annual and financial report 2012-13 · 2013. 12. 17. · consolidated balance sheet as at 30 june...

Annual and Financial Report 2012-13

Queensland Rail FY2012/13 Annual and Financial Report

Welcome to the Queensland Rail Annual and Financial Report for the financial year

(FY) 2012/13. This report is broken up into four sections beginning with general

company information, followed by a review based on Queensland Rail’s strategic pillars

of Safety, Customer, People, Commercial and Community. The organisation’s

Governance and Statement of Corporate Intent (SCI) is detailed in the third section

moving through to the Financial Report FY2012/13.

This report is also available, along with other useful resources, via the

Queensland Rail website: queenslandrail.com.au.

For further information on Queensland Rail:

Phone: 13 16 17

Mail: GPO Box 1429, Brisbane, Queensland, 4001

Registered Office Queensland Rail, Level 14

Rail Centre 1, 305 Edward Street

Brisbane, Queensland, 4000

Queensland Rail ABN 68 598 268 528

Queensland Rail Limited ABN 71 132 181 090


Copyright

© Queensland Rail Limited 2013.

Disclaimer While all care has been taken in preparing this publication, Queensland Rail accepts no responsibility for decisions or actions taken as a result of any data, information, statement or advice, expressed, implied or contained in this publication. Queensland Rail is committed to minimising our impact on the environment by printing a limited numbers of copies of this report. Electronic versions of this document are available from our website at queenslandrail.com.au. To request a copy of our report, please contact our Manager of External Communications.

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ABN 68 598 268 528 queenslandrail.com.au

Level 14, Rail Centre 1 305 Edward Street Brisbane Qld 4000 The Honourable Scott Emerson MP Minister for Transport and Main Roads Member for Indooroopilly Level 15, Capital Hill Building 85 George Street Brisbane Qld 4000 The Honourable Tim Nicholls MP Treasurer and Minister for Trade Member for Clayfield Level 9, Executive Building 100 George Street Brisbane Qld 4000 Dear Minister/Treasurer

FY2012/13 Annual and Financial Report for Queensland Rail

I am pleased to present the FY2012/13 Annual and Financial Report for Queensland Rail. I certify that this Annual Report complies with: • the prescribed requirements of the Financial Accountability Act 2009 and the Financial and Performance

Management Standard 2009 • the detailed requirements set out in the Annual report requirements for Queensland Government agencies • timing consistent with the extension granted by the responsible Ministers to allow the review of accounting

treatment to be concluded. A checklist outlining the annual reporting requirements can be found at pages 221-223 in the FY2012/13 Annual and Financial Report for Queensland Rail. Yours sincerely

Michael Klug Chairman

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http://www.queenslandrail.com.au/


Contents Queensland Rail Annual Report FY2012/13

About Us 6

Financial Summary 8

Summary of Non-Financial Measures 10

Chairman’s Outlook 12

Chief Executive Officer’s (CEO) Report 14

Delivering Value 17

Safety 21

Customer 26

People 32

Commercial 35

Community 40

Governance Structure 46

Board 47

Leadership Team 51

Corporate Governance 54

Summary of the FY2012/13 Statement of Corporate Intent 69

Corporate Entertainment and Hospitality 71

Financial Report for Queensland Rail 72

Financial Report for Queensland Rail Limited 141

Compliance Checklist 221

Glossary 224


About Us Queensland Rail has a proud history of contributing to Queensland’s economic, social

and regional development. Throughout our 148 year history, our organisation has

adapted to meet the changing needs of the growing State of Queensland.

On 3 May 2013, the organisation

evolved again when the Queensland

Government passed a bill

transferring it from one of

Queensland’s largest Government

Owned Corporations to a Statutory

Authority. This change of status has

sharpened Queensland Rail’s focus

to solely delivering passenger

services, train operations and

network management. As

Queensland Rail, we remain

committed to building a better

passenger business, improving

frontline services and contributing

to Queensland’s growth and

development, as we have done for

the last 148 years.

As an integrated rail operator,

Queensland Rail operates the rail

network along with a fleet of trains

that provide vital public passenger

transport in South East Queensland

Our long distance trains travel

between Brisbane and Cairns,

Rockhampton, Longreach and

Charleville and Townsville to Mount

Isa.

Queensland Rail’s network consists

of 6754 kilometres of track,

including the Mount Isa, North

Coast, Western, West Moreton,

South Western and Central Western

lines. This critical infrastructure

gives our freight customers from

the agricultural, mining,

manufacturing, retail and tourism

industries of Queensland access to

supplies and key markets.

The four core functions in

Queensland Rail - Network, Rail

Operations, Access and Business

Strategy and Customer Service - are

supported by the enabling functions

focused on specialist services,

governance and enterprise

frameworks and systems. We offer

services and products that support

Queensland’s four pillar economy

built on agriculture, tourism,

resources and construction.

What Queensland Rail does and how

we do it is underpinned by five key

areas - Safety, Customer, People,

Commercial and Community.

Through day-to-day business and

long-term strategic planning

activities, Queensland Rail is

focused on improving its three main

services:

• City network

• Regional Access

• Long Distance Commuter and Tourist.

City Network The City network is an integrated

passenger and rail access service

that extends from the centre of

Brisbane, south to Beenleigh and

Varsity Lakes on the Gold Coast,

north to Ferny Grove, Shorncliffe,

Doomben, Caboolture and Gympie,

east to Cleveland and west to

Richlands, Ipswich and Rosewood,

and soon to Springfield.

Passenger services are provided

through the City network and are

integral to the daily life of our

customers, whether students,

workers, tourists or residents,

moving between suburbs and cities.

Aside from the rapid expansion in

South East Queensland’s

population, commuter and long

distance passenger trains compete

with freight operators for access to

paths on the network. Queensland

Rail is working with the Queensland

Government to tackle the capacity

challenges through a long term rail

network strategy for growth.

We are continuing to implement

key initiatives to improve reliability

and frequency on the City network,

such as Active Platform

Management, improved terminating

train procedures and availability of

network response teams during

peak periods.

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A key challenge we are faced with

is improving patronage growth. We

are focused on initiatives to

enhance patronage growth such as

the provision of additional services

during peak periods and improving

the on-time running of our trains.

We have also made enhancements

to our station facilities, improved

the cleanliness and maintenance of

our trains and we are continuing to

improve the quality of service

information for our customers.

Regional Access Agreements Regional access agreements include

the design, delivery and

management of network paths and

rail assets across Queensland.

These agreements contributed $218

million in revenue to Queensland

Rail in FY2012/13. Approximately

28 million tonnes of freight is

transported on our network each

year.

With a focus on improving supply

chain solutions, developing

partnerships and creating new

business opportunities, we are

working with supply chain partners

to optimise revenue and contribute

to Queensland’s economic growth.

Our West Moreton supply chain is

being reinvented with a focus on

moving primary producers back to

rail.

We are also developing network

plans to meet customer growth and

build seamless infrastructure supply

chain outcomes along the Mount Isa

Corridor with the Port of

Townsville.

By fostering a disciplined safety

and compliance culture, we will

keep our people, customers and

property safe as we continue to

meet the needs of our customers as

well as freight, travel and tourist

rail operators.

Long Distance Commuter and Tourist Services

The long distance commuter and

tourist service integrates travel and

regional accessibility for

commuters and tourists, with a

comfortable rail experience across

the state. This includes services

along the north coast, services

connecting the western

communities, along with the

Kuranda Scenic Railway and

Gulflander services.

Customers of the Queensland Rail

Travel network are provided with a

unique rail travel experience in

comfort with world-class customer

service. Improvements to the

Queensland Rail Travel network

support growth in Queensland

tourism as well as commerce and

regional development.

We also own and operate specialist

travel centres in key regional hubs

offering complete holiday packages

to complement our customers’ rail

journey. One key strategy for

Queensland Rail Travel is to open

new market segments. The new

Cairns Tilt Train will help deliver on

this strategy by providing a new

level of train travel in Queensland.

The business is also working to

deliver online reservation system

improvements across the product

range and a revised timetable, in

order to best meet our customers’

needs.

Queensland Rail Travel provides

long distance services throughout

regional Queensland. In FY2012/13,

more than 750,000 passengers

travelled with Queensland Rail

along the Queensland coast, west

to Charleville, Longreach and

Mount Isa, as well as along the

Kuranda Scenic Railway.

These services continue to provide

a safe and reliable transport option

for both travelling Queenslanders

and tourists visiting regions

throughout the state. We are also

working closely with regional areas

throughout Queensland to promote

tourism growth.

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Financial summary

FY2012/13

($M)

FY2011/12

($M)

Consolidated income statement for the year ended 30 June 2013

The Queensland Rail group’s EBITDA increased by $17.2 million to $708.5 million. This increase was primarily due to a

reduction in consumable spend across the group. This reduction was due to the group’s focus on cost control through

efficiency measures that resulted in a 2.6% decrease in operating expenses.

A dividend of $115.8 million was declared in respect of the year ended 30 June 2013. This dividend will be paid during

FY2013/14.

FY2012/13

Actual

FY2012/13

Target

Financial performance measures compared to the Statement of Corporate Intent

Revenue 1,916.4 1,931.9

Operating Expenses (1,207.9) (1,240.6)

Earnings Before Interest, Tax, Depreciation and Amortisation 708.5 691.3

Depreciation and Amortisation Expense (298.2) (296.5)

Earnings Before Interest and Tax 410.3 394.8

Net Finance Costs (209.5) (208.8)

Income Tax Expense (56.0) (57.7)

Net Profit 144.8 128.3

Earnings Before Interest and Tax ($M) 410.3 453.0

Net Profit After Tax ($M) 144.8 168.5

Return on Operating Assets (%) 6.4 7.2

Return on Equity (%) 5.3 6.1

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FY2012/13

($M)

2011/12

($M)

Consolidated balance sheet as at 30 June 2013

The group’s non-current assets increased by $143 million to $6,419.7 million as a result of Queensland Rail’s significant

capital expenditure program.

Total equity for the group increased by 1.1% to $2,768.0 million as a result of the $144.8 million profit for the year. This was

offset by the declared dividend of $115.8 million.

FY2012/13 ($M)

2011/12

($M)

Consolidated cash flows for the year ended 30 June 2013

Cash flow from operating activities decreased significantly in FY2012/13 due to the previous year being extraordinarily high

in terms of customer payments, with approximately $50 million in outstanding debt paid in full. When comparing FY2012/13

with FY2011/12, there has been an increase in $20 million in customer payments.

During FY2012/13, the group invested $491.7 million in capital expenditure across Queensland Rail operations. The most

significant investments were made in passenger network infrastructure and rollingstock as part of the South East Queensland

Infrastructure Plan and Program.

Borrowings increased by $99.8 million during FY2012/13. The group’s net position increased by $181.7 million resulting in an

increase in the gearing ratio from 52.2% to 53.4%.

Current Assets 527.1 569.9

Non-current Assets 6,419.7 6,276.7

Total Assets 6,946.8 6,846.6

Current Liabilities 685.0 626.5

Non-current Liabilities 3,493.8 3,482.4

Total Liabilities 4,178.8 4,108.9

Net Assets 2768.0 2,737.7

Contributed Equity 2,602.7 2,602.6

Retained Earnings 165.0 136.1

Reserves 0.3 (1.0)

Total Equity 2768.0 2,737.7

Net cash inflow from operating activities 422.2 556.1

Net cash outflow from investing activities (482.2) (558.8)

Net cash outflow from financing activities (2.8) (161.6)

Net increase in cash and cash equivalents (62.8) 158.9

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Summary of non-financial measures

FY2012/13

Actual

FY2012/13 SCI

Target

Efficiency

Growth

On-time running, customer satisfaction, reliability and frequency of service

Safety improvement, employee engagement and environmental management

1 Although the SPAD rate is unfavourable against target, results are positive when benchmarked against other Australian rail operators. Analysis is being undertaken to determine SPAD causal factors, with several initiatives under implementation. 2 YTD statistics were unfavourable due to the unusually high number of incidents at Logan stations during December 2012. 3 Although results were above target, the number of injuries steadily declined during FY2012/13. Slips, trips and falls account for the majority of incidents. Strategies are in place to focus on mitigation of this injury type.

On-time running – City network (combined peaks) % 96.30 94.53

On-time running – City network (24/7) % 95.04 94.17

On-time running – Travel network on-time departure % 92.88 70.00

On-time running – Travel network on-time arrival % 64.54 60.00

Below Rail Delays per 100 train kilometres – SEQ network 0.93 0.77

Below Rail Delays per 100 train kilometres – Regional network 3.52 3.88

City network rollingstock utilisation % 87.34 90.00

24/7 reliability – City network % 99.86 99.87

Network Gross Tonne Kilometres (billions) 23.91 24.37

Customer satisfaction – City network 72 71

Customer satisfaction – Travel network 82 81

Signals passed at danger (per million train kilometres)1 2.80 1.95

Derailments (per million train kilometres) 0.13 0.11

Lost time injury frequency rate (LTIFR) 6.09 4.25

Medical treatment injury frequency rate 7.61 8.15

Customer assaults per million passenger journeys – City network2 6.05 5.57

Customer injuries per million passenger journeys – Queensland Rail3 17.22 15.88

Environmental Protection Act 1994 enforceable breaches 0 0

Patronage Growth % - City network -4.49 -0.52

Consumable cost reduction ($ million) 66.27 42.60

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1team values and behaviours Queensland Rail’s Values and Behaviours define how we

collaborate and work together. We define values in

Queensland Rail as the core benefits that lie at the heart

of our organisation and direct the way in which our

people behave. Behaviours are the way we see values in

action. They are tangible, observable and something to

which everyone can relate.

These values are at the heart of everything we do and

they:

• form the framework that guides all of our decisions

• define our culture and are visible through our

behaviour

• are central to effective leadership and good

management

• enable our team to work together positively and

towards shared goals

• underpin our future success.

Queensland Rail

Be one, proud, focused.

We work together to achieve our objectives and do

what we say we are going to do.

reat each other with respect

Be open, honest, supportive.

We all have a voice and a part to play by sharing

information, respecting, supporting and trusting

each other.

njoy what we do

Be positive, involved, enthusiastic.

We work together to bring humour and fun to each

day and enjoy what we do.

ct safely

Be aware, prepared, accountable.

We look out for each other, our customers and

ourselves so that nobody gets hurt.

ake a difference

Be innovative, adaptable, resourceful.

We encourage new ideas and fresh ways of

thinking. We make it simple and we treat every

situation as a learning opportunity.

team

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Chairman and Deputy Chairman’s Outlook

The Chairman, Michael Klug, is

pleased to jointly provide this

Outlook with Deputy Chairman,

Geoff Harley. The Board welcomed

the appointment of Michael Klug as

Chairman on 1 October 2013.

The last 12 months have been

punctuated by important changes

in our external environment and

significant internal reforms.

While changes of this magnitude

can create challenges for the

organisation and its people, they

also present an opportunity for

Queensland Rail to reinvent itself

and deliver improved performance

across all aspects of the business.

During FY2012/13, Queensland Rail

continued its reform journey and

focused on getting “back to

basics”. In doing so, we

demonstrated an ability to

consistently perform well in many

different areas. We have the best

Australian city on-time running

results for our services in South-

East Queensland. On-time arrivals

and departures on our long distance

travel services have improved. We

have enhanced rollingstock

availability and our network is

more reliable than ever. Our

customer satisfaction remains at all

time high levels and we continue to

focus on safety and security

initiatives to reduce injuries to our

people and customers. We have

done this while progressing the

ongoing organisational reform that

has resulted in a significant

reduction of the non-operational

workforce and we have saved more

than $66 million in consumable

expenditure.

Despite these solid results, there is

still room for improvement in many

areas of the business. Importantly,

the Queensland Commission of

Audit Report made

recommendations that affect

Queensland Rail. In particular, the

report positions Queensland Rail to

operate under contestable service

delivery arrangements in the

future.

Another change announced was the

institutional restructure

transferring Queensland Rail from a

Government Owned Corporation to

a Statutory Authority. While this

does not affect our business

operations or key priorities, it does

represent an important step in our

reform journey.

Based on strategic decisions made

during the last two years,

Queensland Rail continued

throughout FY2012/13 to transform

the business into a truly efficient,

effective and integrated railway

service. This has placed us in a

strong position to respond to the

Queensland Commission of Audit

Report.

The year ahead will be a year of

continuing transformation for

Queensland Rail as we move to a

more competitive business model

focused on maximising value for

money, embracing competition and

benchmarking our performance

against best practice. As we

prepare for contestability,

Queensland Rail must focus on

providing smarter, more tailored

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services to our customers while

maintaining improvements in safety

and value for money.

In FY2013/14, our focus will be on

our commitment to:

• driving organisational

performance (specifically

operational, financial and

customer)

• ensuring value for money and

affordability

• facilitating patronage and

network tonnage growth

• ensuring safety and security

• enhancing service delivery.

Central to our reform and

movement to a contestable

business model is our Efficiency

Improvement Program, which aims

to identify and realise significant

savings in labour and non-labour

costs throughout our business. This

program will enter stage two during

FY2013/14 and will focus on

delivering further labour reform,

cost reductions and progressing

industry partnering opportunities.

I would like to take this opportunity

to congratulate and welcome the

new members of the Queensland

Rail Board appointed in October

2013, the Hon. John Mickel and

Glenn Poole.

During FY2012/13, we also

welcomed new directors, David

George and Wendy McMillan. These

appointments allow a wealth of

experience and skills to guide

Queensland Rail through this

transformation.

Along with fellow directors, Dawson

Petie, Merren McArthur and Julie-

Anne Schafer, the Board has been

committed to driving performance

improvements and cultural change

across our business during

FY2012/13.

I also wish to recognise my

predecessor, Glen Dawe, for his

valuable operational, business and

strategic contribution to

Queensland Rail during this period

of change and would also like to

pay tribute to outgoing directors

Maureen Hayes, Denise McMillan-

Hall, Dawson Petie, Merren

McArthur, Julie-Anne Schafer and

Dr Leo Keliher, who made

significant contributions to the

organisation during their time on

the Queensland Rail Board.

On behalf of the fellow directors, I

would also like to acknowledge

Queensland Rail’s management

team, led by former Acting Chief

Executive Officer Jim Benstead.

Jim and his team have

demonstrated leadership in taking

the organisation forward during a

period of transition. The leadership

team has my full confidence as it

continues to drive the reform

agenda.

This is an exciting time for our

organisation, but with it comes the

challenge of reform. We are

committed to delivering reliable

and affordable rail services and

positioning rail as the centrepiece

of public transport in Queensland. I

am confident we have the right

people to deliver our ambitious

program and achieve our potential

as a world-class railway operator.

In becoming a performance based

premier rail operator, we need to

shine in all aspects of our business

and deliver on our business

objectives. This will ensure

superior service for our customers

and contribute to Queensland’s

economic growth and development.

That’s the challenge and our

opportunity for the years ahead.

Finally, I would like to sincerely

thank Queensland Rail employees

for their dedication, hard work and

enthusiasm. It has been a

challenging year for our staff, but I

am proud of their unwavering

commitment to the organisation

and its customers. Our people are

our greatest asset and the key to

our success in the future.

The Queensland Rail Board

understands the future is now and

will ensure our performance counts.

Michael Klug Chairman

Geoff Harley Deputy Chairman

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CEO’s Report

The past financial year was truly a

year of challenges, opportunities

and achievements for Queensland

Rail. It was also a year that

provided clarity for the

organisation, confirming that our

strategic direction is aligned with

the Government’s vision for

Queensland.

We have been driving performance,

efficiency and productivity

improvements throughout

Queensland Rail for the past two

years. During FY2012/13, we

stepped up the reforms and

produced vastly improved

performance, along with a leaner

workforce, a significant reduction

in spending and efficiency programs

that have reshaped the business.

The recommendations of the

Queensland Commission of Audit

Report and the Government’s

response confirmed the direction

we have been taking and have

given us greater impetus to reach

and exceed our operational and

financial performance goals. We

have implemented all Network SEQ

Audit recommendations.

The Government has now set out its

vision for an effective, efficient

and affordable rail solution for all

Queenslanders. Queensland Rail

shares that vision and is preparing

to demonstrate its expertise and

capability to deliver quality

services as efficiently as any

provider in the market.

During FY2012/13, we were focused

on our commitment to:

• organisational performance (specifically operational, financial and customer)

• affordability

• patronage growth

• safety and security.

The FY2012/13 Queensland Rail

Statement of Corporate Intent

outlined the following business

objectives:

• improving operational efficiency

and reducing our cost base to

relieve funding burdens and

make rail travel more

affordable for our passengers

• getting “back to basics” to improve the safety and reliability of our services, remedy causes of disruptions, improve confidence in rail travel and increase patronage growth

• partnering with stakeholders to improve project delivery and capital performance

• improving safety, engaging our employees and managing the environment in which we operate.

In addition to these objectives, we

reported against five strategic

pillars – safety performance,

customer service, commercial

capability, people development and

the relationship with the

community in which we operate.

Our key performance indicators for

FY2012/13 place us at the forefront

of rail passenger transport in

Australia.

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Contestability is the inevitable and

ultimate test of efficiency and

operational performance and we

will continue to drive improvement

and accelerate our reforms to

ensure we can compete with the

best rail operators in the world.

Safety

Safety is the cornerstone of

everything we do. Our focus on

safety, looking out for our people,

our customers and the community,

has ensured we are tracking well in

terms of our lead safety indicators

(medically treated injuries).

However, the harsh reality is that

too many of our people are still

being injured.

We will continue to devote all of

our energy to achieving Zero Harm

across the organisation through

implementation of employee safety

initiatives such as “Work to Live”.

We have seen positive results in

reducing crime across our network

and we acknowledge our strong

partnership with the Queensland

Police Service for enhancing

security on our services and within

the rail corridor.

We continue to invest heavily in

information and education

campaigns to raise safety

awareness around our rail network.

In FY2012/13, there was a 35 per

cent reduction in near misses at

level crossings state-wide

coinciding with an extensive,

multimedia campaign on level

crossing safety called “What Would

You Miss?”. In January 2013, we

launched our “Coffins” campaign in

response to the more than 4,000

reported incidents of trespass on

our rail corridor during the previous

year. The campaign provides a

dramatic reminder of the

potentially deadly consequences of

trespassing on the rail corridor.

Customer In FY2012/13, we continued to

deliver high levels of customer

service by focusing on reliability,

efficiency, on-time running and

customer comfort. The measure of

our success is the fact that

customer satisfaction levels for

both our City and Travel networks

are at record highs.

One of the most pleasing and

significant improvements

throughout the year was our

network reliability. We finished the

year achieving an on-time running

result of 96.30 per cent for our 240

City network morning and

afternoon peak services. Given that

we have the most stringent on-time

running targets of any rail operator

in Australia, I am extremely proud

of this result.

We also improved frequency of

services on a number of lines, with

new peak services for Gold Coast

and Beenleigh Line customers and

the trial of 15-minute off-peak

services for customers on the Ferny

Grove Line. In 2013/14, we will

introduce further improvements to

services.

Our Travel network also reached

milestones with The Sunlander

celebrating 60 years of carrying

Queensland families and tourists

along the coast. More than three

million people have travelled on

the iconic train service since it was

launched in June 1953. After six

decades in operation, The

Sunlander is due to be retired from

service next year and will be

replaced by new and refurbished

high speed tilt trains currently

under construction in Maryborough.

A farewell tour for the Sunlander

has been announced, designed to

drive patronage onto this service

throughout its final year.

People

In order to improve efficiency and

reduce costs, Queensland Rail

reshaped the organisation through

a Voluntary Redundancy scheme

and a significant organisational

restructure that delivered cost

savings, with a reduction in full

time equivalents (FTEs) and

contractors.

I want to acknowledge the staff

members who left the organisation

through the Voluntary Redundancy

program. Some of these employees

had been with us for many years

and I thank each and every one of

them for their important

contributions during their time with

Queensland Rail.

15


Commercial In July 2012, Queensland Rail

commenced its Efficiency

Improvement Program to identify

and realise significant savings

throughout the business. This

program will ultimately improve

our financial and operating

performance and ensure we deliver

value for money services for

Queenslanders. This year alone, we

have achieved savings of $83

million in non-labour expenses.

This program will continue during

FY2013/14 and will focus on further

labour reform, cost reductions and

industry partnering opportunities.

The efficiencies we achieve are

assisting to reduce the government

funding required to deliver our

Transport Service Contracts and

decrease borrowings, which will

ultimately deliver greater returns

to Queenslanders and provide

investment and growth

opportunities.

Community Queensland Rail provides

Queensland communities with vital

public transport and essential

transport infrastructure -

infrastructure that not only

supports the State’s manufacturing,

travel and other export industries,

but also generates wages,

investment and purchasing of goods

and services in regional

communities.

We acknowledge and embrace our

responsibilities to the communities

in which we operate and are

committed to being a good

neighbour. During FY2012/13, we

worked with industry to implement

strategies and undertook steps to

minimise the impact of both noise

and coal dust from the rail

corridor.

Challenges

Queensland Rail operates in a

changing and challenging business

environment and we will continue

to work closely with our partners in

Government to respond to the task

ahead. The challenges are great:

Queensland Rail needs to be ready

to play an even more significant

role in the growth of the State’s

four pillar economy.

We will work with Government to

increase capacity, upgrade our

rollingstock and invest in

maintenance that improves

reliability of trains and tracks,

ensuring customers have access to

a safe and reliable rail network

that meets their current and future

requirements. We will continue to

reduce our cost base to realise

savings in non-business-critical

activities.

I would like to acknowledge

Queensland Rail’s Responsible

Ministers and thank the Deputy

Chairman and Queensland Rail

Board for their steadfast

commitment to the organisation

throughout its journey of significant

reform. I also wish to thank

Queensland Rail employees for

their continued hard work and for

remaining dedicated during this

challenging time.

While the demands in the past

financial year have been

considerable, there is a renewed

vigour across Queensland Rail in

terms of transformation of the

organisation. As we move

confidently towards contestability,

we will maintain momentum. We

will further improve our reliability

and continue to pursue better and

more affordable ways to deliver rail

services. More than ever, we have a

clear picture of our future as a

world-class rail operator.

Glen Dawe Chief Executive Officer

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Delivering Value In 2011, Queensland Rail commenced a journey of continuous improvement to

transform the business and better position it to deliver safe, reliable and value for

money rail transport solutions to its shareholders and customers. The change of

government in March 2012 and subsequent Queensland Commission of Audit Report

provided greater impetus to drive efficiency and reform across the business.

The program of reform has been

designed to be delivered in two

phases, with the first phase

completed at the end of

FY2012/13.

The focus this past financial year

has been to improve efficiency and

effectiveness and ensure

Queensland Rail is appropriately

sized to deliver the best possible

service at the lowest, sustainable

price to customers and the people

of Queensland.

As a result, key initiatives were

introduced based on the four

objectives: affordability, customer

outcome, growth and value.

Affordability Queensland Rail is committed to

reducing the cost of rail to

government and delivering a

contestability framework that

demonstrates value. Initiatives

built around smart, effective and

safe use of resources that delivers

value for money have achieved the

below results.

Consumable and Non-Labour Cost Reduction

A concentrated effort has been made to reduce consumable costs across the organisation. Consumable costs include professional services, advertising, accommodation and travel expenses and these costs are a sub-set of the organisation’s overall non-labour costs.

The consumable cost reduction target of $42.6 million was exceeded two months prior to the end of the financial year, with a total reduction of $66.27 million. This contributed to a reduction of $83 million in total non-labour costs for FY2012/13.

Consumable Cost Reduction

Organisational Restructure

A significant organisational

restructure across the business

commenced in July 2012 to enable

efficiencies and cost savings and to

refocus Queensland Rail’s core

business and enable functions to

concentrate resources in areas that

impact directly on operational

performance.

New Work Practices

Queensland Rail has introduced new work practices, including the use of flexible start and finish work locations within Station Operations. In addition, the business has implemented rostered ordinary hours on weekends and the use of 12-hour rostered ordinary hour shifts within Network SEQ and Regional, where possible.

Customer Outcome We are delivering customer

outcome initiatives focused on

optimising operational

performance to provide safe,

reliable and customer-centric rail

services, which has achieved

positive results.

66.27

0

20

40

60

80

Jul

Aug

Sep Oct

Nov

Dec Jan

Feb

Mar Apr

May Jun

$ M

illion

Actual 12/13 Plan 12/13

17


On-Time Running (OTR) Improvement

An OTR Taskforce was created in August 2012 to drive the development and implementation of initiatives to achieve OTR targets for the City and Travel networks.

The OTR Taskforce is operating

across all areas of Queensland Rail

and is analysing performance as

well as causes of delays,

identifying new initiatives,

implementing them and ensuring

they become business as usual

practices. The taskforce has helped

deliver improved reliability with

Queensland Rail exceeding the City

network OTR target of 94.53 per

cent every month since September

2012.

The overall result of 96.30 per cent

for FY2012/13 was the best result

in 10 years.

OTR City network (Combined Peaks)

Independent Audit – South East Queensland

In April 2012, the Government

commissioned an audit of the

South-East Queensland network,

following a dewirement incident in

February 2012 and a signalling

disruption that occurred in March

2012.

The audit report entitled

Independent Audit into the

reliability of Queensland Rail’s

South-East Queensland network

found no immediate safety issues

that required the attention of the

Rail Safety Regulator or

Queensland Rail. All

recommendations have been

implemented, with a focus on

improving the management of the

network.

Growth Queensland Rail has been working

with stakeholders, rail operators,

end customers (mining companies),

supply chain partners and industry

stakeholders to:

• address capacity issues

• facilitate continued economic

growth

• improve cycle times and on-

time performance

This work includes the following

key initiatives.

Patronage Growth

Queensland Rail is partnering with

TransLink to develop a tactical fare

strategy to drive patronage growth

in the CBD. Patronage numbers

have been impacted by the easing

in economic activities and

subsequent reduction in workforce

numbers as well as the public

transport fare increase that

occurred in January 2013.

96.30

91%92%93%94%95%96%97%98%99%

Jul

Aug

Sep Oct

Nov

Dec Jan

Feb

Mar Apr

May Jun

Actual 12/13 Plan 12/13

18


Regional Freight Growth Strategy

Queensland Rail is working with the

Department of Transport and Main

Roads (DTMR) to develop a


aimed at attracting further

agricultural product railings,

particularly cotton and grain, from

South-West Queensland. This

partnership has resulted in an

announcement by the Queensland

Government on 16 May 2013 for a

$50 million upgrade for the

Toowoomba Range rail

infrastructure, which will remove

25,000 trucks, transporting grain

and cotton, from South-East

Queensland roads each year.

The project scope is proposed to

include the construction of two

one-kilometre rail passing loops at

Harlaxton and Ballard. This project

is expected to take two years to

complete.

South-East Queensland Network Upgrades

In FY2012/13, Queensland Rail

successfully completed the $12

million Keperra to Ferny Grove

Upgrade, which has enabled

increased off-peak services on the

Ferny Grove Line and progressed

the $475 million Richlands to

Springfield Project (Stage Two)

ahead of schedule.

Value

With a proud history of supporting

rural communities, Queensland Rail

remains committed to driving

economic growth by supporting

resources, agriculture, tourism and

construction industries. To achieve

this, Queensland Rail actively

participates in supply chain forums

and works collaboratively with

stakeholders across the network on

a regular basis.

Supply Chain Forums (Mount Isa, West Moreton and North Coast lines)

This year, Queensland Rail has

continued to actively facilitate

regular supply chain forums to

engage with stakeholders, supply

chain partners and customers of

planning activities and

maintenance updates.

Queensland Rail is keen for its

supply chain partners to

understand its business by

providing information on capacity

analysis, train control and planning

to better inform customers on key

business drivers. This improved

understanding and open

communication is creating better

comprehension, improved cohesion

and aligned planning, resulting in

greater efficiencies.

The net outcome is increased

supply chain optimisation and

delivery of ongoing economic

growth for the state.

19


Priorities for the Year Ahead

The second phase of our change

journey will deliver further

performance improvement across

the business. Central to this reform

is the Efficiency Improvement

Program, which will drive

reductions in the cost base and

improvement in productivity. This

program will identify and drive

significant savings through

initiatives such as:

• ongoing workforce reform

• consumable cost reductions

• industry partnering program

• operational improvement program.

A program of capital works will

ensure Queensland Rail is able to

meet the growing need for public

transport in South East and

regional Queensland, as well as the

demands of a growing freight

network. This program includes the

following key capital projects:

• Coomera to Helensvale duplication program

• Sunlander 14 rollingstock upgrade

• Lawnton to Petrie Third track project

• Electric Multiple Unit life extension program

• stabling requirements for the New Generation Rollingstock

• project signalling and other critical infrastructure enhancement.

20


Safety The safety of our people and customers is the number one priority of Queensland Rail.

We are focused on becoming a world-class safety organisation with zero injuries.

The number one priority for

Queensland Rail is ensuring that its

customers, employees and the

broader community who use and

access its network and

infrastructure are able to do so in a

safe way.

This is achieved by eliminating or

minimising safety risks and by

maintaining effective management

and control of the rail

infrastructure, operations and

rollingstock.

The greatest potential safety risks

are train-to-train collisions,

trespass incidents. In these

scenarios, the difference between

a near miss and a fatality can be a

fraction of a second.


continued to dedicate significant

resources to eliminating these risks

from its operations.

SPAD Management

SPADs are a lead indicator for some

of our highest safety risks including

collision and derailment. SPAD

performance is a key safety metric

for Queensland Rail and a positive

long term trend is paramount in

terms of risk management and

public perception. Queensland Rail

implemented a number of SPAD

mitigation strategies during

FY2012/13, including:

• Implementation of the new

SPAD Risk Management

Standard that provides a

framework for improved

selection, training and

management of rail traffic

drivers.

• Quarterly regional SPAD forums

in Townsville and Brisbane

involving third-party operators

on the Queensland Rail

network.

• Hosting of the Rail Co-

Operative Research Centre

“SPAD Future Inquiry” workshop

involving cross industry

representatives.

• Introduction of a new method

of measuring SPAD collision risk

to better understand the

context of each SPAD.

• Improvement to training,

including communicating safety

critical SPAD information,

human error and avoidance

techniques, along with

programs incorporating

simulated SPAD scenarios and

Professional Route

Management.

Travelling Customer Safety Strategy


embarked on various initiatives to

reduce the injuries sustained by

customers. The Travelling

Customer Safety Strategy was

developed to target customer

behaviour in and around stations

and onboard trains. This initiative

is expected to contribute to a

reduction in slip, trip and fall

related injuries, which are the

most common form of incidents

resulting in customer injury on

Queensland Rail property.

Security Program

Queensland Rail has an extensive

program to manage a diverse range

of security risks, from anti-social

behaviour to acts of terrorism.

Working closely with the

Department of Transport and Main

Roads (DTMR), the Queensland

Police Service (QPS), Crime

Stoppers and a number of local

councils is integral to the

program’s success.

21


Response to the Cleveland Collision

Queensland Rail suspended services

on the Cleveland Line on 31

January 2013, after a train failed

to stop at the Cleveland Station

platform and collided with the

end-of-line buffer stop, the

platform and the station building.

A number of people on the train

were treated for minor injuries and

transported to hospital for further

examination.

The Australian Transport Safety

Bureau (ATSB) conducted an

independent investigation into the

collision and concluded that

contamination of the rail surface

most likely contributed to wheel

slide, which caused the collision.

Following the release of the

interim ATSB report, Queensland

Rail immediately formed a working

group to investigate a range of

potential wheel/rail interface

issues, focusing on track

conditions, train crew capabilities

and rollingstock, particularly the

160 and 260 class units. These units

make up a third of the Queensland

Rail fleet.

The primary finding of the working

group required Queensland Rail to

adopt an holistic approach to

minimising the risk of wheel slide,

which includes identifying and

removing contaminants from

affected sections of rail and

engineering solutions for

rollingstock.

The working group recommended a

range of controls and safety

measures, such as retrofitting the

160 and 260 Class fleets with

sanding systems to increase

adhesion at the wheel/rail

interface.

Automatic Train Protection (ATP)

Queensland Rail continued to work

with Government stakeholders

throughout FY2012/13 on the

development of ATP, an advanced

train protection system, for the

South East Queensland

Metropolitan System.

In FY2012/13, the key

achievements were:

• Installing Wi-Fi Internet

technology on 64 trains to allow

security monitoring officers to

watch live streaming of closed-

circuit television (CCTV)

footage. It is anticipated that

remote monitoring capability of

these trains will be achieved in

FY2013/14.

• Working in partnership with

Crime Stoppers to visit 81

stations and educate more than

13,000 customers on how to

report security incidents on the

rail network.

• Enhancing network security by

displaying Crime Stoppers

intelligence notices on

Passenger Information Display

Screens (PIDS). This has led to a

number of railway offenders

being arrested and prosecuted.

• Signing a new Memorandum of

Understanding (MOU) with QPS.

As part of this MOU, QPS

Railway Squad numbers are

expected to increase to 70 by

the end of FY2014/15. The

Robina Police Outpost opened

in April 2012.

22


• Completing a $3.3 million CCTV

camera upgrade across 47

stations, which involved

replacing old video records with

digital technology to increase

recording capacity.

Queensland Rail also implemented

and/or continued the following

security initiatives in FY2012/13:

• Train and station patrols by 61

Transit Officers and

approximately 200 private

security guards.

• Mobile security dog patrol

teams, each team incorporating

a handler and security dog,

patrolling train stations, car

parks and other Queensland

Rail property.

• Guardian Train services

(carrying private security

guards) on 40 per cent of

timetabled services after 7pm

from Sunday to Thursday and

100 per cent of timetabled

services after 7pm on Friday

and Saturday.

• Police outposts at Petrie,

Manly, Beenleigh, Redbank,

Robina and Roma Street

stations.

• Police trains, which involve an

out-of-service unit with police

and Transit Officers onboard

trains responding to issues

across the network.

• An “after dark” security

program at 34 stations involving

a night time staff presence

until the last train on selected

days.

• Regular patrols by mounted

police targeting corridor

security issues.

• Regular joint operations

between Queensland Rail, QPS

and Transit Officers targeting

various offences and locations,

based on intelligence analysis

and operational planning.

• Core zones on most train

platforms (indicated by blue

and white stripes and featuring

enhanced lighting, CCTV

cameras and an emergency help

phone).

• Multiple emergency phones on

all City network services.

• An Electronic Recording

Forensic Unit that undertakes

collection, analysis and

preparation of CCTV footage for

QPS and Queensland Rail to

support investigations.

Level Crossing and Trespass Campaigns

In 2012, Queensland Rail launched

the confronting, state-wide

“Crosses” campaign with the

message: “Don’t gamble with your

life at level crossings”. This

campaign urged pedestrians and

motorists to act safely near trains

and tracks.

In January 2013, the state-wide

“Coffin” campaign was introduced.

This was in response to the more

than 4,000 reported incidents of

trespass on the rail network during

2012. The campaign “Not everyone

makes it across the tracks” has

provided a dramatic reminder of

the potentially fatal consequences

of trespassing on the rail corridor.

Trespassing in the rail corridor and

in stabling yards is the most

frequent type of security incident

on the rail network across the

state.

Level Crossing Innovation

Queensland Rail and DTMR are

working together on a Level

Crossing Innovation Project aimed

at investigating new technology to

make level crossings safer.

The Queensland Government has

provided $2.1 million to fund three

separate trials of technology to

improve level crossing safety.

23


A solar-powered system

incorporating active and passive

sign technology will be trialled in

FY2013/14 near Forest Hill and

Rosewood stations to warn

motorists of approaching trains.

Two different radio break-in

systems will also be trialled. One

system is set to be trialled at Malu

on the Western Line and the other

between Townsville and Charters

Towers on the Mount Isa Line. The

technology has the ability to alert

motorists to the presence of

oncoming trains at level crossings

and reduce risk of level crossing

collision.

Railnet Safety Systems, La Trobe

University and NFA Innovations

were awarded the contracts for

these projects. The contract period

for the trials, including

installation, trial, decommissioning

and reporting is expected to run

until closer to the end of 2014.

The Valet innovation, a wirelessly

controlled rail level crossing

warning system, has also been

trialled at Bemerside near Ingham

on the North Coast Line. The

initiative improves visibility and

provides advanced warning to

prevent a road user actively or

unknowingly circumventing level

crossing control measures. The

trial at Halifax-Bemerside Road at

Bemerside in North Queensland has

recently concluded, with a report

being undertaken on the findings.

Bridge Strike Prevention

Queensland Rail has implemented a

variety of warning systems to alert

drivers to vehicle height

restrictions as they approach a low

level rail bridge.

These systems include:

• advance warning signs as

drivers approach a bridge

• sacrificial beams and

overhanging chimes along

roadways coming up to bridges

• large and highly visible rubber

flap signs over roadways

• hazard stripes and warning

signs on bridges

• laser-activated electronic

warning signs with flashing

lights mounted on bridges.

The location and frequency of

bridge strikes is constantly

monitored by Queensland Rail. Low

level bridges over roadways in

South East Queensland are

currently being prioritised for the

installation of various measures,

taking into consideration such

aspects as the number of bridge

strikes, the potential bridge

damage and the impacts on the

organisation.

Safety Motivated Action Resource Teams (SMARTs)

The SMARTs program encourages

employees to take an active role in

improving safety in their local

workplace. It draws on employees’

knowledge, empowering each

individual to contribute to the

implementation of safety

improvements.

The SMARTs project was

successfully transitioned to

business as usual. At the end of

FY2012/13, there were 81 active

SMARTs in Queensland Rail and 57

SMARTs initiatives approved, which

were directly linked to controlling

risk at worksite level.

24


Centre of Safety Excellence

The Centre of Safety Excellence

addresses key safety and

environmental issues facing the

organisation, its people and

customers. Benefits include the

enhancement of safety culture and

sharing of innovative safety ideas

across the organisation.

The Centre of Safety Excellence

continues to grow in Queensland

Rail, with 9% of employees involved

in Communities of Practice forums.

These forums are used to share and

build knowledge and proactively

solve safety issues.

Rail Rover Prototype

The Rail Rover prototype is an

unmanned inspection vehicle used

when it is not safe for manned

vehicles to complete track

inspections. This includes areas

susceptible to extreme weather

conditions and high risk

environments, such as a bomb

threat situation. An unmanned on-

track inspection vehicle will have a

significant impact in terms of

eliminating the risk of injury.

The first trial of the Rail Rover

prototype was successfully

conducted in June 2013, with two

further trials planned for

FY2013/14.

25


Customer Queensland Rail aims to exceed customer expectations by embedding customer needs

into how we do business and integrating a service culture into all areas of the

organisation.


continued to place a strong focus

on customer service by delivering

initiatives on frequency, reliability,

efficiency, on-time running,

customer comfort, customer

engagement and supply chain

improvements.

One of the greatest challenges

faced in delivering on these

priorities has been to meet the

demand for more passenger

services while also delivering

adequate trains for our freight

customers. Queensland Rail is

currently working with the

Queensland Government to

investigate future options to

expand the network so that

projected growth demands in the

passenger and freight markets can

be met.

City Network Customers

On the City network, Queensland

Rail’s objective is to be South East

Queensland’s first choice in public

transport by providing a reliable,

timely and cost effective transport

solution.

Our City network customers:

• exceed 65,000 passengers on

services arriving at Central

Station between 6am and 6pm

each weekday

• took more than 48.5 million

customer journeys during

FY2012/13

• are more likely to drive or be

driven to the station, compared

to bus passengers who would

generally walk to bus stops

• most frequently use the Gold

Coast, Ipswich and Caboolture

lines, with the Gold Coast Line

having the highest patronage

results during morning peak

services.

Travel Network Customers

On the Travel network, Queensland

Rail is committed to operating

efficient and effective travel and

commuter services in regional

Queensland.

Our Travel network customers:

• prefer travel by train over

other modes because of the

price, convenience and

enjoyment of the rail journey

• visit friends and relatives, take

long break/short break

holidays, travel for business and

commute between regional

centres for appointments,

shopping and education

• originate from Australia, mostly

in Queensland, with the most

frequent international

customers being visitors from

the United Kingdom, other

parts of Europe and New

Zealand

• are typically aged between 35

and 74 years of age, with the

majority of travellers being

over the age of 55 years.

In FY 2012/13, more than 353,000

customers travelled on the Kuranda

Scenic Railway, which is an 11 per

cent improvement on results for

the same period last year.

26


Below Rail (Access) Customers

Customers of Queensland Rail’s

below rail business can generally

be categorised into the following

four main groups:

• Above rail operators – including

Aurizon, Pacific National, Rail

Corp and Cairns Kuranda Steam.

• End users – including Xstrata,

Yancoal, Palmer Nickel

Corporation and BHP Billiton.

• Infrastructure customers –

Queensland Rail works with

infrastructure customers, not

only on access and supply chain

solutions, but also in the

design, development and

installation of adjoining

infrastructure, such as the

current Cloncurry Multi-User

Depot.

• Other stakeholders –

Queensland Rail works to build

close relationships with all

stakeholders in various supply

chains, including ports, industry

bodies, regional councils and

government agencies. This is an

important aspect in reducing

system variability, improving

planning and communication

and increasing supply chain

system reliability.

International Customer Service Standard (ICSS)

Queensland Rail once again

received certification against ICSS

through the annual assessment

process.

The results of an assessment in

November 2012 showed an increase

in our score from 6.08 to 6.68,

which is ranked at the integration

(highest) level of the International

Customer Service Standard. ICSS is

a continuous improvement

framework for benchmarking

standards of customer service

excellence.

The assessment team noted the

following themes:

• the culture of customer service

is well and truly embedded in

the psyche of Queensland Rail

• a focus at all levels of the

business on improving OTR

performance

• a strong focus on process

management

• moves to integrate social media

into the established

communications environment

• a clear focus on the future,

driven by the updated Customer

Charter and the strategic and

operational plans.

On-Time Running (OTR) Taskforce

An OTR Taskforce was created in

August 2012 to drive the

development and implementation

of initiatives to achieve OTR

targets for the City and Travel

networks.

The OTR Taskforce achieved the

following significant results during

FY2012/13:

• ten months’ continuous OTR

results exceeding the

contractual City network target

of 94.53%

• improved positioning of crews

for changeovers, alleviating

congestion at Bowen Hills and

Roma Street stations in peak

periods

• an increased number of on-time

services departing Mayne depot

• improved infrastructure, such

as signalling, to reduce

headway and increase capacity

across the network

• targeted investigations and

programs of works for specific

lines (Caboolture) and events

(February and March 2013

where students are returning to

school and university)

27


• improved platform management

across the City network with

station employees actively

assisting customers on

platforms and working with

Traincrew to ensure services

depart on-time

• implementation of daily Travel

network reviews, which provide

a synopsis of the previous day’s

delays.

New Timetables

One of the key strategies to

manage passenger capacity is the

timetable design process. By

providing a consistent and

customer focused approach to

managing the City network service

timetable, Queensland Rail

commits to improving frequency

and responding to load monitoring

and feedback.

In the past year, the following

timetable changes were

implemented:

• In October 2012, a two-year

trial of 15-minute service

intervals during the off-peak

period was introduced on the

Ferny Grove Line.

• On 29 January 2013, an

additional morning peak service

and an additional evening peak

service were introduced on the

Gold Coast Line. There are now

at least four services each hour

during the majority of the

morning and afternoon peak

period. Beenleigh customers

are also benefiting from an

additional morning and evening

express service.

Station Upgrade Program

More than $45 million was

allocated in the FY2012/13 budget

to upgrade the following stations

on the City network:

In addition, the following minor

improvements at more than 50

stations across the City network

were delivered:

• $1.8 million for new fixed

signage and way-finding

information at five stations

• $7.9 million for new digital

CCTV security equipment at 47

stations

• $2.8 million for new TransLink

station fare gates at four

stations

• $6.9 million for refurbishment

of toilets at Central and Roma

Street stations, as well as

platform resurfacing at Oxley

Station.

Station

Actual Budget ($M)

Completion Date

Narangba 28.8 July 2013

Sandgate 19.93 September 2013

South Brisbane 11.97 October 2013

Eagle Junction 7.68 May 2013

28


Keperra to Ferny Grove Rail Upgrade Project

The Keperra to Ferny Grove Rail

Upgrade Project was completed,

marking the final stage of track

duplication between Bowen Hills

and Ferny Grove.

The $85 million project included

duplicating 2.6 kilometres of new

track between Keperra and Ferny

Grove stations, an upgrade of the

Ferny Grove station, expansion of

the car park, improved road traffic

flow and better interchange

between trains, buses, bicycles and

vehicles.

The project was completed on-

time and on-budget by Queensland

Rail.

Richlands to Springfield Project (Stage 2)

The Richlands to Springfield

Project (Stage 2) commenced in

September 2012 and has delivered

a 9.5 kilometre dual track rail line

from Richlands to Springfield. In

addition to the dual track, the

project delivers:

• two new stations – one at

Springfield near Woodcrest

College and the other at

Springfield Central, near Orion

Shopping Centre, to serve a

rapidly growing community

• two new road underpasses

under the Centenary Highway

from Springfield Station to the

Orion Shopping Centre

• facilities for cyclists

• upgrades to the Centenary

Highway between Springfield

Parkway and Johnson Road

(budgeted separately by DTMR).

The project is also delivering 200

Park’n Ride spaces at Springfield

Station and 500 Park ‘n Ride spaces

at Springfield Central Station, with

construction works due for

completion in March 2014.

This new rail line will help reduce

congestion on the Centenary

Highway, with up to 2,500 cars

taken off roads during morning

peak periods.

More than 3,200 jobs will also be

created throughout the life of this

project.

29


Traveltrain Renewal Program

Queensland Rail is undertaking a

project to deliver a new and

upgraded long distance fleet, with

the impending retirement of

existing rollingstock, which is more

than 40 years old.

The Traveltrain Renewal Program

plans to fulfil future requirements

by providing comfortable, modern

and reliable services for customers.

Approximately $92 million was

allocated in the FY2012/13 budget

to fund part of the Sunlander 14

project, which has already

delivered a new tilt train and will

allow for the refurbishment of the

existing pair of Cairns Tilt Trains.

The new tilt train The Spirit of

Queensland entered service in

October 2013 and includes

premium economy seating with

innovative railbeds and personal in-

seat electronic entertainment

systems to provide a high level of

comfort for customers.

Queensland Rail Supported Projects and Program of Works

Queensland Rail also supports and

contributes to a number of

government-led projects and

program of works, which

incorporates the following

projects.

Moreton Bay Rail Link (MBRL) Project

The MBRL Project involves

constructing a 12.6 kilometre dual

track rail line between Petrie and

Kippa-Ring with new stations at

Kallangur, Murrumba Downs, Mango

Hill, Mango Hill East (near Kinsellas

Road East), Rothwell and Kippa-

Ring. Rail Corridor works will

commence in early 2014, with an

expected completion in late 2016.

Lawnton to Petrie Third Track

The Lawnton to Petrie Third Track

project is part of the broader MBRL

project and delivers a grade

separated interface between the

North Coast main line and the new

MBRL spur line.

New Generation Rollingstock (NGR) Project

The Queensland Government’s NGR

project involves procuring new

trains to replace ageing

rollingstock and add to the existing

City network fleet.

Brisbane Inner Rail Solution

The Queensland Government has

announced the Brisbane Inner rail

Solution, a major program of works

and initiatives to address inner city

network capacity.

The program includes an early

network capacity works program to

deliver value for money, short to

medium term solutions and the

core Cross River Rail project

between Yeerongpilly and Victoria

Park.

30


Improving the Onboard Customer Experience

We are committed to delivering

customer service excellence

through working innovatively to

positively influence the overall

Queensland Rail customer

experience. This includes

implementation of the following

initiatives.

Wi-Fi Internet on Rollingstock

In June 2012, Queensland Rail was

the first operator in Australia to

offer customers free Wi-Fi access

to the Internet while travelling by

installing Wi-Fi on 64 City network

trains.

Quiet Carriages

Queensland Rail was also the first

rail operator to introduce quiet

carriages on every City network

service. Customers travelling in

these carriages are requested to

refrain from loud conversations,

talking on mobile phones and

listening to noisy musical devices.

Almost three in four customers who

are aware of these carriages use

them on some of their journeys.

Etiquette Campaign

This campaign continues to address

the top 15 issues identified by

customers as anti-social behaviour

on the City network. It tackles

onboard issues, such as feet on

seats, priority seating, littering,

noisy behaviour and bags on seats.

Meeting Customers’ Information Needs

Social Media

Queensland Rail has a strong focus

on social media and recognises that

it is a key channel for

communicating a variety of

messages in a timely manner to

engage customers and community

members.

Queensland Rail’s social media

profile, which includes sites such

as YouTube, Facebook, Flickr and

Twitter, allows for a wide range of

information on service disruptions,

promotion of safety measures,

campaigns and initiatives to be

shared with customers.

Queensland Rail has grown its

social media presence and now has

over 11,000 followers on Twitter

and more than 9,800 “likes” on

Facebook.

Increasingly, customers are using

social media to provide feedback,

compliments and ideas for

improvement of our services.

Another key benefit of using social

media is communication with

customers during disruptions and,

by working with TransLink,

Queensland Rail aims to ensure

customers receive up-to-date and

timely notice of any delays or

service changes.

Smart Phone Applications

Queensland Rail is actively

developing Smart Phone

applications for customers to use

for “real-time” train information,

station facilities and information

on accessibility, as well as service

updates. Queensland Rail Travel is

launching a multi-lingual

application for the Kuranda Scenic

Rail service that will provide both

written and audio information

highlighting significant points of

interest along the customer’s

journey.

31


People We want all Queensland Rail employees to be accountable, proud and committed to

delivering high performance outcomes. Our challenge is to ensure that during our

organisational reform journey, we retain and attract the right capability to be well

placed in achieving objectives in line with our owner’s expectations.

Queensland Rail employs a

workforce from a range of

occupations situated across the

state. As at 30 June 2013, there

were 6488.1 full time equivalents,

of which:

• 90 per cent were employed in

core functions (Rail Operations,

Network, Customer, Access and

Business Strategy)


operational areas (train driving,

network control, station and

onboard operations and a

variety of trades)


regional areas

• 19 percent were women (49

percent in the Enabling

functions and 17 per cent in

core functions)

• two per cent were apprentices,

graduates or trainees

• 95 per cent were employed on

a permanent basis.

New Service Delivery Model

A new Human Resources (HR)

service delivery model was

implemented during FY2012/13 to

allow for better management and

consistency in responding to

workplace issues. This delivery

model also enables HR to work with

leaders to better leverage their

human capital to deliver business

outcomes. The new model has

incorporated several initiatives,

such as the creation of:

• a HR Central Call Centre – a

centralised service that

provides support for all

employee and manager

enquiries and workplace issues

• Centres of Excellence – these

teams support organisational

success through the design and

governance of HR program s

and initiatives.

The business model represents

contemporary HR theory and

practice and has already proven its

effectiveness during the significant

organisational restructuring

process. HR will continue to embed

the new service delivery model in

FY2013/14 and will continue to

sharpen its focus on providing

services that effectively impact

operational performance.

Workforce Reform

The transformation of Queensland

Rail requires the workforce to

adapt to new ways of working. Our

workforce needs to be agile and

flexible in responding to

competitive challenges, as well as

displaying competence in

delivering on stakeholder and

customer demands.

In October 2012, a Voluntary

Redundancy Scheme was

introduced. Following the

introduction of this scheme,

significant organisational reform

occurred in February 2013 to renew

the organisation’s focus on its core

business and to enable functions to

concentrate resources in areas that

directly contribute to operational

performance.

Along with improving efficiency,

effective performance has been a

key theme throughout FY2012/13,

with leaders being accountable for

driving organisational performance

and continuing to engage with staff

through the changes.

32


Enterprise Agreements

Following implementation of seven

new Enterprise Agreements in May

2012 that covered all employees,

with the exception of Traincrew,

considerable progress was made

during FY2012/13 in terms of the

productivity measures negotiated

in these agreements. Some of the

successfully realised benefits

include:

• achievement of 106.7 per cent

of the productivity initiative in

the Administration Services/

Professional/Technical (ASPT)

Agreement

• enabling the use of flexible

start and finish work locations

within Station Operations

• full implementation of rostered

ordinary hours on weekends and

use of 12 hour rostered ordinary

hour shifts within Network SEQ

and Regional, where possible.

Preparation also commenced for

the renegotiation of the Traincrew

Agreement, which expired in July

2013. Queensland Rail’s

negotiating framework was

approved by the Cabinet Budget

Review Committee in April 2013

and bargaining commenced with

the relevant unions.

Early preparations have also

commenced with respect to the

renegotiation of the remainder of

the collective agreements, which

cover the majority of the

workforce. These agreements

expired in FY2013/14.

Talent Management and Development

With the average age of

Queensland Rail employees being

43 years and holding a tenure

averaging 14 years, strategies must

be identified to address the

impending exodus of skills and

knowledge from the organisation.

Approximately 50 per cent of the

Queensland Rail workforce is aged

between 40 and 59 years, which is

posing a specific challenge in terms

of replacing skills and knowledge.

As part of the process of managing

a significant number of staff

leaving the organisation, a formal

knowledge transfer process has

been developed and is being used

to capture valuable information

and knowledge from exiting staff,

many of whom are long term

employees.

Talent and successful management

and knowledge transfer are key

priorities to ensure long term

success and business continuity. As

Queensland Rail undergoes

significant change, the Executive

Leadership Team has identified the

top talent within the organisation

and these individuals have

participated in a structured

interview to determine their career

and development aspirations.

33


Leadership Development and Accountability

Leaders have played a key role in

the transformation of Queensland

Rail during the last year and will

continue to drive the organisation

to improve its performance.

To ensure all leaders in Queensland

Rail possess a sound understanding

of their required key attributes and

expectations, specific

responsibilities have been

developed and communicated.

These responsibilities will be

incorporated into each leader’s

performance plan to enable

accountability in terms of

achieving expected outcomes.

In addition, all managers will have

their performance moderated at

the end of the financial year,

which will enable a more accurate

and balanced view of the

performance of leaders across the

organisation. This will drive

consistent standards and

performance expectations and will

ensure leaders are focused on

achieving the vision of Queensland

Rail.

34


Commercial By focusing on continuous improvement, cost management, increased revenue,

improved asset management and optimisation of operations, Queensland Rail

continues to build a sustainable railway. Our commercial strategy is to efficiently

deliver core business and expand areas to support Government objectives for

economic growth.

The Regulatory Framework

The Queensland Rail network is an

open access railway, which means

that third party operators may seek

to operate train services on

Queensland Rail tracks.

Third party access to the network

is legislated under the Queensland

Competition Authority Act 1997

administered by the Queensland

Competition Authority (QCA).

Queensland Rail operates under a

QCA-approved Access Undertaking

that provides a framework under

which parties are to seek access to

the Queensland Rail network. This

includes outlining:

• negotiation process and

timeframes

• pricing principles

• utilisation of the network’s

capacity

• network performance reporting

requirements.

The current Access Undertaking

was assigned to Queensland Rail via

a transfer notice on 1 July 2010 as

part of the separation of QR

Limited into QR National (now

Aurizon) and Queensland Rail,

expiring 31 December 2013.

Draft Access Undertaking

Queensland Rail is currently

developing its own Access

Undertaking and has submitted

drafts to the QCA for its

consideration during FY2012/13.

The Draft Access Undertaking is

better suited to Queensland Rail’s

business activities than the current

undertaking and is based on a light

handed “negotiate arbitrate

model”. Queensland rail has

worked closely with industry in

developing this draft Access

Undertaking, which has also

received several rounds of QCA

public consultation. It is expected

that the draft will be approved by

the QCA in late 2013.

West Moreton Reference Tariff Reset

The draft Access Undertaking

includes a reference tariff (price)

for coal carrying train services on

the West Moreton System. On 28

June 2013, as part of the approval

process for the draft Access

Undertaking, Queensland Rail

submitted a reference tariff reset

for FY2013/14 to FY2016/17 to the

QCA for its consideration.

Queensland Rail’s proposed

reference tariff is based on

transparent and repeatable

methodology that can be rolled

forward to future regulatory

periods. Queensland Rail is

currently awaiting feedback from

the QCA and industry on its

submission.

35


Revenue and Funding

Transport Service Contracts (TSCs)

Queensland Rail derives

approximately 80 per cent of its

revenue through the following

three TSCs with the State. These

contracts each provide funding for

the provision of infrastructure and

passenger services that would

otherwise fail to be commercially

viable. These contracts include:

• TSC (City network) – funds the

efficient delivery of above rail

passenger services across the

Brisbane suburban network.

• TSC (Travel network) – funds

the delivery of regional above

rail services along the east

coast (Brisbane to Cairns),

Charleville, Longreach and

Mount Isa corridors.

• TSC (Rail Infrastructure) – funds

approximately 70 per cent of

the below rail network. The

Mount Isa Line is the only

system not currently funded.

Government funding for these

services is supplemented by fare

earnings and access revenue

earned by Queensland Rail.

Queensland Rail has recently

negotiated renewal of the TSCs

with DTMR. These contracts came

into effect 1 July 2013 for an initial

term of 12 months, with options to

renew for a further three 12-month

terms.

Access Revenue

Queensland Rail derives

approximately 11 per cent of its

revenue from third party access

charges to the below rail network.

In January 2013, ex-tropical

Cyclone Oswald affected the

network, flooding parts of the

North Coast Line and closing the

Toowoomba Range for two and a

half weeks, with a major land slide

occurring between Spring Bluff and

Ballard. Despite these significant

events and the challenging

economic conditions, access

revenue totalled $218.8 million in

FY2012/13, which was up from

$217.5 million for FY2011/12.


Queensland Rail is working with

DTMR to develop a Regional Freight

Growth Strategy with the key

objective to increase Rail’s share

of agricultural products such as

grain and cotton.

This partnership has resulted in an

announcement by the Queensland

Government on 16 May 2013 for a

$50 million upgrade of the

Toowoomba Range rail

infrastructure, which will remove

25,000 trucks transporting grain

and cotton from South East

Queensland roads each year. The

project’s scope is proposed to

include the construction of two

one-kilometre rail passing loops at

Harlaxton and Ballard. This project

is expected to take two years to

complete.

36


Supply Chain Forums

Queensland Rail has continued to

actively facilitate regular supply

chain forums for the Mount Isa

Line, North Coast Line and West

Moreton System. These open

forums are aimed at:

• informing supply chain partners

and stakeholders of planning

activities and maintenance

updates

• providing any other relevant

information.

At these forums, Queensland Rail

provides information on capacity

analysis, train control and planning

to better inform customers of key

business drivers. This open

communication is creating

improved understanding and

cohesion, aligned planning that

leads to greater efficiencies along

these critical supply chains.

Master Plan 2012

Queensland Rail developed and

released to industry its Mount Isa

Line Rail Infrastructure Master Plan

2012 in September 2012. The Plan

provided clarity on the strategic

planning needs for specific growth

scenarios to assist customers,

regional and local planning bodies

and other stakeholders in preparing

and developing their own

strategies. The Plan further

presents options to enhance system

capacity to cater for base, medium

and high tonnage growth scenarios.

The projects identified within the

Plan are able to be progressed at a

time and pace that supports

customer tonnage growth

requirements whilst generating

sufficient revenue from access

charges to provide a sustainable

commercial outcome for

Queensland Rail. The plans have

been targeted at providing a cost

effective and reliable rail-based

supply chain solution in support of

our customers’ business.

Capacity and Reliability Enhancements

Mount Isa Line Asset Replacement

In February 2013, sections of the

Mount Isa Line were upgraded to

60kg on concrete sleepers to

increase overall system reliability.

The heavier track has improved

system resilience and delivers a

robust structure that is best suited

to the extreme conditions on the

line, such as the harsh climate and

the black soil formation that

rapidly deteriorates during the wet

season.

System tonnages have also

progressively increased well

beyond the design performance of

the original track structure.

Upgrades have carried out at the

following locations:

• Hughenden to Julia Creek

• Mumu to Barabon

• Barabon to Marathon

• Richmond to Moselle

• Julia Creek to Quarrells.

37


Mount Isa Line Capacity

Bulk minerals are currently the key

product transported on the Mount

Isa Line and sizeable deposits have

been identified that will

potentially add considerable

tonnage to the Mount Isa Line.

These products include phosphate

rock, copper, lead, zinc and

sulphur.

Existing opportunities in the

Northern Galilee Basin are also

emerging with interest developing

in terms of significant coal

deposits. Coal haulage by rail may

fundamentally transform

operations on the Mount Isa Line

from a base metals supply chain to

a coal supply chain.

Network capacity enhancements

will continue to be delivered for

future projects provided there are

sufficient contracted tonnages that

justify the necessary capital

investment on commercial terms.

Additional works to increase

capacity may include:

• a new passing loop at Kimburra

• two holding roads at Hughenden

• re-arrangement of port

infrastructure at Townsville to

improve access to unloading

facilities and traffic

management.

City Network Capacity – Non-Passenger Traffic

Queensland Rail is working to

address network capacity issues

through a better understanding of

unused capacity for coal freight

through the City network and

identifying potential enhancements

to the rail network. This involves

working collaboratively with

stakeholders and supply chain

partners to:

• identify options to grow the

coal business in an efficient

manner

• ensure the long term viability

of West Moreton coal producers

• ensure that the solution

identified meets environmental

standards

• improve the cycle times and on-

time performance of each

system.

North Coast Line Capacity

Queensland Rail is working with

industry groups and supply chain

partners to identify immediate and

long-term strategies to continually

improve reliability and freight

delivery on the North Coast Line.

Whilst there are complex

intersections of the North Coast

Line, sufficient capacity exists to

accommodate the anticipated

traffic requirements into the

future.

38


Enterprise Asset Management System (EAMS)

Over the past 12 months,

Queensland Rail has been preparing

for the implementation of EAMS,

which will provide enhanced asset

information, enable better business

decisions and build a safer

workplace.

The move to implement EAMS was

endorsed by DTMR in a July 2012

report into the reliability of the

South East Queensland rail

network, with independent

auditors stating that such systems

“have greatly assisted decision-

making” in other infrastructure

organisations.

EAMS is being designed to enable

everyone in the asset management

chain to “see” an asset and “know”

its condition. EAMS will:

• provide a single source of asset

truth for information currently

held in more than 260 separate

asset management systems and

databases

• support whole-of-life asset

management across Queensland

Rail

• promote process efficiencies

• enable improved capabilities to

support the achievement of

good asset management

practice.

Design of the system is in its final

stages, with implementation to

commence during the second

quarter of FY2013/14.

39


Community Through community activities, Queensland Rail recognises and embraces

responsibilities to the communities in which we operate. Queensland Rail strives to

maintain a strong social responsibility ethos by engaging with local communities,

customers, employees and the general public.

Queensland Rail delivers

sustainable public transport to

hundreds of thousands of

commuters and tourists each year.

Our community contributions span

throughout the organisation and

across the State of Queensland. We

are committed to using resources

efficiently with business strategies

and objectives focused on

efficiency improvement,

operational reliability and sound

environmental management.

Noise and Coal Dust

Queensland Rail is committed to

working with industry to manage

the environmental impacts

associated with operations. We

seek to be a good neighbour in the

communities in which we operate.

In FY2012/13, the focus was on

addressing noise and coal dust

issues across the network.

Queensland Rail has been working

closely with government and third

party operators on noise

management issues and, where

reasonable and practicable, we

implement strategies and

undertake steps to minimise noise

from the rail corridor. Queensland

Rail is currently working with DTMR

to review noise management

strategies to align with government

expectations.

In December 2012, the Premier of

Queensland established a taskforce

to investigate and address

community concerns around

potential coal dust emissions

associated with rail transport of

coal in South East Queensland. The

taskforce comprises of Queensland

Rail and government

representatives, as well as industry

members from the South West

System Users Group, consisting of

representatives of coal producers

and rail freight operators.

The South West System Users

Group, of which Queensland Rail is

a member, has committed to the

development of a collaborative and

holistic Coal Dust Management Plan

for the rail corridor within which

coal is transported in South East

Queensland. This plan is currently

being finalised, with ongoing

implementation.

The Group engaged the

Department of Science,

Information Technology, Innovation

and the Arts (DSITIA) to design and

implement an air quality

monitoring program for the rail

corridor. Monitoring commenced in

March 2013 analysis of results is

underway.

Veneering of coal wagons by the

main coal supplier on the system

commenced in May 2013, with all

remaining coal suppliers to

commence veneering by December

2013.

Ballast Recycling Program

Queensland Rail has reviewed

opportunities associated with

ballast spoil and is implementing a

ballast spoil recycling program,

which is focused on the screening

and characterisation of ballast

spoil to separate valuable ballast

stone for beneficial re-use.

This recycling program is set to

reduce costs associated with

sampling, analysing and landfilling.

Key outcomes expected to be

achieved through this program

include:

• the diversion of recovered

ballast stone away from

landfill, resulting in projected

savings of around $8.8 million

over the next five years

• re-use of ballast spoil internally

for road or rail construction to

reduce the organisation’s

natural resources

40


• reduced operational costs,

which would otherwise be

associated with the purchase of

high quality aggregate material.

The ballast recycling project will

improve operational management

of the rail corridor, conserve

valuable natural resources and

positively contribute to the

organisation’s overall

environmental performance.

Railsmart and Community

Queensland Rail proactively

promotes community safety across

the rail network. The Railsmart

Community Education Program is a

dedicated school and community

engagement initiative that has

been implemented to improve

safety at level crossings and on the

rail corridor.

Throughout FY2012/13, Community

Education officers actively engaged

123,534 students by giving rail

safety presentations to 391 schools

and early learning centres across

Queensland.

The team took part in various other

community engagement activities

throughout the year, actively

participating in events extending

from South East Queensland to

regional areas.

Community Reference Groups

Our Community Reference Groups

provide the opportunity to engage

with customers and the

community, share information

about services and plans and

gather important information

about their perspectives and

preferences.

Meetings are held for each City

network line on a bi-monthly basis.

Topics for regular discussion

include customer service,

operations, facilities, upcoming

projects, accessibility and

communication.

Accessibility and Community Engagement

Queensland Rail actively engages

with organisations in the disability

sector to ensure access to services

is equitable, dignified and

comfortable.

Since 2003, Queensland Rail has

continued to maintain and co-

ordinate an Accessibility Reference

Group, which is comprised of

representatives from various

disability groups and organisations,

such as Vision Australia, Blind

Citizens Australia, Guide Dogs

Queensland, Better Hearing

Australia, Deaf Services

Queensland, Endeavour

Foundation, Arthritis Queensland,

Queenslanders with Disabilities

Network and The Multiple Sclerosis

(MS) Society.

The reference group ensures that

requirements of customers with

disabilities are considered across a

variety of projects and initiatives.

The group has recently provided

advice on the Narangba and

Sandgate station upgrades,

accessible internal layouts for

trains and station information

points for customers with

disabilities. This engagement

facilitates two-way

communication, information

sharing and education.

41


Furthermore, Queensland Rail has

been working with customers with

disabilities to:

• provide tailored information for

specific travelling requirements

• release a suite of information

on easy access to services for

customers using mobility aids

• update the popular Station

Access Guide for the City

network.

The Queensland Rail website

information for customers with

disabilities utilising Travel network

services is under review.

Queensland Rail understands how

vital information is to the success

of each customer’s journey.

Disability Discrimination Act 1992

The Disability Discrimination Act

1992 (DDA) seeks to eliminate

discrimination, as far as reasonably

possible, against people with

disabilities. Under the legislation,

as a public transport operator,

Queensland Rail is required to

comply with design specifications

for all premises, conveyances and

infrastructure.

Queensland Rail is drafting an

accessibility action plan for

FY2013/14. This plan will provide a

single point of reference detailing

a managed response to issues

associated with DDA obligations.

Based on the experience of the

organisation over the past five

years, the plan mandates that

Queensland Rail:

• will ensure that persons with

special needs have equivalent

levels of access to services as

those without special needs

• will provide a safe, accessible

and affordable transport

logistic solution for all

customers

• utilises a customer driven

approach to deliver

accessibility at stations and

maintain a health and

constructive relationship with

community groups

• works closely with transport

partners and the State

Government to address

technical challenges unique to

rail and to ensure the use of an

efficient, consistent and co-

ordinated approach

• commits to ongoing community

and stakeholder engagement

• emphasises excellent customer

service.

42


Community Partnerships

Queensland Rail has maintained its

commitment to community

contribution through a Corporate

Social Responsibility (CSR) program

to ensure that its responsibilities to

the community are met.

Under the CSR program, high-level

partnerships with non-profit

organisations have been

established and supported through

activities such as fundraising,

partnerships, volunteering and

payroll giving programs.

Queensland Rail forms positive

community partnerships that assist

to address local area issues,

ensuring Queensland Rail maintains

a positive reputation as a good

corporate citizen within the

community.

The current top five partners

chosen by Queensland Rail

employees are:

• Cancer Council Queensland

• beyondblue

• Guide Dogs Queensland

• Prince Charles Hospital

Foundation

• Starlight Children’s Foundation.

Through the Community Partnering

Program, Queensland Rail also

supports small local initiatives

(through contributions up to

$5000).

Graffiti Management and Prevention

Every year, more than $5.5 million

is spent on preventing and

removing graffiti from Queensland

Rail assets and private properties

adjoining the rail corridor.

Graffiti not only costs millions of

dollars each year to remove, but it

also damages Queensland Rail’s

reputation, which affects our

customers’ perception on safety

and security. Research indicates

that rail customers can experience

increased fear of crime in areas

where graffiti is a regular

occurrence. This research is based

on analysis of the annual

Queensland Rail Customer Security

Survey (Colmar Brunton, 2012)

results where correlations have

been drawn between customer

perception of safety and security

at locations where graffiti crime is

present. Queensland Rail employs a

best practice graffiti management

program, which combines

intelligence collection and

enforcement, along with state-of-

the-art technology and

infrastructure design to reduce

graffiti and enhance community

engagement.

In FY 2012/13, Queensland Rail

partnered with the community,

QPS and local councils to prevent

and remove graffiti. Initiatives and

activities included:

• joint operations with the Police

Railway Squad targeting graffiti

vandals across the network

• a new partnership with

Brisbane City Council to combat

graffiti crime through a joint

corridor graffiti removal

program

• a new MOU with Logan City

Council in 2013, with a joint

corridor enhancement program

underway

• launch of a joint marketing

campaign with Crime Stoppers

and Brisbane City Council

targeting graffiti vandals

through the “Tag them Back”

initiative.

As part of the Community

Education program, Queensland

Rail employees also visit schools

and community groups across

Queensland with a focus on

improving student behaviour and

trespass prevention, all of which

contribute to a wider graffiti

prevention education program.

43


The program is supported through

syllabus-based graffiti prevention

modules developed by Queensland

Rail and Griffith University for use

by teachers throughout

Queensland.

The award winning Positive

pARTnerships program also helps

reduce graffiti by producing high

quality public artwork in locations

attractive to vandals. The program

works with community groups,

schools and stakeholders.

National Trust of Queensland Awards for Heritage Conservation

There are 71 sites on the

Queensland Heritage Register

comprising of approximately 208

operational and non-operational

assets. A further 268 assets are

listed on the Queensland Rail

Heritage Register, which

Queensland Rail self-manages.

These assets include stations,

goods sheds, bridges and culverts.

Queensland Rail Engages with local

communities to identify any re-use

options for heritage properties that

are surplus to operational

requirements. These uses may

include tourist information offices,

local museums, retail outlets,

cafes and community meeting

centres.

Queensland Rail is investing $3

million in FY2013/14 to maintain

and conserve a number of sites on

the Queensland Heritage Register.

The Queensland Rail Heritage

Committee has recently endorsed a

Heritage Property Strategy to

address the future management of

the Heritage Portfolio.

In recognition of recent heritage

conservation achievements,

Queensland Rail was the recipient

of the following National Trust of

Queensland Awards for Heritage

Conservation in October 2012:

• a gold award for the South

Brisbane Station Upgrade

project

• a silver award for the Bremer

River Bridge repainting

• a silver award in The

Governor’s Heritage Award

Category for use of interpretive

signage and storyboards that

depict the history of rail in

local areas.

Heritage Rollingstock

Queensland Rail helps preserve

Queensland’s rail heritage by

maintaining a fleet of heritage

rollingstock. The fleet consists of a

variety of operational and display

rollingstock including steam

locomotives from different eras,

diesel locomotives, rail motors,

wooden and steel carriages, water

wagons and coal wagons.

The fleet is used to operator tours

and charter services and a schedule

of maintenance has been planned

to ensure maximum usage during

the celebrations for 150 years of

rail in Queensland in 2015. The

versatile rail motors are also used

for training employees in essential

operational roles.

In consultation with The Workshops

Rail Museum, items of historical

significance have been identified

for preservation as part of the

State collection. Items that are not

required for the State collection or

by Queensland Rail are offered, in

custodian arrangements, to tourist

and heritage rail organisations.

44


Environmental Management

Queensland Rail continues to apply

innovative environmental

initiatives across its operations to

achieve cost savings,

environmental improvements and

operational efficiencies.

The design and construction of the

new Train Driver Training Facility

at Bowen Hills has delivered a

facility of high comfort and

amenity whilst integrating

environmental efficiencies and

minimising environmental impacts.

Green Fleet

In April 2013, Queensland Rail’s

Executive Leadership Team

endorsed a recommendation to

progressively replace all

Queensland Rail road vehicles with

standardised commercial models.

This decision virtually eliminates

any purchase of petrol driven

vehicles and ensures that only

small volume diesel vehicles will be

purchased as the fleet requires

replacement.

45


Governance Structure as at 30 June 2013

State of Queensland – Responsible Ministers

Treasurer and Minister for Trade The Hon. Tim Nicholls MP

Minister for Transport and Main Roads

The Hon. Scott Emerson MP

Queensland Rail

Board Members Geoff Harley – Deputy Chair

David George Wendy McMillan

Dawson Petie Julie-Anne Schafer Merren McArthur

*Chief Executive Officer

Glen Dawe

Audit and Risk Committee

Dawson Petie – Chair

Wendy McMillan Julie-Anne Schafer

Organisational Performance and

Strategy Committee

Julie-Ann Schafer - Chair David George Geoff Harley

People and Safety Committee

Merren McArthur - Chair

David George Geoff Harley

Wendy McMillan

Queensland Rail Limited

On Track Insurance Pty Ltd

* Mr Glen Dawe was appointed Chief Executive Officer on 2 August 2013.

46


Board

Michael Klug (Chairman)

LLB, FAICD

Michael is a well-respected solicitor with more than 40 years’ experience. He recently concluded his third

term as Partner in Charge of the Brisbane office of Clayton Utz.

He is a leader in the area of Alternative Dispute resolution and he is one of the original founders of LEADR

(Lawyers Engaged in Alternative Dispute Resolution). He was also an original Director of the Australasian

Disputes Centre and has served on ADR committees nationwide.

Michael is a nationally recognised practitioner, public speaker and lecturer in negotiation, having taught

in Australia and overseas to university students, the business and public sector communities. Michael has

extensive Board experience across a diverse range of fields including education, health care and

transport. He was recently appointed Chairman of Autism Queensland.

Michael is also a Fellow of the Australian Institute of Company Directors and Vice-President of the

Brisbane Club.

Geoff Harley (Deputy Chairman)

LLB, FAICD, MAHRI

Geoff is a consultant to and former Managing Partner of the Brisbane Office of Clayton Utz.

He was for a number of years an Adjunct Professor at the University of Queensland Law School and a

member of the Advisory Council of the Queensland Conservatorium of Music.

Geoff served in the Australian Army Reserve for several decades (Infantry and Legal Corps) and retired

with the rank of Major. Geoff also holds the Reserve Force Decoration.

Geoff has previously served as Chair of TransLink Transit Authority and CS Energy and is currently Chair of

Queensland Urban Utilities. His board experience covers fields as diverse as electricity generation,

communications, information technology, investment attraction, tourism and agribusiness.

Geoff has practised law for more than 40 years, the last 20 specialising in industrial and employment

law. His role as a company director and as Chief Executive of Clayton Utz in Queensland for almost ten

years has given him invaluable experience in strategy, operational management and governance. He is a

Fellow of the Australian Institute of Company Directors and a member of the Australian Human Resources

Institute.

47


Wendy McMillan

BBus, BA, MAICD, AIM, AMI

Wendy has more than 18 years of commercial experience in transport, infrastructure, resources, trade,

property, marketing and investment attraction.

Her previous positions include Director of Infrastructure for QC Resources Investments Pty Ltd, Manager

Strategic Projects and Ports O&M, Transport Services, and Strategic Development with the John Holland

Group, General Manager, Australia TradeCoast and senior management roles with the Port of Brisbane

Corporation, Carter and Spencer International and Gambaro’s Seafood and Exports.

Wendy holds a Bachelor of Business and a Bachelor of Arts. She is the Chairman of the judging panel for

the Premier of Queensland’s Export Awards, a Director of St. Aidan’s School Council and a Member of the

Australian Institute of Company Directors, Fellow of the Australian Institute of Management and an

Associate Fellow and CPM of the Australian Marketing Institute.

David George

MA (Hons), FAICD, FCILT

David has more than 35 years’ experience in the rail industry. This includes being Chief Executive of

ONTRACK (New Zealand rail network) between 2004 and 2007 and responsibility for Queensland Rail’s coal

and freight businesses between 1998 and 2004. Prior to this, he was Director of European Business for

British Rail (freight) in the run-up to the opening of the Channel Tunnel.

David is currently Chief Executive Officer of the Co-Operative Research Centre (CRC) for Rail Innovation,

a position held since 2007. He is Vice Chair of the International Railway Research Board and Chair of the

organising committee of the World Congress on Railway Research (WCRR) being jointly hosted by the CRC

and Australasian Rail Association in Sydney in late 2013. David is a Director of TasRail and also a Fellow of

both the Australian Institute of Company Directors and the Chartered Institute of Logistics and Transport

Australia.

Hon. John Mickel

M. Lit St, BA, B Ed. St, Dip T

The Honourable John Mickel entered Queensland Parliament in June 1998 as the Member for Logan and

was appointed Minister for State Development, Employment and Industrial Relations from September 2006

to September 2007 and then Minister for Transport, Trade, Employment and Industrial Relations from

September 2007 to March 2009. John was the 36th Speaker of the Legislative Assembly of the Queensland

Parliament. He was first elevated to the Cabinet as Minister for Environment in February 2004 and

appointed Minister for Energy in August 2004 and gained the additional portfolio of Aboriginal and Torres

Strait Islander Policy in March 2005. He has represented Australia on the Executive of the Commonwealth

Parliamentary Association and represented Queensland businesses on trade missions to Asia, India and the

Middle East. He oversaw major reforms to the Queensland energy sector as Minister for Energy, continued

the Smart State initiative as Minister for State Development, implemented new technology reforms to the

public transport sector as Minister for Transport and is recognised for his diplomatic protocols and public

speaking in domestic and international forums.

Before entering the Queensland Parliament, John held a number of senior Government roles including

Chief of Staff to the Queensland Premier. He is also a former university lecturer in politics and public

policy. Currently John serves on the Queensland Catholic Education Commission Political Advisory

Committee, is a Board Member of the Sisters of St Paul de Chartres Aged Care Facility, and undertakes

lecturing and public speaking engagements at Griffith University, the QUT and for community

organisations. John has established the Vietnamese Orphans and Disability Trust with his wife, is an

honorary member of Rotary and has been awarded Honorary Citizenship of Boystown.

48


Glenn Poole

BEc, GradDip Bus Admin, FCPA, FCA, FAICD

Glenn is a professional senior executive and Board member with over thirty years' experience in strategic

leadership, governance and management across the public and not-for-profit sectors.

He has significant practical experience in corporate governance and financial management through

appointments as a director of boards and audit committees in the government and not-for-profit sectors.

He is currently a member of the Local Government Association of Queensland Audit and Compliance

Committee, the Public Trustee of Queensland Audit and Risk Management Committee, the Board of

Governors of the Queensland Community Foundation and the Governance, Nomination and Remuneration

Committee of the Queensland Synod of the Uniting Church in Australia. Glenn is also the Chair of the

Advisory Board for the Australian Centre for Philanthropy and Nonprofit Studies, QUT.

Glenn has successfully undertaken senior executive positions in the Queensland Treasury Department

providing influential policy advice on economic, financial management and corporate governance issues

impacting on the public sector and the community and most recently was the Auditor-General of

Queensland from 2004 to 2011.

Glenn holds a Bachelor of Economics and is a member of CPA Australia, the Institute of Chartered

Accountants of Australia and the Australian Institute of Company Directors.

Merren McArthur

BA, LLB, Dip AppFin

Cessation Date: 4 August 2013

Merren was recently appointed Chief Executive Officer of Virgin Australia Regional Airlines following

Virgin Australia’s acquisition of Skywest Airlines in Western Australia. Merren joined Virgin Australia (then

Virgin Blue) five years ago as General Counsel and Company Secretary and has held various Senior

Executive roles, including Group Executive-Alliances, Network and Yield and Group Executive – Corporate

Advisory.

Prior to joining Virgin, Merren was Chief Advisor at Rio Tinto Iron Ore, based in Perth. Her previous

positions include Deputy State Solicitor for Western Australia and Executive Partner at national law firm

Allens Arthur Robinson, based in Melbourne.

Dawson Petie FAICD, FASFA

Cessation Date: 2 August 2013

Dawson has more than 30 years’ experience as a company director, including serving on the QR Limited

Board for nearly 11 years where he was chair of the Audit and Risk Committee, prior to his appointment

to the Queensland Rail Limited Board.

Prior to his retirement from full-time employment, Dawson was a General Manager for QIC Limited.

49


Julie-Anne Schafer LLB (Hons), GAICD, ANZIIF

Cessation Date: 30 September 2013

Julie-Anne brought to Queensland Rail strong legal credentials and corporate experience, as well as

transport experience in Queensland and at national level. She has been chair of the Royal Automobile

Club of Queensland (RACQ) and is a National Transport Commissioner. She is a director of several

companies and is a former Queensland Telstra Business Women’s award winner, President of the

Queensland Law Society, Chair of the Solicitors’ Board of Queensland, Deputy Chancellor of the

Queensland University of Technology and Adjunct Professor at the University of Queensland. Julie-Anne

was previously a partner in two Queensland legal professional services firms. She holds a Bachelor of Laws

(Honours) degree from the University of Queensland and an AICD Company Directors Diploma. Julie-Anne

is a member of the Australian Institute of Company Directors and of the Australian and New Zealand

Institute of Insurance and Finance.

50


Leadership team

Glen Dawe – Chief Executive Officer

Glen’s father was a Station Master and he is the third generation of his family to work in Queensland

Rail. Glen joined Queensland Rail as a Porter and his career progressed from planning and

development roles to commercial, business and operations management; including Group General

Manager Citytrain, which became Australia’s best performing urban rail passenger business.

He then took on the broader role of Group General Manager Metropolitan and Regional Services which

involved managing Queensland Rail’s community service obligation businesses such as Citytrain,

Traveltrain and Regional Freight. He then led Queensland Rail’s commercial businesses as Group

General Manager Coal and Mainline Freight before moving to NSW to become General Manager Access

at the Rail Infrastructure Corporation with responsibility for Access, Freight and Country

Infrastructure.

Finally he moved to the Manildra Group, which is one of this country’s largest private rail users, as

National Manager Rail Transport before retiring in 2011.

Mark Hope - Chief Financial Officer

As Chief Financial Officer, Mark brings over 20 years of financial management experience and

expertise to Queensland Rail. In this role Mark directs all financial aspects of the business including

accounting practices, budgeting, financial planning, financial analysis and is responsible for

monitoring all financial performance.

Mark commenced with Queensland Rail in March 2013, joining the Change Management Office in the

role of GM Special Projects (Industry Partner Team Lead). He has a proven track record in delivering

outstanding results and organisational change across numerous organisations.

In his previous roles, with the Department of Transport and Main Roads and TransLink, as both

General Manager Technology and Commercial and Chief Financial Officer, he successfully liaised with

Boards, Government, media, operating partners and suppliers, which played a key component in

delivering TransLink’s ticketing reform project and the Gold Coast rapid transit project. Prior to

these transport and infrastructure roles, Mark worked for APN News and Media as a Chief Financial

Officer in Australia and New Zealand and PwC as an Audit Manager in Australia and England.

Mark has experience working in both chartered and commercial financial roles with significant

organisational accomplishments achieved through innovation, skilled commercial acumen and a

demonstrated partner-focused approach.

Tim Ripper - Executive General Manager Access and Business Strategy

Tim has been in the rail industry for more than 25 years, working with organisations in Australia and

Hong Kong. During this time he has performed a variety of roles in design, construction,

maintenance, asset management and, more recently, in business leadership.

In his current role as Executive General Manager Access and Business Strategy, Tim is responsible for

the strategic management of the commercial relationship with Government, facilitating third party

access to the rail network, organisational reporting and the efficient use of property.

51


Martin Ryan - Executive General Manager Customer Service

Martin is responsible for developing and implementing Queensland Rail’s customer strategy. This

means ensuring all aspects of customers’ pre-trip, during trip and post-trip expectations are

satisfied.

Martin has more than 25 years’ experience working in communications, marketing events, travel and

tourism roles and has extensive knowledge and understanding of the importance of high quality

customer service and positive relationships.

Rob Green - Executive General Manager Network

With over 25 years in the rail industry, Rob draws on his years of experience in signalling,

telecommunications, overhead traction, track renewals, construction and project delivery of railway

infrastructure and stations when managing Queensland Rail’s network. With responsibility for the

operational and strategic readiness of the rail network and associated facilities, Rob must deliver fit-

for-purpose, safe and reliable business outcomes for Queensland Rail.

His team also provides network services to rail operators on freight systems, including negotiating

access to the network, consultation to provide alignment with freight market requirements and

regional network control.

Kevin Wright - Executive General Manager Rail Operations

As a veteran of rail operations, safety and customer services, Kevin is responsible for ensuring the

quality, movement and delivery of train services. This includes overseeing the areas of rollingstock

engineering and maintenance, South East Queensland and Far North Queensland operations, Travel

network operations, train service delivery, operations facilities and program co-ordination.

Kevin has twice received recognition for his service to the rail industry, winning the New South Wales

Public Service Medal in 2003 and the Australian Public Service Medal in 2008.

Jim Benstead - A/Executive General Manager Commercial and Corporate Services

Jim is responsible for optimising commercial outcomes for Queensland Rail as well as the provision of

enterprise services including property, procurement, ICT, Road Fleet and Project Delivery Services.

Jim joined QR Limited in July 2008 to focus on transformational leadership and change management

leading to the separation of the company and formation of Queensland Rail. He was the Chief

Financial Officer from the commencement of the new Queensland Rail in 2010 and was the Acting

CEO from December 2011 to August 2013.

Before joining QR Limited, Jim held senior management positions in TNT, Carpentaria Transport and

Toll Australia where he held lead roles in finance, shared services, credit management, customer

service, business integration, commercial management and procurement. Jim has more than 30

years’ experience in the transport industry specialising in driving business improvement, delivering

transformational change and leading outcome focused commercial teams.

Greg Ford - Executive General Manager Safety and Environment

Greg leads the overall safety journey in Queensland Rail in areas such as workplace health and

safety, environment, investigation, assurance and emergency management.

Greg has more than 35 years’ experience in safety, performing in quality roles across both the

defence and transport industries. Before Queensland Rail, Greg held the position of the Rail Safety

Regulator for Queensland Transport for 10 years.

52


Nicholle Duce - General Manager Human Resources

Nicholle is responsible for establishing the vision for human resource management, including the

development of a strategic framework, supporting governance and programs that facilitate cultural

change and foster a high performing culture.

Nicholle has more than 15 years’ human resources experience in various roles, including strategic and

operational positions in major organisations such as Suncorp and Rio Tinto.

Nick Le Mare - General Counsel

Nick leads the legal team at Queensland Rail.

Nick is an experienced lawyer with over 15 years’ experience in the transport and mining industries.

Prior to working at Queensland Rail, Nick held a General Manager’s role at Virgin Australia and before

that a Senior Legal Counsel role that saw him play an integral part in the start-up of a long haul

international airline. Before that, Nick was in private practice. He acted almost exclusively for

clients in the mining industry.

53


Corporate Governance Queensland Rail is committed to ensuring that its systems, procedures and practices

reflect the highest standards of corporate governance. Processes have been

established to ensure that Queensland Rail’s corporate governance practices are

reviewed regularly and are continually refined in accordance with its enterprise

governance framework.

Statutory Authority Conversion

On 3 May 2013, Queensland Rail

was established as a Statutory

Authority in accordance with the

Queensland Rail Transit Authority

Act 2013 (QRTA Act). Queensland

Rail Limited ceased being a

Government Owned Corporation

from this date and became a

wholly-owned subsidiary of the

Statutory Authority. The Directors

of Queensland Rail Limited were

also appointed as Board Members

(Members ) of the Statutory

Authority.

Guidelines

The responsible Ministers have

requested that while Queensland

Rail is no longer a Government

Owned Corporation, Queensland

Rail will continue to apply the

Corporate Governance Guidelines

for Government Owned

Corporations (Guidelines).

The Guidelines reference the

Australian Securities Exchange

(ASX) Corporate Governance

Principles and Recommendations

and they provide the framework for

Government Owned Corporations to

develop, implement, review and

report on their corporate

governance arrangements.

An overview of existing corporate

governance practices in line with

the above Guidelines is set out

below.

Principle 1 – Foundations for management and oversight

The roles and responsibilities of the

Board and individual Members are

defined in a Board Charter. These

roles and responsibilities are

reviewed by the Board annually and

a copy of the Charter is available

on our website.

The Board’s specific functions

include:

• developing the strategies and

the operational, administrative

and financial policies of

Queensland Rail

• ensuring Queensland Rail

performs its functions and

exercises its powers in a proper,

effective and efficient way

• ensuring that, so far as is

practicable, Queensland Rail

acts under, and achieves the

objects in, the strategic and

operational plans

• accounting to the responsible

Ministers, as required under the

QRTA Act, for Queensland Rail’s

performance

• annually reviewing the

performance of the Chief

Executive Officer (CEO).

In exercising its functions and

powers, the Board’s key

responsibilities include:

• business strategy and planning

• delegation of authority to senior

management

• relations with responsible

Ministers

• major capital projects and

expenditure

• financial reporting and risk

management

• governance and policy

• senior management

appointments.

The Board has delegated

responsible for the day-to-day

operation of Queensland Rail to the

CEO including the implementation

and delivery of the Board’s

strategic direction. The CEO is

supported by the senior executive

team with management

responsibilities clearly defined and

documented through formal

position descriptions, performance

plans and Board approved

Authorities, Approvals and

Accountabilities Policy.

54


Newly appointed Members are

taken through a formal induction

process to provide them with an

overview of our business

operations, strategies and

information in relation to the Board

and Committee functions. The

induction process assists the

Members to understand their roles

and responsibilities within

Queensland Rail and includes an

overview of key corporate

expectations, existing governance

arrangements and the culture and

values of the organisation.

The induction process is also

relevant to new senior executives

to allow them to participate fully

and actively in management

decision making at the earliest

opportunity.

Members are issued with a

comprehensive Board handbook

that details Queensland Rail and

Board operational information,

governance requirements and

policies. The Board handbook

assists with the induction process

and also supports existing Members

with their ongoing governance

responsibilities. The handbook is

reviewed and updated annually.

Performance evaluations for the

CEO and senior executives are

carried out each financial year in

accordance with Queensland Rail’s

remuneration framework and the

Board approved Performance

Payment Policy: Chief and Senior

Executives. The performance

evaluation for the CEO is conducted

by the Board and is based on the

achievement of agreed Key

Performance Indicators (KPIs),

which are set annually by the Board

and link to the strategic and

operational objectives of

Queensland Rail. The performance

evaluation for senior executives is

carried out in accordance with the

same process based on the

achievement of agreed KPIs. The

evaluation is conducted by the CEO

and the Board.

Principle 2 – Structure the Board to add value

All Members of the board, including

the Chairman, are non-executive

members. Queensland Rail

Members are appointed by the

responsible Ministers in accordance

with the QRTA Act. As such, the

size and composition of the Board

is determined by the responsible

Ministers.

The Board considers that all Board

Members who held office during the

year are independent as defined

under the ASX Corporate

Governance Principles and

Recommendations. In assessing the

ongoing independence of each

Member, the Board considers the

assessment criteria outlined in the

ASX recommendations. Materiality

in relation to independence is

considered on a case-by-case basis

with reference to each Member’s

individual circumstances.

Board Members are required to

keep the Board advised, on an

ongoing basis, of any business

interests and other directorship and

employment roles that could

potentially conflict with those of

Queensland Rail. In circumstances

where a conflict is believed to

exist, the Member concerned does

not take part in any decision or

consideration of the issue. In

addition, the Member will not

receive copies of the relevant

Board papers. Members must notify

the Board via the Company

Secretary of changes to business

interests and appointments.

55


Details of the current Board

Member’s experience and expertise

are disclosed in the Annual Report

as is information on attendance at

Board and Committee meetings.

Information in relation to

composition of the Board and terms

of appointment for all Members

who held office during the financial

year is set out in the FY2012/13

Financial Report.

A process is in place whereby

Members, either collectively or

individually, may seek independent

professional advice where it is

considered necessary to fulfil their

duties and responsibilities. This is

done at Queensland Rail’s expense.

A Member wishing to seek such

advice must first obtain the

approval of the Chairman.

Members are encouraged to further

their knowledge through

participation in industry,

governance and government forums

and attend seminars hosted by the

Australian Institute of Company

Directors, Chartered Secretaries

Australia and other peak

professional bodies. In addition to

peer review, interaction and

networking with other Directors

and industry leaders, Queensland

Rail Members participate in

Queensland Rail leadership forums

and actively engage with

Queensland Rail employees and

visit Queensland Rail operations to

gain an understanding of

operational employee

requirements, challenges and

issues.

The ongoing provision of timely and

relevant information to the Board is

of critical importance in enabling

the Board to effectively discharge

their obligations in accordance with

the requirements of the QRTA Act.

The structure, format and content

of Board agendas presented to

Members for consideration and

decision, along with Board Paper

format, quality and timeliness is

reviewed on an ongoing basis with a

formal review annually.

The Board reviews its own

performance and that of the

Committees of the Board on a

regular basis to ensure they are

working effectively. The Board

participates in regular in-camera

sessions that provide an

opportunity for the Members to

review and analyse their current

performance as a Board and discuss

any issues that may exist.

56


A formal Board performance

evaluation is conducted on an

annual basis to achieve and

maintain corporate governance

best practice and continual

improvement. An independent

consultant is engaged to assist with

the evaluation every second year,

with the latest independent review

completed during FY2011/12.

The performance evaluation

process generally includes the

evaluation of the Board as a whole,

the Chair and the effectiveness of

the Board Committees. The process

is undertaken through a formal

questionnaire completed by each

Member and members of the senior

executive team. The review

considers a range of issues

including Board role, strategy,

monitoring performance, risk and

compliance oversight, stakeholder

communication, Board structure

and processes. Due to changes to

Board composition and the

establishment of the Statutory

Authority during the year, the

formal Board evaluation for

FY2012/13 has been deferred until

June 2014.

A written advice of the outcome of

the evaluation will be provided to

responsible Ministers on completion

of the review.

Principle 3 – Promote ethical and responsible decision making

Queensland Rail has well

established policies, procedures

and practices that seek to promote

ethical standards of behaviour and

a culture of compliance that is risk

aware and embraces good

governance practices in accordance

with our corporate, legal and

community obligations.

These expected standards of

integrity, honesty and

accountability are reflected in our

formal Code of Conduct which

applies to all Members and

employees and is aligned with the

organisations five key strategic

pillars of safety, customer, people,

commercial and community. The

Code of Conduct is supported by

other policy related documents in

relation to ethics, privacy, dealing

with conflicts of interest, trading in

securities and official misconduct.

While, as a Statutory Authority, no

Member or employee holds or

trades securities in Queensland

Rail, the organisation has

established standards and

procedures that set out the legal

duties that apply to Members and

employees in relation to the

potential misuse of information

including the insider trading

prohibition under the Corporations

Act.

57


Ongoing training in relation to

ethical business practices is

provided by the organisation and

the Queensland Rail Code of

Conduct also forms part of the

induction process for new

employees, consultants and

contractors. A copy of the Code of

Conduct is available on our

website.

Queensland Rail also has in place

related processes and policy

documents setting out the

requirements of the Public Interest

Disclosure Act 2010, which

facilitates disclosure of public

interest information and provides

protection for those who make

public disclosures.

Principle 4 – Safeguard integrity in financial reporting

The Board has established an Audit

and Risk Committee that reviews

the integrity of Queensland Rail’s

financial reporting systems. The

Committee is governed by its own

Charter, which is approved by the

Board and reviewed annually. A

copy of the Audit and Risk

Committee Charter is available on

the website. The Committee assists

the Board by reviewing and

monitoring assurance activities

over business operations, the

effectiveness of internal controls,

regulatory reporting, financial

risks, compliance issues and

enterprise risk management

frameworks. The Committee

monitors both internal and external

audit functions.

The role of the Chair of the

Committee is not held by the

Chairman of the Board and all

Committee members are

independent non-executive

Members. Membership of the

Committee and details of

attendance at meetings is disclosed

below in the Board Committees

section.

The CEO and Chief Financial Officer

(CFO) certify in writing that the

Queensland Rail Financial Report

represents a true and fair view of

Queensland Rail’s financial position

and that it has been prepared in

accordance with all relevant

accounting standards and

legislation.

Queensland Rail has a detailed

internal audit plan that is approved

by the Audit and Risk Committee

and managed by the Senior

Manager Risk, Internal Audit and

Governance, who provides regular

reports to the Audit and Risk

Committee.

In accordance with the Auditor-

General Act 2009, the external

audit function of Queensland Rail is

performed by the Queensland Audit

Office. The Audit and Risk

Committee monitors the

performance of the external

auditors on an annual basis.

58


Principle 5 – Make timely and balanced disclosure

Queensland Rail has established

communication protocols and

standards in relation to the

disclosure of public information and

regularly assesses the information

needs of all stakeholders to ensure

that they continue to be informed

about our activities in a timely and

accurate manner.

In addition, the company has

established a dedicated

Government and Stakeholder

Relationships team to assist with

management of government and

regulatory relationships and the co-

ordination of information and

reporting requests.

Regular communications are

initiated with key stakeholders

including responsible Ministers and

government representatives. The

Chairman and CEO meet with

responsible Ministers and/or their

representatives on a regular basis.

Queensland Rail management also

meets with representatives of the

responsible Ministers after each

Board meeting to update them on

relevant issues. Information needs

of these stakeholders are also

discussed at these meetings.

As required by the QRTA Act,

detailed quarterly reports are

provided to responsible Ministers

and their representatives, as well

as individual Ministerial briefings on

specific issues. These reports

include information regarding

financial performance, updates on

major capital programs, key

operational matters, risk

management and governance issues

as well as information required to

be given in accordance with

Queensland Rail’s Operational and

Strategic Plans.

Principle 6 – Respect the rights of shareholders

Queensland Rail respects the rights

of responsible Ministers as the

ultimate owners of the business.

The Board and senior executives of

Queensland Rail engage with our

responsible Ministers and their

representatives on a regular basis.

As at 30 June 2013, Queensland

Rail’s responsible Ministers were

the Honourable Scott Emerson MP,

Minister for Transport and Main

Roads and the Honourable Tim

Nicholls MP, Treasurer and Minister

for Trade.

We are committed to ensuring that

our responsible Ministers and their

representatives are provided with

the information they need to make

informed assessments of the

operations, financial and

performance and financial position

of Queensland Rail and its

subsidiaries.

59


Queensland Rail prepares an

Operational Plan and Strategic Plan

for our responsible Ministers’

approval. The Operational Plan and

Strategic Plan are formal

performance contracts between

Queensland Rail and its responsible

Ministers detailing proposed

undertakings and target

performance for the year ahead.

In line with the requirements of the

QRTA Act, responsible Ministers are

advised in a timely manner of all

issues likely to have a significant

financial, operating, employee,

community or environmental

impact including those matters that

may prevent or significantly affect

achievement of the performance

objectives outlined in the

Operational Plan.

Approval of responsible Ministers is

sought for major investments and

expenditure outlays, as well as

Queensland Rail’s entry into

significant supply or customer

contracts.

Principle 7 – Recognise and manage risk

Queensland Rail recognises that

effective risk management and

compliance frameworks are a key

element of an organisation’s

corporate governance process. The

Board has approved a Risk

Management Policy and associated

framework for identifying,

assessing and managing Queensland

Rail’s strategic, operational,

financial and reputation risks.

The objectives of the policy are to:

• provide an enterprise-wide

approach to risk management to

ensure it is managed in an

integrated, systematic and

practical manner

• facilitate the achievement of

Queensland Rail’s corporate

objectives and strategies

• define the mechanisms by which

the company determines its risk

appetite and the process for

identification and management

of risk

• articulate roles, responsibilities

and accountabilities for the

management, oversight and

governance of risk.

The approach defined within this

policy is consistent with the

Australian and New Zealand

standard on change to risk

management (ISO 31000:2009).

Supporting the policy is a

framework prepared to guide the

various business functions in

addressing their particular risks

through a structured risk

management approach. The

framework is designed to ensure

risks are regularly identified,

assessed, monitored and reported

to the Board on a periodic basis,

along with appropriate risk

mitigation and management plans.

The Board evaluates reported risks

reaching a defined enterprise risk

tolerance level and actively

monitors these risks and associated

controls, including any additional

risk mitigation treatments that are

proposed. Assurance activities are

undertaken to ensure that the

controls are operating effectively.

60


The Board has charged

management with the responsibility

for managing risk within the

organisation and the

implementation of mitigation

measures, under the direction of

the CEO supported by senior

executives. The group risk

management function, led by the

Senior Manager Risk, International

Audit and Governance, has been

established to facilitate the process

by providing a centralised role in

advising the various business

functions on executing risk

management and mitigation

strategies, as well as consolidating

risk reporting to senior executives

and the Board.

The CEO and CFO have declared in

writing to the Board that

Queensland Rail’s risk management

and control system is operating

effectively in all material respects

based on representations by

management.

Queensland Rail has established an

appropriate fraud control

framework for the ongoing

monitoring and co-ordination of

fraud control activities. The

framework is supported by the

Code of Conduct and associated

governance principles, standards

and procedures that outline

employee obligations in relation to

ethical behaviour and the process

for reporting, recording and

investigating allegations of fraud.

A dedicated Ethics Hotline has been

established to enable employees to

report any concerns regarding

unethical conduct, breaches of the

law and suspected fraud or official

misconduct. A dedicated Crime and

Misconduct Commission (CMC)

Liaison Officer manages the

obligations under the Crime and

Misconduct Act 2001 in relation to

notification of suspected official

misconduct to the CMC.

Principle 8 – Remunerate fairly and responsibly

The Board has established a People

and Safety Committee that, among

other things, reviews Queensland

Rail’s remuneration framework.

The Committee is governed by its

own Charter, which is approved by

the Board and reviewed annually. A

copy of the People and Safety

Committee Charter is available on

the website. The Committee assists

the Board by reviewing and

providing recommendations on the

recruitment, retention,

remuneration and performance

measurements of the CEO and

senior executives.

61


Membership of the Committee and

details of attendance at meetings is

disclosed below in the Board

Committees section. Queensland

Rail recognises that the

achievement of its corporate

objectives is dependent on the

efforts of its people and has

established remuneration policies,

procedures and framework

designed to attract and retain high

calibre employees and to align

individual and team efforts to

agreed KPIs linked to the

Operational and Strategic Plans of

the organisation.

Our senior executive remuneration

arrangements are subject to

approval or endorsement by the

Board in accordance with the

Governance Remuneration

arrangements for Chiefs and Senior

Executives. Remuneration for

Member is established by the

responsible Ministers in accordance

with the QRTA Act.

Details of the nature and amount of

payments to each Member of

Queensland Rail and specified

Queensland Rail senior executives

are set out in the FY2012/13

Financial Report.

Board Meetings

The Board held 13 meetings during

the financial year, including an

offsite meeting at the Townsville

office.

Typically, at Board meetings, the

agenda will include the following:

• disclosure of Member interests

• minutes of the previous meeting

and any outstanding issues

raised by Members at previous

meetings

• CEO’s report

• reports on major projects and

current business issues

• transactions requiring Board

approval in accordance with the

Delegations Framework

• updates from Committee Chairs

on matters considered at

Committee meetings

• the minutes of previous

Committee meetings.

A private session involving only

non-executive Members is held at

the beginning of each Board

meeting and chaired by the

Chairman. The CEO, General

Counsel and Company Secretary are

also present at all Board meetings.

Members of senior management

attend Board meetings when an

issue under their area of

responsibility is being considered or

as otherwise requested by the

Board.

62


Member attendance at meetings of

the Board* in FY2012/13 are

detailed below:

1 Appointed to the Board 20/12/12, appointed Deputy Chair 21/06/13

2 Appointed Chair 12/07/12, ceased as Member 18/6/13

3 Appointed to the Board 20/12/12

4 Ceased as Board Member 12/12/12



7 Ceased as Board Member 30/09/12, re-appointed to the Board 20/12/12

Board Committees

The Board has established

Committees to assist with meeting

its responsibilities. The Audit and

Risk Committee, People and Safety

Committee and the Organisational

Performance and Strategy

Committee are governed by their

own Charters.

The membership of each Board

Committee is made up of a

minimum of three Members from

the Board.

The CEO and Senior Executives

attend meetings at the discretion

of the Committee.

An annual evaluation of Committee

performance forms part of the

Board’s overall performance

review.

Audit and Risk Committee

The Audit and Risk Committee is a

committee of the Board created to

assist the Board in the effective

discharge of its governance and

oversight responsibilities relating to

the financial reporting and risk

management of Queensland Rail.

The Committee oversees and

monitors the preparation of

financial statements, internal

control structures, compliance and

risk management frameworks and

the internal and external audit

functions of Queensland Rail.

The Committee’s key


• the integrity of Queensland

Rail’s financial reporting and

disclosure processes

• review of significant accounting

policies and alternative

treatments available

• the effectiveness of Queensland

Rail’s systems of accounting and

internal controls

• the scope of Queensland Rail’s

internal audit and external

audit programs and any

material issues arising from

these audits

Committee Member

Attended

Eligible to Attend

Geoff Harley 1 (Deputy Chair) 6 6

Glen Dawe 2

(Chair) 11 11

David George3 6 6

Stephen Gregg4

(Chair) 1 1

Maureen Hayes5 4 7

Leo Keliher6 3 4

Merren McArthur 11 13

Wendy McMillan3 6 6

Denise McMillan-Hall6 4 4

Dawson Petie7 9 10

Julie-Anne Schafer 11 13

63


• the effectiveness of the

processes and assurance

activities used by management

to monitor and ensure

Queensland Rail’s compliance

with laws, regulations, ethical

guidelines and obligations for

external reporting of financial

information

• review of risk policies and

associated risk documentation

adopted by Queensland Rail

• the effectiveness of risk

management processes and

frameworks used to support

Queensland Rail’s risk

management policies,

procedures and documentation

• review and monitor key risk

exposures, control mitigations

and residual risks of Queensland

Rail

• the effectiveness of the risk

management and control

structures in place to identify

and monitor Queensland Rail’s

compliance with applicable

laws, regulations and

governance obligations.

Mr Dawson Petie chaired the

Committee. The Committee

members and attendance at

meetings in FY2012/13 are detailed

below:

1 Appointed Chair to the Committee 30/01/13

2 Appointed to the Committee 31/07/12, ceased as Committee Member 18/06/2013

3 Ceased as Committee member 30/09/12

4 Appointed to the Committee 30/01/13

People and Safety Committee

The People and Safety Committee

is a committee of the Board

created to assist the Board in the

effective discharge of its

governance and oversight

responsibilities relating to the

human resource and safety

practices of Queensland Rail.

The Committee oversees and

monitors the remuneration and

performance framework for

Queensland Rail’s senior executives

and employees. The Committee

also provides direction and

oversight for safety policies,

frameworks and practices.



• the appointment and

termination of the CEO and

senior executives (direct reports

to CEO)

• the annual remuneration and

performance review for the CEO

and senior executives including

the establishment of

appropriate performance

measures and incentive targets

Committee Member

Attended

Eligible to Attend

Dawson Petie 1 (Chair) 3 3

Glen Dawe 2 3 5

Leo Keliher3 1 1

Wendy McMillan4 3 3

Denise McMillan-Hall3 1 1

Julie-Anne Schafer 4 5

64


• the development and review of

human resource policies and

practices including

remuneration, learning and

development, people

performance framework, code

of conduct, ethics and expected

values and behaviours

• the adequacy and effectiveness

of Queensland Rail’s

employment, remuneration and

industrial relations strategies

and plans

• external stakeholder

engagement (including

responsible Ministers,

government and community)

and external corporate

communications strategies and

plans

• development and review of

policies, frameworks and

practices relating to the

security and safety of

Queensland Rail’s network and

trains

• review and monitor frameworks

and practices dealing with the

health, safety and welfare of

Queensland Rail’s customers,

employees and the public

• the adequacy and effectiveness

of Queensland Rail’s compliance

with relevant safety legislation,

regulations, engineering

• standards and accreditation

requirements

• provide direction and oversight

of safety related risks, controls

and assurance processes.

Ms Merren McArthur chaired the



meetings in FY2012/13 are detailed

below:

1 Appointed Chair to the Committee 30/01/13 2 Appointed to the Committee 31/07/12,

ceased as Committee member 18/06/13 3 Appointed to the Committee 30/01/13 4 Ceased to be a member 10/07/12

5 Ceased to be a member 20/12/12 6 Ceased to be a member 30/09/12

Organisational Performance and Strategy Committee

Established 1 January 2013, the

Organisational Performance and

Strategy Committee is a committee

of the Board created to assist the

Board in the effective discharge of

its governance and oversight

responsibilities for ensuring

Queensland Rail operates in an

efficient and cost effective manner

while meeting its performance and

strategic expectations.



• the development of Queensland

Rail’s Operational and Strategic

plans (including principal

assumptions and scenarios)

• identify objectives, outcomes

and KPIs against which the

performance of the organisation

will be measured

• review and monitor the

operational and financial

performance outcomes to

ensure alignment with

Queensland Rail’s strategic

objectives relating to service

quality, efficiency, profitability

and growth

Committee Member

Attended

Eligible to Attend

Merren McArthur1 (Chair) 4 4

Glen Dawe2 2 3

David George3 2 2

Stephen Gregg4 1 1

Geoff Harley3 1 2

Maureen Hayes5 2 2

Wendy McMillan3 2 2

Dawson Petie6 1 1

65


• monitor and review delivery of

capital projects and funding to

ensure alignment with

Queensland Rail’s approved

organisational plans and

strategies

• review and monitor

development of strategic

business initiatives to ensure

policies, procedures and

frameworks are consistent with

the strategic planning and

performance objectives of

Queensland Rail

• review and monitor

organisational performance

assessment and operational

planning processes to identify

improvement opportunities for

the future

• monitor changes in the external

environment, which may affect

efficiencies and improvements

criteria

• monitor and oversee compliance

with any requests from

responsible Ministers in relation

to performance related

matters.

Ms Julie-Anne Schafer chaired the



meetings from 1 January 2013 are

detailed below.

1 All Committee members were appointed on safety 2 Ceased as Committee member on 18/06/13

Notifications by Shareholding Ministers

By letter dated 30 January 2013,

pursuant to section 114 of the

Government Owned Corporations

Act 1993 and section 24AA of the

Acts Interpretation Act 1954, the

Shareholding Ministers revoked the

public sector policies entitled

Purchasing Carbon offsets for

Queensland Government Air Travel,

the QFleet Climate Smart Policy

and the Sport and Recreation

Sponsorship Policy. Consequently,

the Shareholding Ministers advised

that these policies will no longer

apply to Queensland Rail, its

subsidiaries and controlled entities.

Committee Member1

Attended

Eligible to Attend

Julie-Anne Schafer (Chair) 3 3

Glen Dawe2 1 2

David George 3 3

Geoff Harley 2 3

66


Notifications by Responsible Ministers

In accordance with a restructure

direction given by responsible

Ministers on 3 May 2013 pursuant to

section 79 of the QRTA Act, the

responsible Ministers directed:

(a) Queensland Rail Limited:

i. To do all things necessary,

incidental or ancillary to

give legal affect to the

transfer of the shares in

Queensland Rail Limited to

Queensland Rail, as

provided for under Section

67 of the Act.

ii. To enter into the Managed

Services Agreement.

iii. As the sole member of On

Track Insurance Pty Ltd, to

pass a special resolution to

repeal the current

Constitution of On Track

Insurance Pty Ltd and

replace it with the New On

Track Constitution.

iv. To continue in force all

Existing Queensland Rail

Limited Policies, subject

to appropriateness and any

modifications necessary,

as the context requires.

v. To amend the Existing


Delegations:

(A) so that all references

to a position in


are taken to be references

to the same or similar

positions in Queensland

Rail that will now be

occupied by Queensland

Rail staff; and

(B) by making all other

necessary amendments as

the context requires to:

reflect the transfer of

Queensland Rail Limited’s

employees to Queensland

Rail under the Queensland

Rail Transit Authority Act

2013 and to facilitate the

operation of the Managed

Services Agreement.

(b) The Board of Queensland Rail

Limited to do all things necessary

to ensure that Queensland Rail

Limited complies with this

Restructure Direction; and

(c) Queensland Rail Limited and the

Board that where there is

ambiguity or doubt about the

meeting or intent of this

Restructure Direction to follow the

interpretation of the Under

Treasurer or Chief Executive of

DTMR about the matter as advised

to it in a clarifying statement.

By letter dated 3 May 2013, the

responsible Ministers have

requested that while Queensland

Rail is no longer a Government

Owned Corporation, Queensland

Rail and its subsidiaries continue to

apply, to the greatest extent

possible, the following governance

policies and guidelines:

• Code of Practice for GOCs’

Financial Arrangements (2009)

• Corporate Entertainment and

Hospitality Guidelines (2008).

• Investment Guidelines for GOCs

(2009).

• Corporate Governance

Guidelines for GOCs (2009)

• Cost of Capital Principles – GOCs

(2006).

• GOCs Bargaining Guidelines

(2010).

• GOCs Governance Arrangements

for Chief and Senior Executives

(2009)

• GOCs Release of Information

Arrangements (2009)

• Local Industry Policy: A Fair Go

for Local Industry (2008)

• Minimum Disclosure

Requirements for Directors and

Chief and Senior Executives of

GOCs (2009)

• Queensland Code of Practice for

the Building and Construction

Industry (2009)

• State Procurement Policy

(2008).

67


By letter dated 28 May 2013, the

Treasurer and Minister for Trade

has advised that pursuant to

section 62 of the QRTA Act,

Queensland Rail and its subsidiaries

are to be listed as National Tax

Equivalents entities of the National

Tax Equivalent Regime (NTER) and

are required to follow the Manual

for the NTER and thereby comply

with the relevant taxation laws.

In accordance with a ministerial

direction given by the responsible

Ministers on 1 August 2013 pursuant

to section 12 of the QRTA Act, the

responsible Ministers directed the

Board of Queensland Rail to appoint

as from 2 August 2013, Mr Glen

Dawe to the position of Chief

Executive Officer of Queensland

Rail for a term of three years.

68


Statement of Corporate Intent The Statement of Corporate Intent is the formal statement of Queensland Rail’s

strategic direction, including objectives, strategies and performance outcomes for

FY2012/13. It represents the performance agreement between the Board of

Queensland Rail and its responsible Ministers. The SCI is consistent with Queensland

Rail’s five-year Corporate Plan and reflects the strategy activity in year one of this

planning horizon.

The Annual Report provides a

summary of Queensland Rail’s SCI

performance outcomes relating to

the delivery of strategic and

operational objectives. Queensland

Rail’s SCI is prepared each financial

year in accordance with the

requirements year in accordance

with the requirements of Part 8 of

the Government Owned

Corporations Act 1993 (GOC Act).

The SCI is tabled in the Queensland

Parliament with Queensland Rail’s

Annual Report.

Queensland Rail measures

performance against objectives to

focus efforts achieving strategy.

Key performance indicator

measures and related targets were

identified within the SCI to track

the success of strategies during

FY2012/13.

Other key components of the SCI

are summarised as follows.

Performance Monitoring

The SCI contains a framework for

performance monitoring that

ensures the Queensland Rail Board

is accountable to our shareholding

Ministers for Queensland Rail’s

performance. This framework

enables Queensland Rail to report

on a number of mandatory financial

and non-financial performance

indicators to present a balanced

perspective on Queensland Rail’s

overall performance. Queensland

Rail reports to its shareholding

Ministers against these indicators

on a quarterly basis via quarterly

reports and yearly via the Annual

Report.

Examples of financial indicators

included in the FY2012/13 SCI are:

• earnings before interest and tax

• net profit after tax

• return on operating assets

• return on equity.

Examples of non-financial

indicators included in the

FY2012/13 SCI are:

• City network OTR

• rollingstock utilisation

• customer satisfaction

• Signals Passed at Danger per

million train kilometres

• LTIFR

• Queensland Rail operator

derailments

• Greenhouse Gas Emissions.

Government Revenues and Funding

The SCI outlines the funding of the

following services, which are

purchased by Government through

TSCs with Queensland Rail:

• City network

• Travel network, with the

exception of Kuranda Scenic

Rail

• Network Infrastructure (for

agreed rail infrastructure

network standards and

capacity).

69


Employment and Industrial Relations Plan

The SCI includes an Employment

and Industrial Relations Plan, which

guides Queensland Rail in

developing and maintaining

conditions of employment for

employees, including labour market

based remuneration.

Modifications to Statement of Corporate Intent

It is required under Section 120 (1)

(d) of the GOC Act that each annual

report of a GOC includes particulars

of any modifications made to the

SCI during the financial year.

Queensland Rail did not modify its

SCI during FY2012/13.

70


Corporate Entertainment and Hospitality

Queensland Rail did not undertake any corporate

entertainment and hospitality activities throughout

FY2012/13 that involved costs greater than $5,000.

71

Queensland Rail68 598 268 528ABN

Financial report30 June 2013for the period 3 May to

72Queensland Rail Financial Report FY2012/13

68 598 268 528ABNQueensland Rail30 June 2013-Financial report

ContentsPage

Financial statementsIncome statement 1Statement of comprehensive income 2Balance sheet 3Statement of changes in equity 4Statement of cash flows 5Notes to the financial statements 6

Management certificate 65INDEPENDENT AUDITOR'S REPORT 66

and its controlled entities.Queensland Railcoverfinancial statementsThese

Queensland Rail Transit Authority Actis an unincorporated statutory body established under theQueensland Rail2013.

The statutory body is controlled by the State of Queensland which is the ultimate parent.

The head office and principal place of business of the statutory body is:

Level 14, Rail Centre 1, 305 Edward Street4000QldBrisbane

A description of the nature of the statutory body's operations and its principal activities is included in the notes tostatements.financialthe


Queensland RailIncome statement

For the period 3 May to 30 June 2013

Consolidated Parent

Notes2013$'000

2013$'000

Revenue from continuing operations 5 328,653 259,096

Other income 6 487 -Consumables (75,602) -Employee benefits expense (113,403) (120,486)Depreciation and amortisation expense 7 (51,419) -Other expenses 7 (2,126) -Finance costs 7 (38,371) -Profit before income tax 48,219 138,610

Income tax expense 8 (10,504) -

periodProfit for the 37,715 138,610

should be read in conjunction with the accompanying notes.income statementThe above


Queensland RailStatement of comprehensive incomeFor the period 3 May to 30 June 2013

Consolidated Parent

Notes2013$'000

2013$'000

periodProfit for the 37,715 138,610

Other comprehensive income*Changes in the fair value of cash flow hedges 28 497 -Income tax relating to components of other comprehensive income 288, (149) -

net of taxperiod,Other comprehensive income for the 348 -

periodTotal comprehensive income for the 38,063 138,610

* Other comprehensive income comprises amounts that are expected to be reclassified to profit or loss insubsequent periods when specific conditions are met.

should be read in conjunction with the accompanying notes.statement of comprehensive incomeThe above


Queensland RailBalance sheet

As at 30 June 2013

Consolidated Parent

Notes2013$'000

2013$'000

ASSETSCurrent assetsCash and cash equivalents 9 276,468 -Trade and other receivables 10 182,025 675,625Inventories 11 61,237 -Derivative financial instruments 12 475 -Other current assets 13 6,862 -

Total current assets 527,067 675,625

Non-current assetsReceivables 14 3,843 31,375Inventories 15 22,533 -Property, plant and equipment 16 6,239,870 -Intangible assets 17 46,988 -Deferred tax assets 18 101,659 73,419Other financial assets 19 - 2,845,324Other non-current assets 20 4,834 -

Total non-current assets 6,419,727 2,950,118

Total assets 6,946,794 3,625,743

LIABILITIESCurrent liabilitiesBank overdraft 9 13,908 -Trade and other payables 21 309,829 501,552Provisions 22 236,728 217,071Borrowings 24 99,817 -Current tax liabilities - 1,154Other current liabilities 23 24,758 67

Total current liabilities 685,040 719,844

Non-current liabilitiesProvisions 22 52,024 37,808Borrowings 24 3,000,000 -Deferred tax liabilities 25 411,894 -Other non-current liabilities 26 29,845 -

Total non-current liabilities 3,493,763 37,808

Total liabilities 4,178,803 757,652

Net assets 2,767,991 2,868,091

EQUITYContributed equity 27 2,602,628 2,845,324Reserves 28 314 -Retained earnings 28 165,049 22,767

Total equity 2,767,991 2,868,091

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


Queensland RailStatement of changes in equity


Consolidated Notes

Contributedequity$'000

Reserves$'000

Retainedearnings

$'000

Totalequity$'000

Balance at 3 May 2013 - - - -

Profit for the period - - 37,715 37,715Other comprehensive income - 348 - 348Total comprehensive income for the period - 348 37,715 38,063

Transactions with owners in their capacityas owners:Acquisition of subsidiaries 2827, 2,602,628 (34) 243,177 2,845,771Dividends provided 29 - - (115,843) (115,843)

2,602,628 (34) 127,334 2,729,928

30 June 2013Balance at 2,602,628 314 165,049 2,767,991

Parent Notes


Reserves$'000

Retainedearnings

$'000

Totalequity$'000

Balance at 3 May 2013 - - - -

Profit for the period - - 138,610 138,610Other comprehensive income - - - -Total comprehensive income for the period - - 138,610 138,610

Transactions with owners in their capacityas owners:Acquisition of subsidiaries 2827, 2,845,324 - - 2,845,324Dividends provided 29 - - (115,843) (115,843)

2,845,324 - (115,843) 2,729,481

30 June 2013Balance at 2,845,324 - 22,767 2,868,091

should be read in conjunction with the accompanying notes.statement of changes in equityThe above


Queensland RailStatement of cash flows


Consolidated Parent

Notes2013$'000

2013$'000

Cash flows from operating activitiesReceipts from customers* 86,106 132,536Receipts from Government* 254,272 -Interest received 1,705 -Payments to suppliers and employees* (239,548) (113,079)Interest and other costs of finance paid (31,421) -Net GST paid (19,562) (6,453)Other (31) 1

from operating activitiesinflowNet cash 36 51,521 13,005

Cash flows from investing activitiesLoans to related parties - (13,005)Proceeds from the disposal of assets 1,075 -Payments for fixed assets (93,990) -

from investing activities(outflow)Net cash (92,915) (13,005)

Cash flows from financing activitiesProceeds from borrowings 28,240 -

from financing activitiesinflowNet cash 28,240 -

in cash and cash equivalents(decrease)Net (13,154) -Cash and cash equivalents acquired from subsidiaries 275,716 -

period**Cash and cash equivalents at end of 9 262,562 -

* Inclusive of goods and services tax (GST).** Net of bank overdraft and monies held in trust.

should be read in conjunction with the accompanying notes.statement of cash flowsThe above


Queensland RailNotes to the financial statements

30 June 2013

Contents of the notes to the financial statements

Page

1 Summary of significant accounting policies 72 Financial risk management 213 Critical accounting estimates and judgements 284 Correction of error and revision of estimates 295 Revenue from continuing operations 306 Other income 307 Expenses 318 Income tax expense 329 Current assets - Cash and cash equivalents 3310 Current assets - Trade and other receivables 3311 Current assets - Inventories 3512 Derivative financial instruments 3613 Current assets - Other current assets 3614 Non-current assets - Receivables 3715 Non-current assets - Inventories 3716 Non-current assets - Property, plant and equipment 3817 Non-current assets - Intangible assets 4018 Non-current assets - Deferred tax assets 4219 Non-current assets - Other financial assets 4320 Non-current assets - Other non-current assets 4321 Current liabilities - Trade and other payables 4322 Liabilities - Provisions 4423 Current liabilities - Other current liabilities 4724 Liabilities - Borrowings 4725 Non-current liabilities - Deferred tax liabilities 4926 Non-current liabilities - Other non-current liabilities 5027 Contributed equity 5028 Reserves and retained earnings 5129 Dividends 5230 Key management personnel disclosures 5331 Contingencies 6032 Commitments 6033 Related party transactions 6134 Subsidiaries 6335 Remuneration of auditors 6436 Reconciliation of profit after income tax to net cash inflow from operating activities 6437 Events occurring after the reporting period 64



30 June 2013(continued)

1 Summary of significant accounting policies

are setfinancial statementsconsolidatedtheseThe principal accounting policies adopted in the preparation ofpresented, unless otherwise stated.periodsout below. These policies have been consistently applied to all the

and its subsidiaries,Queensland Railconsisting ofentityconsolidatedare for thefinancial statementsTheLtd.On Track Insurance PtyandQueensland Rail Limited

were transferred to the Queensland Rail Transit Authority.Queensland Rail LimitedOn 3 May 2013, the shares inQueensland Rail Transit Authority Act 2013The Queensland Rail Transit Authority was established under the

(QRTA Act). In accordance with the QRTA Act, the name of the Queensland Rail Transit Authority was changedon 2 June 2013.Queensland Railto

previously approved by the Board on 28 August 2013, have beenRail,Queenslandforfinancial statementsTheamended subsequent to receiving an unqualified audit opinion from the Auditor-General of Queensland on 30

resolved to transfer costs from capital work in progress toQueensland RailofBoardAugust 2013. Theconsumables expense as those costs no longer represent future economic value. This decision was madesubsequent to considering the accounting implication of a significant de-scope in its Sunlander 14 capitalprogram.

The recognition of the transfer of costs from capital work in progress to consumables expense relates to an eventTransit Authority. This transaction is not reflectedQueensland Railthat occurred prior to the establishment of the

in the financial statements for the reporting period 3 May 2013 to 30 June 2013. The consolidated balance sheetdoes, however, reflect the impact of this event at 30 June 2013.

is an unincorporated statutory body domiciled in Australia and owned by the Queensland StateQueensland Railare denominated in Australianfinancial statementsis a for-profit entity. TheseQueensland RailGovernment.

dollars.

togetherQueensland Railis referred to in this financial report as the "company" or the "parent".Queensland Railare collectively referred to as theLtd,On Track Insurance PtyandQueensland Rail Limitedwith its subsidiaries,

"group".

comprises:financial periodobjectives for thegroup’sThe(a) Efficiency improvement and revenue creation;(b) On time running, reliability, frequency of service and patronage growth;(c) Capital performance and project delivery; and(d) Safety improvement, employee engagement and environment management.

consists of:groupThe principal activities of the(a) Passenger services throughout Queensland;(b) Network access services throughout Queensland;(c) Design and construction of rail infrastructure; and(d) Associated maintenance of both the above and below rail operations.

In accordance with the QRTA Act, all employees and their associated leave entitlements belonging toon 3 May 2013. All expenses incurred byQueensland Railwere transferred toQueensland Rail Limited

in accordanceQueensland Rail Limitedrelating to these employees have been recharged toQueensland Railwith a Managed Services Agreement.

2013.16 DecemberonmembersThese financial statements were approved for issue by the




1 (continued)Summary of significant accounting policies

(a) Basis of preparation

(i) Statement of compliance

which have been prepared in accordancefinancial statementsare general purposefinancial statementsThesewith:

• applicable Australian Accounting Standards (AASBs) (including Australian Interpretations) adopted bythe Australian Accounting Standards Board (AASB);

• 2009;Financial and Performance Management Standardthe• Financial Reporting Requirements for Queensland GovernmentQueensland Treasury and Trade’s

to the extent relevant; andAgencies• other authoritative pronouncements.

(ii) groupNew and amended standards adopted by the

None of the new standards and amendments to standards that are mandatory for the first time for the financialwere early adopted. Their adoption has not affected any of the amounts recognised in1 July 2012year beginning

the current period or any prior period and is not likely to affect future periods. However, amendments made tonow require the statement of2012,1 JulyeffectiveStatements,Presentation of FinancialAASB 101

comprehensive income to show the items of comprehensive income grouped into those that are not permitted tobe reclassified to profit or loss in a future period and those that may have to be reclassified if certain conditionsare met.

(iii) Early adoption of standards

The following standards and amendments to standards are available for early adoption for the financial year2012:1 Julybeginning

Financial InstrumentsAASB 9Amendments to Australian Accounting Standards arising from AASB 9 FinancialAASB 2009-11

InstrumentsAmendments to Australian Accounting Standards arising from AASB 9 FinancialAASB 2010-7

InstrumentsAmendments to Australian Accounting Standards - Mandatory Effective Date of AASB 9 andAASB 2012-6

Transition DisclosuresConsolidated Financial StatementsAASB 10Joint ArrangementsAASB 11Disclosure of Interests in Other EntitiesAASB 12

(2011)Separate Financial StatementsAASB 127(2011)Investments in Associates and Joint VenturesAASB 128

Amendments to Australian Accounting Standards arising from the Consolidation and JointAASB 2011-7Arrangements Standards

Amendments to Australian Accounting Standards - Transition Guidance and otherAASB 2012-10amendments

Fair Value MeasurementAASB 113Amendments to Australian Accounting Standards arising from AASB 113 Fair ValueAASB 2011-8

Measurement(September 2011)Employee BenefitsAASB 119

Amendments to Australian Accounting Standards arising from AASB 119 Employee BenefitsAASB 2012-5(September 2011)

Amendments to Australian Accounting Standards - Disclosures - Offsetting Financial Assets andAASB 2012-2(June 2012)Liabilities

Amendments to Australian Accounting Standards - Offsetting Financial Assets and LiabilitiesAASB 2012-3Amendments to Australian Accounting Standards arising from the Annual ImprovementsAASB 2012-5

2009-2011 CycleApplication of Tiers of Australian Accounting StandardsAASB 1053

Amendments to Australian Accounting Standards arising from Reduced DisclosureAASB 2010-2Requirements

Queensland Rail Financial Report FY2012/13 81




The application of these standards and amendments in future periods is not expected to have a material impacton the accounts of the group. The group has not elected to early adopt any pronouncements for the currentannual reporting period.

There are no other standards that are not yet effective and that are expected to have a material impact on thegroup in the current or future reporting periods and on foreseeable future transactions.

(iv) Historical cost convention

been prepared under the historical cost convention, except for certain assetshavefinancial statementsThesewhich, as stated, are at fair value.

(v) Critical accounting estimates

requires the use of certain critical accounting estimates. It also requiresfinancial statementsThe preparation ofThe areas involving amanagement to exercise its judgement in the process of applying the accounting policies.

higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the3.are disclosed in notestatements,financial

(vi) Going Concern

is prepared on a going concern basis despite current liabilities exceedinggroupThe financial report for thecurrent assets at reporting date. The shortfall is partly due to vested employee benefits being classified ascurrent. Funding through Transport Service Contracts, adequate interest coverage and a low gearing ratio

status as a going concern.group'sprovides adequate assurance of the

Queensland RailThe parent is a going concern as all costs incurred in providing employees to its subsidiary,AllLimited.Queensland Railis recharged by the parent under a Managed Services Agreement withLimited,

banking facilities.Queensland Rail Limitedfunding for operating activities of the parent are sourced from the

(b) Principles of consolidation

(i) Subsidiaries

Queensland Railthe assets and liabilities of the subsidiaries ofincorporatefinancial statementsconsolidatedThethen ended.periodas at reporting date and the results of the subsidiaries for the

has the power to govern thegroupA subsidiary is an entity (including a special purpose entity) over which thefinancial and operating policies so as to obtain benefits from their activities, generally accompanying ashareholding of more than one-half of the voting rights.

They aregroup.Subsidiaries are fully consolidated from the date on which control is transferred to thede-consolidated from the date that control ceases.

companies aregroupInter-company transactions, balances and unrealised gains on transactions betweeneliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment ofthe asset transferred.

Non-current inter-company loans may not be demanded by the other entity and do not become payable otherthan through settlement of obligations associated with the loans or one of the entities exits the wholly-ownedgroup.

group.Accounting policies have been adopted consistently across the

Investment in the subsidiary is accounted for at cost in the financial records of the parent entity.





(c) Foreign currency translation

(i) Functional and presentation currency

entities are measured using the currency of thegroup'sof each of thefinancial statementsItems included in theconsolidatedprimary economic environment in which the entity operates (i.e. the functional currency). The

functional and presentationgroup'spresented in Australian dollars, which is thearefinancial statementscurrency.

(ii) Transactions and balances

Foreign currency transactions are initially translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of

end exchange rates of monetary assets and liabilitiesperiodsuch transactions and from the translation atdenominated in foreign currencies are recognised in profit or loss, except when they are deferred in equity asqualifying cash flow hedges and qualifying net investment hedges.

(d) Rounding of amounts / Comparative restatements

functional currency. Amountsgroup’sare presented in Australian dollars, which is thefinancial statementsThehave been rounded to the nearest thousand dollars unless disclosure of thefinancial statementsincluded in the

full amount is specifically required.

Comparative information has been restated where necessary to be consistent with disclosures in the currentreporting period.

(e) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, except where the amountof GST incurred is not recoverable from the Australian Taxation Office (ATO). In these circumstances, the GST isrecognised as part of the cost of acquisition of the asset or as part of the expense.

Trade receivables and trade payables in the balance sheet are shown inclusive of GST. The net amount of GSTrecoverable from, or payable to, the ATO is included with other receivables or payables in the balance sheet.

Cash flows are presented in the cash flow statement on a gross basis, except for the GST component ofinvesting or financing activities, which are disclosed as operating cash flow.

are individualOn Track Insurance Pty LtdandQueensland Rail LimitedRail,QueenslandFrom 3 May 2013entities recognised as separate taxpayers for the purposes of GST. Transactions between these entities andexternally to third parties are subject to GST.

(f) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable after taking into account anyrecognises revenue whengroupdiscounts allowed. Amounts disclosed as revenue are net of indirect taxes. The

the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entityactivities as described below. Exchanges of goodsgroup'sand specific criteria have been met for each of the

and services of the same nature and value without any cash consideration are not recognised as revenues.Revenue is recognised for the major business activities as follows:

(i) Services revenue

Services revenue comprises revenue earned from Transport Service Contracts, the provision of passengertransport and track access.

In addition to revenue receivable from non-related parties, the company receives revenue from Transport ServiceContracts with the Department of Transport and Main Roads as well as amounts from various State Governmentdepartments as direct reimbursement for concessions provided to senior citizens, pensioners and students.





Transport Service Contracts

Transport Service Contract revenue is accounted for as follows:

• Transport Service Contract (Rail Infrastructure) (TSC(RI))

with funding to cover capital andcompanyThis contract is a multi-tiered arrangement which provides theoperating costs for the Regional and South East Queensland networks.

Under the contract, a stream of annuity-based funding is provided for operating and capital costs whichhave been previously incurred as well as the capital costs for enhancements to these existing systems.This annuity (which is paid in monthly instalments) is calculated on a seven year forecast of capital andoperating costs for the respective systems under the TSC(RI). Capital costs are based on depreciatingassets over a 30 year period.

• Transport Service Contract - South East Queensland Infrastructure Plan and Program (TSC - SEQIPP)

is contracted tocompanyUnder the South East Queensland Infrastructure Plan and Program, theconstruct infrastructure at various locations throughout the South East Queensland network. The

property, plant and equipment which will generategroup'sinfrastructure constructed forms part of therevenue through the TSC (RI) contract. TSC - SEQIPP revenue is recognised on a systematic basis inaccordance with the agreed rate of return of the SEQIPP assets.

• SEQIPP - Third party work

Revenue is recognised based on the actual costs incurred for the work performed. The revenue isrecognised when the work is complete and the costs incurred are taken to the income statement in thesame financial period.

• Citytrain and Traveltrain Transport Service Contracts

receives payments under the Transport Service Contract which defines passengercompanyTheRevenue is recognised on a straight-line basis based on thegroup.services to be provided by the

annual Transport Service Contract amount or periodic adjustments thereto.

Passenger Transport

Other train passenger service revenue comprises ticket and travel related sales and is recognised as revenueonce the service has been rendered.

Government concession revenue is recognised in the period in which the service is provided based on apredetermined formula as agreed with the local authority.

Track Access

Revenue generated from rail network access is recognised as the services are provided and is calculated basedon a number of operating parameters (such as tonnage hauled) applied to either regulator approved tariffs ornegotiated access agreements.

(ii) Other revenue

Other revenue comprises revenue earned from the sale of goods and services. Revenue for sale of goods isrecognised when the significant risks and rewards are passed to the buyer and the costs incurred, or to beincurred in respect of the transaction can be measured reliably. Risks and rewards are considered passed to thebuyer at the time of delivery.

(iii) Interest income

Interest income is recognised using the effective interest method.





(g) Other Income

(i) Government grants

Grants from the government are recognised at their fair value where there is a reasonable assurance that thewill comply with all attached conditions.groupgrant will be received and the

Government grants relating to costs are deferred and recognised in income statement over the period necessaryto match them with the costs that they are intended to compensate.

Government grants relating to the purchase of property, plant and equipment are included in the cost base ofthose assets and amortised to the income statement on a straight-line basis over the expected lives of theassets.

(ii) Disposal of assets

The gain or loss on disposal of an asset is recognised at the date when the significant risks and rewards ofownership of the asset pass to the buyer, usually when the purchaser takes delivery of the asset. The gain orloss on disposal is calculated as the difference between the carrying amount of the asset at the time of disposaland the net proceeds on disposal and is recognised as other income or expenses in the income statement.

(h) Defined benefit superannuation obligations

The group makes contributions to the State Public Sector Superannuation Scheme (QSuper) on behalf of itsemployees concerning superannuation. QSuper is an employer-sponsored fund, with the major employer beingthe State of Queensland. There are a number of membership categories in QSuper, which are eitheraccumulation or defined benefits in nature.

The Treasurer has ultimate responsibility for funding payments to defined benefit members. The State has inplace funding arrangements designed to meet the defined benefit obligations for its members. The Treasurer hasthe ability to require employers to pay any amounts needed to meet these benefits. Generally, this is handledthrough the regular standard fortnightly contribution paid by every employer, which has been determined on theadvice of the State Actuary. No directions varying this contribution have been received by the group to reportingdate.

The State Actuary makes a recommendation to the Treasurer on the standard employer contribution raterequired to fund the normal range of benefits at the conclusion of each triennial actuarial investigation. The mostrecent actuarial investigation was completed in 2010 and the actuary’s recommendation to leave the employercontribution rate unchanged was approved by the Treasurer. This investigation is undertaken on QSuper as awhole and is not segregated into different employers or occupations.

(i) Income tax

The income tax expense or benefit for the period is the tax payable / receivable on the current period's taxableincome based on the national income tax rate adjusted by changes in deferred tax assets and liabilitiesattributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts inthe financial statements and by unused tax losses.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to applywhen the assets are recovered or liabilities are settled, based on those tax rates that are enacted. The relevanttax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure thedeferred tax asset or liability.

Deferred tax assets are recognised for deductible temporary differences, unused tax losses and tax credits, onlyif it is probable that future taxable amounts will be available to utilise those temporary differences, losses andcredits.





Deferred tax liabilities and assets are not recognised for the temporary differences between the carrying amountand tax bases of investments in controlled entities where the parent entity is able to control the timing of thereversal of the temporary differences and it is probable that the differences will not reverse in the foreseeablefuture.

Current and deferred tax is recognised as an expense or income in the income statement, except when it relatesto items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity.

(i) Tax consolidation legislation

measures current and deferred taxgrouphas not elected to form a tax consolidated group. ThegroupTheOn Track Insurance PtyandQueensland Rail Limitedand its controlled entities,Queensland Railamounts for

as individual stand-alone taxpayers and aggregates the balances for disclosure.Ltd,

(ii) Income tax equivalents

is required to make income tax equivalent payments to the Queensland Government, based upon thegroupThevalue of benefits derived and rulings set out in the National Tax Equivalent Regime (NTER) which is administeredby Australian Taxation Office (ATO).

and instruction from theQueensland Rail Transit Authority Act 2013These payments are made pursuant to theTreasurer. The NTER gives rise to obligations which reflect in all material respects those obligations for taxation

andIncome Tax Assessment Act 1997the1936,Income Tax Assessment Actwhich would be imposed by theassociated legislation, as well as Rulings and other pronouncements by the ATO to determine the tax payable by

group.the

(j) Cash and cash equivalents

For statement of cash flows and balance sheet presentation purposes, cash and cash equivalents include cashon hand, deposits held at call with financial institutions and other short-term highly liquid investments that arereadily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(k) Trade receivables

Trade receivables

Trade receivables are initially recorded at fair value less any allowance for uncollectible amounts. Tradereceivables generally have credit terms ranging from 7 to 31 days.

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible arewritten off. An allowance for impairment of trade receivables is established when there is objective evidence that

will not be able to collect all amounts due according to the original terms of the receivables.groupthe

Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financialreorganisation and default or delinquency in payments (more than 90 days overdue) are considered indicatorsthat the trade receivable is impaired.

The amount of the impairment loss is recognised in the income statement within other expenses. When a tradereceivable for which an impairment allowance had been recognised becomes uncollectible in a subsequentperiod, it is written off against the allowance account. Subsequent recoveries of amounts previously written offare credited against other expenses in the income statement.

Other receivables

Other receivables include accruals, contractual receivables and GST receivable. Collectability is reviewed on anongoing basis.





(l) Inventories

The value of inventories reported includes items held in centralised stores, workshops and infrastructure androllingstock depots. Cost comprises cost of purchase, cost of conversion and other costs incurred in bringing theinventory to its present location and condition.

Inventories are valued at the lower of cost or net realisable value. Cost is determined predominantly on anaverage cost basis.

Items expected to be consumed after more than one year are classified as non-current.

The allowance for inventory obsolescence is based on assessments by management of particular inventoryclasses and relates specifically to infrastructure and rollingstock maintenance items. The amount of theallowance is based on a proportion of the value of damaged stock, slow moving stock and stock that has becomeobsolete during the reporting period.

has an agreement in place with Aurizon Operations Limited (formerly QR Limited) regarding inventorygroupTheheld in the Aurizon Operations Limited workshops on behalf of the group. The agreement includes both "calloption" and "put option" clauses and expires on 30 June 2015. The group may exercise a call option upon expiryor termination of the agreement to acquire all or part of the dedicated inventory held by Aurizon OperationsLimited at the expiry or termination date. Aurizon Operations Limited, may in turn, exercise a put option to require

to acquire all or any part of the dedicated inventory held on behalf of the company at the expiry orgroupthetermination date.

(m) Investments and other financial assets

classifies its non-derivative financial assets based on the purpose for which the investments weregroupTheacquired. Management determines the classification of its investments at initial recognition. At reporting date, the

has only one type of non-derivative financial asset: loans and receivables.group

(i) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are notquoted in an active market. They are included in current assets, except for those with maturities greater than 12months after the reporting date which are classified as non-current assets. Loans and receivables are included in

in the balance sheet.14)(noteand non-current receivables10)(notecurrent trade and other receivables

(ii) Recognition and derecognition

Regular purchases and sales of financial assets are recognised on trade-date which is the date on which thecommits to purchase or sell the asset. Investments are initially recognised at fair value plus transactiongroup

costs. Financial assets are derecognised when the rights to receive cash flows from the financial assets havehas transferred substantially all the risks and rewards ofgroupexpired or have been transferred and the

ownership.

(iii) Subsequent measurement

Loans and receivables are carried at amortised cost using the effective interest method.

2.noteDetails on the determination of the fair value of financial instruments are disclosed in

(iv) Impairment

assesses at each reporting date whether there is objective evidence that a financial asset or group ofgroupThefinancial assets carried atgroup’sfinancial assets are impaired. If there is evidence of impairment for any of the

amortised cost, the loss is measured as the difference between the asset’s carrying amount and the presentvalue of estimated future cash flows, excluding future credit losses that have not been incurred. The cash flowsare discounted at the financial asset’s original effective interest rate. The loss is recognised in the incomestatement.





(n) Derivatives and hedging activities

enters into derivative contracts to hedge exposures to foreign exchange rates and commodity pricesgroupThe12.noteDerivative balances are disclosed in2.noteas described in

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and aresubsequently remeasured to their fair value. The method of recognising the resulting gain or loss depends onwhether the derivative is designated as a hedging instrument and, if so, the nature of the item being hedged.

designates certain derivatives as hedges of the cash flows of recognised assets and liabilities andgroupThehighly probable forecast transactions (cash flow hedges).

documents the relationship between hedging instruments and hedged items, as well as itsgroupAt inception, thealso documentsgrouprisk management objective and strategy for undertaking various hedge transactions. The

its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used inhedging transactions have been and will continue to be, highly effective in offsetting future cash flows of hedgeditems.

The full fair value of a hedging derivative is classified as a non-current asset or liability when the remainingmaturity of the hedged item is more than 12 months; it is classified as a current asset or liability when theremaining maturity of the hedged item is less than 12 months.

(i) Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flowhedges is recognised in other comprehensive income. The gain or loss relating to the ineffective portion isrecognised immediately in the income statement.

Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item willaffect profit or loss. However, when the forecast transaction that is hedged results in the recognition of anon-financial asset, the gains and losses previously deferred in equity are transferred from equity and included inthe measurement of the initial cost or carrying amount of the asset.

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria forhedge accounting, any cumulative gain or loss existing in equity at that time is recognised when the forecasttransaction is ultimately recognised in the income statement. When a forecast transaction is no longer expectedto occur, the cumulative gain or loss that was reported in equity is immediately transferred to the incomestatement.

(ii) Derivatives that do not qualify for hedge accounting

Certain derivative instruments do not qualify for hedge accounting. Changes in fair value of any derivativeinstrument that does not qualify for hedge accounting are recognised immediately in the income statement.

(iii) Embedded derivatives

purchase and sale contracts, it is possible that embedded derivatives have been enteredgroup'sThrough theinto. An embedded derivative will cause some or all of the cash flows of the purchase or sale contract (i.e. thehost contract) to be modified by reference to a variable such as a foreign exchange rate or a commodity price ifthat variable is not closely related to the host contract.

Embedded derivatives are separated from the host contract and accounted for as a stand alone derivative if theeconomic characteristics and risks of the embedded derivatives are not closely related to those of the hostcontract.

At reporting date, there were no embedded derivatives not closely related to the host contract.





(o) Property, plant and equipment

Methodology for valuation of fixed assets

Property, plant and equipment is measured at cost less accumulated depreciation. Cost is the amount of cash orcash equivalents paid or the fair value of the other consideration given to acquire an asset at the time of itsacquisition or construction. Cost may also include transfers from other comprehensive income of any gain or losson qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

The cost of fixed assets constructed by the group includes the cost of all materials used in construction, directlabour, site preparation, interest and foreign currency gains and losses incurred where applicable and anappropriate proportion of variable and fixed overheads.

Gifted and Donated Assets

Assets acquired from government at no cost are measured at fair value as government grants. Fair value meansthe amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing partiesin an arm’s length transaction.

Assets acquired from customers at no cost are recorded at fair value.

Land

only retains ownership ofgroupstipulates that theTransport Infrastructure Act 1994Land is carried at cost. Theits non-corridor land. As such, only non-corridor land is recorded in these accounts. Ownership of corridor landremains with the Department of Natural Resources and Mines on behalf of the State. This land is leased to the

for no cost. The sub-leasegroupDepartment of Transport and Main Roads and subsequently sub-leased to theterm is for an initial term of 100 years with a renewal option for an additional 100 years.

Owned building, plant and equipment and major plant and equipment

Owned building, plant and equipment and major plant and equipment are carried at cost less accumulateddepreciation. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset,as appropriate, only when it is probable that future economic benefits associated with the item will flow to the

and the cost of the item can be measured reliably.group

Owned infrastructure

Owned infrastructure assets are carried at cost and represent capitalised expenditures that are directly related tocapital projects and may include materials, labour and equipment, in addition to an allocable portion of indirectcosts that clearly relate to a particular project that will provide future economic benefits and remain within the

group.control of the

Subsequent and maintenance costs

Costs related to repairs and maintenance activities are expensed when such repairs are performed. Subsequentcosts are only capitalised when it is probable that future economic benefits associated with the item which flow to

and the cost of the item can be measured reliably. The carrying amount of any component accountedgroupthefor as a separate asset is derecognised when replaced.

Leased property, plant and equipment

Capitalised fit out of leased properties is disclosed under buildings.

does not have any finance leases.groupThe

Work in progress

includes the cost of all materials used in construction, directgroupThe cost of fixed assets constructed by thelabour, site preparation, interest and foreign currency gains and losses incurred where applicable and anappropriate proportion of variable and fixed overheads.





Depreciation and Amortisation

Buildings, plant and equipment, major plant and equipment and infrastructure are depreciated on a straight-linebasis over the useful life net of the residual value. Motor vehicles are depreciated using the diminishing valuebasis (percentages range from 13.64% to 35.00%), with land and work in progress not depreciated.

Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or theestimated useful lives of the improvements.

Assets are depreciated or amortised from the date of acquisition, or, in respect of internally constructed ormanufactured assets, from the time an asset is completed and held ready for use. Major spares purchasedspecifically for particular assets are capitalised and depreciated in line with standard default asset class lives.

Where assets have separately identifiable components that are subject to regular replacement, thesecomponents are assigned useful lives distinct from the asset to which they relate. Any expenditure that increasesthe originally assessed capacity or service potential of an asset is capitalised and the new depreciable amount isdepreciated over the remaining life of the asset.

were based on the following range of useful lives:periodThe depreciation and amortisation rates used during the

- Buildings 10 - 50 years- Major plant and equipment 8 - 40 years- Plant and equipment 3 - 25 years- Infrastructure* 5 - 100 years

The depreciation and amortisation rates are reviewed annually and adjusted if appropriate.

An asset’s carrying amount is written down to its recoverable amount if the asset’s carrying amount is greater1(r)).(notethan its estimated recoverable amount

* Longer life infrastructure includes bridges, tunnels and other long lived civil works. Shorter life infrastructureincludes telecommunications and security and surveillance equipment.

(p) Intangible assets

(i) IT development and software

Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that willcontribute to future period financial benefits are capitalised to software and systems. Costs capitalised includeexternal direct costs of materials and service and direct payroll and payroll related costs of employees' time spenton the project. Amortisation is calculated using the straight-line method over their useful life which varies from 3to 7 years.

IT development costs include only those costs directly attributable to the development phase and are onlyhas an intention and ability to usecompanyrecognised following completion of technical feasibility and where the

the asset.

(q) Classification of expenditure

Items of expenditure in excess of $2,000 which are expected to provide future economic benefits are capitalised,with the exception of the purchase of office equipment and other items of a similar nature that provide limitedquantifiable benefits. The threshold applies to all asset classes except capital spares and intangibles.

Capital spares have a threshold of $20,000. If capital spares are under $20,000, the item is recorded in inventory.Expenditure not capitalised is treated as an operating expense in the period in which the expenditure is incurred.

Intangibles have a threshold of $50,000. If intangibles are under $50,000, expenditure is not capitalised and istreated as an operating expense in the period in which the expenditure is incurred.





(r) Impairment of assets

Assets are reviewed for impairment annually to determine if there are indications that the carrying amount maynot be recoverable.

An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverableamount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For thepurposes of assessing impairment, assets are grouped at the lowest levels for which there are separatelyidentifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets(cash generating units).

Non-financial assets that have suffered impairment are reviewed for possible reversal of the impairment at eachreporting date.

(s) Trade and other payables

financialprior to the end ofgroupThese amounts represent liabilities for goods and services provided to thewhich are unpaid. The amounts are unsecured and are usually paid within the terms set by the supplier.period

(t) Borrowings and borrowing costs

Debt is drawn from facilities with the Queensland Treasury Corporation (QTC) incorporating fixed and floatingdebt and is initially recognised at fair value, plus transaction costs incurred. Borrowings are subsequentlymeasured at amortised cost, using the effective interest rate method. Interest is accrued and paid monthly.

Interest costs are calculated and advised by QTC in accordance with an agreed book rate methodology, whichequates with amortised cost using the effective interest rate method. The effective interest rate is the rate thatexactly discounts estimated future cash payments or receipts through the expected life of the financialinstrument.

Borrowing costs, which includes interest calculated using the effective interest method and administration fees,are expensed in the period in which they arise.

Borrowing costs which are directly attributable to the construction of material qualifying assets are capitalised.Qualifying assets are assets not funded from other sources with a cost of more than $1.0 million and which take asubstantial period of time to prepare for intended use or sale. The rate used to determine the amount ofborrowing cost to be capitalised is the QTC interest rate applicable to the entity’s outstanding borrowings during

million were capitalised.$(0.6)interest costs ofperiod,During the7.48%.in this caseperiod,the

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement ofthe liability for at least 12 months after the reporting date.

(u) Provisions

has a present legal or constructive obligation as a result of pastgroupProvisions are recognised when theevents, it is probable that an outflow of resources will be required to settle the obligation and the amount hasbeen reliably estimated. Provisions are not recognised for future operating losses.

The amount recognised as a provision is the best estimate of the consideration required to settle the presentobligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where aprovision is measured using the cash flows estimated to settle the present obligation, its carrying amount is thepresent value of those cash flows. The discount rate used to determine the present value is a pre tax rate thatreflects current market assessments of the time value of money and the risks specific to the liability.

(v) Employee benefits

(i) Wages and salaries, annual leave and leave loading

Liabilities for wages and salaries, including non-monetary benefits, annual leave and leave loading arerecognised as current liabilities. These liabilities are in respect of employees' services up to the reporting dateand are measured at the amounts expected to be paid when the liabilities are settled plus related on-costs.





(ii) Other long-term employee benefit obligations

Liabilities for long service leave where employees have completed the required period of service, or are entitledto pro-rata payments are recognised as current liabilities at nominal values. The remaining unvested liabilities areincluded as non-current liabilities.

The liability for long service leave is measured using the expected future payments to be made in respect ofservices provided by employees up to the reporting date. Consideration is given to expected future wage andsalary levels, experience of employee departures and periods of service. Expected future non-current paymentsare discounted using market yields at the reporting date on Commonwealth government bonds with terms tomaturity that match, as closely as possible, the estimated future cash outflows.

(iii) Retirement allowance

Retirement allowance is payable to employees that retire or are paid according to Voluntary EmployeeRedundancy Scheme (VERS) or Medical Separation who:

• are not members of a QSuper contributory or defined benefit superannuation fund;• were employed prior to 1 February 1995;• have 10 or more years of continuous service; and• have reached the retirement attainment age of 55.

Liabilities for retirement allowance where employees fulfil all of the above requirements are recognised as currentliabilities at nominal values. The remaining unvested liabilities are included as non-current liabilities.

The liability for retirement allowance is measured using the expected future payments to be made in respect ofservices provided by employees up to the reporting date. Consideration is given to the history of employeedepartures, expected future wage and salary levels as well as expected age of retirement.

Expected future non-current payments are discounted using market yields at the reporting date onCommonwealth government bonds with terms to maturity that match, as closely as possible, the estimated futurecash outflows.

These conditions continue to apply to employees who have transferred, or will transfer, from Aurizon OperationsRail.QueenslandLimited and Aurizon Network Pty Ltd (formerly QR Network Pty Ltd) to

(iv) Sick leave

Sick leave is not provided for on the grounds that it is non-vesting and on average, no more than the annualentitlement is taken each year.

(v) Superannuation

Contributions are expensed as they are made.

The group pays an employer subsidy to the Government Superannuation Office in respect of employees who arecontributors to either the Public Sector Superannuation (QSuper) scheme or State Service Superannuation.

Employer contributions to the Super Defined Benefit Fund are determined by the State Actuary. No liability isrecognised for accruing superannuation benefits as this liability is held on a Whole-of-Government basis andreported in the Whole-of-Government financial statements. The group also makes superannuation guaranteepayments into the QSuper Accumulation Fund (RailSuper) and QSuper Accumulation Fund (Contributory)administered by the Government Superannuation Office.

No liability / asset is recognised for the group's share of any potential deficit of the Super Defined Benefit Fund offor further information on defined benefit liabilities.1(h)noteQSuper. Refer to





(w) Contributed equity

Ordinary shares are classified as equity.

Equity injections are treated as an increase in the value of issued shares.

(x) Dividends

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at thebut not distributed at reporting date.financial periodon or before the end of thegroup,discretion of the

(y) Leases

(i) Leases on property, plant and equipment

asgroupLeases in which a significant portion of the risks and rewards of ownership are not transferred to theOperating lease rental (net any incentive received from the32).(notelessee are classified as operating leases

lessor) is expensed on a straight-line basis over the lease term and is charged to the income statement.

as lessee, assumes substantially all the risks andgroup,Leases of property, plant and equipment where thedid not have any finance leases at reportinggroupbenefits of ownership are classified as finance leases. The

date.

is a lessor is recognised as income on agroupExpected rental revenue from operating leases where the32).(notestraight-line basis over the lease term

(z) Insurance

insures against risks which are largely uncontrollable, have significant or catastrophic consequencesgroupThefor assets and / or revenue and the aggregate costs of which would exceed the limit of exposure the organisationis prepared to accept.

Insurance cover has accordingly been effected for a variety of such risks. Other areas of risk exposure areself-insured, including workers' compensation.

Rail'sQueenslandUntil 30 June 2010, self-insurance and other underwriting activities were performed bywas transferred from AurizonOn Track Insurance Pty LtdLtd.On Track Insurance Ptywholly-owned subsidiary,

Operations Limited on 6 October 2010 and will continue to provide cover for claims relating to events up until 30and the Aurizon Operations Limited group.Queensland RailJune 2010 for both

(aa) Environmental regulation

is subject to a variety of laws and regulations in the jurisdiction in which it operates or maintains land.groupTheWhere remediation measures are probable and can be reliably measured, such costs incurred in complying with

1(u).noterelevant laws and regulations are accounted for in accordance with the policy in

it does2011,Clean Energy Actis not required to purchase carbon permits under thegroupAlthough thehasgrouppurchase electricity and other inputs whose prices have increased as a result of the legislation. The

assessed the impact of these increases and determined that they are not material to its operations.

(ab) Authorisation for issue

managementare authorised for issue by the Chairman at the date of signing thefinancial statementsThecertificate.




2 Financial risk management

activities expose it to a variety of financial risks including market risk, credit risk and liquidity risk. Thegroup'sTheoverall risk management program focuses on the unpredictability of financial markets and seeks togroup's

uses derivative financialgroupThegroup.minimise potential adverse effects on the financial performance of theinstruments such as foreign exchange contracts and commodity swap contracts to hedge significant riskexposures. Trading for profit is strictly prohibited.

under policies approvedgroupFinancial risk management is being carried out by a central treasury unit within theThe treasury unit identifies, evaluates and hedges financial risks inBoard).(theBoardof theMembersby the

approves the Finance Policy for overall riskBoardoperating units. Thegroup'sclose co-operation with themanagement, as well as principles covering specific areas, such as mitigating foreign exchange, commodityprice, interest rate and credit risks, use of derivative financial instruments and investing excess liquidity. Any

Board.breaches of policy are reported to the

Sensitivity analysis has been used to help assess the financial risk of the group. In determining this sensitivity,the average of the 50 day historical volatility of the closing daily spot rate for three years, was used to adjust theforward curve. A three year period was chosen in line with the group's current hedging framework. For foreigncurrency the adjustment was applied to the US Dollar, the Euro and the Japanese Yen. For commodity price risk,the adjustment was applied to the Singapore Gasoil curves.

(a) Market risk

(i) Foreign exchange risk

Foreign exchange risk arises from capital expenditures that are denominated in a currency that is not the entity'sfunctional currency. The group is exposed to foreign exchange risk arising from various currency exposures,primarily with respect to the US Dollar (USD), the Euro (EUR) and the Japanese Yen (JPY). The risk is measuredusing cash flow at risk.

has a Treasury Principle in place to manage foreign exchange risk. All foreign exchange risk isgroupThecentrally managed by the treasury unit using approved derivative instruments.

foreign exchange risk management policy dictates the level of hedging to be undertaken within thegroup'sTheapproved trading range for the foreign exchange risk hedgingBoardapproved limits. At reporting date, theBoard

is:

0 - 1 year: 80% - 100%1 - 2 years: 60% - 100%2 - 3 years: 40% - 100%

designates forward foreign currency derivatives for hedging foreign exchange forecast transactionsgroupTheof foreign exchange hedges were designated for hedge100%which are highly probable. At reporting date,

accounting purposes.

million.$0.4At reporting date, contracts recognised directly in equity were net gains of

million were removed from equity and included in the$0.01gains of2013,30 Juneperiod endedDuring theacquisition cost of capital.




2 (continued)Financial risk management

exposure to foreign currency risk at reporting date was as follows:group'sThe

30 June 2013

ConsolidatedUSD$'000

EUR€'000

JPY¥'000

Cash and cash equivalents 28 125 1Forward exchange contracts- capital expenditure foreign currency (qualifying for hedge accounting) 577 2,525 -

Net exposure 605 2,650 1

30 June 2013

ParentUSD$'000

EUR€'000

JPY¥'000

Cash and cash equivalents - - -Forward exchange contracts- capital expenditure foreign currency (qualifying for hedge accounting) - - -

Net exposure - - -

Sensitivity

against the USD / EUR / JPY with10%At reporting date, had the Australian dollar weakened / strengthened bymillion lower.$0.006higher /nilpost tax profit would have beengroup’sall other variables held constant, the

(ii) Commodity price risk

Commodity price risk arises when future commercial supply agreements are subject to fluctuations in pricemovements. Commodity swap contracts, transacted by the treasury unit, are used to manage commodity pricerisk.

has a Treasury Principle in place to manage commodity price risk. All commodity price risk is centrallygroupTheuses the commodity Singaporegroupmanaged by Group Treasury using approved derivative instruments. The

has chosen Singapore Gasoil 0.05% to hedgegroupGasoil 0.001% due to environmental efficiencies. Theexposures as these are the most liquid markets available.

Boardcommodity price risk management policy dictates the level of hedging to be undertaken withingroup'sTheapproved trading range for the commodity price hedging is:Boardapproved limits. At reporting date, the

0 - 1 year: 0% - 100%1 - 2 years: 0% - 100%2 - 3 years: 0% - 100%

designates forward commodity derivatives for hedging commodity forecast transactions which aregroupThehighly probable. At reporting date, no commodity hedges were designated for hedge accounting purposes.

At reporting date, contracts recognised directly in equity were nil.

million were removed from equity and included in the cost$0.1losses of2013,30 Juneperiod endedDuring theof diesel fuel.

Sensitivity

At reporting date, had the Singapore Gasoil price decreased / increased with all other variables held constant, thepost tax profit would not have been effected as there were no commodity hedges in place.group's





(iii) Cash flow and fair value interest rate risk

main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates exposegroup'sTheto fair value interestgroupthe group to cash flow interest rate risk. Borrowings issued at fixed rates expose the

rate risk. The QTC has been authorised to manage the interest rate risk of the group within limits in accordanceBoard.with the risk profile approved by the

This is achieved by varying the proportion of the floating and fixed rate funding. The performance of this riskmanagement is assessed against the benchmark duration of the debt portfolio.

had the following exposure to variable rate borrowings:groupAt reporting date the

30 June 2013

Consolidated

Weightedaverage

interest rate%

Balance$'000

Bank overdrafts and bank loans 7.3 3,099,817

Net exposure to cash flow interest rate risk 3,099,817

30 June 2013

Parent

Weightedaverage

interest rate%

Balance$'000

Bank overdrafts and bank loans - -

Net exposure to cash flow interest rate risk -

debt with QTC to interest rate risk:group’sThe following table summarises the sensitivity of the

Interest rate risk-1% +1%

Consolidated30 June 2013

Carryingamount

$'000Profit$'000

Equity$'000

Profit$'000

Equity$'000

Client Specific Debt Pool 3,000,000 1,711 1,711 (1,577) (1,577)Total increase / (decrease) 1,711 1,711 (1,577) (1,577)


Parent30 June 2013

Carryingamount

$'000Profit$'000

Equity$'000

Profit$'000

Equity$'000

Client Specific Debt Pool - - - - -Total increase / (decrease) - - - -





(b) Credit risk

The maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting date torecognised financial assets, is the carrying amount, net of any allowances for impairment of those assets, asdisclosed in the balance sheet and notes to the consolidated financial statements.

does not have any material credit risk exposure to any single receivable or group of receivables undergroupTheother than amounts owing by the State of Queensland. For somegroup,financial instruments entered into by the

trade receivables the group may also obtain security in the form of guarantees, deeds of undertaking or letters ofcredit which can be called upon if the counterparty is in default under the terms of the agreement.

Policies are in place to ensure that sales of products and services are only made to customers with anappropriate credit history.

Derivative counterparties and cash transactions are limited to high credit quality financial institutions and arehas policies that limit the amount of credit exposure to any one financialgroupTheBoard.approved by the

had the following credit exposure risk:groupinstitution. At reporting date the

Consolidated Parent2013$'000

2013$'000

Cash at bank and short-term bank depositsAA+ 276,339 -

276,339 -

Derivative financial assetsAA 475 -

475 -





(c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability offunding through an adequate amount of committed credit facilities and the ability to close out market positions.

ensures sufficient cash to meet short-term and long-term financialgroupLiquidity risk management within thehas policies in place to manage liquidity risk, including the establishment of an annualgroupcommitments. The

approved borrowing program and the availability of appropriate working capital facilities.

manages liquidity risk by monitoring forecast cash flows and ensuring that adequate cash flow isgroupThemaintained.

Financing arrangements

The borrowing2(a)(iii).The short-term borrowing arrangements with QTC are interest bearing, refer to notearrangements are subject to annual review.

The amount of undrawn short-term borrowing facilities with QTC available at reporting date is shown below:


2013$'000

QTC short-term facilitiesUsed at reporting date 99,817 -Unused at reporting date 350,183 -

Total facilities 450,000 -

Long-term borrowings are sourced from the Queensland Rail Client Specific Pool subject to annual approval ofmay draw up to the amount of the approved borrowing program.groupthe Queensland State Treasurer. The

Borrowings are not secured.





Maturity Analysis

financial liabilities and net and gross settled derivative financial instrumentsgroup'sThe tables below analyse theinto relevant maturity groupings based on the remaining period at the reporting date to the contractual maturitydate. The amounts disclosed in the table are the contractual undiscounted cash flows.


Less than1 year$'000

Between1 and 5 years

$'000

Over5 years$'000

Totalcontractualcash flows

$'000

Non-derivativesNon-interest bearing 168,475 - - 168,475Variable rate 125,328 - - 125,328Fixed rate 219,113 877,056 2,962,320 4,058,489Total non-derivatives 512,916 877,056 2,962,320 4,352,292

Derivatives

Gross settled (foreign exchange hedges)Assets- (inflow) (4,294) - - (4,294)- outflow 3,811 - - 3,811Total derivatives (483) - - (483)

Parent30 June 2013



$'000

Over5 years$'000


$'000

Non-derivativesNon-interest bearing 385,709 - - 385,709Variable rate - - - -Fixed rate - - - -Total non-derivatives 385,709 - - 385,709

Derivatives

Gross settled (foreign exchange hedges)Assets- (inflow) - - - -- outflow - - - -Total derivatives - - - -





(d) Fair value measurements

The fair value of financial assets and financial liabilities must be estimated for recognition and for disclosurepurposes.

requires disclosure of fair value measurements by level of theFinancial Instruments: DisclosuresAASB 7following fair value measurement hierarchy:

(Level 1) quoted prices (unadjusted) in active markets for identical assets or liabilities;(Level 2) inputs other than quoted prices included within level 1 that are observable for the asset or liability,

either directly (as prices) or indirectly (derived from prices); and(Level 3) inputs for the asset or liability that are not based on observable market data (unobservable

inputs).

30 Juneassets and liabilities measured and recognised at fair value atgroup'sThe following table presents the2013:


Level 1$'000

Level 2$'000

Level 3$'000

Total$'000

AssetsDerivatives used for hedging

Forward exchange contracts - 475 - 475Total assets - 475 - 475

Parent30 June 2013

Level 1$'000

Level 2$'000

Level 3$'000

Total$'000


Forward exchange contracts - - - -Total assets - - - -

The fair value of financial instruments traded in active markets (such as foreign exchange and commodityderivatives) is based on observable market prices at reporting date. The observable market price used for

for effective hedges is the average (i.e. mid) forward rate at closegroupfinancial assets and liabilities held by theof business on reporting date.

The fair value of financial instruments that are not traded in an active market (for example, over the counterderivatives) is determined using generally accepted valuation techniques. The group uses a variety of methodsand makes assumptions that are based on market conditions existing at the end of each reporting period.Observable market prices or dealer estimates for similar instruments are used to estimate fair value for long-termdebt for disclosure purposes. Other techniques, such as estimated discounted cash flows, are used to determinefair value for the remaining financial instruments. The fair value of forward exchange contracts and commodityswap contracts is determined using forward market rates at the end of the reporting period. These instrumentsare included in level 2 and comprise derivative financial instruments. In the circumstances where a valuationtechnique for these instruments is based on significant unobservable inputs, such instruments are included inlevel 3.

The carrying amounts of trade receivables and payables are assumed to approximate their fair values due totheir short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting

for similargroupthe future contractual cash flows at the current market interest rate that is available to thefinancial instruments. The carrying amount of current borrowings approximates the fair value, as the impact ofdiscounting is not significant.




3 Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors,including expectations of future events that may have a financial impact on the entity and that are believed to bereasonable under the circumstances.

(a) Critical accounting estimates and assumptions

makes estimates and assumptions concerning the future. The resulting accounting estimates will, bygroupThedefinition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of

arefinancial periodcausing a material adjustment to the carrying amounts of assets and liabilities within the nextdiscussed below.

(i) Estimated impairment of property, plant and equipment

tests annually whether property, plant and equipment has suffered any impairment, in accordance withgroupTheThe recoverable amounts of cash generating units have been1(r).the accounting policy stated in note

determined based on value in use calculations or fair value less costs to sell. Value in use calculations requirethe use of assumptions.

(ii) Provisions for insurance claims

managed the self-insurance activities of the AurizonLtd,On Track Insurance PtyThe subsidiary company,belonged untilOn Track Insurance Pty LtdandQueensland Rail LimitedOperations Limited group to which both

30 June 2010 and 6 October 2010 respectively. Actuarial assessments are undertaken annually to assess thefor further information.1(z)value of the provision for any outstanding claims. Refer to note

Accrued insurance liabilities (includes Workers' Compensation) is based on a combination of managementfor more22end. Refer to noteperiodestimates and independent actuarial assessments performed as at

information.

(iii) Provision for land rehabilitation

There is uncertainty as to the amount that will ultimately be required to be expensed to remediate contaminatedfor more information.22land. Refer to note

(iv) Workers compensation self-insurance provision

Independent actuarial valuations are used to estimate the provisions required for self-insured workerscompensation.

The determination of the provisions required is dependent on a number of assumptions including the total futurecost to finalise existing open claims, wage increases that will impact existing claims, inflation and the amount ofclaims that have been incurred but not yet reported.

for more information.22Refer to note

(v) Long service leave provision

The determination of the provisions required is dependent on a number of assumptions including expected wageincreases, length of employee service and bond rates.





3 (continued)Critical accounting estimates and judgements

(vi) Taxation

accounting policy for taxation requires management's judgement as to the types of arrangementsgroup'sTheconsidered to be subject to a tax. Judgement is also required in assessing whether deferred tax assets andcertain deferred tax liabilities are recognised on the balance sheet. Deferred tax assets, including those arisingfrom unrecouped tax losses, capital losses and temporary differences, are recognised only when it is consideredprobable that they will be recovered. Recoverability is dependent on the generation of sufficient future taxableprofits.

for carrying amounts of deferred tax assets and deferred tax liabilities.25and18Refer to notes

(vii) Depreciation

Management estimates the useful lives and residual values of property, plant and equipment based on theexpected period of time over which economic benefits from use of the asset will be derived. Management reviewsuseful life assumptions on an annual basis having given consideration to variables including historical andforecast usage rates, technological advancements and changes in legal and economic conditions. Refer to note

for details of current depreciation rates used.1(o)

(viii) Hedge accounting

Management's judgement is necessary when determining whether a derivative financial instrument qualifies forFinancialhedge accounting, such as whether forecast transactions are highly probable as required by AASB 139

The assessment of whether forecast transactions are highlyMeasurement.Instruments: Recognition andprobable is judgmental and is subject to changes to the timing and magnitude of underlying purchases.

4 Correction of error and revision of estimates

There have been no corrections of error in the current reporting period.

There were no material revisions of estimates during the current reporting period.




5 Revenue from continuing operations


2013$'000

Transport service contract revenue 246,264 -Services revenue - 120,486Passenger transport revenue 11,577 -Network access revenue 43,174 -Other revenue* 25,916 -Interest revenue 1,722 -Inter-company dividend revenue - 138,610

328,653 259,096

$5.9million, External construction works revenue$8.9* Other revenue includes Insurance claims revenuemillion$1.7million, Telecommunication revenue$2.0million, Airtrain revenue$3.9million, Workshop revenue

million$1.7and Leasing revenue

6 Other income


2013$'000

Net foreign exchange gains 19 -Rebates 468 -

487 -




7 Expenses


2013$'000

Profit before income tax includes the followingspecific expenses:

Depreciation and amortisationDepreciation

Buildings 3,252 -Plant and equipment 3,844 -Infrastructure 22,631 -Major plant and equipment 18,328 -

Total depreciation 48,055 -Amortisation

Lease fit out 489 -17)Software (note 2,875 -

Total amortisation 3,364 -

Total depreciation and amortisation 51,419 -

Finance costsInterest and finance charges paid / payable 38,371 -

Total finance costs 38,371 -

Other expensesRental expenses relating to leases 9 -Allowance for inventory obsolescence 215 -Research and development costs 75 -Settlement of litigation expenses 83 -Impairment losses

Trade receivables (20) -Net losses on commodity hedge ineffectiveness 3 -Net loss on disposal of property, plant and equipment 1,190 -Other expenses 571 -

Total other expenses 2,126 -

Superannuation expenses*Defined benefit superannuation expense 3,487 2,783Defined contribution superannuation expense 6,802 6,893

Total superannuation expenses 10,289 9,676

* Forms part of employee benefits expense.




8 Income tax expense

(a) Income tax expense


2013$'000

Current tax 5,574 1,154Deferred tax 4,930 (1,154)

10,504 -

(benefit) included in income tax expense/expenseDeferred income taxcomprises:

18)(note(Increase) / decrease in deferred tax assets (948) (1,154)25)(noteIncrease / (decrease) in deferred tax liabilities 5,878 -

4,930 (1,154)

(b) Numerical reconciliation of income tax expense to prima facie tax payable


2013$'000

Profit from continuing operations before income tax expense 48,219 138,61030%)(2012:30%Tax at the Australian tax rate of 14,466 41,583

Tax effect of amounts which are not deductible / (taxable) in calculatingtaxable income:

Research and development (381) -Inter-company eliminations (3,587) -Dividends received from subsidiaries - (41,583)Other 8 -Non-assessable income (2) -

(3,962) (41,583)

Total income tax expense 10,504 -

(c) Amounts recognised directly in equity


2013$'000

Aggregate current and deferred tax arising in the reporting period and notrecognised in net profit or loss but directly debited or credited to equity:

25)and18Net deferred tax - debited / (credited) directly to equity (notes 149 -149 -




9 Current assets - Cash and cash equivalents


2013$'000

Cash on hand 129 -Short-term investments 276,339 -

Total cash and cash equivalents 276,468 -

Less: bank overdraft (13,908) -Less: trust monies 2 -

(13,906) -

Balance as per statement of cash flows 262,562 -

(a) Interest rate risk exposure

2.exposure to interest rate risk is discussed in notegroup’sThe

10 Current assets - Trade and other receivables


2013$'000

Trade receivables 65,704 -(a)Allowance for impairment of receivables (253) -

Net trade receivables 65,451 -

Inter-company receivables - 537,015Inter-company dividend receivables - 138,610

- 675,625

Transport service contracts 90,437 -Receivables - SEQIPP works 7,345 -Other receivables 18,792 -

116,574 -

Total trade and other receivables 182,025 675,625

Due to the short-term nature of these receivables, their carrying amount is assumed to approximate their fairvalue.




10 (continued)Current assets - Trade and other receivables

(a) Impaired trade receivables

At reporting date, it was assessed that a portion of the impaired receivables is expected to be recovered. Thenominal values and ageing of the impaired trade receivables is as follows:


2013$'000

1 to 3 months 6 -3 to 6 months 82 -Over 6 months 252 -

340 -

Movements in the allowance for impairment of receivables are as follows:


2013$'000

Opening balance - -Acquisition of subsidiaries 273 -Unused amounts reversed (20) -

253 -

The creation and release of the allowance for impaired receivables has been included in the income statement.Amounts charged to the allowance account are generally written off when there is no expectation of recoveringadditional cash.

(b) Past due but not impaired

trade receivables were past due but not impaired. These relate to agroup’sAt reporting date, some of thenumber of independent customers for whom there is no recent history of default. The ageing analysis of thesetrade receivables is as follows:


2013$'000

3 to 6 months 315 -Over 6 months 1,991 -

2,306 -




11 Current assets - Inventories


2013$'000

(b)Raw materials and stores 62,314 -Work in progress 125 -Less: allowance for inventory obsolescence (1,202) -

Inventory at lower of cost or net realisable value 61,237 -

(a) Inventory expense

million.$19.639amounted to30 June 2013period endedInventory recognised as expense during the30 Juneperiod endedWrite-downs of inventories to net realisable value recognised as an expense during the

million.$0.004amounted to2013

(b) Raw materials and stores

The amount of raw materials and stores includes surplus materials held to support the existing rollingstock assetsAn independent external valuer performed a stock take and assessed the value of the surplusgroup.of the

materials in connection with the carriages that were de-scoped from the Sunlander 14 capital program to be $5.0million. This amount was transferred to inventory from capital work in progress in the current reporting period.

engaged an independent external valuer to assess and value materials procured in relation toQueensland Railthe portions of the Sunlander 14 capital program that were de-scoped. Key estimates and assumptions were

to supportQueensland Railmade by the valuer in determining the value of the materials that could be used byexisting rollingstock. These include:

• All materials were considered to be new at reporting date and no aging allowances were included in thevalues determined.

• All materials transferred to inventory only included those items that are replaceable units which supportRail.Queenslandthe rendering of services to

• to the supplier where itQueensland RailThe value of procured materials represented the cost paid bycould expect toQueensland Railwas identifiable. Otherwise, the value represented the likely price that

pay for each item.• The materials valued were components created and purchased in order to assemble a narrow gauge tilt

train. Accordingly, it was held that there was no opportunity to dispose of surplus materials inaccordance with its best and highest use to another rail operator.

Physical inspections were included up to and including those on 19 November 2013 and were undertaken byinspecting a representative sample with a focus on high value sub system components first. The inspections andvaluations have been based upon the information provided to the valuer.




12 Derivative financial instruments


2013$'000

Current assetsForward exchange contracts - cash flow hedges 475 -Total current derivative financial instrument assets 475 -

Total derivative financial instrument assets 475 -

(a) Instruments used by the group

holds derivative financial instruments to hedge (including economically hedge) its foreign currency andgroupThe2).financial risk management policy (notegroup’scommodity price risk exposures in accordance with the

13 Current assets - Other current assets


2013$'000

Prepayments 6,439 -tax*Prepaid income 423 -

6,862 -

has made Pay As You Go quarterly income tax instalments for the 2012/13 period which havegroup* Theexceeded the income tax liability for the same period.




14 Non-current assets - Receivables


2013$'000

Loan receivable* 3,843 -Inter-company receivables - 31,375

3,843 31,375

On Track* Loan receivable represents the outstanding balance of the loan between the subsidiary company,and its former parent company, Aurizon Operations Limited. This loan is non-interest bearingInsurance Pty Ltd

settlesOn Track Insurance Pty Ltdand is not repayable on demand. The loan balance is reduced asoutstanding insurance claims by Aurizon Operations Limited and its subsidiaries.

(a) Impaired receivables and receivables past due

None of the non-current receivables are impaired or past due but not impaired.

(b) Fair values

The carrying value of non-current receivables represents the best approximation of fair value.

15 Non-current assets - Inventories


2013$'000

Raw materials and stores 22,533 -22,533 -




16 Non-current assets - Property, plant and equipment

Consolidated

Work inprogress

$'000Land$'000

Buildings$'000

Plant andequipment

$'000

Major plantand

equipment$'000

Infrastructure$'000

Total$'000

At 3 May 2013Cost - - - - - - -Accumulated depreciation / amortisation and impairment losses - - - - - - -Net book amount - - - - - - -

30 June 2013Period endedOpening net book amount - - - - - - -Acquisition of subsidiaries 539,096 127,152 409,544 122,829 1,338,346 3,652,751 6,189,718Additions 111,744 - - 42 - - 111,786Transfers between asset classes (76,353) 65 4,001 512 17,288 43,660 (10,827)Disposals - (4) (60) (1,816) (65) (318) (2,263)Depreciation / amortisation expense - - (3,741) (3,844) (18,328) (22,631) (48,544)Closing net book amount 574,487 127,213 409,744 117,723 1,337,241 3,673,462 6,239,870

30 June 2013AtCost 574,487 129,002 540,597 233,999 1,907,339 4,320,286 7,705,710Accumulated depreciation / amortisation and impairment losses - (1,789) (130,853) (116,276) (570,098) (646,824) (1,465,840)Net book amount 574,487 127,213 409,744 117,723 1,337,241 3,673,462 6,239,870




16 (continued)Non-current assets - Property, plant and equipment

Parent

Work inprogress

$'000Land$'000

Leasedproperty

$'000Buildings

$'000

Plant andequipment

$'000

Major plantand

equipment$'000

Infrastructure$'000

Total$'000

At 3 May 2013Cost - - - - - - - -Accumulated depreciation / amortisation andimpairment losses - - - - - - - -Net book amount - - - - - - - -

30 June 2013Period endedOpening net book amount - - - - - - - -Acquisition of subsidiaries - - - - - - - -Additions - - - - - - - -Transfers between asset classes - - - - - - - -Disposals - - - - - - - -Depreciation / amortisation expense - - - - - - - -Closing net book amount - - - - - - - -

30 June 2013AtCost - - - - - - - -Accumulated depreciation / amortisation andimpairment losses - - - - - - - -Net book amount - - - - - - - -

(a) Non-current assets pledged as security

company.No assets have been pledged as security by the(b) Impairment

An impairment assessment was undertaken prior to reporting date. No impairment was recognised in the current or prior reporting periods.





(c) Acquisition of subsidiaries for work in progress

The acquisitions of subsidiaries section of work in progress reflect the transfer of costs to consumables expenseand the transfer to inventory relating to the de-scope of the Sunlander 14 capital program. The acquisitions ofsubsidiaries for work in progress have been reduced by $48.2 million representing the transfer of costs toconsumables expense and $5.0 million representing the transfer to inventory.

The transfer of estimated costs to consumables expense represent materials, project management andengineering design costs relating to the de-scoped portions of the capital program. These costs were incurred tobuild carriages which were unique to a narrow gauge tilt train. Accordingly, it was held that these costs did notrepresent a future economic benefit and there was no opportunity to dispose of the surplus materials inaccordance with its best and highest use to another rail operator.

17 Non-current assets - Intangible assets

Consolidated

Computersoftware*

$'000Total$'000

At 3 May 2013Cost - -Accumulated amortisation and impairment - -Net book amount - -

30 June 2013Period endedOpening net book amount - -Acquisition of subsidiaries 39,036 39,036Transfers 10,827 10,827Amortisation expense (2,875) (2,875)Closing net book amount 46,988 46,988

30 June 2013AtCost 74,456 74,456Accumulated amortisation and impairment (27,468) (27,468)Net book amount 46,988 46,988

* Software includes capitalised development costs being an internally generated intangible asset.




17 (continued)Non-current assets - Intangible assets

Parent

Computersoftware*

$'000Total$'000

At 3 May 2013Cost - -Accumulated amortisation and impairment - -Net book amount - -

30 June 2013Period endedOpening net book amount - -Acquisition of subsidiaries - -Transfers - -Amortisation expense - -Closing net book amount - -

30 June 2013AtCost - -Accumulated amortisation and impairment - -Net book amount - -


An impairment assessment was undertaken prior to reporting date. No impairment was recognised in the currentor prior reporting periods.




18 Non-current assets - Deferred tax assets


2013$'000

The balance comprises temporary differences attributable to:Tax losses 2,011 -Accrued expenses 10,230 4,524Capital losses 3,211 -Provisions 81,683 68,903Superannuation contributions 706 (8)Unearned revenue 3,818 -

Total deferred tax assets 101,659 73,419


2013$'000

Movements:Opening balance - -Acquisition of subsidiaries 98,734 -Transfer from subsidiaries - 72,265

8)(noteCredited to the consolidated income statement 948 1,154Cash flow hedges (14) -Increase in carried forward tax losses 1,991 -

Closing balance at 30 June 101,659 73,419


2013$'000

Deferred tax assets expected to be recovered within 12 months - -

Deferred tax assets expected to be recovered after more than 12 months 101,659 73,419




19 Non-current assets - Other financial assets


2013$'000

Shares in subsidiaries - 2,845,324- 2,845,324

20 Non-current assets - Other non-current assets


2013$'000

Prepayments 4,834 -4,834 -

21 Current liabilities - Trade and other payables


2013$'000

Trade payables 166,086 17,167Inter-company payables - 355,736Dividend payable 115,843 115,843Other payables 27,900 12,806

309,829 501,552




22 Liabilities - Provisions

2013

ConsolidatedCurrent

$'000Non-current

$'000Total$'000

(a)Employee benefits 210,401 19,273 229,674(b)Provision for insurance claims 13,296 - 13,296

(c)Litigation and workers' compensation provision 7,149 19,024 26,173(d)Land rehabilitation provision - 10,967 10,967

(e)Make good provision - 2,760 2,760(f)Other provisions 5,882 - 5,882

236,728 52,024 288,752

2013

ParentCurrent

$'000Non-current

$'000Total$'000

(a)Employee benefits 210,401 19,273 229,674(b)Provision for insurance claims - - -

(c)Litigation and workers' compensation provision 6,670 18,535 25,205(d)Land rehabilitation provision - - -

(e)Make good provision - - -(f)Other provisions - - -

217,071 37,808 254,879

(a) Employee benefits


2013$'000

Annual leave and leave loading 60,490 60,490Long service leave 150,661 150,661Other 18,523 18,523

229,674 229,674

The current provision for long service leave covers all unconditional entitlements where employees havecompleted the required period of service and also those where employees are entitled to pro-rata payments in

does not have angroupcertain circumstances. This portion of the provision is presented as current, since theunconditional right to defer settlement for any of these obligations. However, based on past experience, the

does not expect all employees to take the full amount of accrued leave or require payment within the nextgroup12 months.

The non-current provision for long service leave covers all conditional entitlements where employees have notcompleted the required period of service and are not entitled to pro-rata payments. This portion of the provision is

does not have an obligation to settle the provision within the next 12grouppresented as non-current, since themonths.

Other employee benefits includes payroll tax and retirement allowances.

on 3 MayQueensland RailtoQueensland Rail LimitedEmployees and their entitlements were transferred fromThis resulted in the transfer of the entire2013.Queensland Rail Transit Authority Act2013 in accordance with the

balance of the employee benefits on the same day.




22 (continued)Liabilities - Provisions

(b) Provision for Insurance Claims

On Trackas recorded bygroupThe provision for insurance claims is raised for insurance claims external to theinternal captive insurance provider for claims up until 30 June 2010. The provisiongroup'stheLtd,Insurance Pty

as determined by angrouprepresents the estimated requirement to settle all third party claims against theactuarial assessment.

(c) Litigation and workers' compensation

Provision is made for the estimated liability for workers' compensation and litigation claims. Claims are assessedseparately for common law, statutory and asbestos claims. The outstanding liability is determined after factoringfuture claims inflation and discounting future claim payments. Estimates are made based on the average numberof claims and average claim payments over a specified period time. Claims Incurred But Not Reported (IBNR) arealso included in the estimate. Claims are expected to be paid over a period exceeding more than one year.

the Queensland State2013,Queensland Rail Transit Authority ActSubsequent to the enactment of theGovernment issued a Transfer Notice resulting in the transfer of the workers' compensation liability from

Rail.QueenslandtoQueensland Rail Limited

(d) Land rehabilitation provision

group'sThis provision recognises the estimated costs to remediate contaminated land in accordance with theconstructive obligations per the environmental sustainability policy. These estimated costs have arisen as a resultof past events.

The provision for land rehabilitation is the present value of management's best estimate of the expenditurerequired to settle the land rehabilitation present obligation at the reporting date. The provision has beencalculated based on advice from external consultants and management's best estimate of likely remediationcosts.

(e) Make good provision

This provision represents the anticipated costs of the future restoration of leased office premises. Make goodrequirements vary for different properties. The provision includes future cost estimates associated with therestoration of office fixtures and fittings to original condition; removal of all property and equipment to return thepremises to a vacant shell and making good any damage caused by their removal; removing any alterations toreturn to its original layout; and repairing and making good any damage which may be caused to land adjoiningthe premises as a result of carrying out structural work or other improvements. The provision has been calculatedbased on management's best estimate of make good costs.

(f) Other provisions

Other provisions comprise an outstanding commitment at reporting date to compensate a supplier for materialsand project administration and engineering costs associated with the carriages that were de-scoped from the

In accordance with the1.noteSunlander 14 capital program for the amount of $5.9 million as disclosed ingroupaccounting standards, this commitment is recognised as a provision in the current reporting period as the

has a present contractual obligation, relating to an event that has occurred, which is expected to be settled in thenext reporting period.





(g) Movements in provisions

other than employee benefits, are set outperiod,financialMovements in each class of provision during thebelow:

Consolidated2013

Provision forinsurance

claims$'000

Litigation andworkers'

compensationprovision

$'000

Landrehabilitation

provision$'000

Make goodprovision

$'000

Otherprovisions

$'000Total$'000

Current and non-currentCarrying amount at start ofperiod - - - - - -Acquisition of subsidiaries 28,616 986 10,882 3,809 - 44,293Transfer from subsidiaries - 31,032 - - - 31,032Charged / (credited) to profitor loss

- additional provisionsrecognised - 2,125 26 - 5,882 8,033

- unused amountsreleased (5,351) (7,134) - (982) - (13,467)

- unwind discount - - 59 31 - 90Amounts used during theperiod (9,969) (836) - (98) - (10,903)Carrying amount at end ofperiod 13,296 26,173 10,967 2,760 5,882 59,078

Parent2013


claims$'000



$'000

Landrehabilitation

provision$'000

Make goodprovision

$'000

Otherprovisions

$'000Total$'000

Current and non-currentCarrying amount at start ofperiod - - - - - -Acquisition of subsidiaries - - - - - -Transfer from subsidiaries - 31,032 - - - 31,032Charged / (credited) to profitor loss

- additional provisionsrecognised - 2,078 - - - 2,078

- unused amountsreleased - (7,134) - - - (7,134)

- unwind discount - - - - - -Amounts used during theperiod - (771) - - - (771)Carrying amount at end ofperiod - 25,205 - - - 25,205




23 Current liabilities - Other current liabilities


2013$'000

(a)Income in advance 21,592 -Other current liabilities 3,166 67

24,758 67

(a) Income in advance

Income in advance predominantly represents amounts received as prepayment for the development of railinfrastructure and lease payments and/or incentives received in advance. Infrastructure prepayments aredeferred and earned over the term of their respective agreements while lease incentives are amortised to theincome statement over the life of the related lease.

24 Liabilities - Borrowings

2013

ConsolidatedCurrent

$'000Non-Current

$'000Total$'000

Queensland Treasury Corporation borrowings* 99,817 3,000,000 3,099,817

Total borrowings 99,817 3,000,000 3,099,817

2013

ParentCurrent

$'000Non-Current

$'000Total$'000

Queensland Treasury Corporation borrowings* - - -

Total borrowings - - -

* Unsecured

(a) Financing arrangements

2(c).financing arrangements please refer to notegroup'sFor details of the




24 (continued)Liabilities - Borrowings

(b) Fair value

The carrying amounts and fair values of current and non-current borrowings and off-balance sheet guarantees atreporting date are:

2013

Consolidated

Carryingamount

$'000Fair value

$'000

(i)On-balance sheetNon-traded financial liabilitiesCurrent borrowings 99,817 99,817Non-current borrowings 3,000,000 3,225,974

3,099,817 3,325,791

(ii)Off-balance sheetUnrecognised financial assetsThird party guarantees - 293,018Bank guarantees - 93,387Insurance company guarantees - 24,857Unrecognised financial liabilitiesThird party guarantees - (2,000)Bank guarantees - (36,015)

- 373,247

2013

Parent

Carryingamount

$'000Fair value

$'000

(i)On-balance sheetNon-traded financial liabilitiesCurrent borrowings - -Non-current borrowings - -

- -

Off-balance sheetUnrecognised financial assetsThird party guarantees - -Bank guarantees - -Insurance company guarantees - -Unrecognised financial liabilitiesThird party guarantees - -Bank guarantees - -

- -

(i) On-balance sheet

The fair value of borrowings is determined by reference to pricing models and valuation techniques as advised byQTC.




24 (continued)Liabilities - Borrowings

(ii) Off-balance sheet

The off-balance sheet items comprise guarantees either held or issued by the group and contingent assets andliabilities not qualifying for recognition at reporting date. A majority of the guarantees held relate to performanceguarantees on construction contracts provided by third parties.

(c) Risk exposures

2.Information about the entity's exposure to interest rate and foreign currency fluctuations is provided in note

25 Non-current liabilities - Deferred tax liabilities


2013$'000

The balance comprises temporary differencesattributable to:Accrued income 1,789 -Consumables and spare parts 6,923 -Property, plant and equipment 401,488 -Prepayments 115 -Cash flow hedges 135 -Foreign exchange gains 1,444 -

Total deferred tax liabilities 411,894 -


2013$'000

Movements:Opening balance - -Acquisition of subsidiaries 405,881 -

8)(noteCharged to the consolidated income statement 5,878 -Cash flow hedges 135 -

Closing balance at 30 June 411,894 -


2013$'000

Deferred tax liabilities expected to be settled within 12 months - -

Deferred tax liabilities expected to be settled after more than 12 months 411,894 -




26 Non-current liabilities - Other non-current liabilities


2013$'000

(a)Income in advance 29,845 -29,845 -


Income in advance predominantly represents amounts received as prepayment for the development of railinfrastructure and lease incentives received in advance. Infrastructure prepayments are deferred and earned overthe term of their respective agreements while lease incentives are amortised to the income statement over the lifeof the related lease.

27 Contributed equity

(a) Share capital


2013$'000

Ordinary sharesShares acquired 2,602,628 2,845,324

Total contributed equity 2,602,628 2,845,324

(b) Movements in ordinary share capital

Consolidated

Date Details Number ofshares

$'000

3 May 2013 Opening balance - -Shares acquired 100 2,602,628

30 June 2013 Balance 100 2,602,628

(c) Ordinary shares

incompanyOrdinary shares entitle the holder to participate in dividends and the proceeds on winding up of theproportion to the number of and amounts paid on the shares held.

(d) Capital risk management

objectives when managing capital are to safeguard its ability to continue as a going concern so that itgroup'sThecan continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimalcapital structure to reduce the cost of capital.

The responsible Ministers advise the appropriate methodology in determining the dividend payable annually.




27 (continued)Contributed equity

monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by totalgroupThecapital. Net debt is calculated as total borrowings (including 'borrowings' and ‘trade and other payables' as shownin the balance sheet) less cash and cash equivalents (including bank overdraft). Total capital is calculated as‘equity’ as shown in the balance sheet plus net debt.

gearing ratios are as follows:group'sThe


2013$'000

Total borrowings 3,409,646 145,816Less: cash and cash equivalents (including bank overdraft) (262,560) -Net debt 3,147,086 145,816Total equity 2,767,991 2,868,091

Total capital 5,915,077 3,013,907

Consolidated ParentGearing ratio 53% N/A

is also required by QTC to maintain an Earnings Before Interest and Tax (EBIT) Interest Coverage ofgroupThegreater than 1.25:1, except where the total debt to capital is greater than 70%, in which case the EBIT Interest

has complied with this requirement for both the current and priorgroupCoverage must be at least 2:1. Thereporting periods.

28 Reserves and retained earnings

(a) Reserves


2013$'000

Hedging reserve - cash flow hedges 314 -314 -


2013$'000

Movements:

Hedging reserve - cash flow hedgesOpening balance - -Acquisition of subsidiaries (34) -Fair value gains taken to equity 407 -Deferred tax (122) -Fair value losses matured and included in components cost 101 -Deferred tax (30) -Fair value (gains) matured and capitalised (11) -Deferred tax 3 -

30 JuneBalance 314 -




28 (continued)Reserves and retained earnings

(b) Retained earnings

Movements in retained earnings were as follows:


2013$'000

Opening balance - -Acquisition of subsidiaries 243,177 -

periodProfit for the 37,715 138,610Dividends provided (115,843) (115,843)

30 JuneBalance 165,049 22,767

29 Dividends

Ordinary shares


2013$'000

dollars per share was declared by1,158,433Dividend of2013:30 Juneperiod endedfor the group for theBoardthe

Dividend declared* 115,843 115,843

* All dividends declared / paid were unfranked.




30 Key management personnel disclosures

(a) Members, directors and specified executives

Compensation and other terms of employment for the specified executives are formalised in service agreements.and directors' terms of appointment and compensation details together with the majormembers'Details of

provisions of the service agreements for specified executives, as at reporting date, relating to compensation areas follows:

(i) Members and directors

Queensland Rail

Members Position Appointment term Expiry date

G Harley Deputy Chairman 2 years 9 months 30 September 2015

D George Member 2 years 9 months 30 September 2015

McArthur1M Member 3 years 3 months 30 September 2013

W McMillan Member 2 years 9 months 30 September 2015

Petie2D Member 2 years 9 months 30 September 2015

Schafer3J Member 3 years 3 months 30 September 2013

Ceased as a Member on 4 August 2013.1

Ceased as a Member on 2 August 2013.2

Ceased as a Member on 30 September 2013.3

as Chairman on 1 October 2013.BoardM Klug was appointed to theon 1 October 2013.Memberas aBoardJ Mickel was appointed to theon 30 October 2013.Memberas aBoardG Poole was appointed to the

ofBoardof theMembersOn 3 May 2013, the directors of Queensland Rail Limited were appointed as2013.Queensland Rail Transit Authority ActQueensland Rail in accordance with section 94 of the


Directors Position Appointment term Expiry date


D George Director 2 years 9 months 30 September 2015

McArthur1M Director 3 years 3 months 30 September 2013

W McMillan Director 2 years 9 months 30 September 2015

Petie2D Director 2 years 9 months 30 September 2015

Schafer3J Director 3 years 3 months 30 September 2013

Ceased as a Director on 4 August 2013.1


Ceased as a Director on 30 September 2013.3

as Chairman on 1 October 2013.BoardM Klug was appointed to theas a Director on 1 October 2013.BoardJ Mickel was appointed to theas a Director on 30 October 2013.BoardG Poole was appointed to the




30 (continued)Key management personnel disclosures



Petie1D Chairman No set appointment term No expiry date

J Benstead Managing Director No set appointment term No expiry date

G Pringle Director 3 years 28 February 2014


(ii) Specified executives

Queensland Rail

Specified executives Position Appointment term Expiry date

Benstead1J Acting Chief Executive Officer 3 years + 2 yearsextension

30 June 2015

N Duce General Manager Human Resources Tenured No expiry date

G Ford Executive General Manager Safety andEnvironment

3 years + 2 yearsextension

30 June 2015

R Green Executive General Manager Network 3 years 16 December 2015

Moller2B Acting Chief Financial Officer 3 years + 2 yearsextension

31 August 2013

T Ripper Executive General Manager Access andBusiness Strategy

3 years 9 December 2015

M Ryan Executive General Manager CustomerService

3 years 11 November 2015

K Wright Executive General Manager Rail Operations 3 years 26 February 2015

Details provided are for this officer’s substantive role.1

Details provided are for this officer's contract term.2

On 3 May 2013, the senior executives of Queensland Rail Limited were transferred to Queensland Rail andQueensland Railappointed as the senior executives of Queensland Rail in accordance with section 95 of the

2013.Transit Authority Act

on 2 August 2013 in accordance with aQueensland RailG Dawe was appointed as Chief Executive Officer of2013.Queensland Rail Transit Authority ActMinisterial Direction by responsible Ministers under section 12 of the








30 June 2015




30 June 2015



31 August 2013






Details provided are for this officer’s substantive role.1

Details provided are for this officer's contract term.2

These executives provide advice in relation to strategygroup.The above are the key executives representing thedoes not haveOn Track Insurance Pty Ltdunder the business model adopted.groupand future direction of theOn Trackany senior executives who are involved in setting strategy or future direction for the entity and no

executives are disclosed above for this reason.Insurance Pty Ltd

Termination of an executive can be made by the group to the specified executive either with notice, without noticeor due to the incapacity of the specified executive. Termination by notice can be made by the specified executiveor the group at any time by either party giving to the other 3 months written notice of termination.

The specified executive is entitled to 12 weeks salary where termination occurs on the agreed termination date.

will pay thegroupWhen the termination occurs prior to the termination date (assuming no gross misconduct), thespecified executive the following:

• a service payment equal to the greater of 4 weeks salary or 2 weeks salary per year of continuousup to a maximum 52 weeks salary; andgroupservice with the

• a separation payment equal to 20% of the salary that the specified executive would have earned had theemployment continued from the day after the notice period ceased until the termination date.

Specified executives that are tenured are entitled to a service payment equal to the greater of 13 weeks salary orup to a maximum 52 weeks salary.group2 weeks salary per year of continuous service with the





(b) Key management personnel compensation

Directors' remuneration and terms of appointment were set by the Governor in Council at the time of a director'sandmembers'2013,Queensland Rail Transit Authority Actappointment. Following the establishment of the

and directors'Members'directors' remuneration and terms of appointment are set by responsible Ministers.remuneration is subsequently reviewed annually by responsible Ministers.

and directors are not entitled to termination payments on termination of their period of service.Members

GovernmentQueensland Rail Chief and Senior Executive Officers are compensated in accordance with thepublication. TheOwned Corporations - Governance Arrangements for Chief and Senior Executives v3.0

Performance Payment Policy - Chief and Senior Executivehas also implemented theBoardQueensland Railwhich reflects the expectations of the Queensland State Government as outlined in the stated policy.

provides for a performance pay process that isPerformance Payment Policy - Chief and Senior ExecutiveTheadministered on a 12 month (financial year) cycle and aligns the executives with Queensland Rail wide andIndividual Key Performance Indicators (KPIs). Performance Payment pays up to a maximum payment of 15% perannum of a Chief or Senior Executive’s total fixed remuneration on the achievement of stretch targets. TheQueensland Rail KPIs are set by the Board at the beginning of the financial year in alignment with the Statementof Strategic Expectations issued by the State Government, the Queensland Rail Statement of Corporate Intentand the delivery of our organisational performance outcomes including safety, reliability, customer outcomes andfinancial performance.

The performance agreement components are weighted as follows:

• Queensland Rail 70%

The Queensland Rail KPIs are aligned to the organisational performance outcomes as follows:

Reliability• On Time Running City network combined peak periods• Below rail delays City network

Financial• Consumable cost reduction• Earnings before interest and tax

Customer• Customer satisfaction City network

Safety• Lost Time Injury Frequency Rate• Signals Passed at Danger

• Individual 30%

The Individual KPIs are set by the Chief Executive Officer on the recommendation of the relevantexecutive member. Individual KPIs are reflective of Queensland Rail and Functional KPIs for which theexecutive has direct accountability and / or reflective of strategic business plans, budgets and capital /infrastructure projects. Eligible executives must also meet minimum expectations for the consistentdemonstration of the Queensland Rail Values and Behaviours.

The Chief and Senior Executives participate in the Queensland Rail performance management process withquarterly and annual performance reviews. Annual performance results of the Executives are assessed and

is responsible forBoardcalibrated by the Chief Executive Officer and General Manager Human Resources. Thethe assessment of the Chief Executive Officer’s performance. The Queensland Rail Board approve thecalculation and payment of the Chief and Senior Executive Performance Payments and provide written advice tothe responsible Ministers in accordance with the Government Arrangements.





director and executive are as follows:member,Details of the compensation of each specified

2013$'000

Short-term benefits 512Post-employment benefits 54

566

Short-term benefits includes cash salary, at risk performance incentives (for specified executives only), fees andnon-monetary benefits. Non-monetary benefits represent the value of Exempt and Reportable Fringe Benefits forthe respective Fringe Benefits Tax year.

(i) Members and directors of Queensland Rail and subsidiaries

2013 Short-term benefits Post-employmentbenefits

MembersMember

fees

Non-monetarybenefits

Super-annuation

Retirementbenefits Total

$'000 $'000 $'000 $'000 $'000

G Harley Deputy 6 - 1 - 7(appointed as Deputy Chairman Chairmanon 21 June 2013)

BlankG Dawe Chairman 18 - 2 - 20

(ceased 18 June 2013)Blank

D George Member 6 - 1 - 7Blank

M McArthur Member 6 - 1 - 7Blank

W McMillan Member 7 - 1 - 8Blank

D Petie Member 7 - 1 - 8Blank

J Schafer Member 6 - 1 - 7BlankBlank

Total 56 - 8 - 64

Queensland Railand directors of theBoardQueensland Railof thememberslisted above aremembersAll theBoard.On Track Insurance Pty Ltdexcept for D Petie who is also Chairman of theBoard,Limited

As an executive of Aurizon Operations Limited, former parent company, G Pringle did not receive additionalLtd.On Track Insurance Ptyremuneration in his capacity as director of

J Benstead did not receive additional remuneration in his capacity asRail,QueenslandAs an executive ofdirector of On Track Insurance Pty Ltd.

These amounts are not in addition to the amounts disclosed in the Key Management Personnel note of theQueensland Rail Limited financial statements as they were recharged by the company in accordance with theManaged Services Agreement from 3 May 2013.





(ii) Specified executives of the group


Long-termbenefits

Specified executives

Cashsalary

and feesCash

bonuses


Super-annuation

Retirementbenefits

Longserviceleave Total

$'000 $'000 $'000 $'000 $'000 $'000 $'000

J Benstead 73 - 1 7 - - 81Acting Chief Executive Officer

BlankN Duce 43 - 1 4 - - 48

General Manager HumanResources

BlankG Ford 48 - 2 6 - - 56

Executive General ManagerSafety and Environment

BlankR Green 60 - 2 6 - - 68

Executive General ManagerNetwork

BlankB Moller 42 - 2 4 - - 48

Acting Chief Financial OfficerBlank

T Ripper 54 - 1 6 - - 61Executive General ManagerAccess and Business Strategy

BlankM Ryan 53 - 3 7 - - 63

Executive General ManagerCustomer Service

BlankK Wright 69 - 2 6 - - 77

Executive General ManagerRail Operations

BlankTotal 442 - 14 46 - - 502

These amounts are not in addition to the amounts disclosed in the Key Management Personnel note of theQueensland Rail Limited financial statements as they were recharged by the company in accordance with theManaged Services Agreement from 3 May 2013.





2013$'000

Aggregate performance bonus compensation

Aggregate performance bonus compensation accrued for current period* (956)

Aggregate compensation (including performance bonus compensation) to employees eligible forperformance bonus compensation 18,351

2013

Number of employees eligible for performance bonus compensation 979

* Bonus was overaccrued when employee benefits liability was transferred from Queensland Rail Limited. Thiswas reversed on 30 June 2013.

The performance bonus compensation disclosed above is for the period 3 May 2013 to 30 June 2013. For full 12months performance payment, refer to note 30 of Queensland Rail Limited 2012/13 financial statements.

The following categories of employees are eligible for performance based at risk incentive bonus compensation:

• specified executives;

• other executives;

• salaried employees; and

• award employees.

Performance bonus compensation paid to specified executives is granted upon approval by the Queensland RailPerformance bonus compensation paid to other employees is granted upon approval by the ChiefBoard.

Executive Officer or in accordance with a subsidiary agreement. The amount of the compensation is determinedby performance against key performance indicators set at the start of the year for employees or conditions of asubsidiary agreement for work units.

(c) Transactions with members, directors and key management personnel

wasLimited,Queensland RailandQueensland RailG Harley, Deputy Chairman ofperiod,During the reportingLimited.Queensland Railthe Chairman of Queensland Urban Utilities that provided utilities to

wasLimited,Queensland Railand Director ofQueensland RailofMemberD George,period,During the reportingLimited.Queensland Railthe Chief Executive Officer of Rail CRC Limited that provided key innovation services to

provided rental accommodation to Rail CRC Limited.Queensland Rail Limited

All figures displayed below are exclusive of GST.

Consolidated2013$'000

Utilities - Queensland Urban Utilities 15Professional services - Rail CRC Limited 42Rental revenue - Rail CRC Limited (27)

30




31 Contingencies

had contingencies at reporting date in respect of:groupThe

(a) Contingent liabilities

Issues relating to common law claims and product warranties are dealt with as they arise. There were no materialcontingent liabilities requiring disclosures in the financial statements other than as set out below.

Litigation

Provisions are taken up for some of thesegroup.A number of common law claims are pending against the22.determination and are included as such in noteBoard'sexposures based on the

Guarantees and letters of credit

24(b).refer to notegroup,For information about guarantees and letters of credit given by the

Deed of Cross Guarantee

nor its subsidiary were a party to a deed of cross guarantee at reporting date.companyNeither the

(b) Contingent assets

24(b).refer to notegroup,For information about guarantees given to the

32 Commitments

(including GST) at reporting date were as follows:groupThe future commitments of the

(a) Capital commitments

Capital expenditure contracted for at reporting date but not recognised as liabilities is payable as follows:


2013$'000

Within one year 187,156 -Later than one year but not later than five years 28,923 -Later than five years - -

216,079 -

(b) Lease commitments

Commitments for minimum lease payments in relation to non-cancellable operating leases are payable asfollows:


2013$'000

Within one year 11,145 -Later than one year but not later than five years 43,549 -Later than five years 28,059 -

82,753 -




32 (continued)Commitments

The above commitments flow primarily from operating leases of property. These leases, with terms mostlywith a right of renewal at which times the lease termsgroupranging from one to ten years, generally provide the

are renegotiated. The lease payments comprise a base amount, while some property leases also contain acontingent rental, which is based on either the movements in the Consumer Price Index or another fixedpercentage as agreed between the parties.

(c) Lease commitments receivable: where the company is the lessor

Minimum lease payments receivable but not recognised in the financial statements are receivable as follows:


2013$'000

Within one year 3,522 -Later than one year but not later than five years 9,882 -Later than five years 83,318 -

96,722 -

33 Related party transactions

(a) Subsidiaries

34.Interests in subsidiaries are set out in note

(b) Key management personnel

30.Disclosures relating to key management personnel are set out in note

(c) Transactions with related parties

The following transactions occurred with related parties:


2013$'000

Sale of goods and services to subsidiaries - 120,486Dividend revenue from subsidiaries - 138,610BlankDividend receivable from subsidiaries - 138,610Receivables from subsidiaries - current - 537,015Receivables from subsidiaries - non-current - 31,375Payables to subsidiaries - current - 355,736BlankShares in subsidiaries - 2,845,324BlankThe current and non-current receivables transferred from subsidiaries on 3 May 2013 include the initial transfer of

Queensland Rail Transit Authority Act 2013employee related liabilities from the subsidiary in accordance with theamounting to $271.9 million. Deferred tax assets amounting to $72.3 million associated with these employeeentitlements were also transferred on the same date.




33 (continued)Related party transactions

(d) Transactions and outstanding balances with State of Queensland controlled entities

is limited by shares with all shares held by the responsible Ministers on behalf of the State ofcompanyTheQueensland.

as set out below:periodtransacted with other State of Queensland controlled entities during thecompanyThe

ConsolidatedNotes 2013

$'000Nature of transaction

Cash and cash equivalents 9 276,339 QTC short-term investments

Trade and other receivables 1410, 114,144 Transport services contracts and otheraccounts receivable

Current tax liabilities - Current tax payable

Other current assets 13 423 Prepaid income tax

Borrowings 24 3,099,817 Unsecured loan facility (QTC)

Trade and other payables 21 141,483 Interest payable, accounts payableand dividend payable

Other current liabilities 23 3,067 Clearing accounts

Revenue 5 252,756 Sales, community service obligation,government concessions and interestrevenue

Interest expense 7 38,281 QTC loan interest (includes financingcost)

Other expenses 7 17,972 Payroll tax, income tax, audit fees,licences and permits andconsumables

Dividends declared 29 115,843 Dividend declared





ParentNotes 2013

$'000Nature of transaction

Cash and cash equivalents 9 - QTC short-term investments

Trade and other receivables 1410, - Transport services contracts and otheraccounts receivable

Current tax liabilities 1,154 Current tax payable

Other current assets 13 - Prepaid income tax

Borrowings 24 - Unsecured loan facility (QTC)

Trade and other payables 21 115,843 Interest payable, accounts payableand dividend payable

Other current liabilities 23 - Clearing accounts

Revenue 5 - Sales, community service obligation,government concessions and interestrevenue

Interest expense 7 - QTC loan interest (includes financingcost)

Other expenses 7 5,138 Payroll tax, income tax, audit fees,licences and permits andconsumables

Dividends declared 29 115,843 Dividend declared

34 Subsidiaries

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary in1(b).accordance with the accounting policy described in note

Name of entityCountry of

incorporation Class of sharesEquity

holding2013

%

Queensland Rail Limited Australia Ordinary 100On Track Insurance Pty Ltd Australia Ordinary 100

Queenslandare to carry out the key objectives of its parent,Queensland Rail LimitedThe principal activities ofretains title of all non-employee related assets,Queensland Rail Limitedin accordance with the QRTA Act.Rail,

liabilities and contracts. The management of its assets are effected through the provision of employee servicesunder a Managed Services Agreement.Queensland Railfrom

are the provision of insurance coverage for all claimsOn Track Insurance Pty LtdThe principal activities ofup until 30Queensland Rail Limitedrelating to events for both Aurizon Operations Limited (former parent) and

June 2010.




34 (continued)Subsidiaries

On Track InsuranceandQueensland Rail LimitedThe Auditor-General of Queensland is the authorised auditor ofLtd.Pty

35 Remuneration of auditors

group:the following fees were paid or payable for services provided by the auditor of theperiodDuring the

(a) Audit services


2013$'000

Auditor-General of QueenslandAudit and review of financial reports 510 19

Total auditors' remuneration 510 19

36 Reconciliation of profit after income tax to net cash inflow from operatingactivities


2013$'000

Profit for the period 37,715 138,610Depreciation and amortisation 51,419 -Amortisation of prepaid access facilitation charges (263) -Losses on sale of non-current assets 1,190 -Unreaslied loss on derivatives 3 -Impairment of trade receivables (20) -Inventory obsolescence 215 -Change in operating assets and liabilities:

(Increase) / decrease in trade debtors (34,636) (138,610)(Increase) / decrease in inventories (1,233) -(Increase) / decrease in other operating assets (885) (1,154)Increase / (decrease) in trade creditors (2,804) 19,965Increase / (decrease) in other liabilities 18,267 1,221Increase / (decrease) in other provisions (17,447) (7,027)

Net cash inflow from operating activities 51,521 13,005

37 Events occurring after the reporting period

which significantly affected, or mayfinancial periodNo matters or circumstances have arisen since the end of thegroupthe results of those operations, or the state of affairs of thegroup,significantly affect the operations of the

in future financial years.


Queensland RailManagement certificate

30 June 2013

Financialhave been prepared pursuant to section 62(1) of thefinancial statementsThese general purposeFinancial and Performance Management Standard(the Act), relevant sections of theAccountability Act 2009

and other prescribed requirements. In accordance with section 62(1)(b) of the Act we certify that in our2009opinion:

(a) the prescribed requirements for establishing and keeping the accounts have been complied with in allmaterial aspects; and

(b) the statements have been drawn up to present a true and fair view, in accordance with prescribedfinancialand its controlled entities for theQueensland Railaccounting standards, of the transactions of

period.and of the financial position at the end of that30 June 2013endedperiod

M KlugChairman

Brisbane, Qld16 December 2013


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Queensland Rail30 June 2013

INDEPENDENT AUDITOR'S REPORT

Queensland RailofBoardTo the

Report on the Financial Report

I have audited the accompanying financial report of Queensland Rail, which comprises the balance sheets as at30 June 2013, income statements, statements of comprehensive income, statements of changes in equity andstatements of cash flows for the year then ended, notes comprising a summary of significant accounting policiesand other explanatory information, and certificates given by the Chairman of the entity and the consolidated entitycomprising the entity and the entities it controlled at the year’s end or from time to time during the financial period3 May to 30 June 2013.

The Board’s Responsibility for the Financial Report

The Board is responsible for the preparation of the financial report that gives a true and fair view in accordanceFinancial andand theFinancial Accountability Act 2009with prescribed accounting requirements identified in the

including compliance with Australian Accounting Standards. The2009,Performance Management StandardBoard’s responsibility also includes such internal control as the Board determines is necessary to enable thepreparation of the financial report that gives a true and fair view and is free from material misstatement, whetherdue to fraud or error.

Auditor’s Responsibility

My responsibility is to express an opinion on the financial report based on the audit. The audit was conducted inwhich incorporate the AustralianStandards,Auditor-General of Queensland Auditingaccordance with the

Auditing Standards. Those standards require compliance with relevant ethical requirements relating to auditengagements and that the audit is planned and performed to obtain reasonable assurance about whether thefinancial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial report. The procedures selected depend on the auditor’s judgement, including the assessment of therisks of material misstatement of the financial report, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the entity’s preparation of the financial report thatgives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but notfor the purpose of expressing an opinion on the effectiveness of the entity’s internal control, other than inexpressing an opinion on compliance with prescribed requirements. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates made by theBoard, as well as evaluating the overall presentation of the financial report including any mandatory financialreporting requirements approved by the Treasurer for application in Queensland.

I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion.

Independence

promotes the independence of the Auditor-General and all authorised auditors.Auditor-General Act 2009TheThe Auditor-General is the auditor of all Queensland public sector entities and can be removed only byParliament.

The Auditor-General may conduct an audit in any way considered appropriate and is not subject to direction byany person about the way in which audit powers are to be exercised. The Auditor-General has for the purposesof conducting an audit, access to all documents and property and can report to Parliament matters which in theAuditor-General’s opinion are significant.


Queensland Rail30 June 2013

(continued)INDEPENDENT AUDITOR'S REPORT

Opinion

-Auditor-General Act 2009In accordance with s.40 of the

(a) I have received all the information and explanations which I have required; and

(b) in my opinion -

(i) the prescribed requirements in relation to the establishment and keeping of accounts have beencomplied with in all material respects; and

(ii) the financial report presents a true and fair view, in accordance with the prescribed accountingstandards, of the transactions of Queensland Rail and the consolidated entity for the financialperiod 3 May 2013 to 30 June 2013 and of the financial position as at the end of that year.

Other Matters - Electronic Presentation of the Audited Financial Report

Those viewing an electronic presentation of these financial statements should note that audit does not provideassurance on the integrity of the information presented electronically and does not provide an opinion on anyinformation which may be hyperlinked to or from the financial statements. If users of the financial statements areconcerned with the inherent risks arising from electronic presentation of information, they are advised to refer tothe printed copy of the audited financial statements to confirm the accuracy of this electronically presentedinformation.

A M GREAVES FCA FCPA Queensland Audit OfficeAuditor-General of Queensland Brisbane


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Queensland Rail Limited71 132 181 090ABN

Financial report30 June 2013year endedfor the

Queensland Rail Limited Financial Report FY2012/13 141

71 132 181 090ABNQueensland Rail Limited30 June 2013-Financial report

ContentsPage

Directors' report 1Financial statements

Consolidated income statement 10Consolidated statement of comprehensive income 11Consolidated balance sheet 12Consolidated statement of changes in equity 13Consolidated statement of cash flows 14Notes to the consolidated financial statements

1 Summary of significant accounting policies 152 Financial risk management 293 Critical accounting estimates and judgements 354 Correction of error and revision of estimates 365 Revenue from continuing operations 376 Other income 377 Expenses 388 Income tax expense 399 Current assets - Cash and cash equivalents 4010 Current assets - Trade and other receivables 4011 Current assets - Inventories 4212 Derivative financial instruments 4313 Current assets - Other current assets 4314 Non-current assets - Receivables 4415 Non-current assets - Inventories 4416 Non-current assets - Property, plant and equipment 4517 Non-current assets - Intangible assets 4818 Non-current assets - Deferred tax assets 4919 Non-current assets - Other non-current assets 4920 Current liabilities - Trade and other payables 5021 Liabilities - Provisions 5022 Current liabilities - Other current liabilities 5223 Liabilities - Borrowings 5324 Non-current liabilities - Trade and other payables 5425 Non-current liabilities - Deferred tax liabilities 5426 Non-current liabilities - Other non-current liabilities 5427 Contributed equity 5528 Reserves and retained earnings 5629 Dividends 5730 Key management personnel disclosures 5831 Contingencies 7032 Commitments 7133 Related party transactions 7234 Subsidiaries 7435 Remuneration of auditors 7436 Reconciliation of profit after income tax to net cash inflow from operating activities 7437 Parent entity financial information 7538 Events occurring after the reporting period 75

Directors' declaration 76INDEPENDENT AUDITOR'S REPORT 77


Queensland Rail LimitedDirectors' report

30 June 2013

Directors' report

consisting ofgroup)present their report on the consolidated entity (referred to hereafter as thedirectorsYour2013.30 Juneyear endedand the entity it controlled at the end of, or during, theQueensland Rail Limited

Directors

Chairman (appointed 1 October 2013)M Klug -Deputy Chairman (appointed 20 December 2012, appointed Deputy Chairman 21 June 2013)G Harley -

Chairman (appointed 12 July 2012, ceased 18 June 2013)G Dawe -Chairman (ceased 12 July 2012)S Gregg -(appointed 20 December 2012)D George

(ceased 20 December 2012)M Hayes(ceased 30 September 2012)Dr L Keliher AO

(ceased 4 August 2013)M McArthur(appointed 20 December 2012)W McMillan

(ceased 30 September 2012)D McMillan-Hall(appointed 1 October 2013)J Mickel

(ceased 30 September 2012, reappointed 20 December 2012, ceased 2 August 2013)D Petie(appointed 30 October 2013)G Poole

(ceased 30 September 2013)J Schafer

to the date of this report unless otherwise stated.financial yearDirectors have been in office since the start of the

of the Financial Report.30remuneration is contained in notedirectors'Information relating to

Principal activities

consisted of:groupthe principal activities of theyearDuring the(a) Passenger services throughout Queensland;(b) Network access services throughout Queensland;(c) Design and construction of rail infrastructure; and(d) Associated maintenance of both the above and below rail operations.

Review of operations

million).$128.3(2012:million$144.8amounted tofinancial yearfor thegroupof theprofitThe

stepped up its reforms and produced vastly improved performance, along withgroupthefinancial yearDuring thea much leaner workforce, a significant reduction in spending and efficiency programs that have reshaped thebusiness.

focused its commitment on:groupThe• organisational performance (specifically operational, financial and customer);• affordability;• patronage growth; and• safety and security.

continued to deliver high levels of customer service by focusing on reliability, efficiency, on-timegroupTherunning and customer comfort. Customer satisfaction levels for both our City and Travel networks are at recordhighs.

commenced its Efficiency Improvement Program to identify and realiseQueensland Rail LimitedIn July 2012,significant savings throughout the business. This program improved financial and operating performanceresulting in significant savings in non-labour expenses.

Dividends

million was declared to the holders of$138.6a dividend of2013,30 Juneendedfinancial yearIn respect of the2013.million). This dividend will be paid in December$102.6(2012:fully paid ordinary shares




Significant changes in the state of affairs

On 3 May 2013, the shares in Queensland Rail Limited were transferred to Queensland Rail (referred to hereafterQueenslandas the Authority). The Authority is an unincorporated statutory body and was established under the

The group is a wholly-owned subsidiary of the Authority from this date. All2013.Rail Transit Authority Actemployees and their associated leave entitlements payable by the group were also transferred to the Authority.All expenses incurred by the Authority relating to these employees have been recharged to the group in

Queenslandaccordance with a Managed Services Agreement. The changes associated with the enactment ofand the Managed Services Agreement has not impacted the operations of theRail Transit Authority Act 2013

business. The group has and will continue to undertake the principal activities identified in this Directors' Report.

year.financialoccurred during thegroupNo other significant changes in the state of affairs of the

Matters subsequent to the end of the financial year

which significantly affected, or mayfinancial yearNo matters or circumstances have arisen since the end of thegroupthe results of those operations, or the state of affairs of thegroup,significantly affect, the operations of the

years.financialin future

Likely developments and expected results of operations

will continue its transformation to a more competitive business model focusing on maximising value forgroupThemoney, embracing competition and benchmarking its performance against best practice. As it prepares for

will focus on providing smarter, more tailored services to its customers while maintaininggroupcontestability, theimprovements in safety and value for money.

will maintain its commitment on:groupOver the next 12 months the• driving organisational performance (specifically operational, financial and customer);• ensuring value for money and affordability;• facilitating patronage and network tonnage growth;• ensuring safety and security; and• enhancing service delivery.

Environmental regulation

is required to comply with relevant environmental legislation. Exposure in this area is primarily relatedgroupTheto air, land and water pollution, management of flora and fauna, environmental impacts associated withdevelopment, consumption of energy, greenhouse gas emissions and waste disposal. Due to their nature it is notpossible to provide an estimate of the future expenditure in these areas.

is subject are as follows:groupPrimary legislation and regulations to which the

• Environmental Protection Act 1994 (Qld)• Energy Efficiency Opportunities Act 2006 (Commonwealth)• Environmental Protection and Biodiversity Conservation Act 1999 (Commonwealth)• Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 (Commonwealth)• National Greenhouse and Energy Reporting Act 2007 (Commonwealth)• Fisheries Act 1994 (Qld)• Sustainable Planning Act 2009 (Qld)• Land Protection (Pest and Stock Route Management) Act 2002 (Qld)• Nature Conservation Act 1992 (Qld)• Plant Protection Act 1989 (Qld)• Vegetation Management Act 1999 (Qld)• Waste Reduction and Recycling Act 2011 (Qld)• Water Act 2000 (Qld)• Wet Tropics World Heritage Protection and Management Act 1993 (Qld)




Greenhouse gas and energy data reporting requirements

National Greenhouse and Energyis subject to the assessment and reporting requirements of thegroupThe2006.Energy Efficiency Opportunities Actand theReporting Act 2007

to report annually its greenhousegrouprequires theNational Greenhouse and Energy Reporting Act 2007Theis registered as aQueensland Rail Limitedgas emissions, energy consumption and energy production.

for the 2012/13groupcontrolling corporation and will be preparing an annual report to cover the activities of theyear for submission in October 2013.

to assess its energy usage, including thegrouprequires theEnergy Efficiency Opportunities Act 2006Theidentification, investigation and evaluation of energy saving opportunities, and subsequently submit a report to

groupthe Commonwealth Government and the public on the assessments undertaken; including what action theQueensland Rail Limited submitted an Assessment PlanAct,intends to take as a result. In accordance with the

in December 2012 to the Federal Department of Resources, Energy & Tourism (DRET). Following feedbackreceived from DRET in April 2013, a revised Assessment Plan was submitted in June 2013. Energy assessmentshave commenced and the first public report will be released by December 2013.




Information on directors and officers

M Klug LLB, FAICD Chairman

Mr Klug was appointed as a non-executive director and chairman on 1 October 2013. Mr Klug is a well respectedsolicitor with more than 40 years experience. He recently concluded his third term as Partner in Charge of theBrisbane office of Clayton Utz. He is a leader in the area of Alternative Dispute Resolution and he is one of theoriginal founders of LEADR (Lawyers Engaged in Alternative Dispute Resolution). He was also an originalDirector of the Australasian Disputes Centre and has served on ADR committees nationwide. Mr Klug is anationally recognised practitioner, public speaker and lecturer in negotiation, having taught in Australia andoverseas to university students, the business and public sector communities. Mr Klug has extensive boardexperience across a diverse range of fields including education, health care and transport. He was recentlyappointed Chairman of Autism Queensland. Mr Klug is a Fellow of the Australian Institute of Company Directorsand the Vice-President of the Brisbane Club.

G Harley LLB, FAICD, MAHRI Deputy Chairman

Mr Harley was appointed as a non-executive director on 20 December 2012 and appointed Deputy Chairman on21 June 2013. Mr Harley is a consultant to and former Managing Partner of the Brisbane Office of Clayton Utz.He was for a number of years an Adjunct Professor at the University of Queensland Law School and a memberof the Advisory Council of the Queensland Conservatorium of Music. Mr Harley served in the Australian ArmyReserve for several decades (Infantry and Legal Corps) and retired with the rank of Major. He also holds theReserve Force Decoration. Mr Harley has previously served as Chair of Translink Transit Authority and CSEnergy and is currently Chair of Queensland Urban Utilities. His board experience covers fields as diverse aselectricity generation, communications, information technology, investment attraction, tourism and agribusiness.Mr Harley has practised law for more than 40 years, the last 20 specialising in industrial and employment law. Hisrole as a company director and as Chief Executive of Clayton Utz in Queensland for almost ten years has givenhim invaluable experience in strategy, operational management and governance. He is a Fellow of the AustralianInstitute of Company Directors and a member of the Australian Human Resources Institute.

G Dawe BA (Econ), MAICD, FCILT, MIRO Chairman

and Chairman on 12 July 2012. His father was a StationdirectorMr Dawe was appointed as a non-executiveMaster and he is the third generation of his family to work in Queensland Rail Limited, originally joining as aPorter. His career progressed from planning and development roles to commercial, business and operationsmanagement; including Group General Manager Citytrain, which became Australia’s best performing urban railpassenger business. He then took on the broader role of Group General Manager Metropolitan and RegionalServices which involved managing Queensland Rail Limited’s community service obligation businesses such asCitytrain, Traveltrain and Regional Freight. He then led Queensland Rail Limited’s commercial businesses asGroup General Manager Coal and Mainline Freight before moving to NSW to become General Manager Accessat the Rail Infrastructure Corporation with responsibility for Access, Freight and Country Infrastructure. Finally hemoved to the Manildra Group, which is one of this country’s largest private rail users, as National Manager RailTransport before retiring in 2011. Mr Dawe ceased to be a director and Chairman of Queensland Rail Limited on18 June 2013.

S Gregg MBA, FAICD Chairman

and Chairman on 1 July 2010. He has extensive experiencedirectorMr Gregg was appointed as a non-executivein the Queensland tourism industry. He was previously CEO of North Queensland Airport Limited, where heoversaw the integration of the newly-privatised Cairns and Mackay airports and developed long-term growthstrategies for both businesses. Earlier roles included CEO of Dreamworld and WhiteWater World theme parksand CEO of Tourism Queensland. In addition, Mr Gregg is Chairman of the Queensland Tourism Industry Council

of the Queensland Events Corporation. He holds a Master of Business Administrationdirector(QTIC) and a(MBA) from Griffith University. His experience in customer oriented roles and his significant regional focus has

Mr Gregg ceased to be a director and Chairman ofBoard.enabled him to make a valuable contribution to theQueensland Rail Limited on 12 July 2012.




(continued)Information on directors and officers

D George MA (Hons), FAICD, FCILT Director

Mr George was appointed as a non-executive director on 20 December 2012. Mr George has more than 35 yearsexperience in the rail industry. This includes being Chief Executive of ONTRACK (New Zealand rail network)between 2004 and 2007 and responsibility for Queensland Rail Limited’s coal and freight businesses between1998 and 2004. Prior to this he was Director of European Business for British Rail (freight) in the run-up to theopening of the Channel Tunnel. Mr George is currently Chief Executive Officer of the Cooperative ResearchCentre (CRC) for Rail Innovation, a position held since 2007. He is Vice Chair of the International RailwayResearch Board and Chair of the organising committee of the World Congress on Railway Research (WCRR)being jointly hosted by the CRC and Australasian Rail Association in Sydney in late 2013. Mr George is aDirector of TasRail and also a Fellow of both the Australian Institute of Company Directors and the CharteredInstitute of Logistics and Transport Australia.

M Hayes BA, DipEd Director

on 1 July 2010. She served in the Brisbane City CouncildirectorMs Hayes was appointed as a non-executivefrom 1991 to 2008. She was Deputy Mayor during that time but her main role was as Chairperson of Transport,Traffic and Major Projects. Some achievements during that time included overseeing the building of the Inner CityBypass, the Eleanor Schonell Bridge, the introduction of CityCat ferries and the establishment of TransLink inpartnership with the State Government. Ms Hayes is a passionate advocate of public transport. Ms Hayes ceasedto be a director of Queensland Rail Limited on 20 December 2012.

Dr L Keliher AO BEcon (1st Class Hons), MA, PhD Director

on 1 July 2010. He has extensive experience in both thedirectorDr Keliher was appointed as a non-executiveQueensland and New South Wales public service, with roles that include Chairman of the former Service Deliveryand Performance Commission and Director-General of the Department of the Premier and Cabinet. He wasappointed as a director of QR Limited in 2008, and brings his public service experience to his position on the

Dr Keliher ceased to be a director of Queensland Rail Limited on 30 SeptemberBoard.Queensland Rail Limited2012.

M McArthur BA, LLB, DipAppFin Director

Ms McArthur was appointed as a non-executive on 1 July 2010. She was recently appointed Chief ExecutiveOfficer of Virgin Australia Regional Airlines following Virgin Australia's acquisition of Skywest Airlines in WesternAustralia. Ms McArthur joined Virgin Australia (then Virgin Blue) 5 years ago as General Counsel and CompanySecretary and has held various Senior Executive roles including Group Executive-Alliances, Network & Yield andGroup Executive - Corporate Advisory. Prior to joining Virgin, Ms McArthur was Chief Advisor at Rio Tinto IronOre, based in Perth. Her previous positions include Deputy State Solicitor for Western Australia and ExecutivePartner at national law firm Allens Arthur Robinson, based in Melbourne. Ms McArthur ceased to be a director of

on 4 August 2013.Queensland Rail Limited

W McMillan BBus, BA, MAICD, AIM, AMI Director

Ms McMillan was appointed as a non-executive director on 20 December 2012. Ms McMillan has more than 18years of commercial experience in transport, infrastructure, resources, trade, property, marketing and investmentattraction. Her previous positions include Director of Infrastructure for QC Resources Investments Pty Ltd,Manager Strategic Projects and Ports O&M, Transport Services and Strategic Development with the JohnHolland Group, General Manager with the Australia TradeCoast and senior management roles with the Port ofBrisbane Corporation, Carter and Spencer International and Gambaro’s Seafood’s and Exports. Ms McMillanholds a Bachelor of Business and a Bachelor of Arts. She is the Chairman of the judging panel for the Premier ofQueensland’s Export Awards, a Director of St. Aidan’s School Council, a Member of the Australian Institute ofCompany Directors, a Fellow of the Australian Institute of Management and an Associate Fellow and CPM of theAustralian Marketing Institute.





D McMillan-Hall BSc (Hons), DipInd (UK), MBA Director

on 1 July 2010. She has extensive rail industrydirectorMs McMillan-Hall was appointed as a non-executiveexperience, working at the Australian Rail Track Corporation (ARTC) for over 10 years, holding the positions ofStrategic Business Manager, General Manager Operations and Customer Service, and General Manager HunterValley. More recently, she was Head of Business Development for the Asia Pacific region of Ansaldo STS, atransport solutions company. Holding a BSc in Finance and an MBA, Ms McMillan-Hall has a background in

directorfinance, including roles with Westpac and financial markets in London. Ms McMillan-Hall ceased to be aof Queensland Rail Limited on 30 September 2012.

J Mickel M. Lit St, BA, B Ed. St, Dip T Director

The Honourable John Mickel was appointed as a non-executive director on 1 October 2013. Mr Mickel enteredQueensland Parliament in June 1998 as the Member for Logan and was appointed Minister for StateDevelopment, Employment and Industrial Relations from September 2006 to September 2007 and then Ministerfor Transport, Trade, Employment and Industrial Relations from September 2007 to March 2009. Mr Mickel wasalso the 36th Speaker of the Legislative Assembly of the Queensland Parliament. Mr Mickel was first elevated tothe Cabinet as Minister for Environment in February 2004 and appointed Minister for Energy in August 2004. Hegained the additional portfolio of Aboriginal and Torres Strait Islander Policy in March 2005. He has representedAustralia on the Executive of the Commonwealth Parliamentary Association and represented Queenslandbusinesses on trade missions to Asia, India and the Middle East. He oversaw major reforms to the Queenslandenergy sector as Minister for Energy, continued the Smart State initiative as Minister for State Development,implemented new technology reforms to the public transport sector as Minister for Transport and is recognisedfor his skills in diplomatic protocols and public speaking in domestic and international forums. Before entering theQueensland Parliament, Mr Mickel held a number of senior Government roles including Chief of Staff to theQueensland Premier. He is also a former university lecturer in politics and public policy. Currently Mr Mickelserves on the Queensland Catholic Education Commission Political Advisory Committee, is a Board Member ofthe Sisters of St Paul de Chartres Aged Care Facility, and undertakes lecturing and public speakingengagements at Griffith University, the QUT and for community organisations. Mr Mickel has established theVietnamese Orphans and Disability Trust with his wife, is an honorary member of Rotary and has been awardedHonorary Citizenship of Boystown.

D Petie FAICD, FASFA Director

Mr Petie was appointed as a non-executive director on 1 July 2010. Mr Petie ceased to be a director on 30September 2012 and was reappointed as a non-executive director on 20 December 2012. He has more than 30years experience as a company director, including nearly 11 years serving on the board of the group's formerparent entity, QR Limited, where he was chair of the Audit and Risk Committee. Before his retirement fromfull-time employment, Mr Petie was a General Manager for QIC Limited. Mr Petie ceased to be a director of

on 2 August 2013.Queensland Rail Limited

G Poole BEc, GradDip Bus Admin, FCPA, FCA, FAICD Director

Mr Poole was appointed as a non-executive director on 30 October 2013. Mr Poole is a professional seniorexecutive and Board member with over thirty years experience in strategic leadership, governance andmanagement across the public and not-for-profit sectors. He has significant practical experience in corporategovernance and financial management through appointments as a director of boards and audit committees in thegovernment and not-for-profit sectors. He is currently a member of the Local Government Association ofQueensland Audit and Compliance Committee, the Public Trustee of Queensland Audit and Risk ManagementCommittee, the Board of Governors of the Queensland Community Foundation and the Governance, Nominationand Remuneration Committee of the Queensland Synod of the Uniting Church in Australia. Mr Poole is also theChair of the Advisory Board for the Australian Centre for Philanthropy and Nonprofit Studies, QUT. Mr Poole hassuccessfully undertaken senior executive positions in the Queensland Treasury Department providing influentialpolicy advice on economic, financial management and corporate governance issues impacting on the publicsector and the community and most recently was the Auditor-General of Queensland from 2004 to 2011. MrPoole holds a Bachelor of Economics and is a member of CPA Australia, the Institute of Chartered AccountantsAustralia and the Australian Institute of Company Directors.





J Schafer LLB (Hons), GAICD, ANZIIF Director

on 1 July 2010. She brings to Queensland Rail LimiteddirectorMs Schafer was appointed as a non-executivestrong legal credentials and corporate experience, as well as transport experience in Queensland and at nationallevel. She has been chair of RACQ and is a National Transport Commissioner. She is a former QueenslandTelstra Business Women’s award winner, President of the Queensland Law Society, Chair of the Solicitors’Board of Queensland, Deputy Chancellor of the Queensland University of Technology and Adjunct Professor atthe University of Queensland. Ms Schafer was previously a partner in two Queensland legal professional servicesfirms. Ms Schafer holds a Bachelor of Laws (Honours) degree from the University of Queensland and an AICDCompany Directors Diploma. She is a member of the Australian Institute of Company Directors and of theAustralian and New Zealand Institute of Insurance and Finance. Ms Schafer ceased to be a director ofQueensland Rail Limited on 30 September 2013.

P McNamara BCom Company Secretary

Mr McNamara was appointed as a Company Secretary on 29 August 2011. He holds a Bachelor of Commerceand has more than 15 years experience in managerial and senior governance roles with ASX listed entitiesoperating in the property and financial services industries.

Meetings of directors

yearand each board committee held during theDirectorsofBoardcompany'sThe number of meetings thewere:directorand the number of meetings attended by each2013*,30 Juneended

BoardMeetings

Audit & RiskCommittee

People &Safety

Committee

OrganisationalPerformance &

StrategyCommittee

A B A B A B A BChairman

1Deputy-G Harley 6 6 - - 1 2 2 3

Chairman2-G Dawe 11 11 3 5 2 3 1 2

Chairman3-S Gregg 1 1 - - 1 1 - -

George4D 6 6 - - 2 2 3 3Hayes5M 4 7 - - 2 2 - -

AO6Dr L Keliher 3 4 1 1 - - - -M McArthur 11 13 - - 4 4 - -

McMillan4W 6 6 3 3 2 2 - -McMillan-Hall6D 4 4 1 1 - - - -Petie7D 9 10 3 3 1 1 - -Schafer8J 11 13 4 5 - - 3 3

A = Number of meetings attendedheld office or was a member of the committee duringdirectorB = Number of meetings held during the time the

yearthe

* Queensland Rail Limited became a wholly-owned subsidiary of Queensland Rail effective 3 May 2013 in2013.Queensland Rail Transit Authority Actaccordance with the

as a Director on 20 December 2012, appointed as Deputy Chairman on 21 June 20131Appointedas a Director and Chairman on 12 July 2012, ceased as a Director on 18 June 20132Appointed

as a Director and Chairman on 12 July 20123Ceasedas a Director on 20 December 20124Appointed

as a Director on 20 December 20125Ceasedas a Director on 30 September 20126Ceasedas a Director on 30 September 2012, reappointed as a Director on 20 December 20127Ceasedas a Director on 30 September 20138Ceased




Insurance of officers

paid a premium in respect of an insurance contract toQueensland Rail Limitedyear,financialDuring theand itsparentindemnify officers against liabilities that may have arisen from their position as officers of the

and all executive officersdirectorscontrolled entity. Officers indemnified include the company secretary,group.participating in the management of the

is prohibited under the terms of theCorporations Act 2001Further disclosure required under section 300 of thecontract.

Proceedings on behalf of the company

for leave to bringCorporations Act 2001No person has applied to the Court under section 237 of theis a party, for thegroupor to intervene in any proceedings to which thegroup,proceedings on behalf of the

for all or part of those proceedings.group,purpose of taking responsibility, on behalf of the

with leave of the Court under sectiongroupNo proceedings have been brought or intervened in on behalf of the2001.Corporations Act237 of the

Auditor's independence declaration

is set outCorporations Act 2001The auditor's independence declaration as required under section 307C of the9.on page

Rounding of amounts

is of a kind referred to in Class Order 98/100, issued by the Australian Securities and InvestmentscompanyThedirectors' reportAmounts in thereport.directors'Commission, relating to the "rounding off" of amounts in the

have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases,to the nearest dollar.

Auditor

Corporations Actcontinues in office in accordance with section 327 of theAuditor-General of QueenslandThe2009.Auditor-General Actthe Auditor-General is appointed in accordance with the2001,

directors.This report is made in accordance with a resolution of

M KlugChairman



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AUDITOR’S INDEPENDENCE DECLARATION

Queensland Rail LimitedTo the Directors of

2001.Corporations ActThis auditor’s independence declaration has been provided pursuant to s.307C of the

Independence Declaration

As lead auditor for the audit of Queensland Rail Limited for the year ended 30 June 2013, I declare that, to thebest of my knowledge and belief, there have been -

(a) in relation toCorporations Act 2001no contraventions of the auditor independence requirements of thethe audit; and

(b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Queensland Rail Limited and the entity it controlled during the period.



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Queensland Rail LimitedConsolidated income statement

For the year ended 30 June 2013

Notes2013$'000

2012$'000

Revenue from continuing operations 5 1,927,457 1,943,275

Other income 6 3,202 2,782Consumables (477,750) (500,072)Employee benefits expense (726,013) (733,477)Depreciation and amortisation expense 7 (298,240) (296,548)Other expenses 7 (4,182) (7,020)Finance costs 7 (223,638) (222,927)Profit before income tax 200,836 186,013

Income tax expense 8 (56,032) (57,726)yearProfit for the 144,804 128,287

should be read in conjunction with the accompanying notes.consolidated income statementThe above


Queensland Rail LimitedConsolidated statement of comprehensive income


Notes2013$'000

2012$'000

yearProfit for the 144,804 128,287

Other comprehensive income*Changes in the fair value of cash flow hedges 28 1,924 112Income tax relating to components of other comprehensive income 288, (577) (34)

net of taxyear,Other comprehensive income for the 1,347 78

yearTotal comprehensive income for the 146,151 128,365

* Other comprehensive income comprises amounts that are expected to be reclassified to profit or loss insubsequent periods when specific conditions are met.

should be read in conjunction with theconsolidated statement of comprehensive incomeThe aboveaccompanying notes.


Queensland Rail LimitedConsolidated balance sheet

As at 30 June 2013

Notes2013$'000

2012$'000

ASSETSCurrent assetsCash and cash equivalents 9 276,468 325,370Trade and other receivables 10 537,761 182,040Inventories 11 61,237 56,313Derivative financial instruments 12 475 -Other current assets 13 8,015 6,192Total current assets 883,956 569,915

Non-current assetsReceivables 14 3,843 57,091Inventories 15 22,533 15,240Property, plant and equipment 16 6,239,870 6,046,377Intangible assets 17 46,988 46,481Deferred tax assets 18 28,240 106,432Other non-current assets 19 4,834 5,049Total non-current assets 6,346,308 6,276,670

Total assets 7,230,264 6,846,585

LIABILITIESCurrent liabilitiesBank overdraft 9 13,908 -Trade and other payables 20 839,636 321,019Derivative financial instruments 12 - 1,783Provisions 21 19,658 274,981Borrowings 23 99,817 -Current tax liabilities - 528Other current liabilities 22 24,691 28,195Total current liabilities 997,710 626,506

Non-current liabilitiesTrade and other payables 24 31,375 -Derivative financial instruments 12 - 31Provisions 21 14,216 50,840Borrowings 23 3,000,000 3,000,000Deferred tax liabilities 25 411,894 400,378Other non-current liabilities 26 29,845 31,147Total non-current liabilities 3,487,330 3,482,396

Total liabilities 4,485,040 4,108,902

Net assets 2,745,224 2,737,683

EQUITYContributed equity 27 2,602,628 2,602,628Reserves 28 314 (1,033)Retained earnings 28 142,282 136,088

Total equity 2,745,224 2,737,683

should be read in conjunction with the accompanying notes.consolidated balance sheetThe above


Queensland Rail LimitedConsolidated statement of changes in equity


Notes


Reserves$'000

Retainedearnings

$'000

Totalequity$'000

1 July 2011Balance at 2,363,172 (1,111) 110,430 2,472,491

Profit for the year - - 128,287 128,287Other comprehensive income - 78 - 78Total comprehensive income for the year - 78 128,287 128,365

Transactions with owners in their capacityas owners:Contributions of equity 27 246,011 - - 246,011Distributions of equity 27 (6,555) - - (6,555)Dividends provided 29 - - (102,629) (102,629)

239,456 - (102,629) 136,827

30 June 2012Balance at 2,602,628 (1,033) 136,088 2,737,683

1 July 2012Balance at 2,602,628 (1,033) 136,088 2,737,683

Profit for the year - - 144,804 144,804Other comprehensive income - 1,347 - 1,347Total comprehensive income for the year - 1,347 144,804 146,151

Transactions with owners in their capacityas owners:Dividends provided 29 - - (138,610) (138,610)

- - (138,610) (138,610)

30 June 2013Balance at 2,602,628 314 142,282 2,745,224

should be read in conjunction with the accompanyingconsolidated statement of changes in equityThe abovenotes.


Queensland Rail LimitedConsolidated statement of cash flows


Notes2013$'000

2012$'000

Cash flows from operating activitiesReceipts from customers* 411,622 491,800Receipts from Government* 1,749,972 1,749,838Interest received 17,458 11,000Payments to suppliers and employees* (1,397,621) (1,362,361)Interest and other costs of finance paid (223,598) (222,618)Net GST paid (107,402) (96,724)Income taxes paid (41,271) (14,848)

from operating activitiesinflowNet cash 36 409,160 556,087

Cash flows from investing activitiesProceeds from the disposal of assets 9,541 7,716Payments for fixed assets (491,701) (566,542)

from investing activities(outflow)Net cash (482,160) (558,826)

Cash flows from financing activitiesContributions of equity 27 - 246,011Proceeds from borrowings 99,817 -Loans from related parties 13,005 -Dividends paid 29 (102,629) (84,429)

from financing activitiesinflowNet cash 10,193 161,582

in cash and cash equivalentsincrease/(decrease)Net (62,807) 158,843Cash and cash equivalents at the beginning of the financial year 325,369 166,526

year**Cash and cash equivalents at end of 9 262,562 325,369

* Inclusive of goods and services tax (GST).** Net of bank overdraft and monies held in trust.

should be read in conjunction with the accompanying notes.consolidated statement of cash flowsThe above


Queensland Rail LimitedNotes to the consolidated financial statements

30 June 2013

1 Summary of significant accounting policies

are setfinancial statementsconsolidatedtheseThe principal accounting policies adopted in the preparation ofpresented, unless otherwise stated. Theyearsout below. These policies have been consistently applied to all the

Onsubsidiary,and itsQueensland Rail Limitedconsisting ofentityconsolidatedare for thefinancial statementsLtd.Track Insurance Pty

The financial statements for Queensland Rail Limited, previously approved by the Board on 28 August 2013,have been amended subsequent to receiving an unqualified audit opinion from the Auditor-General ofQueensland on 30 August 2013. The Board of Queensland Rail resolved to transfer costs from assets underconstruction to consumables expense as those costs no longer represent future economic value. This decisionwas made subsequent to considering the accounting implication of a significant de-scope in its Sunlander 14capital program.

is a corporation limited by shares, incorporated and domiciled in Australia and owned byQueensland Rail Limitedis a for-profit entity. These financial statements are denominated inQueensland Rail LimitedQueensland Rail.

Australian dollars.

Queensland Railis referred to in this financial report as the "company" or the "parent".Queensland Rail Limitedare collectively referred to as the "group".Ltd,On Track Insurance Ptytogether with its subsidiary,Limited

On 3 May 2013, the shares in Queensland Rail Limited were transferred to Queensland Rail (referred to hereafterQueenslandas the Authority). The Authority is an unincorporated statutory body and was established under the

The group is a wholly-owned subsidiary of the Authority from this date.2013.Rail Transit Authority Act

2013.16 DecemberThese financial statements were approved for issue by the directors on

(a) Basis of preparation

been prepared in accordance with Australian Accountinghavefinancial statementsgeneral purposeTheseStandards, other authoritative pronouncements of the Australian Accounting Standards Board, and the

2001.Corporations Act

(i) Compliance with International Financial Reporting Standards (IFRS)

comply with IFRS as issued by the International Accountinggroupof thefinancial statementsconsolidatedTheStandards Board (IASB).

(ii) groupNew and amended standards adopted by the

None of the new standards and amendments to standards that are mandatory for the first time for the financialwere early adopted. Their adoption has not affected any of the amounts recognised in1 July 2012year beginning

the current period or any prior period and is not likely to affect future periods. However, amendments made tonow require the statement of2012,1 JulyeffectiveStatements,Presentation of FinancialAASB 101

comprehensive income to show the items of comprehensive income grouped into those that are not permitted tobe reclassified to profit or loss in a future period and those that may have to be reclassified if certain conditionsare met.





(iii) Early adoption of standards

The following standards and amendments to standards are available for early adoption for the financial year2012:1 Julybeginning

Financial InstrumentsAASB 9Amendments to Australian Accounting Standards arising from AASB 9 FinancialAASB 2009-11

InstrumentsAmendments to Australian Accounting Standards arising from AASB 9 FinancialAASB 2010-7

InstrumentsAmendments to Australian Accounting Standards - Mandatory Effective Date of AASB 9 andAASB 2012-6

Transition DisclosuresConsolidated Financial StatementsAASB 10Joint ArrangementsAASB 11Disclosure of Interests in Other EntitiesAASB 12

(2011)Separate Financial StatementsAASB 127(2011)Investments in Associates and Joint VenturesAASB 128

Amendments to Australian Accounting Standards arising from the Consolidation and JointAASB 2011-7Arrangements Standards

Amendments to Australian Accounting Standards - Transition Guidance and otherAASB 2012-10amendments

Fair Value MeasurementAASB 113Amendments to Australian Accounting Standards arising from AASB 113 Fair ValueAASB 2011-8

Measurement(September 2011)Employee BenefitsAASB 119

Amendments to Australian Accounting Standards arising from AASB 119 Employee BenefitsAASB 2012-5(September 2011)

Amendments to Australian Accounting Standards - Disclosures - Offsetting Financial Assets andAASB 2012-2(June 2012)Liabilities

Amendments to Australian Accounting Standards - Offsetting Financial Assets and LiabilitiesAASB 2012-3Amendments to Australian Accounting Standards arising from the Annual ImprovementsAASB 2012-5

2009-2011 CycleApplication of Tiers of Australian Accounting StandardsAASB 1053

Amendments to Australian Accounting Standards arising from Reduced DisclosureAASB 2010-2Requirements

The application of these standards and amendments in future periods is not expected to have a material impacton the accounts of the group. The group has not elected to early adopt any pronouncements for the currentannual reporting period.

There are no other standards that are not yet effective and that are expected to have a material impact on thegroup in the current or future reporting periods and on foreseeable future transactions.

(iv) Historical cost convention

been prepared under the historical cost convention, except for certain assetshavefinancial statementsThesewhich, as stated, are at fair value.

(v) Critical accounting estimates

requires the use of certain critical accounting estimates. It also requiresfinancial statementsThe preparation ofThe areas involving amanagement to exercise its judgement in the process of applying the accounting policies.

higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the3.are disclosed in notestatements,financial





(vi) Going Concern

The financial report is prepared on a going concern basis despite current liabilities exceeding current assets atreporting date. The shortfall is partly due to the current intercompany loan with the Authority concerningemployee benefits. Funding through Transport Service Contracts, adequate interest coverage and a low gearing

status as a going concern.group'sratio provides adequate assurance of the

(b) Principles of consolidation

(i) Subsidiaries

Queensland Railthe assets and liabilities of the subsidiary ofincorporatefinancial statementsconsolidatedTheas at reporting date and the results of the subsidiary for the year then ended.Limited

has the power to govern thegroupA subsidiary is an entity (including a special purpose entity) over which thefinancial and operating policies so as to obtain benefits from their activities, generally accompanying ashareholding of more than one-half of the voting rights.

They aregroup.Subsidiaries are fully consolidated from the date on which control is transferred to thede-consolidated from the date that control ceases.

companies aregroupInter-company transactions, balances and unrealised gains on transactions betweeneliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment ofthe asset transferred.

Non-current inter-company loans may not be demanded by the other entity and do not become payable otherthan through settlement of obligations associated with the loans or one of the entities exits the wholly-ownedgroup.

group.Accounting policies have been adopted consistently across the

Investment in the subsidiary is accounted for at cost in the financial records of the parent entity.

(c) Foreign currency translation

(i) Functional and presentation currency

entities are measured using the currency of thegroup'sof each of thefinancial statementsItems included in theconsolidatedprimary economic environment in which the entity operates (i.e. the functional currency). The

functional and presentationgroup'spresented in Australian dollars, which is thearefinancial statementscurrency.

(ii) Transactions and balances

Foreign currency transactions are initially translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement ofsuch transactions and from the translation at year end exchange rates of monetary assets and liabilitiesdenominated in foreign currencies are recognised in profit or loss, except when they are deferred in equity asqualifying cash flow hedges and qualifying net investment hedges.

(d) Rounding of amounts / Comparative restatements

is of a kind referred to in Class Order 98/100, issued by the Australian Securities and InvestmentscompanyTheCommission, relating to the "rounding off" of amounts in the financial report. Amounts in the financial report havebeen rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, thenearest dollar.

Comparative information has been restated where necessary to be consistent with disclosures in the currentreporting period.





(e) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, except where the amountof GST incurred is not recoverable from the Australian Taxation Office (ATO). In these circumstances, the GST isrecognised as part of the cost of acquisition of the asset or as part of the expense.

Trade receivables and trade payables in the balance sheet are shown inclusive of GST. The net amount of GSTrecoverable from, or payable to, the ATO is included with other receivables or payables in the balance sheet.

Cash flows are presented in the cash flow statement on a gross basis, except for the GST component ofinvesting or financing activities, which are disclosed as operating cash flow.

were part of the Aurizon Operations Limited (formerlyOn Track Insurance Pty LtdandQueensland Rail LimitedQR Limited) GST group until 30 September 2010. Any transactions with the Aurizon Operations Limited group tothat date did not attract GST.

are individual entities recognisedOn Track Insurance Pty LtdandQueensland Rail LimitedFrom 1 October 2010as separate taxpayers for the purposes of GST. Transactions between these entities and externally to thirdparties are subject to GST.

(f) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable after taking into account anyrecognises revenue whengroupdiscounts allowed. Amounts disclosed as revenue are net of indirect taxes. The

the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entityactivities as described below. Exchanges of goodsgroup'sand specific criteria have been met for each of the

and services of the same nature and value without any cash consideration are not recognised as revenues.Revenue is recognised for the major business activities as follows:

(i) Services revenue

Services revenue comprises revenue earned from Transport Service Contracts, the provision of passengertransport and track access.

In addition to revenue receivable from non-related parties, the company receives revenue from Transport ServiceContracts with the Department of Transport and Main Roads as well as amounts from various State Governmentdepartments as direct reimbursement for concessions provided to senior citizens, pensioners and students.

Transport Service Contracts

Transport Service Contract revenue is accounted for as follows:

• Transport Service Contract (Rail Infrastructure) (TSC(RI))

with funding to cover capital andcompanyThis contract is a multi-tiered arrangement which provides theoperating costs for the Regional and South East Queensland networks.

Under the contract, a stream of annuity-based funding is provided for operating and capital costs whichhave been previously incurred as well as the capital costs for enhancements to these existing systems.This annuity (which is paid in monthly instalments) is calculated on a seven year forecast of capital andoperating costs for the respective systems under the TSC(RI). Capital costs are based on depreciatingassets over a 30 year period.

• Transport Service Contract - South East Queensland Infrastructure Plan and Program (TSC - SEQIPP)

is contracted tocompanyUnder the South East Queensland Infrastructure Plan and Program, theconstruct infrastructure at various locations throughout the South East Queensland network. The

property, plant and equipment which will generategroup'sinfrastructure constructed forms part of therevenue through the TSC (RI) contract. TSC - SEQIPP revenue is recognised on a systematic basis inaccordance with the agreed rate of return of the SEQIPP assets.





• SEQIPP - Third party work

Revenue is recognised based on the actual costs incurred for the work performed. The revenue isrecognised when the work is complete and the costs incurred are taken to the income statement in thesame financial period.

• Citytrain and Traveltrain Transport Service Contracts

receives payments under the Transport Service Contract which defines passengercompanyTheRevenue is recognised on a straight-line basis based on thegroup.services to be provided by the

annual Transport Service Contract amount or periodic adjustments thereto.

Passenger Transport

Other train passenger service revenue comprises ticket and travel related sales and is recognised as revenueonce the service has been rendered.

Government concession revenue is recognised in the period in which the service is provided based on apredetermined formula as agreed with the local authority.

Track Access

Revenue generated from rail network access is recognised as the services are provided and is calculated basedon a number of operating parameters (such as tonnage hauled) applied to either regulator approved tariffs ornegotiated access agreements.

(ii) Other revenue

Other revenue comprises revenue earned from the sale of goods and services. Revenue for sale of goods isrecognised when the significant risks and rewards are passed to the buyer and the costs incurred, or to beincurred in respect of the transaction can be measured reliably. Risks and rewards are considered passed to thebuyer at the time of delivery.

(iii) Interest income

Interest income is recognised using the effective interest method.

(g) Other Income

(i) Government grants

Grants from the government are recognised at their fair value where there is a reasonable assurance that thewill comply with all attached conditions.groupgrant will be received and the

Government grants relating to costs are deferred and recognised in income statement over the period necessaryto match them with the costs that they are intended to compensate.

Government grants relating to the purchase of property, plant and equipment are included in the cost base ofthose assets and amortised to the income statement on a straight-line basis over the expected lives of theassets.

(ii) Disposal of assets

The gain or loss on disposal of an asset is recognised at the date when the significant risks and rewards ofownership of the asset pass to the buyer, usually when the purchaser takes delivery of the asset. The gain orloss on disposal is calculated as the difference between the carrying amount of the asset at the time of disposaland the net proceeds on disposal and is recognised as other income or expenses in the income statement.





(h) Defined benefit superannuation obligations

The group makes contributions to the State Public Sector Superannuation Scheme (QSuper) on behalf of itsemployees concerning superannuation. QSuper is an employer-sponsored fund, with the major employer beingthe State of Queensland. There are a number of membership categories in QSuper, which are eitheraccumulation or defined benefits in nature.

The Treasurer has ultimate responsibility for funding payments to defined benefit members. The State has inplace funding arrangements designed to meet the defined benefit obligations for its members. The Treasurer hasthe ability to require employers to pay any amounts needed to meet these benefits. Generally, this is handledthrough the regular standard fortnightly contribution paid by every employer, which has been determined on theadvice of the State Actuary. No directions varying this contribution have been received by the group to reportingdate.

The State Actuary makes a recommendation to the Treasurer on the standard employer contribution raterequired to fund the normal range of benefits at the conclusion of each triennial actuarial investigation. The mostrecent actuarial investigation was completed in 2010 and the actuary’s recommendation to leave the employercontribution rate unchanged was approved by the Treasurer. This investigation is undertaken on QSuper as awhole and is not segregated into different employers or occupations.

(i) Income tax

The income tax expense or benefit for the period is the tax payable / receivable on the current period's taxableincome based on the national income tax rate adjusted by changes in deferred tax assets and liabilitiesattributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts inthe financial statements and by unused tax losses.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to applywhen the assets are recovered or liabilities are settled, based on those tax rates that are enacted. The relevanttax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure thedeferred tax asset or liability.

Deferred tax assets are recognised for deductible temporary differences, unused tax losses and tax credits, onlyif it is probable that future taxable amounts will be available to utilise those temporary differences, losses andcredits.

Deferred tax liabilities and assets are not recognised for the temporary differences between the carrying amountand tax bases of investments in controlled entities where the parent entity is able to control the timing of thereversal of the temporary differences and it is probable that the differences will not reverse in the foreseeablefuture.

Current and deferred tax is recognised as an expense or income in the income statement, except when it relatesto items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity.

(i) Tax consolidation legislation

measures current and deferred taxgrouphas not elected to form a tax consolidated group. ThegroupTheas individualOn Track Insurance Pty Ltdand its controlled entityQueensland Rail Limitedamounts for

stand-alone taxpayers and aggregates the balances for disclosure.

(ii) Income tax equivalents

is required to make income tax equivalent payments to the Queensland Government, based upon thegroupThevalue of benefits derived and rulings set out in the National Tax Equivalent Regime (NTER) which is administeredby Australian Taxation Office (ATO).





and instruction from theQueensland Rail Transit Authority Act 2013These payments are made pursuant to theTreasurer. The NTER gives rise to obligations which reflect in all material respects those obligations for taxation

andIncome Tax Assessment Act 1997the1936,Income Tax Assessment Actwhich would be imposed by theassociated legislation, as well as Rulings and other pronouncements by the ATO to determine the tax payable by

group.the

(j) Cash and cash equivalents

For cash flow statement and presentation purposes, cash and cash equivalents include cash on hand, depositsheld at call with financial institutions and other short-term highly liquid investments that are readily convertible toknown amounts of cash and which are subject to an insignificant risk of changes in value.

(k) Trade receivables

Trade receivables

Trade receivables are initially recorded at fair value less any allowance for uncollectible amounts. Tradereceivables generally have credit terms ranging from 7 to 31 days.

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible arewritten off. An allowance for impairment of trade receivables is established when there is objective evidence that

will not be able to collect all amounts due according to the original terms of the receivables.groupthe

Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financialreorganisation and default or delinquency in payments (more than 90 days overdue) are considered indicatorsthat the trade receivable is impaired.

The amount of the impairment loss is recognised in the income statement within other expenses. When a tradereceivable for which an impairment allowance had been recognised becomes uncollectible in a subsequentperiod, it is written off against the allowance account. Subsequent recoveries of amounts previously written offare credited against other expenses in the income statement.

Other receivables

Other receivables include accruals, contractual receivables and GST receivable. Collectability is reviewed on anongoing basis.

(l) Inventories

The value of inventories reported includes items held in centralised stores, workshops and infrastructure androllingstock depots. Cost comprises cost of purchase, cost of conversion and other costs incurred in bringing theinventory to its present location and condition.

Inventories are valued at the lower of cost or net realisable value. Cost is determined predominantly on anaverage cost basis.

Items expected to be consumed after more than one year are classified as non-current.

The allowance for inventory obsolescence is based on assessments by management of particular inventoryclasses and relates specifically to infrastructure and rollingstock maintenance items. The amount of theallowance is based on a proportion of the value of damaged stock, slow moving stock and stock that has becomeobsolete during the reporting period.

has an agreement in place with Aurizon Operations Limited regarding inventory held in the AurizongroupTheOperations Limited workshops on behalf of the group. The agreement includes both "call option" and "put option"clauses and expires on 30 June 2015. The group may exercise a call option upon expiry or termination of theagreement to acquire all or part of the dedicated inventory held by Aurizon Operations Limited at the expiry or

to acquire allgrouptermination date. Aurizon Operations Limited, may in turn, exercise a put option to require theor any part of the dedicated inventory held on behalf of the company at the expiry or termination date.





(m) Investments and other financial assets

classifies its non-derivative financial assets based on the purpose for which the investments weregroupTheacquired. Management determines the classification of its investments at initial recognition. At reporting date, the

has only one type of non-derivative financial asset: loans and receivables.group

(i) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are notquoted in an active market. They are included in current assets, except for those with maturities greater than 12months after the reporting date which are classified as non-current assets. Loans and receivables are included in

in the balance sheet.14)(noteand non-current receivables10)(notecurrent trade and other receivables

(ii) Recognition and derecognition

Regular purchases and sales of financial assets are recognised on trade-date which is the date on which thecommits to purchase or sell the asset. Investments are initially recognised at fair value plus transactiongroup

costs. Financial assets are derecognised when the rights to receive cash flows from the financial assets havehas transferred substantially all the risks and rewards ofgroupexpired or have been transferred and the

ownership.

(iii) Subsequent measurement

Loans and receivables are carried at amortised cost using the effective interest method.

2.noteDetails on the determination of the fair value of financial instruments are disclosed in

(iv) Impairment

assesses at each reporting date whether there is objective evidence that a financial asset or group ofgroupThefinancial assets carried atgroup’sfinancial assets are impaired. If there is evidence of impairment for any of the

amortised cost, the loss is measured as the difference between the asset’s carrying amount and the presentvalue of estimated future cash flows, excluding future credit losses that have not been incurred. The cash flowsare discounted at the financial asset’s original effective interest rate. The loss is recognised in the incomestatement.

(n) Derivatives and hedging activities

enters into derivative contracts to hedge exposures to foreign exchange rates and commodity pricesgroupThe12.noteDerivative balances are disclosed in2.noteas described in

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and aresubsequently remeasured to their fair value. The method of recognising the resulting gain or loss depends onwhether the derivative is designated as a hedging instrument and, if so, the nature of the item being hedged.

designates certain derivatives as hedges of the cash flows of recognised assets and liabilities andgroupThehighly probable forecast transactions (cash flow hedges).

documents the relationship between hedging instruments and hedged items, as well as itsgroupAt inception, thealso documentsgrouprisk management objective and strategy for undertaking various hedge transactions. The

its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used inhedging transactions have been and will continue to be, highly effective in offsetting future cash flows of hedgeditems.

The full fair value of a hedging derivative is classified as a non-current asset or liability when the remainingmaturity of the hedged item is more than 12 months; it is classified as a current asset or liability when theremaining maturity of the hedged item is less than 12 months.





(i) Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flowhedges is recognised in other comprehensive income. The gain or loss relating to the ineffective portion isrecognised immediately in the income statement.

Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item willaffect profit or loss. However, when the forecast transaction that is hedged results in the recognition of anon-financial asset, the gains and losses previously deferred in equity are transferred from equity and included inthe measurement of the initial cost or carrying amount of the asset.

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria forhedge accounting, any cumulative gain or loss existing in equity at that time is recognised when the forecasttransaction is ultimately recognised in the income statement. When a forecast transaction is no longer expectedto occur, the cumulative gain or loss that was reported in equity is immediately transferred to the incomestatement.

(ii) Derivatives that do not qualify for hedge accounting

Certain derivative instruments do not qualify for hedge accounting. Changes in fair value of any derivativeinstrument that does not qualify for hedge accounting are recognised immediately in the income statement.

(iii) Embedded derivatives

purchase and sale contracts, it is possible that embedded derivatives have been enteredgroup'sThrough theinto. An embedded derivative will cause some or all of the cash flows of the purchase or sale contract (i.e. thehost contract) to be modified by reference to a variable such as a foreign exchange rate or a commodity price ifthat variable is not closely related to the host contract.

Embedded derivatives are separated from the host contract and accounted for as a stand alone derivative if theeconomic characteristics and risks of the embedded derivatives are not closely related to those of the hostcontract.

At reporting date, there were no embedded derivatives not closely related to the host contract.

(o) Property, plant and equipment

Methodology for valuation of fixed assets

Property, plant and equipment is measured at cost less accumulated depreciation. Cost is the amount of cash orcash equivalents paid or the fair value of the other consideration given to acquire an asset at the time of itsacquisition or construction. Cost may also include transfers from other comprehensive income of any gain or losson qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

The cost of fixed assets constructed by the group includes the cost of all materials used in construction, directlabour, site preparation, interest and foreign currency gains and losses incurred where applicable and anappropriate proportion of variable and fixed overheads.

Gifted and Donated Assets

Assets acquired from government at no cost are measured at fair value as government grants. Fair value meansthe amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing partiesin an arm’s length transaction.

Assets acquired from customers at no cost are recorded at fair value.





Land

only retains ownership ofgroupstipulates that theTransport Infrastructure Act 1994Land is carried at cost. Theits non-corridor land. As such, only non-corridor land is recorded in these accounts. Ownership of corridor landremains with the Department of Natural Resources and Mines on behalf of the State. This land is leased to the

for no cost. The sub-leasegroupDepartment of Transport and Main Roads and subsequently sub-leased to theterm is for an initial term of 100 years with a renewal option for an additional 100 years.

Owned building, plant and equipment and rollingstock

Owned building, plant and equipment and rollingstock are carried at cost less accumulated depreciation.Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,

and the costgrouponly when it is probable that future economic benefits associated with the item will flow to theof the item can be measured reliably.

Owned infrastructure

Infrastructure assets are carried at cost and represent capitalised expenditures that are directly related to capitalprojects and may include materials, labour and equipment, in addition to an allocable portion of indirect costs thatclearly relate to a particular project that will provide future economic benefits and remain within the control of thegroup.

Subsequent and maintenance costs

Costs related to repairs and maintenance activities are expensed when such repairs are performed. Subsequentcosts are only capitalised when it is probable that future economic benefits associated with the item which flow to

and the cost of the item can be measured reliably. The carrying amount of any component accountedgroupthefor as a separate asset is derecognised when replaced.

Leased property, plant and equipment

Capitalised fit out of leased properties is disclosed under leased property.

does not have any finance leases.groupThe

Assets under construction

includes the cost of all materials used in construction, directgroupThe cost of fixed assets constructed by thelabour, site preparation, interest and foreign currency gains and losses incurred where applicable and anappropriate proportion of variable and fixed overheads.

Depreciation and Amortisation

Buildings, plant and equipment, rollingstock and infrastructure are depreciated on a straight-line basis over theuseful life net of the residual value. Motor vehicles are depreciated using the diminishing value basis(percentages range from 13.64% to 35.00%), with land and assets under construction not depreciated.

Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or theestimated useful lives of the improvements.

Assets are depreciated or amortised from the date of acquisition, or, in respect of internally constructed ormanufactured assets, from the time an asset is completed and held ready for use. Major spares purchasedspecifically for particular assets are capitalised and depreciated in line with standard default asset class lives.

Where assets have separately identifiable components that are subject to regular replacement, thesecomponents are assigned useful lives distinct from the asset to which they relate. Any expenditure that increasesthe originally assessed capacity or service potential of an asset is capitalised and the new depreciable amount isdepreciated over the remaining life of the asset.





The depreciation and amortisation rates used during the year were based on the following range of useful lives:

- Buildings 10 - 50 years- Rollingstock 8 - 40 years- Plant and equipment 3 - 25 years- Infrastructure* 5 - 100 years

The depreciation and amortisation rates are reviewed annually and adjusted if appropriate.

An asset’s carrying amount is written down to its recoverable amount if the asset’s carrying amount is greater1(r)).(notethan its estimated recoverable amount

* Longer life infrastructure includes bridges, tunnels and other long lived civil works. Shorter life infrastructureincludes telecommunications and security and surveillance equipment.

(p) Intangible assets

(i) IT development and software

Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that willcontribute to future period financial benefits are capitalised to software and systems. Costs capitalised includeexternal direct costs of materials and service and direct payroll and payroll related costs of employees' time spenton the project. Amortisation is calculated using the straight-line method over their useful life which varies from 3to 7 years.

IT development costs include only those costs directly attributable to the development phase and are onlyhas an intention and ability to usecompanyrecognised following completion of technical feasibility and where the

the asset.

(q) Classification of expenditure

Items of expenditure in excess of $2,000 which are expected to provide future economic benefits are capitalised,with the exception of the purchase of office equipment and other items of a similar nature that provide limitedquantifiable benefits. The threshold applies to all asset classes except capital spares and intangibles.

Capital spares have a threshold of $20,000. If capital spares are under $20,000, the item is recorded in inventory.Expenditure not capitalised is treated as an operating expense in the period in which the expenditure is incurred.

Intangibles have a threshold of $50,000. If intangibles are under $50,000, expenditure is not capitalised and istreated as an operating expense in the period in which the expenditure is incurred.

(r) Impairment of assets

Assets are reviewed for impairment annually to determine if there are indications that the carrying amount maynot be recoverable.

An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverableamount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For thepurposes of assessing impairment, assets are grouped at the lowest levels for which there are separatelyidentifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets(cash generating units).

Non-financial assets that have suffered impairment are reviewed for possible reversal of the impairment at eachreporting date.

(s) Trade and other payables

financial yearprior to the end ofgroupThese amounts represent liabilities for goods and services provided to thewhich are unpaid. The amounts are unsecured and are usually paid within the terms set by the supplier.





(t) Borrowings and borrowing costs

Debt is drawn from facilities with the Queensland Treasury Corporation (QTC) incorporating fixed and floatingdebt and is initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequentlymeasured at amortised cost, using the effective interest rate method. Interest is accrued and paid monthly.

Interest costs are calculated and advised by QTC in accordance with an agreed book rate methodology, whichequates with amortised cost using the effective interest rate method. The effective interest rate is the rate thatexactly discounts estimated future cash payments or receipts through the expected life of the financialinstrument.

Borrowing costs, which includes interest calculated using the effective interest method and administration fees,are expensed in the period in which they arise.

Borrowing costs which are directly attributable to the construction of material qualifying assets are capitalised.Qualifying assets are assets not funded from other sources with a cost of more than $1.0 million and which take asubstantial period of time to prepare for intended use or sale. The rate used to determine the amount ofborrowing cost to be capitalised is the QTC interest rate applicable to the entity’s outstanding borrowings during

(2012:million were capitalised$2.2During the year, interest costs of7.49%).(2012:7.48%the year, in this casemillion).$4.1

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement ofthe liability for at least 12 months after the reporting date.

(u) Provisions

has a present legal or constructive obligation as a result of pastgroupProvisions are recognised when theevents, it is probable that an outflow of resources will be required to settle the obligation and the amount hasbeen reliably estimated. Provisions are not recognised for future operating losses.

The amount recognised as a provision is the best estimate of the consideration required to settle the presentobligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where aprovision is measured using the cash flows estimated to settle the present obligation, its carrying amount is thepresent value of those cash flows. The discount rate used to determine the present value is a pre tax rate thatreflects current market assessments of the time value of money and the risks specific to the liability.

(v) Employee benefits

(i) Wages and salaries, annual leave and leave loading

Liabilities for wages and salaries, including non-monetary benefits, annual leave and leave loading arerecognised as current liabilities. These liabilities are in respect of employees' services up to the reporting dateand are measured at the amounts expected to be paid when the liabilities are settled plus related on-costs.Employee benefits disclosed as liabilities and also as employee benefits expense in the consolidated incomestatement include amounts recharged by Queensland Rail from 3 May 2013 in accordance with the ManagedServices Agreement.

(ii) Other long-term employee benefit obligations

Liabilities for long service leave where employees have completed the required period of service, or are entitledto pro-rata payments are recognised as current liabilities at nominal values. The remaining unvested liabilities areincluded as non-current liabilities.

The liability for long service leave is measured using the expected future payments to be made in respect ofservices provided by employees up to the reporting date. Consideration is given to expected future wage andsalary levels, experience of employee departures and periods of service. Expected future non-current paymentsare discounted using market yields at the reporting date on Commonwealth government bonds with terms tomaturity that match, as closely as possible, the estimated future cash outflows.





(iii) Retirement allowance

Retirement allowance is payable to employees that retire or are paid according to Voluntary EmployeeRedundancy Scheme (VERS) or Medical Separation who:

• are not members of a QSuper contributory or defined benefit superannuation fund;• were employed prior to 1 February 1995;• have 10 or more years of continuous service; and• have reached the retirement attainment age of 55.

Liabilities for retirement allowance where employees fulfil all of the above requirements are recognised as currentliabilities at nominal values. The remaining unvested liabilities are included as non-current liabilities.

The liability for retirement allowance is measured using the expected future payments to be made in respect ofservices provided by employees up to the reporting date. Consideration is given to the history of employeedepartures, expected future wage and salary levels as well as expected age of retirement.

Expected future non-current payments are discounted using market yields at the reporting date onCommonwealth government bonds with terms to maturity that match, as closely as possible, the estimated futurecash outflows.

These conditions continue to apply to employees who have transferred, or will transfer, from Aurizon OperationsLimited.Queensland RailLimited and Aurizon Network Pty Ltd (formerly QR Network Pty Ltd) to

(iv) Sick leave

Sick leave is not provided for on the grounds that it is non-vesting and on average, no more than the annualentitlement is taken each year.

(v) Superannuation

Contributions are expensed as they are made.

The group pays an employer subsidy to the Government Superannuation Office in respect of employees who arecontributors to either the Public Sector Superannuation (QSuper) scheme or State Service Superannuation.

Employer contributions to the Super Defined Benefit Fund are determined by the State Actuary. No liability isrecognised for accruing superannuation benefits as this liability is held on a Whole of Government basis andreported in the Whole of Government financial statements. The group also makes superannuation guaranteepayments into the QSuper Accumulation Fund (RailSuper) and QSuper Accumulation Fund (Contributory)administered by the Government Superannuation Office.

No liability / asset is recognised for the group's share of any potential deficit of the Super Defined Benefit Fund offor further information on defined benefit liabilities.1(h)noteQSuper. Refer to

(w) Contributed equity

Ordinary shares are classified as equity.

Equity injections are treated as an increase in the value of issued shares.

(x) Dividends

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at thebut not distributed at reporting date.financial yearon or before the end of thegroup,discretion of the





(y) Leases

(i) Leases on property, plant and equipment

asgroupLeases in which a significant portion of the risks and rewards of ownership are not transferred to theOperating lease rental (net any incentive received from the32).(notelessee are classified as operating leases

lessor) is expensed on a straight-line basis over the lease term and is charged to the income statement.

as lessee, assumes substantially all the risks andgroup,Leases of property, plant and equipment where thedid not have any finance leases at reportinggroupbenefits of ownership are classified as finance leases. The

date.

is a lessor is recognised as income on agroupExpected rental revenue from operating leases where the32).(notestraight-line basis over the lease term

(z) Insurance

insures against risks which are largely uncontrollable, have significant or catastrophic consequencesgroupThefor assets and / or revenue and the aggregate costs of which would exceed the limit of exposure the organisationis prepared to accept.

Insurance cover has accordingly been effected for a variety of such risks. Other areas of risk exposure areself-insured. Other areas of risk exposure include workers' compensation and is self-insured by the Authority.

Limited'sQueensland RailUntil 30 June 2010, self-insurance and other underwriting activities were performed bywas transferred from AurizonOn Track Insurance Pty LtdLtd.On Track Insurance Ptywholly-owned subsidiary,

Operations Limited on 6 October 2010 and will continue to provide cover for claims relating to events up until 30and the Aurizon Operations Limited group.Queensland Rail LimitedJune 2010 for both

(aa) Environmental regulation

is subject to a variety of laws and regulations in the jurisdiction in which it operates or maintains land.groupTheWhere remediation measures are probable and can be reliably measured, such costs incurred in complying with

1(u).noterelevant laws and regulations are accounted for in accordance with the policy in

it does2011,Clean Energy Actis not required to purchase carbon permits under thegroupAlthough thehasgrouppurchase electricity and other inputs whose prices have increased as a result of the legislation. The

assessed the impact of these increases and determined that they are not material to its operations.

(ab) Authorisation for issue

declaration.directors'are authorised for issue by the Chairman at the date of signing thefinancial statementsThe

(ac) Parent entity financial information

has been prepared37notedisclosed inLimited,Queensland RailThe financial information for the parent entity,except as set out below:statements,financialon the same basis as the consolidated

(i) Investments in subsidiaries

Limited.Queensland Railoffinancial statementsInvestments in subsidiaries are accounted for at cost in the

(ii) Tax consolidation legislation

1(i)(i).noteFor information regarding tax consolidation legislation, please refer to




2 Financial risk management

activities expose it to a variety of financial risks including market risk, credit risk and liquidity risk. Thegroup'sTheoverall risk management program focuses on the unpredictability of financial markets and seeks togroup's

uses derivative financialgroupThegroup.minimise potential adverse effects on the financial performance of theinstruments such as foreign exchange contracts and commodity swap contracts to hedge significant riskexposures. Trading for profit is strictly prohibited.

under policies approvedgroupFinancial risk management is being carried out by a central treasury unit within theThe treasury unit identifies, evaluates and hedges financial risks in closeBoard).(theDirectorsofBoardby the

approves the Finance Policy for overall riskBoardoperating units. Thegroup'sco-operation with themanagement, as well as principles covering specific areas, such as mitigating foreign exchange, commodityprice, interest rate and credit risks, use of derivative financial instruments and investing excess liquidity. Any

Board.breaches of policy are reported to the

Sensitivity analysis has been used to help assess the financial risk of the group. In determining this sensitivity,the average of the 50 day historical volatility of the closing daily spot rate for three years, was used to adjust theforward curve. A three year period was chosen in line with the group's current hedging framework. For foreigncurrency the adjustment was applied to the US Dollar, the Euro and the Japanese Yen. For commodity price risk,the adjustment was applied to the Singapore Gasoil curves.

(a) Market risk

(i) Foreign exchange risk

Foreign exchange risk arises from capital expenditures that are denominated in a currency that is not the entity'sfunctional currency. The group is exposed to foreign exchange risk arising from various currency exposures,primarily with respect to the US Dollar (USD), the Euro (EUR) and the Japanese Yen (JPY). The risk is measuredusing cash flow at risk.

has a Treasury Principle in place to manage foreign exchange risk. All foreign exchange risk isgroupThecentrally managed by the treasury unit using approved derivative instruments.

foreign exchange risk management policy dictates the level of hedging to be undertaken within thegroup'sTheapproved trading range for the foreign exchange risk hedgingBoardapproved limits. At reporting date, theBoard

is:

0 - 1 year: 80% - 100%1 - 2 years: 60% - 100%2 - 3 years: 40% - 100%

designates forward foreign currency derivatives for hedging foreign exchange forecast transactionsgroupTheof foreign exchange hedges were designated for89%)(2012:100%which are highly probable. At reporting date,

hedge accounting purposes.

$0.6net losses of(2012:million$0.4At reporting date, contracts recognised directly in equity were net gains ofmillion).

million) were removed from equity and$1.2(2012:million$0.7losses of2013,30 JuneDuring the year endedincluded in the acquisition cost of capital.





exposure to foreign currency risk at reporting date was as follows:group'sThe

30 June 2013 30 June 2012USD$'000

EUR€'000

JPY¥'000

USD$'000

EUR€'000

JPY¥'000

Cash and cash equivalents 28 125 1 87 28 86Forward exchange contracts- capital expenditure foreign currency (not

qualifying for hedge accounting) - - - 850 100 -- capital expenditure foreign currency (qualifying

for hedge accounting) 577 2,525 - 1,473 4,325 94,461Net exposure 605 2,650 1 2,410 4,453 94,547

Sensitivity

against the USD / EUR / JPY with10%At reporting date, had the Australian dollar weakened / strengthened bymillion lower$0.006higher /nilpost tax profit would have beengroup’sall other variables held constant, the

million lower).$0.2million higher /$0.313%,(2012:

(ii) Commodity price risk

Commodity price risk arises when future commercial supply agreements are subject to fluctuations in pricemovements. Commodity swap contracts, transacted by the treasury unit, are used to manage commodity pricerisk.

has a Treasury Principle in place to manage commodity price risk. All commodity price risk is centrallygroupTheuses the commodity Singaporegroupmanaged by Group Treasury using approved derivative instruments. The

has chosen Singapore Gasoil 0.5% to hedgegroupGasoil 0.001% due to environmental efficiencies. Theexposures until December 2012 and Singapore Gasoil 0.05% to hedge exposures from January 2013 onwardsas these are the most liquid markets available.

Boardcommodity price risk management policy dictates the level of hedging to be undertaken withingroup'sTheapproved trading range for the commodity price hedging is:Boardapproved limits. At reporting date, the

0 - 1 year: 0% - 100%1 - 2 years: 0% - 100%2 - 3 years: 0% - 100%

designates forward commodity derivatives for hedging commodity forecast transactions which aregroupThe(2012:highly probable. At reporting date, no commodity hedges were designated for hedge accounting purposes

100%).

million).$0.9net losses of(2012:At reporting date, contracts recognised directly in equity were nil

million) were removed from equity and$0.03(2012:million$0.23losses of2013,30 JuneDuring the year endedincluded in the cost of diesel fuel.

Sensitivity

At reporting date, had the Singapore Gasoil price decreased / increased with all other variables held constant, thenil25%,(2012:post tax profit would not have been effected as there were no commodity hedges in placegroup's

lower).nilhigher /





(iii) Cash flow and fair value interest rate risk

main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates exposegroup'sTheto fair value interestgroupthe group to cash flow interest rate risk. Borrowings issued at fixed rates expose the

rate risk. The QTC has been authorised to manage the interest rate risk of the group within limits in accordanceBoard.with the risk profile approved by the

This is achieved by varying the proportion of the floating and fixed rate funding. The performance of this riskmanagement is assessed against the benchmark duration of the debt portfolio.

had the following exposure to variable rate borrowings:groupAt reporting date the

30 June 2013 30 June 2012Weightedaverage

interest rate%

Balance$'000

Weightedaverage

interest rate%

Balance$'000

Bank overdrafts and bank loans 7.3 3,099,817 7.5 3,000,000Net exposure to cash flow interest rate risk 3,099,817 3,000,000

debt with QTC to interest rate risk:group’sThe following table summarises the sensitivity of the


30 June 2013

Carryingamount

$'000Profit$'000

Equity$'000

Profit$'000

Equity$'000



30 June 2012

Carryingamount$'000

Profit$'000

Equity$'000

Profit$'000

Equity$'000


(b) Credit risk

The maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting date torecognised financial assets, is the carrying amount, net of any allowances for impairment of those assets, asdisclosed in the balance sheet and notes to the consolidated financial statements.

does not have any material credit risk exposure to any single receivable or group of receivables undergroupTheother than amounts owing by the State of Queensland. For somegroup,financial instruments entered into by the

trade receivables the group may also obtain security in the form of guarantees, deeds of undertaking or letters ofcredit which can be called upon if the counterparty is in default under the terms of the agreement.

Policies are in place to ensure that sales of products and services are only made to customers with anappropriate credit history.





Derivative counterparties and cash transactions are limited to high credit quality financial institutions and arehas policies that limit the amount of credit exposure to any one financialgroupTheBoard.approved by the

had the following credit exposure risk:groupinstitution. At reporting date the

2013$'000

2012$'000

Cash at bank and short-term bank depositsAA+ 276,339 119,036AA - 206,175

276,339 325,211

Derivative financial assetsAA 475 -

475 -

(c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability offunding through an adequate amount of committed credit facilities and the ability to close out market positions.

ensures sufficient cash to meet short-term and long-term financialgroupLiquidity risk management within thehas policies in place to manage liquidity risk, including the establishment of an annualgroupcommitments. The

approved borrowing program and the availability of appropriate working capital facilities.

manages liquidity risk by monitoring forecast cash flows and ensuring that adequate cash flow isgroupThemaintained.

Financing arrangements

The borrowing2(a)(iii).The short-term borrowing arrangements with QTC are interest bearing, refer to notearrangements are subject to annual review.

The amount of undrawn short-term borrowing facilities with QTC available at reporting date is shown below:

2013$'000

2012$'000

QTC short-term facilitiesUsed at reporting date 99,817 -Unused at reporting date 350,183 450,000Total facilities 450,000 450,000

Long-term borrowings are sourced from the Queensland Rail Limited Client Specific Pool subject to annualmay draw up to the amount of the approved borrowinggroupapproval of the Queensland State Treasurer. The

program.

Borrowings are not secured.

had a credit standby arrangement with the Commonwealth Bank of Australia in the form of a bankgroupThecancelled during the previous financial year.groupoverdraft totalling $2.0 million which the





Maturity Analysis

financial liabilities and net and gross settled derivative financial instrumentsgroup'sThe tables below analyse theinto relevant maturity groupings based on the remaining period at the reporting date to the contractual maturitydate. The amounts disclosed in the table are the contractual undiscounted cash flows.

Less than1 year


Over5 years


30 June 2013 $'000 $'000 $'000 $'000

Non-derivativesNon-interest bearing 675,517 31,375 - 706,892Variable rate 125,326 - - 125,326Fixed rate 219,113 877,056 2,962,320 4,058,489Total non-derivatives 1,019,956 908,431 2,962,320 4,890,707

DerivativesNet settled (forward commodity hedges)

- - - -

Gross settled (foreign exchange hedges)Assets- (inflow) (4,294) (1,436) - (5,730)- outflow 3,811 1,428 - 5,239Liabilities- (inflow) - - - -- outflow - - - -Total derivatives (483) (8) - (491)

30 June 2012



$'000

Over5 years$'000


$'000

Non-derivativesNon-interest bearing 192,921 - - 192,921Variable rate 25,469 - - 25,469Fixed rate 224,204 897,432 3,024,290 4,145,926Total non-derivatives 442,594 897,432 3,024,290 4,364,316

DerivativesNet settled (forward commodity hedges)Liabilities 859 - - 859

Gross settled (foreign exchange hedges)Assets- (inflow) - - - -- outflow - - - -Liabilities- (inflow) (8,778) (280) - (9,058)- outflow 9,723 313 - 10,036Total derivatives 1,804 33 - 1,837





(d) Fair value measurements

The fair value of financial assets and financial liabilities must be estimated for recognition and for disclosurepurposes.

requires disclosure of fair value measurements by level of theFinancial Instruments: DisclosuresAASB 7following fair value measurement hierarchy:

(Level 1) quoted prices (unadjusted) in active markets for identical assets or liabilities;(Level 2) inputs other than quoted prices included within level 1 that are observable for the asset or liability,

either directly (as prices) or indirectly (derived from prices); and(Level 3) inputs for the asset or liability that are not based on observable market data (unobservable

inputs).

30 Juneassets and liabilities measured and recognised at fair value atgroup'sThe following table presents the2012:30 Juneand2013

30 June 2013Level 1$'000

Level 2$'000

Level 3$'000

Total$'000


Forward exchange contracts - 475 - 475Total assets - 475 - 475

LiabilitiesFinancial liabilities at fair value through profit or loss

Forward exchange contracts - - - -Derivatives used for hedging

Forward exchange contracts - - - -Commodity swaps - - - -

Total liabilities - - - -

30 June 2012Level 1$'000

Level 2$'000

Level 3$'000

Total$'000


Forward exchange contracts - - - -Total assets - - - -

LiabilitiesFinancial liabilities at fair value through profit or loss

Forward exchange contracts - 8 - 8Derivatives used for hedging

Forward exchange contracts - 947 - 947Commodity swaps - 859 - 859

Total liabilities - 1,814 - 1,814

The fair value of financial instruments traded in active markets (such as foreign exchange and commodityderivatives) is based on observable market prices at reporting date. The observable market price used for

for effective hedges is the average (i.e. mid) forward rate at closegroupfinancial assets and liabilities held by theof business on reporting date.





The fair value of financial instruments that are not traded in an active market (for example, over the counterderivatives) is determined using generally accepted valuation techniques. The group uses a variety of methodsand makes assumptions that are based on market conditions existing at the end of each reporting period.Observable market prices or dealer estimates for similar instruments are used to estimate fair value for long-termdebt for disclosure purposes. Other techniques, such as estimated discounted cash flows, are used to determinefair value for the remaining financial instruments. The fair value of forward exchange contracts and commodityswap contracts is determined using forward market rates at the end of the reporting period. These instrumentsare included in level 2 and comprise derivative financial instruments. In the circumstances where a valuationtechnique for these instruments is based on significant unobservable inputs, such instruments are included inlevel 3.

The carrying amounts of trade receivables and payables are assumed to approximate their fair values due totheir short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting

for similargroupthe future contractual cash flows at the current market interest rate that is available to thefinancial instruments. The carrying amount of current borrowings approximates the fair value, as the impact ofdiscounting is not significant.

3 Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors,including expectations of future events that may have a financial impact on the entity and that are believed to bereasonable under the circumstances.

(a) Critical accounting estimates and assumptions

makes estimates and assumptions concerning the future. The resulting accounting estimates will, bygroupThedefinition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of

arefinancial yearcausing a material adjustment to the carrying amounts of assets and liabilities within the nextdiscussed below.

(i) Estimated impairment of property, plant and equipment

tests annually whether property, plant and equipment has suffered any impairment, in accordance withgroupTheThe recoverable amounts of cash generating units have been1(r).the accounting policy stated in note

determined based on value in use calculations or fair value less costs to sell. Value in use calculations requirethe use of assumptions.

(ii) Provisions for insurance claims

managed the self-insurance activities of the AurizonLtd,On Track Insurance PtyThe subsidiary company,belonged untilOn Track Insurance Pty LtdandQueensland Rail LimitedOperations Limited group to which both

30 June 2010 and 6 October 2010 respectively. Actuarial assessments are undertaken annually to assess thefor further information.1(z)value of the provision for any outstanding claims. Refer to note

Accrued insurance liabilities (includes Workers' Compensation) is based on a combination of managementfor more21estimates and independent actuarial assessments performed as at year end. Refer to note

information.

(iii) Provision for land rehabilitation

There is uncertainty as to the amount that will ultimately be required to be expensed to remediate contaminatedfor more information.21land. Refer to note

(iv) Workers compensation self-insurance provision

Independent actuarial valuations are used to estimate the provisions required for self-insured workerscompensation.




3 (continued)Critical accounting estimates and judgements

The determination of the provisions required is dependent on a number of assumptions including the total futurecost to finalise existing open claims, wage increases that will impact existing claims, inflation and the amount ofclaims that have been incurred but not yet reported.


(v) Long service leave provision

The determination of the provisions required is dependent on a number of assumptions including expected wageincreases, length of employee service and bond rates.


(vi) Taxation

accounting policy for taxation requires management's judgement as to the types of arrangementsgroup'sTheconsidered to be subject to a tax. Judgement is also required in assessing whether deferred tax assets andcertain deferred tax liabilities are recognised on the balance sheet. Deferred tax assets, including those arisingfrom unrecouped tax losses, capital losses and temporary differences, are recognised only when it is consideredprobable that they will be recovered. Recoverability is dependent on the generation of sufficient future taxableprofits.

for carrying amounts of deferred tax assets and deferred tax liabilities.25and18Refer to notes

(vii) Depreciation

Management estimates the useful lives and residual values of property, plant and equipment based on theexpected period of time over which economic benefits from use of the asset will be derived. Management reviewsuseful life assumptions on an annual basis having given consideration to variables including historical andforecast usage rates, technological advancements and changes in legal and economic conditions. Refer to note

for details on a change in the useful lives in the4for details of current depreciation rates used and note1(o)current reporting period.

(viii) Hedge accounting

Management's judgement is necessary when determining whether a derivative financial instrument qualifies forFinancialhedge accounting, such as whether forecast transactions are highly probable as required by AASB 139

The assessment of whether forecast transactions are highlyMeasurement.Instruments: Recognition andprobable is judgmental and is subject to changes to the timing and magnitude of underlying purchases.

(ix) Sunlander 14 capital program

Management estimated the cost associated with the de-scoped carriages from the Sunlander 14 capital program.Refer to note 16(d) for details.

4 Correction of error and revision of estimates

There have been no corrections of error in the current reporting period.

assets. The reviewgroup’sDuring the reporting period management undertook a review of the useful lives of thegroup’stook into account useful lives adopted by rail managers in Australia and New Zealand as well as the

asset maintenance and replacement history.

As a result of the review, the useful lives of a number of asset classes were amended. The changes wereadopted prospectively from 1 July 2012 and resulted in a reduction in depreciation expense for the reportingperiod of approximately $19.1 million.

There were no other material revisions of estimates during the current reporting period.




5 Revenue from continuing operations

2013$'000

2012$'000

Transport service contract revenue 1,526,614 1,530,327Passenger transport revenue 67,831 71,836Network access revenue 218,833 217,463Other revenue* 99,938 109,483Interest revenue 14,241 14,166

1,927,457 1,943,275

million), External construction works$25.0(2012:million$20.5* Other revenue includes Workshop revenuemillion),$13.9(2012:million$12.9million), Leasing revenue$21.5(2012:million$19.2revenue

$10.4(2012:million$11.2million), Airtrain revenue$13.0(2012:million$12.5Telecommunication revenuemillion$3.7million) and Natural disaster funding$0.2(2012:million$9.1million), Insurance claims revenue

million).$14.3(2012:

6 Other income

2013$'000

2012$'000

Net gain on disposal of property, plant and equipment 1,138 -Net gains on non-hedge currency derivatives and hedge ineffectiveness 33 -Net foreign exchange gains - 36Rebates 2,031 2,746

3,202 2,782




7 Expenses

2013$'000

2012$'000

Profit before income tax includes the following specific expenses:

Depreciation and amortisationDepreciation

Buildings 19,001 18,445Plant and equipment 21,810 20,958Infrastructure 132,115 139,304Rollingstock 108,243 103,274

Total depreciation 281,169 281,981Amortisation

Lease fit out 3,182 2,61917)Software (note 13,889 11,948

Total amortisation 17,071 14,567

Total depreciation and amortisation 298,240 296,548

Finance costsInterest and finance charges paid / payable 223,638 222,927

Total finance costs 223,638 222,927

Other expensesRental expenses relating to leases 55 55Allowance for inventory obsolescence 571 1,540Research and development costs 100 100Settlement of litigation expenses 303 521Impairment losses

Trade receivables 226 35Net losses on non-hedge currency derivatives and hedgeineffectiveness - 920Net foreign exchange losses 12 -Net loss on disposal of property, plant and equipment - 2,125Other expenses 2,915 1,724

Total other expenses 4,182 7,020

Superannuation expenses*Defined benefit superannuation expense 20,366 20,744Defined contribution superannuation expense 43,662 44,481

Total superannuation expenses 64,028 65,225

* Forms part of employee benefits expense.




8 Income tax expense

(a) Income tax expense

2013$'000

2012$'000

Current tax 37,157 32,115Deferred tax 19,476 26,215Adjustments for current tax of prior periods (601) (604)

56,032 57,726

included in income tax expense comprises:expenseDeferred income tax18)(note(Increase) / decrease in deferred tax assets 8,095 (2,221)

25)(noteIncrease / (decrease) in deferred tax liabilities 11,381 28,43619,476 26,215

(b) Numerical reconciliation of income tax expense to prima facie tax payable

2013$'000

2012$'000

Profit from continuing operations before income tax expense 200,836 186,01330%)(2012:30%Tax at the Australian tax rate of 60,251 55,804

Tax effect of amounts which are not deductible / (taxable) in calculatingtaxable income:

Entertainment 2 14Research and development (381) (739)Inter-company eliminations (3,266) 3,242Other 36 18Non-assessable income (9) (9)

Adjustments for current tax of prior periods (601) (604)(4,219) 1,922

Total income tax expense 56,032 57,726

(c) Amounts recognised directly in equity

2013$'000

2012$'000

Aggregate current and deferred tax arising in the reporting period and notrecognised in net profit or loss but directly debited or credited to equity:

25)and18Net deferred tax - debited / (credited) directly to equity (note 577 34577 34




9 Current assets - Cash and cash equivalents

2013$'000

2012$'000

Cash on hand 129 158Bank balances - 2,727Short-term investments 276,339 322,484Trust monies - 1Total cash and cash equivalents 276,468 325,370

Less: bank overdraft (13,908) -Less: trust monies 2 (1)

(13,906) (1)

Balance as per statement of cash flows 262,562 325,369

(a) Interest rate risk exposure

2.exposure to interest rate risk is discussed in notegroup’sThe

10 Current assets - Trade and other receivables

2013$'000

2012$'000

Trade receivables 65,704 59,308(a)Allowance for impairment of receivables (253) (119)

Net trade receivables 65,451 59,189

Inter-company receivables 355,736 -355,736 -

Transport service contracts 90,437 106,885Receivables - SEQIPP works 7,345 5,870Other receivables 18,792 10,096

116,574 122,851

Total trade and other receivables 537,761 182,040

Due to the short-term nature of these receivables, their carrying amount is assumed to approximate their fairvalue.




10 (continued)Current assets - Trade and other receivables

(a) Impaired trade receivables

At reporting date, it was assessed that a portion of the impaired receivables is expected to be recovered. Thenominal values and ageing of the impaired trade receivables is as follows:

2013$'000

2012$'000

1 to 3 months 6 -3 to 6 months 82 1Over 6 months 252 105

340 106

Movements in the allowance for impairment of receivables are as follows:

2013$'000

2012$'000

Opening balance 119 99Allowance for impairment recognised during the year 226 35Receivables written off during the year as uncollectable (92) (15)

253 119

The creation and release of the allowance for impaired receivables has been included in the income statement.Amounts charged to the allowance account are generally written off when there is no expectation of recoveringadditional cash.

(b) Past due but not impaired

trade receivables were past due but not impaired. These relate to agroup’sAt reporting date, some of thenumber of independent customers for whom there is no recent history of default. The ageing analysis of thesetrade receivables is as follows:

2013$'000

2012$'000

3 to 6 months 315 1,545Over 6 months 1,991 3,805

2,306 5,350




11 Current assets - Inventories

2013$'000

2012$'000

(b)Raw materials and stores 62,314 56,907Work in progress 125 431Less: allowance for inventory obsolescence (1,202) (1,025)Inventory at lower of cost or net realisable value 61,237 56,313

(a) Inventory expense

$109.0(2012:million$102.1amounted to30 June 2013year endedInventory recognised as expense during the30year endedmillion). Write-downs of inventories to net realisable value recognised as an expense during the

million).$0.3(2012:million$0.3amounted toJune 2013

(b) Raw material and stores

The amount of raw materials and stores includes surplus materials held to support the existing rollingstock assetsof the group. An independent external valuer performed a stock take and assessed the value of the surplusmaterials in connection with the carriages that were de-scoped from the Sunlander 14 capital program to be $5.0million. This amount was transferred to inventory from assets under construction in the current reporting period.

Queensland Rail engaged an independent external valuer to assess and value materials procured in relation tothe portions of the Sunlander 14 capital program that were de-scoped. Key estimates and assumptions weremade by the valuer in determining the value of the materials that could be used by Queensland Rail to supportexisting rollingstock. These include:

• All materials were considered to be new at reporting date and no aging allowances were included in thevalues determined.

• All materials transferred to inventory only included those items that are replaceable units which supportthe rendering of services to Queensland Rail.

• The value of procured materials represented the cost paid by Queensland Rail to the supplier where itwas identifiable. Otherwise, the value represented the likely price that Queensland Rail could expect topay for each item.

• The materials valued were components created and purchased in order to assemble a narrow gauge tilttrain. Accordingly, it was held that there was no opportunity to dispose of surplus materials inaccordance with its best and highest use to another rail operator.

Physical inspections were included up to and including those on 19 November 2013 and were undertaken byinspecting a representative sample with a focus on high value sub system components first. The inspections andvaluations have been based upon the information provided to the valuer.




12 Derivative financial instruments

2013$'000

2012$'000

Current assetsForward exchange contracts - cash flow hedges 475 -Total current derivative financial instrument assets 475 -

Total derivative financial instrument assets 475 -

Current liabilitiesForward exchange contracts - cash flow hedges - 916Forward exchange contracts - at fair value through profit and loss - 8Commodity contracts - cash flow hedges - 859Total current derivative financial instrument liabilities - 1,783

Non-current liabilitiesForward exchange contracts - cash flow hedges - 31Total non-current derivative financial instrument liabilities - 31

Total derivative financial instrument liabilities - 1,814

(a) Instruments used by the group

holds derivative financial instruments to hedge (including economically hedge) its foreign currency andgroupThe2).financial risk management policy (notegroup’scommodity price risk exposures in accordance with the

13 Current assets - Other current assets

2013$'000

2012$'000

Prepayments 6,439 6,192Prepaid Income Tax* 1,576 -

8,015 6,192

* The group has made Pay As You Go quarterly income tax instalments for the 2012/13 period which haveexceeded the income tax liability for the same period.




14 Non-current assets - Receivables

2013$'000

2012$'000

Transport service contracts - 39,907Loan receivable* 3,843 17,184

3,843 57,091

* Loan receivable represents the outstanding balance of the loan between the subsidiary company and its formerparent company, Aurizon Operations Limited. This loan is non-interest bearing and is not repayable on demand.The loan balance is reduced as the subsidiary settles outstanding insurance claims by Aurizon OperationsLimited and its subsidiaries.

(a) Impaired receivables and receivables past due

None of the non-current receivables are impaired or past due but not impaired.

(b) Fair values

The carrying value of non-current receivables represents the best approximation of fair value.

15 Non-current assets - Inventories

2013$'000

2012$'000

Raw materials and stores 22,533 15,24022,533 15,240




16 Non-current assets - Property, plant and equipment

Assets underconstruction

$'000Land$'000

Leasedproperty

$'000Buildings

$'000

Plant andequipment

$'000Rollingstock

$'000Infrastructure

$'000Total$'000

1 July 2011AtCost 339,570 139,806 21,052 453,194 180,041 1,685,058 3,983,123 6,801,844Accumulated depreciation / amortisation andimpairment losses - (1,812) (1,613) (86,510) (85,391) (420,138) (380,341) (975,805)Net book amount 339,570 137,994 19,439 366,684 94,650 1,264,920 3,602,782 5,826,039

30 June 2012Year endedOpening net book amount 339,570 137,994 19,439 366,684 94,650 1,264,920 3,602,782 5,826,039Additions 558,273 - 1,518 - 5,681 - - 565,472Transfers between asset classes (445,026) 603 2,847 27,707 36,024 179,802 153,904 (44,139)Disposals - (9,315) - (860) (1,459) (273) (4,488) (16,395)Depreciation / amortisation expense - - (2,619) (18,445) (20,958) (103,274) (139,304) (284,600)Closing net book amount 452,817 129,282 21,185 375,086 113,938 1,341,175 3,612,894 6,046,377

30 June 2012AtCost 452,817 131,084 25,416 479,730 215,131 1,830,739 4,129,319 7,264,236Accumulated depreciation / amortisation andimpairment losses - (1,802) (4,231) (104,644) (101,193) (489,564) (516,425) (1,217,859)Net book amount 452,817 129,282 21,185 375,086 113,938 1,341,175 3,612,894 6,046,377

Queensland Rail Limited Financial Report FY2012/13

187




Assets underconstruction

$'000Land$'000

Leasedproperty

$'000Buildings

$'000

Plant andequipment

$'000Rollingstock

$'000Infrastructure

$'000Total$'000

30 June 2013Year endedOpening net book amount 452,817 129,282 21,185 375,086 113,938 1,341,175 3,612,894 6,046,377Additions 552,651 - 461 - 121 - 561 553,794Transfers between asset classes (377,830) 205 151 35,205 29,274 104,612 193,987 (14,396)Transfers to inventory (c) (5,000) - - - - - - (5,000)Transfers to consumables (d) (48,151) - - - - - - (48,151)Disposals - (2,274) - (161) (3,800) (303) (1,865) (8,403)Depreciation / amortisation expense - - (3,182) (19,001) (21,810) (108,243) (132,115) (284,351)Closing net book amount 574,487 127,213 18,615 391,129 117,723 1,337,241 3,673,462 6,239,870

30 June 2013AtCost 574,487 129,002 26,028 514,569 233,999 1,907,339 4,320,286 7,705,710Accumulated depreciation / amortisation andimpairment losses - (1,789) (7,413) (123,440) (116,276) (570,098) (646,824) (1,465,840)Net book amount 574,487 127,213 18,615 391,129 117,723 1,337,241 3,673,462 6,239,870

(a) Non-current assets pledged as security

company.No assets have been pledged as security by the

(b) Impairment

An impairment assessment was undertaken prior to reporting date. No impairment was recognised in the current or prior reporting periods.


188




(c) Transfers to inventory

The transfers to inventory for assets under construction reflect inventory relating to the de-scope of the Sunlander 14 capital program. The value of the inventory transferredwas determined by an independent external valuer. Key assumptions made by the valuer include:

• All materials transferred to inventory only included those items that are replaceable units which support the rendering of services to Queensland Rail.• The value of procured materials represented the cost paid by Queensland Rail to the supplier where it was identifiable. Otherwise, the value represented the likely

price that Queensland Rail could expect to pay for each item.

(d) Transfers to consumables

The transfer of estimated costs from assets under construction to consumables expense represents the costs relating to the de-scope of the Sunlander 14 capital program.These costs represent materials, project management and engineering design costs relating to the de-scoped portions of the capital program. These costs were incurred tobuild carriages which were unique to a narrow gauge tilt train. Accordingly, it was held that these costs did not represent a future economic benefit and that there was noopportunity to dispose of the surplus materials in accordance with its best and highest use to another rail operator.


189



17 Non-current assets - Intangible assets

Computersoftware*

$'000Total$'000

1 July 2011AtCost 15,921 15,921Accumulated amortisation and impairment (1,631) (1,631)Net book amount 14,290 14,290

30 June 2012Year endedOpening net book amount 14,290 14,290Transfers 44,139 44,139Amortisation expense (11,948) (11,948)Closing net book amount 46,481 46,481


30 June 2013Year endedOpening net book amount 46,481 46,481Transfers 14,396 14,396Amortisation expense (13,889) (13,889)Closing net book amount 46,988 46,988



An impairment assessment was undertaken prior to reporting date. No impairment was recognised in the currentor prior reporting periods.




18 Non-current assets - Deferred tax assets

2013$'000

2012$'000

The balance comprises temporary differences attributable to:Accrued expenses 5,705 11,213Revenue losses 2,011 -Capital losses 3,211 2,613Provisions 12,781 86,315Superannuation contributions 714 728Unearned revenue 3,818 4,983Cash flow hedges - 443Various adjustments - temporary differences - 137Total deferred tax assets 28,240 106,432

2013$'000

2012$'000

Movements:Opening balance 106,432 103,817

8)(noteCredited / (charged) to the consolidated income statement (8,095) 2,221Cash flow hedge (442) (34)Transfer of provision to Queensland Rail (72,265) -Increase in carried forward tax losses 2,011 -Increase in capital losses 599 428Closing balance at 30 June 28,240 106,432

2013$'000

2012$'000

Deferred tax assets expected to be recovered within 12 months - -Deferred tax assets expected to be recovered after more than 12 months 28,240 106,432

19 Non-current assets - Other non-current assets

2013$'000

2012$'000

Prepayments 4,834 5,0494,834 5,049




20 Current liabilities - Trade and other payables

2013$'000

2012$'000

Trade payables 148,917 200,338Trade payables - intercompany 537,015 -Dividend payable 138,610 102,629Other payables 15,094 18,052

839,636 321,019

21 Liabilities - Provisions

2013 2012Current

$'000Non-current

$'000Total$'000

Current$'000

Non-current$'000

Total$'000

(a)Employee benefits - - - 233,786 16,749 250,535(b)Provision for insurance claims 13,296 - 13,296 32,196 - 32,196

Litigation and workers' compensation(c)provision 479 489 968 8,999 19,850 28,849

(d)Land rehabilitation provision - 10,967 10,967 - 10,585 10,585(e)Make good provision - 2,760 2,760 - 3,656 3,656

(f)Other provisions 5,883 - 5,883 - - -19,658 14,216 33,874 274,981 50,840 325,821

(a) Employee benefits

2013$'000

2012$'000

Annual leave and leave loading - 66,938Long service leave - 158,278Other - 25,319

- 250,535

The current provision for long service leave covers all unconditional entitlements where employees havecompleted the required period of service and also those where employees are entitled to pro-rata payments in

does not have angroupcertain circumstances. This portion of the provision is presented as current, since theunconditional right to defer settlement for any of these obligations. However, based on past experience, the

does not expect all employees to take the full amount of accrued leave or require payment within the nextgroup12 months.

The non-current provision for long service leave covers all conditional entitlements where employees have notcompleted the required period of service and are not entitled to pro-rata payments. This portion of the provision is

does not have an obligation to settle the provision within the next 12grouppresented as non-current, since themonths.

Other employee benefits includes payroll tax and retirement allowances.

Employee benefits were previously disclosed under Other current liabilities and Other non-current liabilities.





Employees and their entitlements were transferred to the Authority on 3 May 2013 in accordance with theThis resulted in the transfer of the entire balance of the employeeQueensland Rail Transit Authority Act 2013.

benefits on the same day.

(b) Provision for Insurance Claims

On Trackas recorded bygroupThe provision for insurance claims is raised for insurance claims external to theinternal captive insurance provider for claims up until 30 June 2010. The provisiongroup'stheLtd,Insurance Pty

as determined by angrouprepresents the estimated requirement to settle all third party claims against theactuarial assessment.

(c) Litigation and workers' compensation

Provision is made for the estimated liability for workers' compensation and litigation claims. Claims are assessedseparately for common law, statutory and asbestos claims. The outstanding liability is determined after factoringfuture claims inflation and discounting future claim payments. Estimates are made based on the average numberof claims and average claim payments over a specified period time. Claims Incurred But Not Reported (IBNR) arealso included in the estimate. Claims are expected to be paid over a period exceeding more than one year.

the Queensland State2013,Queensland Rail Transit Authority ActSubsequent to the enactment of theGovernment issued a Transfer Notice resulting in the transfer of the workers' compensation liability to theAuthority.

(d) Land rehabilitation provision

group'sThis provision recognises the estimated costs to remediate contaminated land in accordance with theconstructive obligations per the environmental sustainability policy. These estimated costs have arisen as a resultof past events.

The provision for land rehabilitation is the present value of management's best estimate of the expenditurerequired to settle the land rehabilitation present obligation at the reporting date. The provision has beencalculated based on advice from external consultants and management's best estimate of likely remediationcosts.

(e) Make good provision

This provision represents the anticipated costs of the future restoration of leased office premises. Make goodrequirements vary for different properties. The provision includes future cost estimates associated with therestoration of office fixtures and fittings to original condition; removal of all property and equipment to return thepremises to a vacant shell and making good any damage caused by their removal; removing any alterations toreturn to its original layout; and repairing and making good any damage which may be caused to land adjoiningthe premises as a result of carrying out structural work or other improvements. The provision has been calculatedbased on management's best estimate of make good costs.

(f) Other provisions

Other provisions comprise an outstanding commitment at reporting date to compensate a supplier for materialsand project administration and engineering costs associated with the carriages that were de-scoped from theSunlander 14 capital program for the amount of $5.9 million as disclosed in Note 1. In accordance with theaccounting standards, this commitment is recognised as a provision in the current reporting period as the grouphas a present contractual obligation, relating to an event that has occurred, which is expected to be settled in thenext reporting period.





(g) Movements in provisions

other than employee benefits, are set out below:year,financialMovements in each class of provision during the

2013


claims$'000



$'000

Landrehabilitation

provision$'000

Make goodprovision

$'000Other$'000

Total$'000

Current and non-currentCarrying amount at start of year 32,196 28,849 10,585 3,656 - 75,286Charged / (credited) to profit orloss

- additional provisionsrecognised - 10,821 26 - 5,883 16,730- unused amounts released (5,351) (435) - (982) - (6,768)- unwind discount - - 356 184 - 540

Transfer to Queensland Rail - (31,032) - - - (31,032)Amounts used during the year (13,549) (7,235) - (98) - (20,882)Carrying amount at end of year 13,296 968 10,967 2,760 5,883 33,874

22 Current liabilities - Other current liabilities

2013$'000

2012$'000

(a)Income in advance 21,592 24,958Other current liabilities 3,099 3,237

24,691 28,195


Income in advance predominantly represents amounts received as prepayment for the development of railinfrastructure and lease payments and / or incentives received in advance. Infrastructure prepayments aredeferred and earned over the term of their respective agreements while lease incentives are amortised to theincome statement over the life of the related lease.




23 Liabilities - Borrowings

2013 2012Current

$'000Non-Current

$'000Total$'000

Current$'000

Non-current$'000

Total$'000

Queensland Treasury Corporationborrowings* 99,817 3,000,000 3,099,817 - 3,000,000 3,000,000Total borrowings 99,817 3,000,000 3,099,817 - 3,000,000 3,000,000

* Unsecured

(a) Financing arrangements

2(c).financing arrangements please refer to notegroup'sFor details of the

(b) Fair value

The carrying amounts and fair values of current and non-current borrowings and off-balance sheet guarantees atreporting date are:

2013 2012Carryingamount

$'000Fair value

$'000

Carryingamount$'000

Fair value$'000

(i)On-balance sheetNon-traded financial liabilitiesCurrent borrowings 99,817 99,817 - -Non-current borrowings 3,000,000 3,225,974 3,000,000 3,284,595

3,099,817 3,325,791 3,000,000 3,284,595

Off-balance sheetUnrecognised financial assetsThird party guarantees - 293,018 - 302,555Bank guarantees - 93,387 - 108,246Insurance company guarantees - 24,857 - 28,269Unrecognised financial liabilitiesThird party guarantees - (2,000) - (2,000)Bank guarantees - (36,015) - (35,904)

- 373,247 - 401,166

(i) On-balance sheet

The fair value of borrowings is determined by reference to pricing models and valuation techniques as advised byQTC.

(ii) Off-balance sheet

The off-balance sheet items comprise guarantees either held or issued by the group and contingent assets andliabilities not qualifying for recognition at reporting date. A majority of the guarantees held relate to performanceguarantees on construction contracts provided by third parties.

(c) Risk exposures

2.Information about the entity's exposure to interest rate and foreign currency fluctuations is provided in note




24 Non-current liabilities - Trade and other payables

2013$'000

2012$'000

Trade payables - intercompany 31,375 -31,375 -

25 Non-current liabilities - Deferred tax liabilities

2013$'000

2012$'000

The balance comprises temporary differences attributable to:Accrued income 1,788 2,019Consumables and spare parts 6,924 6,298Cash flow hedges 135 -Property, plant and equipment 401,488 390,579Prepayments 115 199Foreign exchange gains 1,444 1,283Total deferred tax liabilities 411,894 400,378

Movements:Opening balance 400,378 371,942

8)(noteCharged / (credited) to the consolidated income statement 11,381 28,436Cash flow hedges 135 -Closing balance at 30 June 411,894 400,378

2013$'000

2012$'000

Deferred tax liabilities expected to be settled within 12 months - -Deferred tax liabilities expected to be settled after more than 12 months 411,894 400,378

26 Non-current liabilities - Other non-current liabilities

2013$'000

2012$'000

(a)Income in advance 29,845 31,14729,845 31,147


Income in advance predominantly represents amounts received as prepayment for the development of railinfrastructure and lease incentives received in advance. Infrastructure prepayments are deferred and earned overthe term of their respective agreements while lease incentives are amortised to the income statement over the lifeof the related lease.




27 Contributed equity

(a) Share capital

2013$'000

2012$'000

Ordinary sharesFully paid at the beginning of the year 2,602,628 2,363,172Distributions of equity - (6,555)Equity injections - 246,011

Total contributed equity 2,602,628 2,602,628

(b) Movements in ordinary share capital

Date Details Number ofshares

$'000

1 July 2011 Opening balance 100 2,363,172Capital distributions - (6,555)Equity injections - 246,011

30 June 2012 Balance 100 2,602,628

1 July 2012 Opening balance 100 2,602,62830 June 2013 Balance 100 2,602,628

(c) Ordinary shares

incompanyOrdinary shares entitle the holder to participate in dividends and the proceeds on winding up of theproportion to the number of and amounts paid on the shares held.

(d) Capital risk management

objectives when managing capital are to safeguard its ability to continue as a going concern so that itgroup'sThecan continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimalcapital structure to reduce the cost of capital.

The responsible Ministers advise the appropriate methodology in determining the dividend payable annually.

monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by totalgroupThecapital. Net debt is calculated as total borrowings (including 'borrowings' and external ‘trade and other payables'as shown in the balance sheet) less cash and cash equivalents (including bank overdraft). Total capital iscalculated as ‘equity’ as shown in the balance sheet plus net debt.




27 (continued)Contributed equity

gearing ratios are as follows:group'sThe

2013$'000

2012$'000

Total borrowings 3,263,827 3,321,019Less: cash and cash equivalents (including bank overdraft) (262,560) (325,370)Net debt 3,001,267 2,995,649Total equity 2,745,224 2,737,683Total capital 5,746,491 5,733,332

Gearing ratio 52% 52%

is also required by QTC to maintain an Earnings Before Interest and Tax (EBIT) Interest Coverage ofgroupThegreater than 1.25:1, except where the total debt to capital is greater than 70%, in which case the EBIT Interest

has complied with this requirement for both the current and priorgroupCoverage must be at least 2:1. Thereporting periods.

28 Reserves and retained earnings

(a) Reserves

2013$'000

2012$'000

Hedging reserve - cash flow hedges 314 (1,033)314 (1,033)

2013$'000

2012$'000

Movements:

Hedging reserve - cash flow hedgesOpening balance (1,033) (1,111)Fair value gains / (losses) taken to equity 1,021 (1,093)Deferred tax (306) 328Fair value losses matured and included in components cost 237 29Deferred tax (71) (9)Fair value losses matured and capitalised 666 1,176Deferred tax (200) (353)

30 JuneBalance 314 (1,033)




28 (continued)Reserves and retained earnings

(b) Retained earnings

Movements in retained earnings were as follows:

2013$'000

2012$'000

Opening balance 136,088 110,430yearProfit for the 144,804 128,287

providedDividends (138,610) (102,629)30 JuneBalance 142,282 136,088

29 Dividends

Ordinary shares

2013$'000

2012$'000

was declared by1,026,290)(2012:dollars per share1,386,103Dividend of2013:30 Juneyear endedfor theBoardthe

Dividend declared* 138,610 102,629Dividend paid* 102,629 84,429

* All dividends declared / paid were unfranked.




30 Key management personnel disclosures

(a) Directors and specified executives

Compensation and other terms of employment for the specified executives are formalised in service agreements.terms of appointment and compensation details together with the major provisions of thedirectors'Details of

service agreements for specified executives, as at reporting date, relating to compensation are as follows:

(i) Directors




D George Director 2 years 9 months 30 September 2015

McArthur1M Director 3 years 3 months 30 September 2013

W McMillan Director 2 years 9 months 30 September 2015

Petie2D Director 2 years 9 months 30 September 2015

Schafer3J Director 3 years 3 months 30 September 2013

as a Director on 4 August 2013.1Ceasedas a Director on 2 August 2013.2Ceasedas a Director on 30 September 2013.3Ceased

M Klug was appointed to the Board as Chairman on 1 October 2013.J Mickel was appointed to the Board as a Director on 1 October 2013.G Poole was appointed to the Board as a Director on 30 October 2013.



Petie1D Chairman No set appointment term No expiry date

J Benstead Managing Director No set appointment term No expiry date

G Pringle Director 3 years 28 February 2014

as Chairman on 2 August 2013.1Ceased





(ii) Specified executives




30 June 2015




30 June 2015



31 August 2013






provided are for this officer’s substantive role.1Detailsprovided are for this officer's contract term.2Details

These executives provide advice in relation to strategygroup.The above are the key executives representing theunder the business model adopted. The subsidiary entity does not have anygroupand future direction of the

senior executives who are involved in setting strategy or future direction for the entity and no subsidiaryexecutives are disclosed above for this reason.

Termination of an executive can be made by the group to the specified executive either with notice, without noticeor due to the incapacity of the specified executive. Termination by notice can be made by the specified executiveor the group at any time by either party giving to the other 3 months written notice of termination.

The specified executive is entitled to 12 weeks salary where termination occurs on the agreed termination date.

will pay thegroupWhen the termination occurs prior to the termination date (assuming no gross misconduct), thespecified executive the following:

• a service payment equal to the greater of 4 weeks salary or 2 weeks salary per year of continuousup to a maximum 52 weeks salary; andgroupservice with the

• a separation payment equal to 20% of the salary that the specified executive would have earned had theemployment continued from the day after the notice period ceased until the termination date.

Specified executives that are tenured are entitled to a service payment equal to the greater of 13 weeks salary orup to a maximum 52 weeks salary.group2 weeks salary per year of continuous service with the





(b) Key management personnel compensation

director'sDirectors' remuneration and terms of appointment were set by the Governor in Council at the time of adirectors'2013,Queensland Rail Transit Authority Actappointment. Following the establishment of the

remuneration and terms of appointment are set by responsible Ministers. Directors' remuneration is subsequentlyreviewed annually by responsible Ministers.

Directors are not entitled to termination payments on termination of their period of service.

Queensland Rail Limited Chief and Senior Executive Officers are compensated in accordance with thepublication.Government Owned Corporations - Governance Arrangements for Chief and Senior Executives v3.0

Performance Payment Policy - Chief and Seniorhas also implemented theBoardThe Queensland Rail Limitedwhich reflects the expectations of the Queensland State Government as outlined in the stated policy.Executive

provides for a performance pay process that isPerformance Payment Policy - Chief and Senior ExecutiveTheadministered on a 12 month (financial year) cycle and aligns the executives with Queensland Rail Limited wideand Individual Key Performance Indicators (KPIs). Performance Payment pays up to a maximum payment of15% per annum of a Chief or Senior Executive’s total fixed remuneration on the achievement of stretch targets.The Queensland Rail Limited KPIs are set by the Board at the beginning of the financial year in alignment withthe Statement of Strategic Expectations issued by the State Government, the Queensland Rail Limited Statementof Corporate Intent and the delivery of our organisational performance outcomes including safety, reliability,customer outcomes and financial performance.

The performance agreement components are weighted as follows:

• Queensland Rail Limited 70%

The Queensland Rail Limited KPIs are aligned to the organisational performance outcomes as follows:

Reliability• On Time Running City network combined peak periods• Below rail delays City network

Financial• Consumable cost reduction• Earnings before interest and tax

Customer• Customer satisfaction City network

Safety• Lost Time Injury Frequency Rate• Signals Passed at Danger

• Individual 30%

The Individual KPIs are set by the Chief Executive Officer on the recommendation of the relevantexecutive member. Individual KPIs are reflective of Queensland Rail Limited and Functional KPIs forwhich the executive has direct accountability and / or reflective of strategic business plans, budgets andcapital / infrastructure projects. Eligible executives must also meet minimum expectations for theconsistent demonstration of the Queensland Rail Limited Values and Behaviours.

The Chief and Senior Executives participate in the Queensland Rail Limited performance management processwith quarterly and annual performance reviews. Annual performance results of the Executives are assessed and

is responsible forBoardcalibrated by the Chief Executive Officer and General Manager Human Resources. Thethe assessment of the Chief Executive Officer’s performance. The Queensland Rail Limited Board approve thecalculation and payment of the Chief and Senior Executive Performance Payments and provide written advice tothe responsible Ministers in accordance with the Government Arrangements.





Details of the compensation of each specified director and executive are as follows:

2013$'000

2012$'000

Short-term benefits 3,858 5,058Post-employment benefits 368 474Long-term benefits 331 -Termination benefits 1,808 -

6,365 5,532

Short-term benefits includes cash salary, at risk performance incentives (for specified executives only), fees andnon-monetary benefits. Non-monetary benefits represent the value of Exempt and Reportable Fringe Benefits forthe respective Fringe Benefits Tax year ending 31 March.





(i) Directors of Queensland Rail Limited and On Track Insurance Pty Ltd


Directors

Directorfees and

allowances


Super-annuation


$'000 $'000 $'000 $'000 $'000

G Harley Deputy 19 - 2 - 21(appointed as Deputy Chairman on Chairman21 June 2013)(appointed as Director on20 December 2012)

G Dawe Chairman 133 - 11 - 144(appointed 12 July 2012)(ceased 18 June 2013)

S Gregg Chairman 10 - - - 10(ceased 12 July 2012)

D George Director 19 - 2 - 21(appointed 20 December 2012)

M Hayes Director 20 - 2 - 22(ceased 20 December 2012)

Dr L Keliher AO Director 11 - 1 - 12(ceased 30 September 2012)

M McArthur Director 40 - 4 - 44

W McMillan Director 21 - 2 - 23(appointed 20 December 2012)

D McMillan-Hall Director 12 - 1 - 13(ceased 30 September 2012)

D Petie* Director 37 - 3 - 40(ceased 30 September 2012)(reappointed 20 December 2012)

J Schafer Director 40 - 4 - 44

R Ashton Director 4 - - - 4(ceased 4 November 2012)

BlankTotal 366 - 32 - 398

Board.On Track Insurance Pty Ltdand Chairman of theBoardQueensland Rail Limited* D Petie is a director of the

The above directors' fees include amounts recharged from Queensland Rail from 3 May 2013 in accordance with the ManagedServices Agreement. The amounts for this period were incurred by Queensland Rail on behalf of the company and are alsodisclosed in the Key Management Personnel note of the Queensland Rail financial statements.

As an executive of Aurizon Operations Limited, former parent company, G Pringle did not receive additional remuneration in hisLtd.On Track Insurance Ptyofdirectorcapacity as

J Benstead did not receive additional remuneration in his capacity as director ofLimited,Queensland RailAs an executive ofOn Track Insurance Pty Ltd.






Directors

Directorfees and

allowances


Super-annuation


$'000 $'000 $'000 $'000 $'000

S Gregg Chairman 129 - 12 - 141Blank

M Hayes Director 39 - 4 - 43Blank

Dr L Keliher AO Director 39 - 4 - 43Blank

M McArthur Director 39 - 4 - 43Blank

D McMillan-Hall Director 40 - 4 - 44Blank

D Petie* Director 46 - 4 - 50Blank

J Schafer Director 39 - 4 - 43Blank

R Ashton Director 4 - - - 4Blank

Total 375 - 36 - 411

On Track Insurance Pty Ltdand Chairman of theBoardQueensland Rail Limited* D Petie is a director of theBoard.

As an executive of Aurizon Operations Limited, former parent company, G Pringle did not receive additionalLtd.On Track Insurance Ptyofdirectorremuneration in his capacity as

J Benstead did not receive additional remuneration in his capacityLimited,Queensland RailAs an executive ofLtd.On Track Insurance Ptyofdirectoras





(ii) Specified executives of the company

2013Short-term benefits Post-

employmentbenefits

Long-term

benefits

Term-ination

benefits


Cashsalary

and feesCash

bonuses


Super-annuation

Longserviceleave

Term-ination

benefits Total$'000 $'000 $'000 $'000 $'000 $'000 $'000

J Benstead 475 - 6 48 - - 529Acting Chief Executive Officer

BlankS Campbell 139 - 2 16 - 196 353

Company Secretary,Corporate Governance andLegal(from 11 September 2012until position abolished 23November 2012)General Counsel / CompanySecretary(until 11 September 2012)

BlankP Coleman 10 - - 1 - - 11

Acting Chief Project DeliveryOfficer(from 31 August 2012 untilposition abolished 11September 2012)

BlankN Duce 206 - 5 21 - - 232

General Manager HumanResources(from 11 September 2012)

BlankM Eisentrager 98 - 1 8 - - 107

Acting Chief Financial Officer(from 11 September 2012until 29 January 2013)

BlankG Ford 311 - 10 34 - - 355

Executive General ManagerSafety and Environment(from 11 September 2012)Chief Safety and EnvironmentOfficer(until 11 September 2012)

BlankR Franklin* - - - - - - -

Acting Chief HumanResources Officer(until 11 September 2012)

Blank






employmentbenefits

Long-term

benefits

Term-ination

benefits


Cashsalary

and feesCash

bonuses


Super-annuation

Longserviceleave

Term-ination

benefits Total$'000 $'000 $'000 $'000 $'000 $'000 $'000

R Green 313 - 6 32 - - 351Executive General ManagerNetwork(from 11 September 2012)Acting Chief Network Officer(from 31 August 2012 until 11September 2012)

BlankC Heffernan 188 - 3 15 203 546 955

Executive General ManagerCustomer Service(from 11 September 2012until ceased on 19 October2012)Chief Customer Officer(until 11 September 2012)

BlankL Lefcourt 82 - 7 8 - - 97

Acting Chief Financial Officer(until 10 September 2012)

BlankB Moller 108 - 5 10 - - 123

Acting Chief Financial Officer(from 29 January 2013)

BlankC Petersen 135 - 8 12 - 186 341

Chief Strategy and CorporateServices Officer(position abolished 24September 2012)

BlankJ Pistak 111 - 1 10 128 505 755

Chief Network Officer(ceased 31 August 2012)

BlankT Ripper 212 - 4 23 - - 239

Executive General ManagerAccess and BusinessStrategy(from 16 November 2012)

BlankM Ryan 334 - 19 41 - - 394

Executive General ManagerCustomer Service(from 27 August 2012)Chief Communications Officer(until 26 August 2012)

Blank






employmentbenefits

Long-term

benefits

Term-ination

benefits


Cashsalary

and feesCash

bonuses


Super-annuation

Longserviceleave

Term-ination

benefits Total$'000 $'000 $'000 $'000 $'000 $'000 $'000

T Taifalos 104 - 3 10 - - 117Chief Operating Officer(position abolished 11September 2012)

BlankM Williams 126 - 1 7 - 375 509

Chief Rail OperationsManager(ceased 31 August 2012)

BlankK Wright 447 - 12 40 - - 499

Executive General ManagerRail Operations(from 31 August 2012)Chief Project Delivery Officer(until 31 August 2012)

BlankTotal 3,399 - 93 336 331 1,808 5,967

* This officer did not receive monetary benefits directly. Payments made to the company in which this officer is a30(c).Principal is disclosed in note

The above executives' remuneration include amounts recharged from Queensland Rail from 3 May 2013 inaccordance with the Managed Services Agreement. The amounts for this period were incurred by QueenslandRail on behalf of the company and are also disclosed in the Key Management Personnel note of the QueenslandRail financial statements.






employmentbenefits

Long-term

benefits

Term-ination

benefits


Cashsalary

and feesCashbonus


Super-annuation

Longserviceleave

Terminationbenefits Total

$'000 $'000 $'000 $'000 $'000 $'000 $'000

J Benstead 420 52 5 47 - - 524Acting Chief ExecutiveOfficer(from 5 December 2011)Chief Financial Officer(until 4 December 2011)

BlankP Scurrah 365 76 4 24 - - 469

Chief Executive Officer(resigned 2 December 2011)

BlankS Campbell 174 - 2 22 - - 198

General Counsel / CompanySecretary(from 14 November 2011)

TestG Ford 304 41 8 39 - - 392

Chief Safety & EnvironmentOfficer

BlankR Franklin* - - - - - - -

Acting Chief HumanResources Officer(from 1 September 2011)Acting General Counsel /Company Secretary(until 31 August 2011)

BlankC Heffernan 332 41 7 37 - - 417

Chief Customer Officer(from 1 September 2011)Chief Human ResourcesOfficer(until 31 August 2011)

BlankL Lefcourt 133 - 8 14 - - 155

Acting Chief Financial Officer(from 8 January 2012)

BlankC Petersen 357 49 11 46 - - 463

Chief Strategy & CorporateServices Officer

BlankJ Pistak 398 56 22 51 - - 527

Chief Network Officer

Blank






employmentbenefits

Long-term

benefits

Term-ination

benefits


Cashsalary

and feesCashbonus


Super-annuation

Longserviceleave

Terminationbenefits Total

$'000 $'000 $'000 $'000 $'000 $'000 $'000

M Ryan 290 40 15 37 - - 382Chief CommunicationsOfficer

BlankT Taifalos 434 52 8 45 - - 539

Chief Operating Officer(from 1 September 2011)Chief Customer Officer(until 31 August 2011)

BlankM Williams 390 60 25 36 - - 511

Chief Rail Operations Officer(from 1 September 2011)Deputy Chief OperationsOfficer(until position abolished on31 August 2011)

BlankK Wright 437 57 10 40 - - 544

Chief Project Delivery Officer(from 1 September 2011)Chief Operations Officer(until position abolished on31 August 2011)

BlankTotal 4,034 524 125 438 - - 5,121

* This officer did not receive monetary benefits directly. Payments made to the company in which this officer is a30(c).Principal is disclosed in note





2013 2012$'000 $'000

Aggregate performance bonus compensation

Aggregate performance bonus compensation paid 19 9,226

Aggregate performance bonus compensation accrued for the current period 10,508 11,586

Aggregate compensation (including performance bonus compensation) toemployees eligible for performance bonus compensation for current period 124,281 180,519

2013 2012

Number of employees eligible for performance bonus compensation 1,050 1,490

The 2012 bonus accrued in the prior period was reversed in full in the current period as the group did not meet allof its performance targets.

The following categories of employees are eligible for performance based at risk incentive bonus compensation:

• specified executives;

• other executives;

• salaried employees; and

• award employees.

Performance bonus compensation paid to specified executives is granted upon approval by the Queensland RailPerformance bonus compensation paid to other employees is granted upon approval by the ChiefBoard.Limited

Executive Officer or in accordance with a subsidiary agreement. The amount of the compensation is determinedby performance against key performance indicators set at the start of the year for employees or conditions of asubsidiary agreement for work units.

(c) Transactions with directors and key management personnel

During the reporting period, G Harley, Deputy Chairman of Queensland Rail Limited, was the Chairman ofQueensland Urban Utilities that provided utilities to Queensland Rail Limited.

During the reporting period, D George, Director of Queensland Rail Limited from December 2012, was the ChiefExecutive Officer of Rail CRC Limited that provided key innovation services to Queensland Rail Limited.Queensland Rail Limited provided rental accommodation to Rail CRC Limited.

During the reporting period, R Franklin, specified executive of Queensland Rail Limited, until the 11 September2012, was a principal of the corporation Franklin Athanasellis Cullen Pty Ltd that had provided key managementpersonnel and consultancy services to Queensland Rail Limited.

The specified executive has the individual capacity to control or significantly influence the financial and operatingLimited.Queensland Railpolicies of another corporation but not

until cessation on 4 NovemberOn Track Insurance Pty LtdDuring the reporting period, R Ashton, Director ofcompany.2012, was compensated for legal advice provided to the same





All figures displayed below are exclusive of GST.

2013$'000

2012$'000

Utilities - Queensland Urban Utilities 230 -Professional Services - Rail CRC Limited 239 -Rental Revenue - Rail CRC Limited (93) -Legal fees - R Ashton 2 -Consultancy fees - Franklin Athanasellis Cullen Pty Ltd 252 922

630 922

31 Contingencies

had contingencies at reporting date in respect of:groupThe

(a) Contingent liabilities

Issues relating to common law claims and product warranties are dealt with as they arise. There were no materialcontingent liabilities requiring disclosures in the financial statements other than as set out below.

Litigation

Provisions are taken up for some of thesegroup.A number of common law claims are pending against the21.determination and are included as such in noteBoard'sexposures based on the

Guarantees and letters of credit

23(b).refer to notegroup,For information about guarantees and letters of credit given by the

Deed of Cross Guarantee

nor its subsidiary were a party to a deed of cross guarantee at reporting date.companyNeither the

(b) Contingent assets

23(b).refer to notegroup,For information about guarantees given to the




32 Commitments

(excluding GST) at reporting date were as follows:groupThe future commitments of the

(a) Capital commitments

Capital expenditure contracted for at reporting date but not recognised as liabilities is payable as follows:

2013$'000

2012$'000

Property, plant and equipment 196,435 343,393196,435 343,393

(b) Lease commitments

Commitments for minimum lease payments in relation to non-cancellable operating leases are payable asfollows:

2013$'000

2012$'000

Within one year 10,132 14,071Later than one year but not later than five years 39,590 36,373Later than five years 25,508 31,827

75,230 82,271

The above commitments flow primarily from operating leases of property. These leases, with terms mostlywith a right of renewal at which timesQueensland Rail Limitedranging from one to ten years, generally provide

the lease terms are renegotiated. The lease payments comprise a base amount, while some property leases alsocontain a contingent rental, which is based on either the movements in the Consumer Price Index or anotherfixed percentage as agreed between the parties.

(c) Lease commitments receivable: where the company is the lessor

Minimum lease payments receivable but not recognised in the financial statements are receivable as follows:

2013$'000

2012$'000

Within one year 3,202 12,232Later than one year but not later than five years 8,984 10,948Later than five years 75,744 62,754

87,930 85,934




33 Related party transactions

(a) Subsidiaries

34.Interests in subsidiaries are set out in note

(b) Key management personnel

30.Disclosures relating to key management personnel are set out in note

(c) Transactions with related parties

The following transactions occurred with related parties:

2013$'000

2012$'000

Purchase of goods and services from Queensland Rail 120,486 -blank

Receivables from Queensland Rail - current 355,736 -Dividend payable to Queensland Rail 138,610 -Payables to Queensland Rail - current 537,015 -Payables to Queensland Rail - non-current 31,375 -

The current and non-current payables transferred to Queensland Rail on 3 May 2013 include the initial transfer ofQueensland Rail Transit Authority Act 2013employee related liabilities from the company in accordance with the

amounting to $271.9 million. Deferred tax assets amounting to $72.3 million associated with these employeeentitlements were also transferred on the same date.





(d) Transactions and outstanding balances with State of Queensland controlled entities

is limited by shares with all shares held by the responsible Ministers on behalf of the State ofcompanyTheQueensland.

transacted with other State of Queensland controlled entities during the year as set out below:companyThe

Notes 2013$'000

2012$'000

Nature of transaction

Cash and cash equivalents 9 276,339 119,036 QTC short-term investments

Trade and other receivables 1410, 114,144 165,143 Transport services contracts and otheraccounts receivable

Other current assets 13 1,576 - Prepaid income tax

Current tax liabilities - 528 Current tax payable

Borrowings 23 3,099,817 3,000,000 Unsecured loan facility (QTC)

Trade and other payables 20 164,250 128,257 Interest payable, accounts payableand dividend payable

Other current liabilities 22 3,067 3,453 Clearing accounts

Contributed equity 27 - 239,456 Equity contributions and capitaldistributions

Revenue 5 1,568,747 1,576,921 Sales, community service obligation,government concessions and interestrevenue

Interest expense 7 223,083 221,961 QTC loan interest (includes financingcost)

Other expenses 7 103,491 112,578 Payroll tax, income tax, audit fees,licences and permits andconsumables

Dividends declared 29 - 102,629 Dividend declared




34 Subsidiaries

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary in1(b).accordance with the accounting policy described in note

Name of entityCountry of

incorporation Class of shares Equity holding2013

%2012

%

On Track Insurance Pty Ltd Australia Ordinary 100 100

are the provision of insurance coverage for all claimsOn Track Insurance Pty LtdThe principal activities ofup until 30Queensland Rail Limitedrelating to events for both Aurizon Operations Limited (former parent) and

June 2010.

Ltd.On Track Insurance PtyThe Auditor-General of Queensland is the authorised auditor of

35 Remuneration of auditors

group:During the year the following fees were paid or payable for services provided by the auditor of the

(a) Audit services

2013$'000

2012$'000

Auditor-General of QueenslandAudit and review of financial reports 491 560

Total auditors' remuneration 491 560

36 Reconciliation of profit after income tax to net cash inflow from operatingactivities

2013$'000

2012$'000

Profit for the year 144,804 128,287Depreciation and amortisation 298,240 296,548Amortisation of prepaid access facilitation charges (1,577) (1,577)(Gains) / losses on sale of non-current assets (1,138) 2,125Unrealised gain on derivatives - (686)Impairment of trade receivables 226 35Inventory obsolescence 571 1,540Change in operating assets and liabilities:

(Increase) / decrease in trade debtors 53,040 132,285(Increase) / decrease in inventories (12,787) (10,877)(Increase) / decrease in other operating assets (4,969) 38,198Increase / (decrease) in trade creditors (54,930) (44,361)Increase / (decrease) in other liabilities 17,720 1,571Increase / (decrease) in other provisions (30,040) 12,999

Net cash inflow from operating activities 409,160 556,087




37 Parent entity financial information

(a) Summary financial information

the following aggregate amounts:entity showparentfor thefinancial statementsThe individual

2013$'000

2012$'000

Balance sheet

Current assets 883,943 569,890Non-current assets 6,349,671 6,266,585Total assets 7,233,614 6,836,475

Current liabilities 984,376 592,162Non-current liabilities 3,511,769 3,508,192Total liabilities 4,496,145 4,100,354

Net assets 2,737,469 2,736,121(8,212,407) (8,208,363)

Contributed equity 2,596,824 2,596,824Hedging reserves 314 (1,033)Retained earnings 140,331 140,330Total equity 2,737,469 2,736,121

yearProfit for the 138,610 134,160

Total comprehensive income 139,957 134,238

(b) Guarantees entered into by the parent entity

The parent entity has not provided financial guarantees in respect of bank overdrafts and loans of subsidiaries.

Ltd.On Track Insurance PtytoQueensland Rail LimitedIn addition, there is no cross guarantee given by

(c) Contingent liabilities of the parent entity

Issues relating to common law claims and product warranties are dealt with as they arise. There were no materialAll provisions31.except as outlined in notefinancial statementscontingent liabilities requiring disclosures in the

except provision for insurance claims relate to the parent entity.

(d) Contractual commitments for the acquisition of property, plant or equipment

At reporting date, the parent entity had contractual commitments. For information about these commitmentsAll commitments outlined in this note relate to the parent entity.32.please see note

38 Events occurring after the reporting period

No matters or circumstances have arisen since the end of the financial year which significantly affected, or maygroupthe results of those operations, or the state of affairs of thegroup,significantly affect the operations of the

in future financial years.


Queensland Rail LimitedDirectors' declaration

30 June 2013

opinion:directors'In the

(a) Corporations Actare in accordance with the75to10and notes set out on pagesfinancial statementstheincluding:2001,

(i) and other mandatoryCorporations Regulations 2001complying with Accounting Standards, theprofessional reporting requirements, and

(ii) and of30 June 2013entity's financial position as atconsolidatedgiving a true and fair view of theon that date, andyear endedits performance for the

(b) will be able to pay its debts as and when theycompanythere are reasonable grounds to believe that thepayable.become due and

(c) with International Financial Reportingcomplyalsofinancial statementsconfirms that the1(a)noteStandards as issued by the International Accounting Standards Board.

directors.This declaration is made in accordance with a resolution of

M KlugChairman



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Queensland Rail Limited30 June 2013

INDEPENDENT AUDITOR'S REPORT

Queensland Rail LimitedTo the Members of

Report on the Financial Report

I have audited the accompanying financial report of Queensland Rail Limited which comprises the consolidatedbalance sheet as at 30 June 2013, consolidated income statement, consolidated statement of comprehensiveincome, consolidated statement of changes in equity and consolidated statement of cash flows for the year thenended, notes comprising a summary of significant accounting policies and other explanatory information, and thedirectors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’send or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fairand for such internal2001,Corporations Actview in accordance with Australian Accounting Standards and the

control as the directors determine is necessary to enable the preparation of the financial report that gives a trueand fair view and is free from material misstatement, whether due to fraud or error. In Note 1(a)(i) the directors

that theStatements,Presentation of Financialalso state, in accordance with Accounting Standard AASB 101Standards.International Financial Reportingfinancial statements comply with

Auditor’s Responsibility

My responsibility is to express an opinion on the financial report based on the audit. The audit was conducted inwhich incorporate the AustralianStandards,Auditor-General of Queensland Auditingaccordance with the

Auditing Standards. Those standards require compliance with relevant ethical requirements relating to auditengagements and that the audit is planned and performed to obtain reasonable assurance about whether thefinancial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial report. The procedures selected depend on the auditor’s judgement, including the assessment of therisks of material misstatement of the financial report, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the company’s preparation of the financial reportthat gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, butnot for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonableness of accountingestimates made by the directors, as well as evaluating the overall presentation of the financial report.

I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion.

Independence

promotes the independence of the Auditor-General and all authorised auditors.Auditor-General Act 2009TheThe Auditor-General is the auditor of all Queensland public sector entities and can be removed only byParliament.

The Auditor-General may conduct an audit in any way considered appropriate and is not subject to direction byany person about the way in which audit powers are to be exercised. The Auditor-General has for the purposesof conducting an audit, access to all documents and property and can report to Parliament matters which in theAuditor-General’s opinion are significant.

have been complied with. ICorporations Act 2001In conducting the audit, the independence requirements of thewhich has been given to the2001,Corporations Actconfirm that the independence declaration required by the

directors of Queensland Rail Limited, would be in the same terms if given to the directors as at the time of thisauditor’s report.


Queensland Rail Limited30 June 2013

(continued)INDEPENDENT AUDITOR'S REPORT

Opinion

In my opinion -

(a) 2001,Corporations Actthe financial report of Queensland Rail Limited is in accordance with theincluding -

(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2013 and oftheir performance for the year ended on that date; and

(ii) Corporations Regulations 2001complying with Australian Accounting Standards and the

(b) as disclosed inInternational Financial Reporting Standardsthe financial report also complies withNote 1(a)(i).

Other Matters - Electronic Presentation of the Audited Financial Report

Those viewing an electronic presentation of these financial statements should note that audit does not provideassurance on the integrity of the information presented electronically and does not provide an opinion on anyinformation which may be hyperlinked to or from the financial statements. If users of the financial statements areconcerned with the inherent risks arising from electronic presentation of information, they are advised to refer tothe printed copy of the audited financial statements to confirm the accuracy of this electronically presentedinformation.



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Compliance Checklist

Summary of Requirement

Basis for requirement

Annual report reference

Letter of Compliance

• A letter of compliance from the

accountable officer or statutory body

to the relevant Minister.

ARRS – Section 8

Page 4

Accessibility

• Table of contents

• Glossary

ARRS – Section 10.1

Page 5

• Public availability


Page 2

• Interpreter service statement

Queensland Government

Language Services Policy


Page 2

• Copyright notice

Copyright Act 1968


N/A

• Information licensing

Queensland Government

Enterprise Architecture –

Information Licensing


N/A

General Information

• Introductory information


Page 3

• Agency role and main functions


Page 6

• Operating environment


Pages 21-45

• Machinery of government changes


Page 14

Non-financial Performance

• Government objectives for the

community


Page 40

221


• Other whole-of-government plans /

specific initiatives

ARRs – Section 12.2

Page 54

• Agency objectives and performance

indicators


Page 54

• Agency services areas, service

standards and other measures


Page 54

Financial Performance

• Summary of financial performances


Page 8-9

• Chief Finance Officer statement


As per Submission by

Chief Finance Officer

Governance – Management and Structure

• Organisational structure


Page 46

• Executive management


Page 51

• Related entities


Page 47-50

• Boards and committees


Page 47-50

• Public Sector Ethics (PSE) Act 1994

PSE Act 1994 (Section 23 and

Schedule) ARRS – Section 14.5

Pages 54-68

Governance – Risk Management and Accountability

• Risk Management


Pages 54-68

• External Scrutiny


Pages 54-68

• Audit Committee


Pages 54-68

• Internal Audit


Pages 54-68

• Public Sector Renewal Program


Pages 54-68

• Information systems and record-

keeping


Pages 54-68

222


Governance – Human Resources

• Workforce planning, attraction and

retention and performance


Pages 54-68

• Early retirement, redundancy and

retrenchment

Directive No. 11/12 Early

Retirement, Redundancy and

Retrenchment

Page 32

Page 92

Page 169

• Voluntary Separation Program


Page 32

Page 92

Page 128

Open Data

• Open Data

ARRS – Section 17

Pages 2-3

Financial Statements

• Certification of Financial Statements

FAA – Section 62

FPMS – Sections 42, 43 and 50

As per Submission by


• Independent Auditors Report

FAA – Section 62

FPMS – Section 50


Pages 139-140

Pages 219-220

• Remuneration Disclosures

Financial Reporting

Requirements for Queensland

Government Agencies


Pages 54-68

FAA Financial Accountability Act 2009

FPMS Financial and Performance Management Standard 2009

ARRs Annual Report requirements for Queensland Government Agencies

223


Glossary

AASB

Australian Accounting Standards Board

AICD

Australian Institute of Company Directors

ASX

Australian Securities Exchange

ATO

Australian Taxation Office

ATSB

Australian Transport Safety Bureau

CCTV

Closed Circuit Television

CEO

Chief Executive Officer

CFO


City network

A collective term for the tracks, stations, trains and infrastructure providing train services in South East Queensland bounded by the Gold Coast in the south, Rosewood in the west and the Sunshine Coast in the north

CMC

Crime and Misconduct Commission

Corporations Act

Corporations Act 2011

CSIA

Customer Service Institute of Australia – Australia’s premier customer service resource organisation

DDA

Disability Discrimination Act 1992

DTMR

Department of Transport and Main Roads

EAMS

Enterprise Asset Management System

EBIT

Earnings Before Interest and Tax

EBITDA

Earnings Before Interest, Tax, Depreciation and Amortisation

EGP

Enterprise Governance Program – established to create a robust governance framework for Queensland Rail

FTE

Full-time equivalent (employee)

General Freight

Freight that is not transported in a bulk train and does not include intermodal and industrial products

GOC

Government-owned Corporation

GOC Act

Government Owned Corporations Act 1993

ICSS

International Customer Service Standard – the global standard for customer service excellence

ICT

Information and Communication Technology, the information technology and telecommunications management division of Queensland Rail

KPIs

Key Performance Indicators

KSR

Kuranda Scenic Railway

LTIFR

A measure of the number of lost time injuries per million hours worked, used by Queensland Rail to monitor and report employee health and safety

MOU

Memorandum of Understanding

MP

Member of Parliament

Network

Queensland’s rail system, including all main railway lines, marshalling yards, bulk freight loading and unloading points and customer stations

NGR

New Generation Rollingstock – a project for the purchase of new rollingstock for the City network

NPAT

Net Profit After Tax – defined as net profit after allowance for tax expense

OGOC

Office of Government-owned Corporations

Positive pARTnerships

A Queensland Rail program that involves working with community groups, local schools and stakeholders to collaborate and produce high quality public artwork projects that transform rail stations across South East Queensland

224


QR Limited

A GOC that ceased to exist on 30 June 2010, following creation of two companies – Queensland Rail Limited and QR National Limited (now Aurizon) (private)

QR National (now Aurizon)

QR National was re-branded as Aurizon in December 2012 – one of the largest publicly listed rail freight haulage companies in Australia

QTC

Queensland Treasury Corporation

Quiet Carriage

The second and fifth carriage of every six-car and the middle of every three-car City network train – a designated quiet area where customers are asked to refrain from having loud conversations, talking on their mobile phone or listening to loud musical devices

Rail Operator

A party (Queensland Rail and/or non-Queensland Rail) that operates rollingstock on a railway

ROA

Return on Assets – defined as EBIT less income from investments, divided by average operating assets

ROE

Return on Equity – defined as operating profit after tax divided by average equity

Rollingstock

Rail locomotives and wagons

SCI

Statement of Corporate Intent – the document in which a GOC sets out its corporate targets and objectives for each financial year

SEQIPP

South East Queensland Infrastructure Plan and Program

225

annual and financial report 2012-13 · 2013. 12. 17. · consolidated balance sheet as at 30 june...

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