283 Unconditional and expected to be settled after 12 months (ii) 294 308
Long Service Leave Unconditional and expected to be settled within 12 months (i) 773 624 Unconditional and expected to be settled after 12 months (ii) 725 763 2,071 1,978
Provisions for on-costs Unconditional and expected to be settled within 12 months (i) 175 147 Unconditional and expected to be settled after 12 months (ii) 170 172 345 319
Total current provisions 2,416 2,297
Non-current provisions Employee benefits Long Service Leave (ii) 426 342 On-costs 67 52
Total non-current provisions 493 394
Total provisions 2,909 2,691
(i) The amounts disclosed are nominal amounts. (ii) The amounts disclosed are discounted to present values.
ANNUAL REPORT 2014 31 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
(a) Employee benefits and on-costs 2014 2013 $’000 $’000
Current employee benefits
Annual Leave 573 590 Long Service Leave 1,498 1,388
Non-current employee benefits Long Service Leave 426 342
Total employee benefits 2,497 2,320
Current on-costs 345 319 Non-current on-costs 67 52 Total on-costs 412 371
Total employee benefits and on-costs 2,909 2,691
11. OTHER LIABILITIES 2014 2013 $’000 $’000
Income received in advance 11,859 13,627 Ticket sales for future events held in trust 42,972 57,838 54,831 71,465 12. LEASES Disclosure of operating leases
Operating Lease Payables Leasing arrangements Operating lease payables relate to plant and office equipment with lease terms between 1 and 3 years.
Non-cancellable operating leases Total lease expenditure contracted for at balance date but not provided for in the accounts:
2014 2013 $’000 $’000
Payable no later than one year 165 169 Later than one year and not later than five years 88 213 Later than five years - - 253 382
32 MELBOURNE & OLYMPIC PARKS TRUST NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
Operating Lease Receivables
Leasing arrangements Operating lease receivables relate to 12 tenancies (12 in 2012-13) within the Trust’s precinct with lease terms between 1 and 22 years.
2014 2013 $’000 $’000
Receivable no later than one year 4,099 4,087 Later than one year and not later than five years 13,881 14,425 Later than five years 39,828 43,470 57,8 0 8 61,982
13. COMMITMENTS FOR EXPENDITURE The following commitments have not been recognised as liabilities in the financial statements. All amounts shown in the commitments note are nominal amounts inclusive of GST.
(a) Capital expenditure commitments The Trust has $34.9m in commitments for capital works relating to stage 2 of the Melbourne Park redevelopment project at the date of this report (2013: $0m). All other capital commitments relating to the Melbourne Park redevelopment project sit with Major Project Victoria, who are the project manager.
2014 2013 $’000 $’000
Payable no later than one year 32,743 - Later than one year and not later than five years 4,173 - Later than five years - - 36,916 -
(b) Operating expenditure commitments The Trust has $1.5m in commitments for operating expenditure relating to the supply of service agreements for mechanical services and lifts at the date of this report. The Trust also has entered into an agreement for the supply of electricity for a period of 18 months, which has not been included in the following table due to the amount of the commitment being dependant on usage.
2014 2013 $’000 $’000
Payable no later than one year 652 - Later than one year and not later than five years 894 - Later than five years - - 1,546 -
(c) Lease commitments Non-cancellable operating lease commitments are disclosed in Note 12 to the financial statements.
ANNUAL REPORT 2014 33 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
14. CONTINGENT LIABILITIES The Trust has no contingent liabilities at the date of this report.
15.CONTINGENT ASSETS There is a contingent asset in relation to Collingwood Football Club’s ground lease at Olympic Park. In December 2013, the Collingwood Football Club was granted permission by the Trust for the construction of the Olympic Park Community Facility on the Trust’s land. Ownership of improvements to the land and any buildings will transfer to the Trust upon expiration of the current lease on 31 May 2033.
16. FINANCIAL INSTRUMENTS
(a) Significant accounting policies The Trust’s principal financial instruments comprise: • cash assets; • term deposits; • receivables (excluding statutory receivables); • payables (excluding statutory payables); and • finance lease liabilities payable. Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement, and the basis on which income and expenses are recognised, with respect to each class of financial asset, financial liability and equity instrument are disclosed in Note 1 to the financial statements. The main purpose in holding financial instruments is to prudentially manage the Trust’s financial risks in the government policy parameters. The Trust’s main financial risks include credit risk, liquidity risk and interest rate risk. The Trust manages these risks in accordance with its treasury policy. Primary responsibility for the identification and management of financial risks rests with the Finance, Audit and Risk committee of the Trust.
(b) Table 16.1: Categorisation of financial instruments
Note Carrying amount Carrying amount 2014 2013 $’000 $’000
(i) Financial assets Cash and cash equivalents 5 103,150 113,603 Receivables (i) 6 1,959 2,041
(ii) Financial liabilities Payables (i) 9 12,406 7,993 Other liabilities 11 54,831 71,465
(i) The amount of receivables and payables disclosed exclude statutory amounts (eg: amounts owing from Victorian Government and GST input tax credit recoverable and taxes payable)
34 MELBOURNE & OLYMPIC PARKS TRUST NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
(c) Credit risk exposure Credit risk arises when there is the possibility of the Trust’s debtors defaulting on their contractual obligations resulting in financial loss to the Trust. The Trust measures credit risk on a fair value basis and monitors risk on a regular basis. The Trust does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The Trust has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral or credit enhancements where appropriate, as a means of mitigating the risk of financial loss from defaults. Credit risk in trade receivables is managed by payment terms of seven days and sound debt collection policies and procedures. In addition, the Trust does not engage in any hedging for its financial assets. The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. Provision of impairment for financial assets is calculated based on past experience, and current and expected changes in client credit ratings. The carrying amount of financial assets recorded in the Financial Report, net of any allowances for losses, represents the Trust’s maximum exposure to credit risk without taking account of the value of any collateral obtained. Financial assets that are either past due or impaired Currently the Trust does not hold any collateral as security nor credit enhancements relating to any of its financial assets. As at the reporting date, there is no event to indicate that any of the financial assets are impaired. There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired and they are stated at the carrying amounts as indicated. The following table discloses the ageing only of financial assets that are past due but not impaired:
Table 16.2: Ageing analysis of contractual financial assets
Not past Carrying due & not Past due but not impaired amount impaired Less 3 1-3 1-5 than 1 months months years month - 1 year
30 June 2014 $’000 $’000 $’000 $’000 $’000 $’000 Receivables (i) 1,959 1,773 185 16 (15) - 1,959 1,773 185 16 (15) -
30 June 2013 $’000 $’000 $’000 $’000 $’000 $’000 Receivables (i) 2,041 1,882 68 71 20 - 2,041 1,882 68 71 20 -
(i) Ageing analysis of financial assets excludes statutory financial assets (eg: amounts owing from Victorian Government and GST input tax credits recoverable).
(d) Liquidity risk Liquidity risk arises when the Trust is unable to meet its financial obligations as they fall due. The Trust operates under the Government fair payments policy of settling financial obligations within 30 days and in the event of a dispute, makes payments within 30 days from the date of resolution. It also continuously manages risk through monitoring future cash flows and maturities planning to ensure adequate holding of high quality liquid assets and dealing in highly liquid markets. The Trust’s exposure to liquidity risk is deemed insignificant based on prior periods’ data and current assessment of risk. Cash for unexpected events could be sourced from early liquidation of cash held on deposit if required. Maximum exposure to liquidity risk is the carrying amounts of financial liabilities.
ANNUAL REPORT 2014 35 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
Table 16.3: Interest rate exposure of financial assets
Weighted average Carrying Interest rate exposure interest amount rate
Fixed Variable Non- interest interest interest rate rate bearing 30 June 2014 % $’000 $’000 $’000 $’000 Cash and cash equivalents: Cash floats held 78 - - 78 Cash at bank 2.16% 11,321 - 11,321 - Term deposits 2.73% 47,000 - 47,000 - Bank deposits (restricted use) 2.44% 1,779 - 1,779 - Cash at bank (ticket sales for future events - 2.90% 42,972 - 42,972 - not available for use)
Receivables (i) 1,959 - - 1,959 105,108 - 103,072 2,037
30 June 2013 % $’000 $’000 $’000 $’000 Cash and cash equivalents: Cash floats held 76 - - 76 Cash at bank 2.53% 8,816 - 8,816 - Term deposits 2.93% 45,500 - 45,500 - Bank deposits (restricted use) 2.68% 1,373 - 1,373 - Cash at bank (ticket sales for future events - 2.84% 57,838 - 57,838 - not available for use)
Receivables (i) 2,041 - - 2,041 115,644 - 113,527 2,117
(i) Ageing analysis of financial assets excludes statutory financial assets (eg: amounts owing from Victorian Government and GST input tax credits recoverable).
36 MELBOURNE & OLYMPIC PARKS TRUST NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
Table 16.4: Interest rate exposure and maturity analysis of financial liabilities
Carrying Interest rate Nominal Maturity dates (i) amount exposure amount Variable Non- Less 1-3 3 1-5 interest interest than 1 months months years rate bearing month - 1 year $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 30 June 2014 Payables (ii) 12,406 - 12,406 12,406 12,406 - - - Other 54,831 - 54,831 54,831 9,863 14,340 22,760 7,868 67,237 - 67,237 67,237 22,269 14,340 22,760 7,868 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 30 June 2013 Payables (ii) 7,993 - 7,993 7,993 7,993 - - - Other 71,465 - 71,465 71,465 33,633 1,354 27,557 8,921 79,458 - 79,458 79,458 41,626 1,354 27,557 8,921
(i) The amounts disclosed are the contractual undiscounted cash flows of each class of financial liabilities. (ii) The carrying amounts disclosed exclude statutory amounts (eg: amounts payable to Victorian Government and taxes payable).
(e) Market risk The Trust’s exposures to market risk, including interest rate risk and foreign currency are insignificant. Objectives, policies and processes used to manage each of these risks are disclosed in the paragraphs below. Foreign currency risk The Trust is exposed to insignificant foreign currency risk through its payables relating to purchases of supplies and consumables from overseas, due to the limited amount of purchases denominated in foreign currencies and the short timeframe between commitment and settlement. The Trust’s exposure to foreign currency risk is set out in Table 16.4. Interest rate risk The Trust is exposed to insignificant interest rate risk as it does not have any loans. Additionally, monies on term deposits are with financial institutions with high credit ratings. The Trust’s exposure to interest rate risk is set out in Table 16.4.
Table 16.4: Market risk
Foreign exchange Interest rate risk risk -1% +1% -10% / 10% (100 basis points) (100 basis points) Carrying Profit Equity Profit Equity Profit Equity amount 30 June 2014 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Financial Assets: Cash and cash equivalents 103,150 - - (1,031) (1,031) 1,031 1,031
30 June 2013 Financial Assets: Cash and cash equivalents 113,603 - - (1,136) (1,136) 1,136 1,136
ANNUAL REPORT 2014 37 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
(f) Fair value The Trust considers that the carrying amount of financial assets and financial liabilities recorded in the financial report to be a fair approximation of their fair values, because of the short-term nature of the financial instruments and the expectation that they will be paid in full.
17. CASH FLOW INFORMATION
(a) Reconciliation of cash and cash equivalents
2014 2013 $’000 $’000
Total cash and cash equivalents disclosed in note 5 103,150 113,603 Balance as per cash flow statement 103,150 113,603
(b) Reconciliation of net result for the period to net cash flows from operating activities
2014 2013 $’000 $’000
Net Result for the financial year 3,596 2,952
Add/(less) non-cash movements: Depreciation and amortisation of non-current assets 27,334 22,100 Net gain/(loss) on non-financial assets (5) (53)
Movements in assets and liabilities: (Increase)/decrease in current receivables (616) 1,093 (Increase)/decrease in other current assets (101) (9) (Decrease)/increase in current payables 680 (1,296) (Decrease)/increase in current provisions 119 140 (Decrease)/increase in other current liabilities (16,633) 46,058 (Decrease)/increase in non-current provisions 99 (68) Net cash flows from/(used in) operating activities 14,473 70,918
38 MELBOURNE & OLYMPIC PARKS TRUST NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
18. RESPONSIBLE PERSONS In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994, the following disclosures are made regarding responsible persons for the reporting period.
Names The persons who held the positions of Ministers and Accountable Officers for the Trust are as follows:
Premier The Honourable Denis Napthine, Premier of Victoria
Minister The Honourable Hugh Delahunty, Minister for Sport and Recreation (to 17/03/14) The Honourable Damian Drum, Minister for Sport and Recreation (from 17/03/14)
Trust Mr Russell Caplan (Chairperson) Ms Deborah Beale Mr Stephen Healy (from 19/11/13) Ms Sharelle McMahon (from 13/05/14) Ms Diana Nicholson Mr Geoffrey Pollard, AM (to 25/10/13) Mr Kenneth Roche, AO Mr Raymond Smith Mr David Stobart Mr Scott Tanner
Chief Executive Officer Mr Brian Morris
Remuneration Total remuneration (including incentive payments) received or receivable by the Accountable Officer in connection with the management of the Trust during the reporting period was in the range of $420,000 - $429,999 ($400,000 - $409,999 in 2013-14).
Trustees did not receive any remuneration from the Trust during the financial year. (2012-13: $0).
Related party transactions Commercial dealings were undertaken during the reporting period with Tennis Australia and Tennis Victoria, both of which have representatives holding positions as Trustees on the Melbourne & Olympic Parks Trust.
During 2013-14, the Trust invoiced Tennis Australia $28,432,448 ($27,187,444 in 2012-13) and as at 30 June 2014, Tennis Australia owed the Trust $560,764 ($578,723 at 30 June 2013). Mr Stephen Healy and Mr Scott Tanner hold positions on the Melbourne & Olympic Parks Trust and also hold positions at Tennis Australia (President and Director respectively). Tennis Australia is the promoter of the Australian Open event, runs a court hire business on the Trust’s premises and rents office space from the Trust.
During 2013-14, the Trust invoiced Tennis Victoria $132,343 ($137,836 in 2012-13) and at 30 June 2014, Tennis Victoria owed the Trust $0 ($0 at 30 June 2013). Mr David Stobart holds a position on the Melbourne & Olympic Parks Trust and also holds the position of President of Tennis Victoria. Tennis Victoria rents office space on the Trust’s premises and purchase related services from the Trust.
There are no other receivable amounts or loans outstanding in relation to related parties, as at 30 June 2014.
ANNUAL REPORT 2014 39 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
19. REMUNERATION OF EXECUTIVES AND PAYMENTS TO OTHER PERSONNEL (i.e. contractors with significant management responsibilities)
(a) Remuneration of executives The number of Executive Officers, other than the Accountable Officer, and their total remuneration during the reporting period are shown in the first two columns in the table below in their relevant income bands. The base remuneration of Executive Officers is shown in the third column and a comparative to the prior year in the fourth column. Base remuneration is exclusive of bonus payments, long service leave payments, redundancy payments and retirement benefits.
Income band Total Remuneration Base Remuneration 2014 2013 2014 2013 No. No. No. No. < $99,999 - - 2 1 $100,000 - $109,999 4 4 4 4 $110,000 - $119,999 2 1 2 1 $120,000 - $129,999 3 3 2 3 $130,000 - $139,999 3 2 3 2 $140,000 - $149,999 3 4 3 3 $150,000 - $159,999 3 1 2 1 $180,000 - $189,999 - 1 - 1 $220,000 - $229,999 1 1 1 1 $240,000 - $249,999 1 - 1 - Total numbers 20 17 20 17
$’000 $’000 $’000 $’000 Total remuneration 2,825 2,332 2,687 2,262
(b) Payments to other personnel (i.e. contractors with significant management responsibilities) The following disclosures are made in relation to other personnel of Melbourne & Olympic Parks Trust, i.e. contractors charged with significant management responsibilities. Payments have been made to a contractor with significant management responsibilities, which are disclosed in the $10 000 expense band. This contractor is responsible for planning, directing or controlling, directly or indirectly, the Trust’s activities. The change in the total expenses from 2013 to 2014 was mainly driven by new functions being undertaken by the Trust in the 2014 reporting period.
Expense band Total Expenses (exclusive of GST) 2014 2013 No. No. $100,000 - $109,999 1 0 $110,000 - $119,999 0 1 $240,000 - $249,999 1 0
Total numbers 2 1
$’000 $’000
Total expenses (exclusive of GST) 345 116
40 MELBOURNE & OLYMPIC PARKS TRUST NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
20. REMUNERATION OF AUDITORS Audit fees paid or payable to the Victorian Auditor-General’s Office for the audit of the Trust’s financial report and KPMG for the Trust’s internal audit program: 2014 2013 $’000 $’000
Audit or review of the financial statements 54 53 Internal audit services 105 86 159 139
21. EMPLOYEE SUPERANNUATION Superannuation contributions for the reporting period are included as part of employee benefits and on-costs in the comprehensive operating statement of the Trust. The name and details of the major employee superannuation funds and contributions (above $10,000) made by the Trust during the reporting period are as follows: 2014 2013 $’000 $’000
AustralianSuper 955 911 Navigator Super Solutions 111 106 Hostplus 90 74 VicSuper Pty Ltd 36 37 Retail Employees Superannuation Pty Ltd 30 24 Universal Super Scheme 24 15 Colonial First State First Choice PERSONAL Super 24 22 First State Super Fund 23 6 Care Super 22 14 C+BUS 15 16 AMP Flexible Lifetime Super 12 9 Unisuper Limited 12 7 Others 131 150 TOTAL 1,485 1,391
22. SUBSEQUENT EVENTS The Trust has entered into a new contract with Ticketek for the provision of ticketing services which commences on 1 July 2014 and expires on 30 June 2019.
23. GLOSSARY OF TERMS Cash and cash equivalents Cash and cash equivalents is petty cash, cash floats, deposits in bank accounts, bank overdrafts and short-term deposits (up to 90 days). Comprehensive result Total comprehensive result is the change in equity for the period other than changes arising from transactions with owners. It is the aggregate of net result and other non-owner changes in equity.
Commitments Commitments include those operating, capital and other outsourcing commitments arising from non-cancellable contractual or statutory sources. Delaware North Australia Sinking Fund Refers to an account managed jointly by the Trust and the Trust’s caterer (Delaware North Australia) and is used for the replacement or improvement of catering equipment or infrastructure.
ANNUAL REPORT 2014 41 NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
Employee benefits expense Employee benefits expenses include all costs related to employment including wages and salaries, leave entitlements, redundancy payments, defined benefits superannuation plans, and defined contribution superannuation plans. Financial asset A financial asset is any asset that is: (a) Cash and Cash Equivalents; (b) an equity instrument of another entity; (c) a contractual or statutory right: • to receive cash or another financial asset from another entity; or • to exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable to the entity; or (d) a contract that will or may be settled in the entity’s own equity instruments and is: • a non-derivative for which the entity is or may be obliged to receive a variable number of the entity’s own equity instruments; or • a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own equity instruments. Financial instrument A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets or liabilities that are not contractual (such as statutory receivables or payables that arise as a result of statutory requirements imposed by governments) are not financial instruments. Financial liability A financial liability is any liability that is: (a) A contractual or statutory obligation: (i) To deliver cash or another financial asset to another entity; or (ii) To exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the entity; or (b) A contract that will or may be settled in the entity’s own equity instruments and is: (i) A non-derivative for which the entity is or may be obliged to deliver a variable number of the entity’s own equity instruments; or (ii) A derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own equity instruments. For this purpose the entity’s own equity instruments do not include instruments that are themselves contracts for the future receipt or delivery of the entity’s own equity instruments. Financial statements Depending on the context of the sentence where the term ‘financial statements’ is used, it may include only the main financial statements (i.e. comprehensive operating statement, balance sheet, cash flow statements, and statement of changes in equity); or it may also be used to replace the old term ‘financial report’ under the revised AASB 101 (September 2007), which means it may include the main financial statements and the notes. Grants Grants can be paid as general purpose grants which refer to grants that are not subject to conditions regarding their use. Alternatively, they may be paid as specific purpose grants which are paid for a particular purpose and/or have conditions attached regarding their use. Intangible assets Intangible assets represent identifiable non-monetary assets without physical substance. Interest expense Costs incurred in connection with the borrowing of funds interest expenses include interest on bank overdrafts and short-term and long-term borrowings, amortisation of discounts or premiums relating to borrowings, interest component of finance leases repayments, and the increase in financial liabilities and non-employee provisions due to the unwinding of discounts to reflect the passage of time.
42 MELBOURNE & OLYMPIC PARKS TRUST NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
Interest income Interest income includes interest received on bank term deposits, interest from investments and other interest received. Net acquisition of non-financial assets (from transactions) Purchases (and other acquisitions) of non-financial assets less sales (or disposals) of non-financial assets less depreciation plus changes in inventories and other movements in non-financial assets. It includes only those increases or decreases in non-financial assets resulting from transactions and therefore excludes write-offs, impairment write-downs and revaluations. Net result Net result is a measure of financial performance of the operations for the period. It is the net result of items of income, gains and expenses (including losses) recognised for the period, excluding those that are classified as other non-owner changes in equity. Net result from transactions (net operating balance) Net result from transactions or net operating balance is a key fiscal aggregate and is income from transactions minus expenses from transactions. It is a summary measure of the ongoing sustainability of operations. It excludes gains and losses resulting from changes in price levels and other changes in the volume of assets. It is the component of the change in net worth that is due to transactions. Non-financial assets Non-financial assets are all assets that are not ‘financial assets’. Other economic flows included in net result Other economic flows included in net result are changes in the volume or value of an asset or liability that do not result from transactions. It includes: • gains and losses from disposals, revaluations and impairments of non-financial physical and intangible assets; and • gains and losses arising from revaluation of long service liability. Other economic flows – other comprehensive income Other economic flows – other comprehensive income comprises items (including reclassification adjustments) that are not recognised in net result as required or permitted by other Australian Accounting Standards. The components of other economic flows other comprehensive income include: • changes in physical asset revaluation surplus. Payables Includes short and long term trade debt and accounts payable, grants, taxes and interest payable. Receivables Includes amounts owing from government through appropriation receivable, short and long term trade credit and accounts receivable, accrued investment income, grants, taxes and interest receivable. Sales of goods and services Refers to revenue from direct provision of goods and services and includes fees and charges for services rendered and sales of goods and services. Tennis Australia Special Purpose Account Refers to a separate trust account established by MOPT for tennis-related capital improvements to Melbourne Park. Transactions Transactions are those economic flows that interact between two entities by mutual agreement. Style Conventions Figures in the tables and in the text have been rounded. Discrepancies in tables between totals and sums of components reflect rounding. Percentage variations in all tables are based on the underlying unrounded amounts. The notion used in the tables is as follows: - zero, or rounded to zero (xxx) negative numbers 200x year 200x-0x year period
ANNUAL REPORT 2014 43 CERTIFICATION
In accordance with a resolution of the members of the Melbourne and Olympic Parks Trust and in our opinion: (a) the accompanying financial report of the Trust, comprising operating statement, balance sheet, cash flow statement and statement of changes in equity read in conjunction with the notes thereto present fairly the financial operations of the Trust for the year ended 30 June 2014 and the State of Affairs of the Trust on that date; (b) these accounts have been prepared in accordance with the Financial Management Act 1994, Australian Accounting Standards and other mandatory professional reporting requirements; and (c) at the date of this statement we are not aware of any circumstances which would render any particulars included in the statement to be misleading or inaccurate.
Russell Caplan Member of Responsible Body Chairman Melbourne and Olympic Parks Trust
Brian Morris Accountable Officer Chief Executive Officer Melbourne and Olympic Parks Trust
Travis Mardling Chief Financial Officer Melbourne and Olympic Parks Trust
Melbourne 27 August 2014
44 MELBOURNE & OLYMPIC PARKS TRUST INDEPENDENT AUDIT REPORT
ANNUAL REPORT 2014 45 INDEPENDENT AUDIT REPORT
46 MELBOURNE & OLYMPIC PARKS TRUST ADMINISTRATIVE REPORTING REQUIREMENTS
Competitive Neutrality Policy compliance Disability Act (2006) The Trust regularly reviews whether its activities are subject to M&OP is committed to providing equitable and dignified access the requirements of the National Competition Policy, including to goods, services and premises used by the public. The $366 compliance with the requirements of the policy statement million redevelopment of Melbourne Park has included extensive ‘Competitive Neutrality Policy Victoria’, and takes necessary universal design principles. This proactive work ensures the action to implement competitive neutrality measures where design of new buildings or upgraded infrastructure are centred required. around improved access for all Victorians. Throughout the course of this financial year, M&OP has prepared a Statement of compliance with the Diversity and Inclusion Plan, setting short, medium and long term goals to improve the guest experience for people with a disability. A Building Act 1993. copy of the plan is available at www.mopt.com.au. The Trust complies with the relevant guidelines, pursuant to Section 220 of the Building Act 1993. Occupational Health and Safety (OH&S) M&OP is committed to providing and maintaining a safe, secure Implementation of the Victorian Industry and healthy workplace for all its employees, business partners, Participation Policy contractors and visitors. In October 2003, the Victorian Parliament passed the Victorian This year has been a busy but successful year, with M&OP being Industry Participation Policy Act 2003 which required public re-certified for its AS4801 accreditation for Safety Management bodies and departments to report on the implementation of Systems. This achievement is underpinned by M&OP’s the Victorian Industry Participation Policy (VIPP). The Trust is commitment to continuous improvement in work practices, required to apply the VIPP where Trust funding exceeds $3 million increasing reporting culture while lowering injury severity and in metropolitan Melbourne and $1 million in regional Victoria. significantly reducing WorkCover Claims and lost days due to work related injury. There were no projects undertaken by the Trust in 2013/14 to which the VIPP applied. The importance of Toolbox meetings continues to be reinforced with 161 meetings held across the precinct during the financial year. In addition, 444 workplace inspections were carried out Financial and other information retained which ensures a proactive approach to safety is adopted. Key by the accountable officer achievements for the year include a 46% improvement in the hours worked per lost time injury incurred (2014: 84,886 per Relevant information detailed in Financial Reporting Direction LTI, 2013: 57,805 per LTI). There was a 48% reduction in lost time (FRD) 22D ‘Standard Disclosures in the Report of Operations’ days due to work related injury or illness (2014: 22 lost days, under the Financial Management Act 1994 Section 3 is retained 2013: 42 lost days) by the Trust’s Accountable Officer and is available on request, subject to the Freedom of Information Act 1982. A strong consultative approach to safety is reflected in toolbox meetings, workplace inspections, audits, training, hazard reporting and incident investigation. An engaged OHS Committee Protected Disclosure Act 2012 have also helped us produce positive OH&S outcomes this year. Melbourne & Olympic Parks (M&OP) is committed to the aims A full copy of the Trust’s OHS policy is available on M&OP’s and objectives of the Protected Disclosure Act. It recognises the website: www.mopt.com.au. value of transparency and accountability in its administrative and management practices, and supports the making of disclosures that reveal improper conduct. It does not tolerate improper conduct by the organisation, its employees, officers or members, nor the taking of detrimental action in reprisal against those who come forward to disclose such conduct. According to the Independent Broad-based Anti-corruption Commission (“IBAC”), M&OP is not permitted to receive disclosures made under the Act. Therefore, if you wish to make a disclosure about M&OP, its officers, members or employees, you will need to make that disclosure directly to the IBAC. If M&OP believes a disclosure may be a protected disclosure made in accordance with the Act, it will ask you to make that disclosure to the IBAC. The IBAC will deal with the disclosure. Procedures in relation to the Protected Disclosure Act 2012 are available on the M&OP website.
ANNUAL REPORT 2014 47 ADMINISTRATIVE REPORTING REQUIREMENTS
Statement of Workforce Data Melbourne and Olympic Park Trust is committed to two codes Melbourne and Olympic Parks Trust employed 100 full time and issued by the Public Sector Standards Commissioner (PSSC), part time staff as at 30 June 2014 (2013:106). The number of being the Director Codes of Conduct and Guidance Notes and the Full Time Equivalent (FTE) staff at 30 June 2014 was 96 (2013: Code of Conduct of Victorian Public Sector employees. 101). The number of fixed term and casual employees at 30 June 2014 was 904 (2013:1,015) and a large number of contractors Enterprise Based Agreements are in place and the Trust provided by our key partners also contribute to M&OP’s continues its ongoing commitment to the PSSC standards workforce (ACG, Capricorn Stages and Rigging, Delaware North on equal opportunity, fair and reasonable treatment, merit in Companies, Michael O’Brien Catering and Ticketek). employment and reasonable avenues of redress. The breakdown of staff is as follows:
Fixed Term Employees Full time Part time FTE & Casual (Headcount) (Headcount) (Headcount) Employees June 2014 100 84 16 96 904 June 2013 106 87 19 101 1,015
June 2014 June 2013
Fixed Term Fixed Term Employee Employees FTE & Casual FTE & Casual (Headcount) (Headcount) Employees Employees Accountable Officer 1 1 1 1 1 1 Executive Officers 5 5 4 6 6 5 Administration Staff 94 90 899 99 94 1,009 Males 56 55 457 60 59 511 Females 44 41 447 46 42 504
Freedom of information The Freedom of Information Act 1982 allows the public a right of access to documents held by Melbourne and Olympic Parks Trust. For the 12 months ending June 2014, the Trust received no new FOI requests. The Chief Financial Officer is the contact officer in relation to all Freedom of Information requests. Access to documents may be obtained through written request to the Chief Financial Officer, addressed as follows: Freedom of Information Melbourne and Olympic Parks Trust GPO Box 4611, Melbourne VIC 3001 Requests can also be lodged via email to [email protected]. All requests must be accompanied by the application fee ($26.50 from 1 July 2014 but may be waived in certain circumstances) and must provide such information concerning the document as is reasonably necessary to enable M&OP to identify the document. New access charges regulations were made effective by the Governor in Council from 28 June 2014. These charges may also apply once documents have been processed and a decision on access is made; for example photocopying and search and retrieval charges.
48 MELBOURNE & OLYMPIC PARKS TRUST ADMINISTRATIVE REPORTING REQUIREMENTS
Consultants
Details of consultancies over $10,000 Consultant Purpose of consultancy Start date End date Total expenditure Future 2013/14 commitments (excluding GST) Kramenna Advice in relation to records management July 2013 Nov 2013 $25,200 Nil FMX Solutions Advice in relation to asset life cycles and Aug 2013 Oct 2013 $20,150 Nil condition Details of consultancies less than $10,000 Number: 1 Total Amount: $10,000
Gosch’s Paddock We are pleased to report that Gosch’s Paddock remained open at all times throughout the year.
Risk Attestation Statement I, Chair of the Trust, certify that the Melbourne and Olympic Parks Trust has risk management processes in place consistent with the Australian/New Zealand Risk Management Standard (AS/NZS ISO 31000:2009) and an internatl control system is in place that enables the executive to understand, manage and satisfactorily control risk exposures. The Trust verifies this assurance and that the risk profile of the Melbourne and Olympic Parks Trust has been critically reviewed within the last 12 months.
Russell Caplan Chairman Melbourne and Olympic Parks Trust
Insurance Attestation Statement I, Chair of the Trust, certify that the Melbourne and Olympic Parks Trust has complied with Ministerial Direction 4.5.5.1 – Insurance.
Russell Caplan Chairman Melbourne and Olympic Parks Trust
ANNUAL REPORT 2014 49 DISCLOSURE INDEX
The Annual Report of Melbourne & Olympic Parks Trust is prepared in accordance with all Victorian Legislation. This index has been prepared to facilitate identification of compliance with statutory disclosure requirements.
Ministerial Directions
Charter and Purpose FRD 22D Manner of establishment and the relevant Minister 4 FRD 22D Objectives, functions, powers and duties 4 FRD 22D Nature and range of services provided 4
Management and structure FRD 22D Organisational Structure 5
Financial and other information FRD 10 Disclosure index 50 FRD 15B Executive officer disclosures 40 FRD 22D Application and operation of Freedom of Information Act 1982 48 FRD 22D Application and operation of the Protected Disclosure Act 2012 47 FRD 22D Compliance with building and maintenance provision of Building Act 1993 47 FRD 22D Details of consultancies over $10,000 49 FRD 22D Details of consultancies under $10,000 49 FRD 22D Major changes or factors affecting performance 12 FRD 22D Occupational Health and Safety 47 SD 4.5.5 Risk Management Compliance 49 FRD 22D Statement of availability of other information 47 FRD 22D Statement on Competitive Neutrality Policy 47 FRD 22D Summary of financial results for the year 12 FRD 22D Summary of major activities 9-10 FRD 22D Subsequent events N/A FRD 25A Victorian Industry Participation Policy disclosures 47 FRD 29 Statement on Workforce Data 48
Financial Statements required under Part 7 of the FMA SD 4.2 (a) Financial Statements 13-46 SD 4.2 (b) Balance Sheet 15 SD 4.2 (b) Cash flow Statement 17 SD 4.2 (b) Comprehensive Operating Statement 14 SD 4.2 (b) Statement of Changes in Equity 19 SD 4.2 (c) Accountable officer’s declaration 44 SD 4.2 (c) Compliance with Australian accounting standards and other authoritative 18 pronouncement SD 4.2 (c) Compliance with Ministerial Directions 44 SD 4.2 (d) Rounding of amounts 43
Other disclosures in notes to the financial statements FRD 9A Departmental disclosure of administered assets and liabilities N/A FRD 11 Disclosure of ex-gratia payments N/A FRD 13 Disclosure of parliamentary appropriations N/A FRD 21B Responsible person and executive officer disclosures 39, 40
Legislation Audit Act 1994 Melbourne and Olympic Parks Act 1985 (amended) Building Act 1993 Occupational Health and Safety Act 2004 Crown Land (Reserves) Act 1978 Protected Disclosure Act 2012 Disability Act 2006 Public Administration Act 2004 Financial Management Act 1994 Victorian Industry Participation Policy Act 2003 Freedom of Information Act 1982 Victorian Managed Insurance Authority Act 1996
50 MELBOURNE & OLYMPIC PARKS TRUST This report has been printed on 100% post consumer recycled stock. © State of Victoria, Melbourne & Olympic Parks Trust 2014. This publication is copyright. No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968.