annual report 2012–13 - parliament of victoria - home report 2012–13 3 our key business partners...

annual report

2012–13

Annual Report 2012–13 1

ContentsAbout the Transport Ticketing Authority .................................................................................................................2

Our role ..............................................................................................................................................................2

Our main objectives and functions ....................................................................................................................2

Our key business partners .................................................................................................................................3

Chief Executive Officer and Administrator’s report ................................................................................................4

Board of Directors ....................................................................................................................................................6

About myki ...............................................................................................................................................................7

About Metcard ..........................................................................................................................................................8

Report of operations ................................................................................................................................................9

Accountable Officer’s and Chief Finance and Accounting Officer’s declaration ...................................................25

Auditor-General’s report........................................................................................................................................26

Comprehensive operating statement ....................................................................................................................28

Balance sheet ........................................................................................................................................................29

Statement of changes in equity .............................................................................................................................30

Cash flow statement ..............................................................................................................................................31

Notes to financial statements ...............................................................................................................................32

2 Transport Ticketing Authority

Our roleThe Transport Ticketing Authority (TTA) was established in June 2003 to:

• manage the Metcard public transport ticketing system contract

• oversee the design, build, delivery and operation of the new myki ticketing system.

The TTA completed its role in the delivery of myki and management of the Metcard system on 31 December 2012, with Public Transport Victoria (PTV) assuming responsibility for all TTA functions as from 1 January 2013.

On this day, the TTA was put into administration with the former Chief Executive Officer, Bernie Carolan, acting as Administrator, to wind down TTA’s affairs by 30 June 2013.

The Metcard ticketing system ceased to operate in Melbourne after the last service of 28 December 2012. At this point myki became the only ticket that could be used in Melbourne.

The TTA ceased being a State Owned Enterprise on 30 June 2013.

Our main objectives and functionsTTA’s primary objective was to ensure that myki was introduced in line with contracted requirements and that it and the Metcard system met the needs of customers and public transport operators. In doing so, TTA aimed to achieve:

• smooth transition to myki throughout metropolitan Melbourne and in specified areas of regional Victoria

• high levels of customer satisfaction with the new ticketing system

• endorsement by public transport operators that myki meets their requirements and provides opportunities to enhance service value

• high performance levels by the myki and Metcard ticketing systems consistent with contractual requirements and within approved budgets, including the ongoing integrity and value for money of ticketing infrastructure and operations

• administration of fare revenue generated by myki and Metcard as agent for Public Transport Victoria (PTV) and transport operators.

TTA was measured by the following outcomes:

• delivery of the modified ticketing system within adjusted timeframes and approved budget

• overseeing the expanding operations of the myki ticketing system within contractual requirements to meet customer expectations

• transition of customers (including use of educational, information and support programs) and public transport operators (including staff training) to the new ticketing system

• overseeing the remaining operations of the Metcard ticketing system so that it continued to meet customer expectations, but that sales of Metcards ceased by 31 December 2012

• assisting less regular public transport users to make the switch to myki via programs emphasising the convenience of smart cards and explaining myki ease-of-use

• customer assessment of smart card convenience, reliability and ease of use, as reflected in the rate of ‘take-up’ of the new ticketing system across all customer groups

• public transport operator confirmation that the delivered system meets agreed requirements

• ongoing achievement of high levels of system performance of the myki and Metcard ticketing systems

• the successful transition of TTA to PTV.

About the Transport Ticketing Authority


Our key business partners

Kamco

Kamco (Keane Australia Micropayment Consortium Pty Ltd) is the consortium delivering the myki ticketing system. Following a public tender process Kamco was contracted in July 2005 to design, build and implement the new ticketing system and then operate it for 10 years.

Following the 2011 Government Review of the myki project negotiations for a revised contract commenced. The negotiations were staged and first addressed the remaining build phase of the system, followed by the ongoing operation of myki.

A Fifth Amending Deed to the contract was signed in November 2011, finalising the build phase of the system. A Sixth Amending Deed was signed in March 2013, by PTV, setting in place terms relating to the ongoing operation of the system.

OneLink Transit Systems

The supplier of the Metcard ticketing system was OneLink Transit Systems Pty Ltd (OLT).

The OLT consortium consists of Ingot Capital Management Pty Ltd, R Noble and the JF & LJ Carroll Family Trust (who each acquired a portion of the Mayne Group former interest), Fujitsu Australia Ltd and Utilico Ltd which acquired the former interest of ERG Pty Ltd.

Subsequent to the Government review of 2011, a new contract with OLT was executed on 29 February 2012 to ensure availability of Metcards during 2012 and to provide for the decommissioning of Metcard systems and equipment.

The Metcard system ceased operating for customers on 28 December 2012, but continued to be used for some operator/system purposes through the early months of 2013.


The 2012-13 year has been one of transformation for the Transport Ticketing Authority and for the development of the myki system.

TTA into PTVOn 31 December 2012, the terms of the TTA’s Chairman, Directors and CEO all expired, consistent with the handover of all TTA functions and responsibilities to PTV on 1 January 2013. An Administrator was appointed to TTA from 1 January so that the Authority could be formally dissolved by 30 June 2013.

From 1 January 2013, responsibility for the further rollout of myki, the ongoing operations of the system and management of the Kamco and OneLink contracts was assumed by PTV. On that date, all remaining TTA staff required to complete the project became PTV fixed-term employees (Ex-TTA staff involved in overseeing the ongoing operation of the myki system and the remaining term of the OneLink contract had already become PTV employees in April 2012). The myki assets, created by the project activity, remained under TTA ownership at this point.

Until PTV assumed the responsibilities, the TTA Board maintained close oversight of TTA activities, with a special focus on achieving the cessation of Metcard use by the target date of 28 December 2012. Under the guidance of the Board, TTA worked diligently to ensure the formal Allocation Statements associated with the transfer of responsibilities were timely, accurate and comprehensive.

Between January and June 2013, TTA prepared for, and achieved, the transfer of the myki assets to VicTrack. TTA retained all corporate records in line with Government policy and has been responsive to any follow-up issues that have arisen following the transfer of budgets and responsibilities to PTV. TTA worked with its Internal Auditors and with the Victorian Auditor General’s Office to ensure there is appropriate endorsement for all treatments associated with the Authority’s dissolution.

myki progressThe Government announced that Metcards would no longer be valid for travel after 28 December 2012, and that myki was to become the only ticket that could be used on Melbourne’s trains, trams and buses. In the lead up to this significant milestone, TTA undertook extensive work to ensure that the transition for public transport users was as smooth as possible.

TTA continued with a combined myki uptake and Metcard product withdrawal strategy, progressively introducing more locations for passengers to buy and top up a myki. As myki use grew, more devices were installed to assist with passenger flow on the network. The replacement of old Metcard barriers with new myki only gates commenced at CBD stations during July 2012, then extended to suburban stations with barriers. This program saw over 50 additional exit/entrance aisles implemented at around 15 key locations. At ungated stations, approximately 300 additional Fare Payment Devices (FPDs) were installed to supplement the around 1,000 FPDs originally specified; this included 60 totally new station entrance/exit points. From August 2012, TTA progressively converted train station ticket windows to full myki sales and top up services. When the Metcard booking office machine was removed ticket windows offered only myki services. ’Starter Pack’ sales of myki commenced onboard buses from the first service of 29 December 2012.

As a result of these deliberate strategies, myki use accounted for more than 95 per cent of all ticket validations by the time Metcard was switched off. Having this number of passengers already transitioned to myki made the cessation of Metcard relatively smooth, but TTA undertook an extensive marketing and information campaign to assist the remaining travellers.

Further improvements to the system, the removal of Metcard equipment from trams and buses, introduction of myki sales/top ups on board buses, extension of the system onto V/Line’s commuter service trains and the continuation of customer education messages became PTV’s responsibility to oversee from 1 January 2013.

Chief Executive Officer and Administrator’s report


TTA peopleWith the transfer of most ex-TTA people across to PTV, a small number of staff remained with TTA past December 2012, to support the Administrator achieve the orderly formal dissolution of the organisation by 30 June 2013.

I wish to acknowledge the contribution made by all of TTA’s staff and contractors over the years that the organisation existed, and especially during 2012–13. The project has been extremely challenging at times but the dedication of all has been an inspiration and allowed TTA to meet its goal of completing the rollout of myki in Melbourne. I have personally found it rewarding to work with others on such a complex and important project for Melbourne and Victoria.

The role of Administrator would not have been possible without the full commitment and professionalism of Craig Barrett and Belinda Mariano as Chief Financial Officer and Corporate Services Manager during my term as Administrator. I thank them sincerely for their support.

Bernie Carolan Administrator of TTA 1/1/13–30/6/13, previously CEO of TTA 1/7/12–31/12/12

Friday 28 June 2013


Mr John McMillan Chair (to 31 December 2012)

Appointed on 1 November 2007, Mr McMillan was acting Chair of the TTA Board from September 2011 and was formally appointed Chairman in December 2011. Mr McMillan previously held senior positions in Victorian and Commonwealth public sector agencies and until 2 April 2012 served as Chairman, Metlink Victoria Pty Ltd.

Mr John Peoples Board Director (to 31 December 2012)

Mr Peoples has been a member of the Board since 1 November 2007 and was Chairperson between 3 February 2009 and March 2010. He is a project adviser to public and private sector organisations on a range of commercial projects.

Mr Peter Matthey Board Director (to 31 December 2012)

Mr Matthey was appointed to the Board effective from 20 September 2010. He was appointed Audit Committee Chair having a wealth of experience as a senior partner at KPMG and a Director of KPMG Transaction Services. Mr Matthey is also Chair of Cabrini Health Limited, and holds Office in Cormack Foundation Pty Ltd.

Mr John Wilson Board Director (to 31 December 2012)

Mr Wilson was appointed to the Board effective 1 April 2011. He is currently a board member of V/Line Pty Ltd and Principal of WD and Associates specialising in consultancy in public transport. He is a Certified Practicing Accountant and a member of the Australian Institute of Company Directors and the International Association for Public Transport.

Board of Directors


myki is a smart card ticketing system. It has replaced Metcard in Melbourne and paper tickets on buses in some regional centres and on V/Line commuter trains to Ballarat, Bendigo, Geelong, Traralgon and Seymour.

Passengers travelling with myki touch on with their smart card at the beginning of a journey and touch off at the end. myki automatically calculates and deducts the lowest fare for the travel taken. All passengers must have either a positive myki money balance, or a valid myki pass and a myki money balance of at least $0.00, in order to touch on and have a valid ticket.

myki stores two kinds of value:

• myki money – a dollar value (e.g. $20) that is stored on a customer’s myki. Fares are calculated and money is deducted according to when and where the passenger touches on and touches off. Various charging caps apply e.g. a 2-hour or daily cap.

• myki pass – pre-purchased travel days similar to weekly and monthly tickets. A passenger specifies the zone(s) of travel and the exact duration of their pass, either seven days or between 28 and 365 consecutive days. The myki pass will be active from the time the passenger first touches on and off in a zone for which the pass is valid.

Passengers can top up their myki at close to 800 retail outlets including all 7-Eleven stores, the ticket window at staffed stations, myki machines at all metropolitan railway stations, some accessible tram stops and bus interchanges, online, by telephone, using auto top up and via the driver on buses.

About myki


A Metcard is an electronically encoded ticket valid for travel on trains, trams and buses in the metropolitan area (Zones 1 and 2).

The Metcard ticketing system ceased operating on 28 December 2012 and was replaced by myki as the ticket to travel on Melbourne’s public transport network.

From November 2012, customers with unused Metcards were able to transfer the value to a myki at the ticket window at staffed stations. Refunds for, and the transfer of any unused Metcards to myki, ceased on 30 June 2013.

About Metcard


1. Key activitiesThe following pages provide an overview of the key activities undertaken by TTA during 2012 – 13.

1.1. Complete delivery of the new ticketing system

The TTA completed its role in the delivery of myki when Public Transport Victoria (PTV) assumed responsibility for all TTA functions on 1 January 2013. All remaining project staff needed to complete the rollout of the system transitioned to PTV for the remainder of their fixed-term employment.

Significant progress had been made in delivery of the system through 2012, which enabled Metcard to be switched off at the end of 2012.

By the end of 2012, all ticket offices had been converted to full myki services, approximately 50 per cent of Metcard barriers had been replaced, with all Metcard ticket vending machines and 85 per cent of validators removed from the rail network.

Moving forward, the focus for PTV in the first half of 2013 was to remove Metcard equipment from trams, convert buses to full myki operation, introduce the system to V/Line commuter services, and work with Kamco to deliver system enhancements.

1.2. Operating the Metcard and new ticketing system in a way that meets passenger expectations

Around 9.5 million Metcards were sold in the 2012 – 13 financial year to 31 December 2012. The Metcard system handled over 16 million validations during the year and continued to perform at high levels of availability. During the six months to 31 December 2012, overall availability of Metcard equipment was:

• 99.78 per cent for ticket vending equipment

• 99.83 per cent for ticket validating equipment.

During 2012 – 13 TTA received only 12 complaints regarding the Metcard system from the Public Transport Ombudsman (PTO).

Metcard ticket vending machines were totally removed from railway stations during the second half of 2012.

Customers were provided the opportunity to transfer the value of unused Metcards to their myki or to receive a refund. Metcards to the value of $1.7 million have been transferred to myki in the period to 30 June 2013.

During 2012 – 13 TTA and PTV continued to work with the PTO to improve customer service across both the Metcard and myki ticketing systems.

The number of passengers contacting the PTO about myki increased from 1,578 in 2011 – 12, to 1,661 in 2012 – 13.

Passengers contacting the PTO directly on myki queries were referred immediately back to TTA or PTV for resolution of their issues.

In cases dealt with by the PTO, TTA and PTV worked actively to ensure a speedy resolution for customers.

1.3. Transition from the Metcard system to the new ticketing system for passengers and operators

The general transition strategy to move passengers from Metcard to myki involved the progressive withdrawal of Metcard ticket types and Metcard sales channels, combined with the introduction of additional myki card sales and top up channels.

On 1 July 2012, eight Metcard types were withdrawn, leaving single-use 2-hour, Daily, City Saver and Seniors Daily as the only Metcards available. At this time myki use accounted for 77 per cent of all ticket validations across the network.

myki use continued to increase in the latter months of 2012 as the ability to buy Metcards at ticket windows was withdrawn. When Metcard was switched off on 28 December 2012, the only place these tickets could be purchased was onboard trams and buses. At this time, however, myki use on the system was approximately 95%, meaning most passengers had already made the switch.

Report of operations


1.4. Uptake of the new ticketing system

The number of myki users and transaction volume grew steadily throughout the year. By the end of 2012:

• approximately 3.9 million myki cards were in the hands of customers

• more than 300,000 cards were purchased in the last four weeks of the year

• the system was regularly processing more than 5.5 million touch ons per week

• for myki users, myki money was the favoured way to pay for public transport travel

• 80 per cent of myki money tops ups per week were for amounts between $5 and $20

• on buses in regional Victoria, myki cards were used for approximately 40 per cent of all trips taken.

1.5. Working with public transport operators to ensure the delivered system meets their requirements

The 2012 – 13 financial year saw continued support from all public transport operators and the bedding down of a number of key operational procedures required to support the efficient running of myki. This cooperation was fundamental to achievement of the 28 December 2012 target for Metcard cessation.

1.6. TTA under Administration

As from 1 January 2013 TTA no longer had operating functions. From that date its focus was:

• Any follow-up issues associated with the 1 January transition of previous TTA responsibilities into Public Transport Victoria

• Liaison with TTA’s Internal Auditors and with the Victorian Auditor General’s Office to ensure they had endorsed the close-down processes

• Preparations for the completion of all necessary annual attestations

• Preparations for the transfer of the myki assets, until now owned by TTA, to the appropriate ongoing agencies

• Preparations for the termination of TTA’s office lease and other similar arrangements necessary to facilitate total dissolution of the Authority

• Appropriate storage of all TTA records, including those related to the history and operations of the Metcard contract.


2. OrganisationCentral to TTA’s aims to meet its main objectives is its focus on people and the value it placed on developing and maintaining a robust human resources framework in the key areas of resourcing and talent management, performance and recognition and career development for all staff.

Resourcing and talent management

While upholding equal opportunity and merit principles in its resourcing strategy, TTA was able to attract and appoint highly valued staff through a process of external sourcing and development of internal staff. This resulted in well-rounded and competent teams achieving NTS milestones and project objectives. All staff, contractors and consultants had to comply with the Code of Conduct for Victorian Public Sector Employees.

Performance and Development

The online performance system introduced in previous years continued to ease the review process for Managers and staff alike. Its alignment with core behavioural capabilities and business deliverables to learning and development needs, facilitated a holistic approach to monitoring, reviewing and developing staff.

Workforce planning

An “as required” resourcing strategy coupled with contract alignment to project schedule and work requirements continued to be the cornerstone of achieving project milestones and objectives.

Pay and Conditions

The TTA Workplace Agreement (2009 – 2012) served TTA well and was effectively extended to apply throughout 2012 – 13. It acted as a fair and transparent framework that summarises salaries and conditions for TTA staff. Its alignment of progression step payments with successful delivery of yearly business objectives is central to how staff were recognised and rewarded at TTA.

Occupational Health and Safety (OHS)

TTA promoted safe work practices and is committed to implementing and maintaining appropriate occupational health and safety policies, procedures and programs to address legislative requirements and the needs of TTA staff. Occupational Health and Safety training was also conducted as part of the staff induction process.

Organisational structure

TTA’s senior management group met weekly to assess progress, activities and the risk profile. Figure 1 shows TTA’s management and governance structures until December 2012.


Commercial& Legal

myki Operations

Project Delivery

Finance

OperatorRelationships

CEO CEO Assistant

CEO Public Transport

Victoria

Secretary DOT

Minister for Public Transport

Treasurer

Board

AuditCommittee

CorporateServices

Metcard Operations

Media &Communications

Figure 1: TTA’s management structure until December 2012

From 1 January 2013, the TTA Administrator retained a Chief Financial Officer and a Manager of Corporate Services, along with a small number of support staff.


Finance CorporateServices

Minister for Public Transport

Treasurer

TTAAdministrator

Figure 2: TTA’s management structure until June 2013


Workforce information

TTA’s staffing profile for the end of the financial year 2012 – 13 is set out in Table 1. The absence of any roles as at the end of June 2013 is consistent with the transfer of roles to PTV and the subsequent wind up and dissolution of TTA on 30 June 2013.

Table 1: TTA staff numbers June 2012 and June 2013

June 2012 June 2013

Workforce profile

Ongoing/Permanent 0 0

Fixed Term 66 0

Casuals 8 0

Total 74 0

Gender

Male 33 0

Female 41 0

Total 74 0

TTA classification (VPS equivalent)

TTA 1 0 0

TTA 2 10 0

TTA 3 21 0

TTA 4 9 0

TTA 5 17 0

TTA 6 12 0

TTA STS 1 0

Executive 4 0

Total 74 0

Secondees 44 0

Contractors 12 0

Total 130 0

Note: On 31 December 2012 the TTA workforce was reduced to 14 personnel with numbers progressively reducing to 3 personnel remaining during June 2013, and none by the end of that month.

3. Governance and complianceThe Public Transport Ticketing Body, operating as the Transport Ticketing Authority, was established in June 2003 through an Order in Council under section 14 of the State Owned Enterprises Act 1992. TTA was governed by a Board of Directors established through the Governor in Council.

TTA reported to the Minister for Public Transport for transport policy matters and the Treasurer for matters regarding the State Owned Enterprises Act.

The TTA Board conducted six ordinary meetings and one special purpose meeting.

Audit Committee

The TTA Audit Committee provided assistance to the Board to help fulfil its corporate governance and oversight responsibilities in relation to TTA’s financial reporting, internal control structure, risk management systems and internal audit functions. It aimed to maintain free and open communication between the committee, external auditors, internal auditors and TTA management.

The Audit Committee consisted of three independent members, all of whom were Board Members, and was chaired by Mr Peter Matthey. Composition of the Committee remained unchanged throughout the 2012 – 13 financial year and met four times during this period.

The Audit Committee also oversaw the internal audit program that was outsourced to RSM Bird Cameron, who remained contracted to undertake farebox and system related reviews until 30 June 2013.

The Audit Committee ceased on 31 December 2012. The TTA received an exemption from Direction 2.2 (Direction Requirement 4: Audit Committee) for the 2012 – 13 financial year because it entered administration and wound up its affairs on or before 30 June 2013.

Board meeting attendance

The number of Board meetings during the financial year (including meetings of committees of the Board) and the number of meetings attended by each director of the Board are listed in Table 2.


Table 2: Attendance at scheduled Board/Board committee meetings 1 July 2012 to 31 December 2012

Meeting BoardSpecial

Purpose Board Audit CommitteeDirectors Information

sessions

Eligible to attend

Number attended

Eligible to attend

Number attended

Eligible to attend

Number attended

Eligible to attend

Number attended

Mr J McMillan 6 6 1 1 4 4 0 0

Mr J Peoples 6 6 1 1 4 4 0 0

Mr P Matthey 6 6 1 1 4 4 0 0

Mr J Wilson 6 6 1 1 4 4 0 0

DTF Observer 6 6 1 1 N/A N/A N/A N/A

DPC Observer 6 6 1 0 N/A N/A N/A N/A

PTV Observer 6 5 1 1 N/A N/A N/A N/A

RSMBird Cameron (internal auditors)

N/A N/A N/A N/A 4 4 N/A N/A

VAGO N/A N/A N/A N/A 4 4 N/A N/A

The board was dissolved on 31 December 2012.

Freedom of information

The Freedom of Information Act 1982 allows members of the public to obtain information held by TTA. The Freedom of Information Officer is the principal officer for the purpose of administering the requirements of the Act.

During the 12 months ending June 2013, TTA received seven requests. Of these, six were from the media and one from the general public. No decisions made during the 12 months to end June 2013 were referred to internal review. None progressed to appeal at the Victorian Civil and Administrative Tribunal.

From 1 January 2013, PTV handled all FOI requests on behalf of TTA.

Availability of additional information

In compliance with the requirements of the Standing Directions of the Minister for Finance, TTA retains information applying to the entity, which is available on request to relevant ministers, members of Parliament and the public (subject to Freedom of Information requirements).

National competition policy

Under the National Competition Policy, the guiding principle is that legislation, including future legislative proposals, should not restrict competition, unless it can be shown that the benefits of the restriction to the community as a whole outweighs the costs and that the objectives of the legislation can only be achieved by restricting competition. TTA complied with the requirements of the National Competition Policy.

Disclosure of major contracts

TTA has not entered into any new major contracts (defined in FRD12A as being in excess of $10 million) during the reporting period.

Implementation of the Victorian Industry Participation Policy

In October 2003, the Victorian Parliament passed the Victorian Industry Participation Policy Act 2003, which requires public bodies and departments to report on the implementation of the Victorian Industry Participation Policy (VIPP). Departments and public bodies are required to apply VIPP in all tenders over $3 million in metropolitan Melbourne and $1 million in regional Victoria.


Protected Disclosure Act 2012

The Protected Disclosure Act 2012 (Vic) protects people who make disclosures about improper conduct by public bodies or public officers. TTA developed procedures for managing any such disclosure about the organisation or any of its officers. These processes provide for the appropriate receipt, assessment and investigation of disclosures and appropriate actions to be taken after investigation. They also allow for managing the welfare of the discloser and the person against whom a disclosure was made.

Disclosures of improper conduct by TTA or its employees could be made to the Protected Disclosure Coordinator nominated in the policy document or directly to the Victorian Ombudsman. Disclosures may be made by TTA’s employees, consultants, contractors or the public.

No disclosures under the protected disclosure legislation relating to TTA or its employees were received during the reporting period. In line with section 104 of the Protected Disclosure Act 2012, the TTA reported the following:

Table 3: Protected Disclosure Act disclosure

Topic Report

Number and type of disclosures made to TTA during the year Nil

Number of disclosures referred to the Ombudsman by TTA to determine whether they are public interest disclosures

Nil

Number and type of disclosed matters referred by TTA to the Ombudsman to investigate Nil

Number and type of disclosed matters referred by the Ombudsman to TTA Nil

Number and type of investigations of disclosed matters taken over by the Ombudsman from TTA Nil

Number and type of requests made under section 74 to the Ombudsman to investigate disclosed matters Nil

Number and types of disclosed matters that TTA declined to investigate Nil

Number and types of disclosed matters substantiated on investigation and action taken (still in progress) Nil

Recommendations made by the Ombudsman that relate to TTA Nil

Number and types of disclosed matters investigated and not substantiated Nil


Environmental commitment

This information has been prepared based on the requirements set out in FRD 24C: Reporting of Office-based Environmental Impacts by Government Departments. It only relates to TTA office-based activities at Levels 37 and 38, 55 Collins St, Melbourne.

Energy

Energy consumption figures are for Levels 37 and 38 at 55 Collins Street only. The below data was collected through energy retailer billing information.

Category Electricity

2012/2013

Total energy used (MJ) 589,353

Greenhouse gas emissions associated with energy use (tonnes) Not recorded

Carbon emissions savings by purchasing Green Power (tonnes) Nil

Percentage of electricity purchased as Green Power Nil

Units of energy used per FTE (MJ/FTE) 11,787

Units of energy used per unit of office area (MJ/m) 403.1

Explanatory note

The floor space area for Levels 37 and 38 combined is 2,065.3 square metres.

Waste

The waste generated by TTA was divided into three general classes: landfill, compost and recycling. At the time of reporting, the breakdown was not available.

Indicator 2012/2013

Total units of waste disposed of (kg/yr) per year Unavailable at the time of reporting

Units of waste disposed of per FTE (kg/FTE) per year Unavailable at the time of reporting

Recycling rate (% of total waste) Unavailable at the time of reporting

Greenhouse gas emissions associated with waste disposal (tonnes) Unavailable at the time of reporting

Paper

The paper figures represented below were compiled through TTA’s paper retailer billing information.

Category 2011/2012

Total units of copy paper used (reams) 571

Units of copy used per FTE (reams per FTE) N/A1

Percentage 76 –100% recycled content copy paper purchased (%) 91.7%1 As the majority of TTA employees were transferred to PTV from 1 January 2013, the number of reams of paper per staff member used is

unable to be reported on accurately


Water

Jones Lang LaSalle (Building Management) advised water usage statistics cannot be provided solely for Levels 37 and 38. Water usage statistics can only be collated for 35 and 55 Collins Street buildings as this information is collated from one water meter (there are no individual floor water meter readings) and the building owners were unable to provide information at time of reporting.

Transport

TTA hired vehicles on 83 occasions throughout the financial year. Of these vehicles, 1.2 per cent are LPG, 8.4 per cent are diesel fuelled cars and 90.4 per cent are unleaded fuelled cars.2

Indicator Unleaded Diesel LPG E101

2012/2013

Total energy consumption by vehicles (MJ) 116,681 25,051 2,934 Nil

Total vehicle travel associated with entity operations (km) 55,163 9,675 744 Nil

Total greenhouse gas emissions from vehicle fleet (Co2-e) 7.82 1.75 0.18 Nil

Greenhouse gas emissions from vehicle fleet per 1,000km travelled (Co2-e)

0.15 0.19 0.25 Nil

Air travel data

TTA staff travelled a total of 5,410 km to national business destinations.

Category 2012/2013

Greenhouse gas emissions associated with energy use No longer reported on

Greenhouse gas emissions associated with vehicle fleet 9.75

Greenhouse gas emissions associated with air travel 1.1

Greenhouse gas emissions associated with waste production Not available at time of reporting

Greenhouse gas emissions offsets purchased None purchased by TTA

2 After 1 January 2013, the majority of TTA staff became PTV staff, drastically reducing our paper costs and transport vehicles hired


Procurement & recycling

TTA follows the Victorian Government Purchasing Board guidelines when buying any IT or office equipment, considering environmental factors before purchasing. Any scrap metal and furniture that cannot be sold is recycled.

TTA participated in the following:

• Mobile phones recycling through Mobile Muster, who have a partnership with Landcare Australia

• Printer cartridges recycling through Cart Collect, who sort, dismantle and evaluate the cartridges. Cart Collect redirect the waste back into manufacturing stream or if it cannot be reused back into the recycling chain

• Compost and recycling bins are placed in each kitchen, collected and recycled by SITA Environmental Solutions

• Recycling of secure, shredded and non-confidential paper material is handled by Visy Recycling.

Compliance with the Building Act 1993

TTA does not own or control any government buildings.

Directions from the Minister

None.

VMIA Insurance attestation

I, Bernie Carolan, certify that the Transport Ticketing Authority has complied with the Ministerial Standing Direction 4.5.5.1 – Insurance, as follows:

• TTA determined the appropriate level of Insurance in consultation with VMIA

• TTA did not have any self-insured retained losses

• TTA had a register of all insurances, but at the time of the Authority’s dissolution it had not made this register available to VMIA

• TTA had a policy of generally not granting indemnities, but did not have a verified register; most of TTA’s contracts were transferred to PTV on 31 December 2012; during the term of my Administration none of the remaining TTA contracts involved indemnities.

Bernie Carolan Accountable Officer (TTA Administrator 1/1/13–30/6/13; previously TTA’s CEO 1/7/12–31/12/12)

Friday 28 June 2013


Risk management and attestation

Risk management was considered to be essential in achieving TTA’s key strategic objectives. TTA had a risk management framework in place that enabled it to identify and manage risks that were inherent to its day to day operations and, for the period to 31 December 2012, to the delivery and ongoing operation of the NTS.

In accordance with Ministerial Standing Direction 4.5.5 of the Financial Management Compliance Framework under Financial Management Act 1994 and the Victorian Government risk management framework, and following a management review of TTA’s risk management practices, the Administrator of TTA makes the following attestation:

I, Bernie Carolan, certify that the Transport Ticketing Authority has had risk management processes in place consistent with the Australian/New Zealand Risk Management Standard and an internal control system was in place that enabled the executive to understand and manage risk exposures.

I certify that the financial report can be prepared on a sound system of risk management and internal compliance and control which implemented the policies adopted by the Board until 31 December 2012, and thereafter by me as Administrator; and that TTA’s risk management and internal compliance and control system operated efficiently and effectively in all material respects.

Bernie Carolan Accountable Officer (TTA Administrator 1/1/13–30/6/13; previously TTA’s CEO 1/7/12–31/12/12)

Friday 28 June 2013


4. Financial Management

Overview

Table 4: Summary of financial results for the five years from 2009 to 2013

($ thousand)

2013 2012 2011 2010 2009

Revenue from government 61,476 147,243 101,279 111,000 87,850

Total income from transactions 75,980 155,891 105,360 114,521 89,877

Total expenses from transactions 105,897 182,039 128,600 117,052 90,681

Net result from transactions (29,917) (26,148) (23,240) (2,531) (804)

Net result for the period (31,577) (27,218) (50,916) (2,640) (1,132)

Net cash flow from/(used in) operating activities (4,966) (144) 3,506 (4,660) (1,571)

Total assets – 378,462 346,052 364,004 280,011

Total liabilities – 71,845 50,217 56,753 21,820

TTA received almost all of its funding through parliamentary appropriations via the Department of Transport, Planning and Local Infrastructure which provides grants to support operating expenditure and capital contributions for the development of the new ticketing system.

On 21 June 2011 the Government announced some scope changes to the myki Project; including no short-term tickets and no card vending machines on trams. Management viewed both of these as impairment events. Impairment was first applied in 2010 – 11. The carrying value of these assets has been reviewed in 2012 – 13 and the assets were written off.

The loss reflected in the operating result for the year is due to the unfunded depreciation and amortisation charges, asset impairment charge and inventory write-down. TTA is funded on a cash requirements basis in line with normal government practice. Depreciation is not offset by grants.

In line with Australian Accounting Standards TTA recognises assets for depreciation purposes when they are capable of operating in the way intended by management. As a result, Work In Progress expenditure was transferred to depreciable tangible assets during the year. The higher depreciation charge for the year reflects the commissioning of additional ticketing devices during the year.

Contracts in relation to the Metcard and myki ticketing systems were transferred to PTV on 1 January 2013. TTA was put into administration on 1 January 2013 and the activities undertaken in the six months to 30 June 2013 were focused on winding up and dissolution of TTA.


Consultancies commissioned

TTA used expert consultants for specific specialist skills and knowledge, which it did not have or need regularly in-house.

A total of $1.2 million was expended on professional fees to 31 December 2012. Table 5 summarises the number of consultancy engagements and the total fees incurred.

Table 5: Consultancy projects undertaken during 2012–13

Fees over $10,000 Fees less than $10,000

Number of projects 9 Number of projects NIL

Total expenditure commitment $3.4m Total expenditure commitment NIL

Table 6: Consultancy projects in 2012-13 where approved fees are $10,000 or over

($ thousand)

Consultant Summary of project scopeTotal approved

project fee Expenditure

2012-13(i)

Possible future

expenditure

Allens Arthur Robinson Legal advice on NTS agreements 150 74 76

CDL & Associates Financial & operational analysis and financial modelling in relation to Kamco proposals.

155 0 155

CardConsults Advice on EMV (Europay, MasterCard and Visa) compliance

16 12 4

Clayton Utz Legal advice on aspects of the project 1,525 531 994

Firecone Ventures Pty Ltd Commercial strategy 1,150 463 687

KPMG Commercial opinion on NTT Data acquisition of KEANE

94 23 71

Maddocks Legal advice on Automated Ticketing Project 232 8 224

Norton Rose Human resources advice 40 0 40

Stratica International Pty Ltd

Advice on Payment Card Industry Compliance and Qualified Security Assessment

114 97 17

(i) Expenditure is for work performed during period 1 July to 31 December 2012. Work performed between 1 January and 30 June 2013 were charged to and paid by PTV.

Of the above expenditure $1.2 million has been capitalised and the balance has been expensed in the operating statement.

Subsequent events

No significant events have occurred since 30 June 2013 that would substantially affect TTA’s financial position.


Disclosure index

This annual report is prepared in line with all relevant Victorian legislation. The index in Table 7 has been prepared to assist readers in identifying TTA’s compliance with statutory disclosure requirements.

Table 7: Disclosure index

Legislation Requirement Page ref

Ministerial Directions

Report of operations

SD 4.2(j) Accountable Officers’ declaration 19, 20

SD 4.3(g) Report of operations to contain relevant information not included in the financial statements

9–20

Charter and purpose

FRD 22C Manner of establishment and the relevant Ministers 14

FRD 22C Objectives, functions, powers and duties 2

FRD 22C Nature and range of services provided 2

Management and structure

FRD 22C Organisational structure 12

Financial and other information

FRD 10 Disclosure index 23–24

FRD 12A Disclosure of major contracts 15

FRD 15B Executive officer disclosures 14

FRD 22C, SD 4.2(k) Operational and budgetary objectives and performance against objectives 9–22

FRD 22C Employment and conduct principles 11

FRD 22C Occupational health and safety policy 11

FRD 22C Summary of the financial results for the year 21

FRD 22C Significant changes in financial position during the year 21

FRD 22C Major changes or factors affecting performance 21

FRD 22C Subsequent events 22

FRD 22C Application and operation of Freedom of Information Act 1982 15

FRD 22C Compliance with building and maintenance provisions of Building Act 1993 19

FRD 22C Statement on National Competition Policy 15

FRD 22C Application and operation of the Whistleblowers Protection Act 2001 16

FRD 22C Details of consultancies over $10,000 22

FRD 22C Details of consultancies under $10,000 22

FRD 22C Statement of availability of other information 15

FRD 24C Reporting of office-based environmental impacts 17

FRD 25 Victorian Industry Participation Policy disclosures 15

FRD 29 Workforce Data disclosures 14

SD 4.5.5 Risk management compliance attestation 20

SD 4.2(g) General information requirements 9–24

SD 4.2(j) Sign-off requirements 25


Legislation Requirement Page ref

Financial statements required under Part 7 of the FMA

SD4.2(a) Statement of changes in equity 30

SD4.2(b) Operating statement 28

SD4.2(b) Balance sheet 29

SD4.2(b) Cash flow statement 31

Other requirements under Standing Direction 4.2

SD4.2(a) Compliance with Australian accounting standards and other authoritative pronouncements

32

SD4.2(a) Statement of compliance 32

SD4.2(d) Rounding of amounts 72

SD4.2(c) Accountable officer’s declaration 25

Other disclosures as required by FRDs in notes to the financial statements

FRD 21B Responsible person and executive officer disclosures 55–58

FRD 102 Inventories 47

FRD 103D Non-current physical assets 48–49

FRD 106 Impairment of assets 68

FRD 109 Intangible assets 50

FRD 110 Cash flow statements 31

FRD 112C Defined benefit superannuation obligations 59

FRD 114A Financial Instruments – General government entities and public non-financial corporations

59–65

FRD 119 Contributions by owners 30

Legislation

Freedom of Information Act 1982 15

Building Act 1983 19

Whistleblowers Protection Act 2001 16

Victorian Industry Participation Policy Act 2003 15

Financial Management Act 1994 25


We certify that the attached financial report for the Transport Ticketing Authority (TTA) has been prepared in accordance with Standing Direction 4.2 of the Financial Management Act 1994, applicable Financial Reporting Directions and Australian Accounting Standards which include Interpretations.

We further state that, in our opinion, the information set out in the comprehensive operating statement, balance sheet, statement of changes in equity, cash flow statement and notes forming part of the financial statements, presents fairly the financial transactions during the year ended 30 June 2013 and the financial position of TTA as at 30 June 2013.

We are not aware of any circumstance which would render any particulars included in the financial statements to be materially misleading or inaccurate.

We authorise the financial statements for issue on 12 September 2013.

Greg Forck Dean Yates Chief Finance and Accounting Officer Secretary Department of Transport, Planning Department of Transport, Planning and Local Infrastructure and Local Infrastructure

Melbourne Melbourne12 September 2013 12 September 2013

Accountable Officer’s and Chief Finance and Accounting Officer’s declaration


Auditor-General’s report


($ thousand)

Notes 2013 2012

Income from transactions

Grants from DTPLI 61,476 147,243

Fair value of services received free of charge from Public Transport Victoria 3(a) 6,200 –

Interest 3(b) 607 1,052

Fair value of net liabilities transferred free of charge 3(c) – 954

Other income 3(d) 7,697 6,642

Total income from transactions 75,980 155,891

Expenses from transactions

Employee expenses 4(a) 2,596 10,252

Costs of PTV seconded staff 1,169 890

Depreciation and amortisation 4(b) 19,220 25,993

Fair value of resources provided free of charge to Public Transport Victoria 4(c) 11,816 –

Fair value of services of asset maintenance provided by Public Transport Victoria 4(d) 6,200 –

Operational and related payments – the existing ticketing system 24,622 66,553

Service charges – Kamco, new ticketing system 21,535 35,261

Provision for decommissioning and removal of the existing ticketing system – 17,381

Access payments to operators 2,275 2,979

Marketing and customer education 2,527 877

Communications services and supplies 1,039 1,157

Bank charges 925 2,341

myki card costs 4,901 5,837

Professional and consultancy services 1,009 926

Accommodation 669 909

IT services 499 820

Fees on audit of financial report by Victorian Auditor-General’s Office 20 213 219

Other operating expenses 4,682 9,644

Total expenses from transactions 105,897 182,039

Net result from transactions (net operating balance) (29,917) (26,148)

Other economic flows included in net result

Asset impairment 23 (1,661) (197)

Inventory write-down 23 49 (1,029)

Net gain/(loss) on non-financial assets 5(a) (48) 169

Other losses from other economic flows 5(b) – (13)

Total other economic flows included in net result (1,660) (1,070)

Net result (31,577) (27,218)

Total other economic flows – other non-owner changes in equity – –

Comprehensive result (31,577) (27,218)

The comprehensive operating statement should be read in conjunction with the accompanying notes.

Comprehensive operating statementfor the year ended 30 June 2013


($ thousand)

Notes 2013 2012

Assets

Current Assets

Cash and deposits 6 – 5,220

Receivables 7 – 31,305

Inventories 8 – 4,521

Total current assets – 41,046

Non-current assets

Plant and equipment 9 – 229,716

Intangible assets 10 – 107,700

Total non-current assets – 337,416

Total assets – 378,462

Liabilities

Current liabilities

Payables 11 – 43,287

Provisions 12 – 23,753

Total current liabilities – 67,040

Non-current liabilities

Provisions 12 – 4,805

Total non-current liabilities – 4,805

Total liabilities – 71,845

Net assets – 306,617

Equity

Accumulated deficit (99,983) (68,406)

Contributed capital 99,983 375,023

Net worth – 306,617

Commitments for expenditure 19

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

Balance sheetas at 30 June 2013


($ thousand)

Accumulated (Deficit)/Surplus

Contributions by Owner Total

Balance at 1 July 2011 (41,188) 337,023 295,835

Net result for the year (27,218) – (27,218)

Capital contribution from DTPLI – 38,000 38,000

Balance at 30 June 2012 (68,406) 375,023 306,617

Net result for the year (31,577) – (31,577)

Capital contribution from DTPLI – 31,543 31,543

Capital transfers through administrative restructure (Refer to Note 2 for details) (306,583) (306,583)

Balance at 30 June 2013 (99,983) 99,983 –

The statement of changes in equity should be read in conjunction with the accompanying notes.

Statement of changes in equityfor the year ended 30 June 2013


($ thousand)

Notes 2013 2012

Cash flows from operating activities

Receipts

Receipts from government 53,311 130,904

Receipts from other entities 7,391 6,564

Interest received 610 1,052

Goods and services tax recovered from the ATO 11,646 15,444

Total receipts 72,958 153,964

Payments

Payments to suppliers and employees (77,924) (154,108)

Total payments (77,924) (154,108)

Net cash flows from / (used in) operating activities 14 (4,966) (144)

Cash flows from investing activities

Payments for non-financial assets (31,391) (40,413)

Cash transferred through administrative restructure (406) –

Proceeds from sale of non-financial assets – 172

Net cash flows from / (used in) investing activities (31,797) (40,241)

Cash flows from financing activities

Owner contributions by State Government 31,543 38,000

Repayment of finance leases – (2)

Net cash flows from / (used in) financing activities 31,543 37,998

Net increase / (decrease) in cash and cash equivalents (5,220) (2,387)

Cash and cash equivalents at the beginning of the financial year 5,220 7,607

Cash and cash equivalents at the end of the financial year 6 – 5,220

Non-cash transactions 22

The above cash flow statement should be read in conjunction with the accompanying notes.

Cash flow statementfor the year ended 30 June 2013


1. Summary of significant accounting policies

These annual financial statements represent the audited general purpose financial statements of the Public Transport Ticketing Body, operating as Transport Ticketing Authority (TTA) for the period ending 30 June 2013. The purpose of the report is to provide users with information about TTA’s stewardship of resources entrusted to it.

TTA was wound up and dissolved on 30 June 2013 pursuant to the Transport Legislation Amendment (Public Transport Development Authority) Act 2011 (Refer to Note 2).

Notes to financial statements in relation to balance sheet, financial instruments and commitments are retained for comparatives as at 30 June 2012.

1.1. Statement of compliance

The general purpose financial statements have been prepared in accordance with the Financial Management Act 1994 (FMA) and applicable Australian Accounting Standards (AAS) which include Interpretations, issued by the Australian Accounting Standards Board (AASB). In particular, they are presented in a manner consistent with the requirements of the AASB 1049 Whole of Government and General Government Sector Financial Reporting.

Where appropriate, those AAS paragraphs applicable to not-for-profit entities have been applied.

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

To gain a better understanding of the terminology used in this report, refer to Note 24 on glossary of terms and style conventions.

The annual financial statements were authorised for issue by the Secretary and Chief Finance Officer of Department of Transport, Planning and Local Infrastructure (DTPLI) on 12 September 2013.

1.2. Basis of accounting preparation and measurement

The accrual basis of accounting has been applied in the preparation of these financial statements whereby assets, liabilities, equity, income and expenses are recognised in the reporting period to which they relate, regardless of when cash is received or paid.

The financial statements have been prepared on a going concern basis.

The financial statements as at June 2013 have been prepared as final accounts for TTA.

Despite the negative working capital, operating cash flow and operating result. The going concern assumption has been made as TTA was fully funded by government grant and capital contribution in accordance with the approved budget, which remained in place after the transition of myki operations and the residual project build into PTV during 2012 – 13.

Judgements, estimates and assumptions are required to be made about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on professional judgements derived from historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

Revisions to accounting estimates are recognised in the period in which the estimate is revised and also in future periods that are affected by the revision. Judgements and assumptions made by management in the application of AASs that have significant effects on the financial statements and estimates relate to:

• provision for decommissioning and removal of the Metcard ticketing system which is an estimate on the costs of decommissioning, removal and making good of the Metcard ticketing equipment from the Metropolitan train, tram and bus network (refer to Note 1.7.5)

• the fair value of plant and equipment, (refer to Note 1.9.5); and

• superannuation expense (refer to Note 1.7.2).

Notes to the financial statementsfor the year ended 30 June 2013


These financial statements are presented in Australian dollars, and prepared in accordance with the historical cost convention, except for certain assets and liabilities that are calculated with regard to estimated costs of decommissioning the ticketing systems. Plant and equipment is valued on a fair value basis. Historical cost is based on the fair values of the consideration given in exchange for assets.

1.3. Reporting entity

The financial statements cover TTA as an individual reporting entity.

TTA was created under the State Owned Enterprises Act 1992 on 17 June 2003 and commenced operating on 1 July 2003. It was wholly owned by the Victorian Government. Its principal address was:

Transport Ticketing Authority Level 38, 55 Collins Street VIC 3000

The financial statements include all the controlled activities of TTA.

TTA was wound up and dissolved on 30 June 2013 pursuant to the Transport Legislation Amendment (Public Transport Development Authority) Act 2011 (Refer to Note 2).

1.4. Objective and funding

For the period 1 July 2012 until 31 December 2012, TTA’s prime objective was to ensure that both the Metcard and myki public transport ticketing systems meet the needs of customers and public transport operators.

For the period 1 January 2013 until 30 June 2013 TTA’s prime objective was to achieve the orderly dissolution of the entity.

TTA was mainly funded by grant from DTPLI for the provision of outputs of managing the Metcard public transport ticketing system contract, the decommissioning of the Metcard system, and overseeing the design, build, delivery and operation of the myki public transport ticketing system.

1.5. Scope and presentation of financial statements

1.5.1. Comprehensive operating statement

Income and expenses in the comprehensive operating statement are classified according to whether or not they arise from ‘transactions’ or ‘other economic flows’. This classification is consistent with the whole of government reporting format and is allowed under AASB 101 Presentation of financial statements.

‘Transactions’ and ‘other economic flows’ are defined by the Australian system of government finance statistics: concepts, sources and methods 2005 Cat. No. 5514.0 published by the Australian Bureau of Statistics (see Note 5).

‘Transactions’ are those economic flows that are considered to arise as a result of policy decisions, usually interactions between two entities by mutual agreement. Transactions also include flows within an entity, such as depreciation where the owner is simultaneously acting as the owner of the depreciating asset and as the consumer of the service provided by the asset. Taxation is regarded as mutually agreed interactions between the government and taxpayers. Transactions can be in-kind (e.g. assets provided/given free of charge or for nominal consideration) or where the final consideration is cash.

‘Other economic flows’ are changes arising from market re-measurements. They include:

• gains and losses from disposals, revaluations and impairments of non-financial physical and intangible assets;

• actuarial gains and losses arising from defined benefit superannuation plans; and

• fair value changes of financial instruments from their use or removal.

The net result is equivalent to profit or loss derived in accordance with AASs.


1.5.2. Balance sheet

Assets and liabilities are presented on a current and non-current basis in liquidity order. Non-current being those assets and liabilities expected to be recovered or settled more than 12 months after balance date.

1.5.3. Cash flow statement

Cash flows are classified according to whether or not they arise from operating activities, investing activities or financing activities. This classification is consistent with requirements under AASB 107 Statement of cash flows.

For the cash flow statement presentation purposes, cash and cash equivalents consist of cash on hand and cash at bank.

1.5.4. Statement of changes in equity

The statement of changes in equity presents reconciliations of non-owner and owner changes in equity from opening balance at the beginning of the reporting period to the closing balance at the end of the reporting period. It also shows separately changes due to amounts recognised in the ‘Comprehensive result’ and amounts recognised in ‘Other economic flows – other movements in equity’ related to ‘Transactions with owner in its capacity as owner”.

1.5.5. Rounding

Amounts in the financial statements have been rounded to the nearest $1 000, unless otherwise stated. Please refer to the end of Note 24 for a style convention explaining that minor discrepancies in totals of tables are due to rounding.

1.6. Income from transactions

Grants from DTPLI

Grants received from DTPLI are recognised as income at the time TTA gains control of the underlying asset, which is deemed to be when the fund/cash is received or receivable.

Interest

Interest income is recognised on a time proportionate basis that takes into account the effective yield on the financial asset. Interest is brought to account when the interest is credited or received and an accrual is made to recognise interest accrued to balance date.

Fair value of net liabilities transferred free of charge

Contributions of resources provided free of charge are recognised at their fair value when the transferee obtains control over them, irrespective of whether restrictions or conditions are imposed over the use of the contributions, unless received from another government department or agency as a consequence of a restructuring of administrative arrangements. In the latter case, such a transfer will be recognised at its carrying value. On 2 April 2012, equipment and employee rights and liabilities of some staff in myki operations, finance and commercial teams were transferred to PTV. The majority of the staff transferred were seconded from PTV back to TTA until 31 December 2012.

Other income

Other income relates to recovery of expenditure from DOT. This is recognised as income when the expenditure becomes recoverable.

1.7. Expenses from transactions

Expenses are recognised as they are incurred and reported in the financial year to which they relate.

1.7.1. Employee expenses

These expenses include all costs related to employment including wages and salaries, leave entitlements, incentive payments, redundancy payments, fringe benefits tax, payroll tax and WorkCover premiums. These expenses do not include the costs of PTV seconded staff.


1.7.2. Superannuation – State superannuation defined benefit plans

The amount recognised in the comprehensive operating statement in relation to employer contributions for members of defined benefit superannuation plans is the employer contributions that are paid or payable to these plans during the reporting period. The level of these contributions will vary depending upon the relevant rules of each plan, and is based upon actuarial advice.

The Department of Treasury and Finance (DTF) in its Annual Financial Statements, discloses on behalf of the state as the sponsoring employer, the net defined benefit cost related to the members of these plans. Refer to DTF’s Annual Financial Statements for more detailed disclosures in relation to these plans.

The amount recognised in the comprehensive operating statement in respect of defined benefit superannuation plans represents the accrual of benefits during the reporting period. Note 17 provides further details.

1.7.3. Depreciation and amortisation

All plant and equipment and other non-financial physical assets (excluding items under operating leases) that have a limited useful life are depreciated. Depreciation is generally calculated on a straight-line basis, at rates that allocate the asset’s value, less any estimated residual value, over its expected useful life to its estimated residual value.

The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period. For the financial year ending 30 June 2013 and 30 June 2012, the estimated useful lives for the following assets were:

Asset class Useful life Depreciation rate %

Computer equipment 3–4 years 25.0–33.3

Furniture and equipment 5–10 years 10.0–20.0

Leasehold improvements Written off in 2012–13 Written off in 2012–13

Motor vehicles under lease 3 years 33.3

Devices (excluding hand-held) 8.9–12 years 8.33–11.2 (approx.)

Hand-held devices 1.8–5 years 20.0–55.5 (approx.)

Network assets 2.3–5 years 20.0–43.5 (approx.)

New ticketing system make good 11–12 years 8.33–9.09 (approx.)

Intangibles 12 years 8.33 (approx.)

Intangible assets with finite useful lives are amortised as an expense from transactions on a systematic basis over the asset’s useful life. Amortisation begins when the asset is available for use, that is, when it is in the location and condition necessary for it to be capable of operating in the manner intended by management.

During the project implementation phase, the units of production method of calculating amortisation is being used for the new ticketing system (NTS) assets recognising that only a portion of the total planned network is in use. This will be changed to a straight-line basis when the complete solution is in operation.


Other operating expenses

1.7.4. Supplies and services

Supplies and services generally represent the day-to-day running costs incurred in the normal operations of TTA. These items are recognised as an expense in the reporting period in which they are incurred.

1.7.5. Existing ticketing system decommissioning and removal costs

In February 2007, the legacy ticketing system equipment assets were transferred to TTA from DTPLI (formerly the Department of Infrastructure). In accordance with AAS, TTA recognised the estimated decommissioning and removal costs associated with those assets.

On 1 January 2013 the provision for decommissioning of the Metcard ticketing system was transferred to PTV (Refer to Note 2).

On 30 June 2013 the provision for the myki ticketing system was transferred to VicTrack (Refer to Note 2).

1.8. Other economic flows included in the net result

Other economic flows measure the change in volume or value of assets or liabilities that do not result from transactions. These include:

1.8.1. Net gain/(loss) on non-financial assets

Net gain/(loss) on non-financial assets and liabilities includes realised and unrealised gains and losses as follows:

Disposal of non-financial assets

Any gain or loss on the sale of non financial assets is recognised at the date that control of the asset is passed to the buyer and is determined after deducting from the proceeds the carrying value of the asset at that time.

Impairment of non-financial assets

Intangible assets which are work in progress and not yet available for use are not amortised but tested annually for impairment (i.e. as to whether their carrying value exceeds their recoverable amount, and so require write-downs) and whenever there is an indication that the asset may be impaired. All other assets are assessed annually for indications of impairment, except for financial assets.

If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their possible recoverable amount. Where an asset’s carrying value exceeds its recoverable amount, the difference is written off as an other economic flow, except to the extent that the write down can be debited to an asset revaluation surplus amount applicable to that class of asset.

The recoverable amount for most assets is measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cash inflows is measured at the higher of the present value of future cash flows expected to be obtained from the asset and fair value less costs to sell.

1.8.2. Other gains/(losses) from other economic flows

Other gains/(losses) from other economic flows include the gains or losses from:

• transfer of amounts from the reserves and/or accumulated surplus to net result due to disposal or derecognition or reclassification

• the revaluation of the present value of the long service leave liability due to changes in the bond interest rates.


1.9. Assets

1.9.1. Cash and deposits

Cash and deposits, including cash equivalents, consist of cash on hand and cash at bank.

1.9.2. Receivables

Receivables consist predominantly of amounts owing from the Victorian Government and GST input tax credits recoverable. Receivables that are contractual are classified as financial instruments. Amounts owing from the Victorian Government, taxes and other statutory receivables are not classified as financial instruments.

Receivables are recognised initially at fair value and subsequently measured at amortised costs, using the effective interest method, less an allowance for impairment. A provision for doubtful receivables is made when there is objective evidence that the debts may not be collected. Bad debts are written off when identified.

Impairment of financial assets

At the end of each reporting period, TTA assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. All financial instrument assets, except those measured at fair value through profit or loss, are subject to annual review for impairment.

Receivables are assessed for bad and doubtful debts on a regular basis. Those bad debts considered as written off by mutual consent are classified as a transaction expense. Bad debts not written off by mutual consent and the allowance for doubtful receivables are classified as ‘other economic flows’ in the net result.

The amount of the allowance is the difference between financial asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate.

In assessing impairment of statutory (non-contractual) financial assets which are not financial instruments, TTA applies professional judgement in assessing materiality and using estimates, averages and computational shortcuts in accordance with AASB 136 Impairment of assets.

1.9.3. Inventories

Inventories include goods and other property held either for sale or for consumption in the ordinary course of business operations. Depreciable assets are excluded. Inventories are measured at the lower of cost and net realisable value.

1.9.4. Work in progress

The Work In Progress (WIP) relates to the myki system and has been separated into two major categories, being tangible and intangible assets.

The tangible assets are categorised as plant and equipment (P&E) and include all costs directly incurred in developing, designing and installing the physical components of the NTS project such as fare payment devices and ticketing machines. These costs include professional fees and costs of employee expenses attributed directly to the development of the P&E asset.

All costs associated in designing, developing and installing the NTS operating system (software) have been capitalised as an intangible asset. This includes expenditure on employee expenses, consultants’ fees and other services and supplies where these are attributable to development of the NTS operating system (see Note 10).

At the date of commissioning, or ‘go live’, the constituent components of WIP are transferred to the relevant asset category and depreciation of tangible assets and amortisation of intangible assets commences. WIP is not depreciated or amortised but is tested for impairment.

1.9.5. Plant and equipment

Plant and equipment are measured at cost less accumulated depreciation and impairment.

Corporate capital expenditure greater than $1,000 (2012: $1,000) is capitalised, whereas new ticketing system capital expenditure greater than $2,000 (2012: $2,000) is capitalised. Cost is measured as the fair value of consideration given for the assets plus incidental costs directly attributable to the acquisition.

Cost of leasehold improvement is capitalised as an asset and depreciated over the remaining term of the lease or the estimated useful life of the improvements, whichever is the shorter.


Revaluations of non-current physical assets

Non current physical assets are measured at fair value in accordance with Financial Reporting Directions (FRD) issued by the Minister for Finance. A full revaluation normally occurs every five years, based on the asset’s government purpose classification, but may occur more frequently if fair value assessments indicate material changes in values. Independent valuers are used to conduct these scheduled revaluations and any interim revaluations are determined in accordance with the requirements of the FRDs.

Revaluation increases or decreases arise from differences between an asset’s carrying value and fair value.

Net revaluation increases (where the carrying amount of a class of assets is increased as a result of a revaluation) are recognised in ‘Other economic flows – other movement in equity’, and accumulated in equity under the asset revaluation surplus. However, the net revaluation increase is recognised in the net result to the extent that it reverses a net revaluation decrease in respect of the same class of plant and equipment previously recognised as an expense (other economic flows) in the net result.

Net revaluation decreases are recognised in ‘Other economic flows – other movements in equity’ to the extent that a credit balance exists in the asset revaluation surplus in respect of the same class of plant and equipment. Otherwise, the net revaluation decreases are recognised immediately as other economic flows in the net result. The net revaluation decrease recognised in ‘Other economic flows – other movements in equity’ reduces the amount accumulated in equity under asset revaluation surplus.

Revaluation increases and decreases relating to individual assets within a class of plant and equipment are offset against one another within that class but are not offset in respect of assets in different classes. Any revaluation surplus is not normally transferred to accumulated funds on de recognition of the relevant asset.

1.9.6. Intangible assets

Intangible assets represent identifiable non-monetary assets without physical substance and are initially recognised at cost. Costs incurred subsequent to initial acquisition are capitalised when it is expected that additional future economic benefits will flow to TTA.

Amortisation begins when the asset is available for use, that is, when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. Amortisation therefore started on intangible assets developed to date as at regional bus ‘go live’ of 8 December 2008, metropolitan train ‘go live’ date of 29 December 2009 and metropolitan tram and bus ‘go live’ date of 25 July 2010.

In recognition that only a portion of the total planned network is in use, the units of production method of calculating amortisation is being used during the project implementation phase. This will be changed to a straight-line basis when the complete solution is in operation.

The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each annual reporting period. In addition, an assessment is made at each reporting date to determine whether there are indicators that the intangible asset concerned is impaired. If so, the assets concerned are tested as to whether their carrying value exceeds their recoverable amount.

Intangible assets are stated at cost less accumulated amortisation and impairment, and are amortised on a units of production method over their useful lives to TTA as follows:

2013 2012

Capitalised software licences

3–5 years 3–5 years

Capitalised NTS development costs

12 years 12 years


1.10. Liabilities

1.10.1. Payables

Payables consist predominantly of accounts payable and other sundry liabilities.

Payables are initially measured at fair value, then subsequently measured at amortised cost and represent liabilities for goods and services provided to TTA prior to the end of the financial year that are unpaid, and arise when TTA becomes obliged to make future payments in respect of the purchase of these goods and services. Fair value is determined in the manner described in Note 18(f).

1.10.2. Provisions

Provisions are recognised when TTA has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

1.10.3. Provision for decommissioning and removal of existing ticketing system

In accordance with AAS, TTA has provided for the estimated costs associated with the decommissioning and removal of the Metcard ticketing system assets. The carrying amount is the present value of the estimated cash outflows.

1.10.4. Employee benefits

Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave for services rendered to the reporting date.

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

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in the provision for employee benefits in respect of employee services up to the reporting date, classified as current liabilities and measured at their nominal values.

Those liabilities that are not expected to be settled within 12 months are recognised in the provision for employee benefits as current liabilities, measured at the present value of the amounts expected to be paid when the liabilities are settled, using the remuneration rate expected to apply at the time of settlement.

(ii) Long service leave

Liability for long service leave (LSL) is recognised in the provision for employee benefits.

Unconditional LSL is disclosed in the notes to the financial statements as a current liability even where TTA does not expect to settle the liability within 12 months because it will not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months:

The components of this current LSL liability are measured at:

• present value – component that TTA does not expect to settle within 12 months

• nominal value – component that TTA expects to settle within 12 months.

Conditional LSL is disclosed as a non-current liability. There is an unconditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service.

This non current LSL liability is measured at present value. Any gain or loss following revaluation of the present value of non current LSL liability is recognised as a transaction, except to the extent that a gain or loss arises due to changes in bond interest rates for which it is then recognised as an other economic flow (refer to Note 1.8.2).


(iii) Termination benefits

Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. TTA recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.

(iv) Employee benefit on-costs

Employee benefits on-costs such as payroll tax, workers compensation, superannuation, annual leave and LSL accrued while on LSL taken in service are recognised separately from provision for employee benefits.

1.11. Leases

A lease is a right to use an asset for an agreed period of time in exchange for payment.

Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and rewards incidental to ownership. Leases of plant and equipment are classified as finance infrastructure leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership from the lessor to the lessee. All other leases are classified as operating leases.

Finance leases

TTA as lessee

At the beginning of the lease term, finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the lease property or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease. The lease asset is depreciated over the shorter of the estimated useful life of the asset or the term of the lease.

Minimum lease payments are apportioned between reduction of the outstanding lease liability, and the periodic finance expense which is calculated using the interest rate implicit in the lease, and charged directly to the comprehensive operating statement. Contingent rentals associated with finance leases are recognised as an expense in the period in which they are incurred.

Operating leases

TTA as lessee

Operating lease payments, including any contingent rentals, are recognised as an expense in the comprehensive operating statement on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern of the benefits derived from the use of the leased asset. The leased asset is not recognised in the balance sheet.

1.12. Commitments

Commitments for future expenditure include operating and capital commitments arising from contracts. These commitments are disclosed by way of a note (refer to Note 19) and inclusive of the goods and services tax (GST) payable. In addition, where it is considered appropriate and provides additional relevant information to users, the net present values of significant individual projects are stated. These future expenditures cease to be disclosed as commitments once the related liabilities are recognised in the balance sheet.

1.13. Contributed capital

Additions to net assets which have been designated as contributions by owners are recognised as contributed capital. Other transfers that are in the nature of contributions or distributions have also been designated as contributed capital.


1.14. Taxation

1.14.1. Accounting for Goods and Services Tax (GST)

Income, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case, it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities, which are recoverable from or payable to the taxation authority, are presented as operating cash flow.

Commitments and contingent liabilities are also stated inclusive of GST.

1.14.2. Income tax status

The activities of TTA are exempt from income tax.

1.15. Events after the reporting period

Assets, liabilities, income or expenses arise from past transactions or other past events. Where the transactions result from an agreement between TTA and other parties, the transactions are only recognised when the agreement is irrevocable at, or before the end of the reporting period. Adjustments are made to amounts recognised in the financial statements for events which occur after the reporting period and before the date the financial statements are authorised for issue, where those events provide information about conditions which existed in the reporting period. Note disclosure is made about events between the end of the reporting period and the date the statements are authorised for issue, where the events relate to conditions which arose after the end of the reporting period and which may have a material impact on the results of subsequent reporting periods.

Section 2(4) of the Transport Legislation Amendment (Public Transport Development Authority) Act 2011 provides for the dissolution of TTA on 30 June 2013. In accordance with this, during 2012-13 the Metcard ticketing system was ceased, and the responsibilities for and management of the myki operations and the residual project build was transitioned to PTV.

1.16. Rounding of amounts

Amounts in the financial statements have been rounded to the nearest thousand dollars, unless otherwise stated. Figures in the financial statements may not equate due to rounding.

1.17. AASs issued that are not yet effective

Certain new AASs have been published that are not mandatory for the 30 June 2013 reporting period. DTF assesses the impact of these new standards and advises departments and other entities of their applicability and early adoption where applicable.

With the dissolution of TTA as at 30 June 2013, any AASs that have been issued but are not yet effective will have no impact on TTA.


2. Dissolution of TTA – Minister Directions and AllocationsTTA was wound up and dissolved on 30 June 2013 pursuant to Transport Legislation Amendment (Public Transport Development Authority) Act 2011. This was achieved in stages as follows:-

2.1. Transfer of assets to PTV

On 1 January 2013 TTA transferred to PTV all property, rights, assets and liabilities except for:

a) Those necessary for the orderly wind up of the affairs of the TTA, and

b) NTS Assets

The transfer was designated as a capital contribution by owners and included the following net assets:

($)

Assets

GST recoverable 1,864,211

Grant receivable from DTPLI 30,462,000

Accounts receivable 528,594

Other receivables 2,708,690

Card inventory 19,827,324

Card inventory write-down (15,653,488)

myki Ticketing System funds in transit (including card vending machine floats & underwriting settlements)

4,333,122

myki Ticketing System development – work in progress 111,175,408

Fixed assets 46,051

Leasehold improvements 291,747

Liabilities

Accounts payable (45,694,690)

Receipt in advance (1,049,167)

Provisioning for decommissioning of Metcard Ticketing System (21,507,305)

Provision for staff entitlements – current (667,174)

Provision for staff entitlements – non-current (122,830)

Net assets transferred to PTV $86,542,493


2.2. Transfer of myki completed civil works assets to VicTrack

On 30 June 2013 TTA transferred to VicTrack completed civil works that form part of the fixed assets of the myki ticketing system (comprising cabling, conduit, trenches, pits, lids and bores).

This transfer was designated as a contribution by owners and included the following net assets:

($)

Assets

Civil works 62,306,043

Assets transferred to VicTrack 62,306,043

2.3. Transfer of myki assets to VicTrack

On 30 June 2013 TTA transferred to VicTrack the fixed assets of the myki ticketing system (comprising devices, network assets, NTS make good, and intangible assets for software development).

This transfer was designated as a capital contribution and included the following net assets:

($)

Assets

Devices 72,430,298

Network assets 254,653

NTS – make good 3,255,434

Intangible assets 85,952,006

Liabilities

Provision for decommissioning (4,580,873)

Net assets transferred to VicTrack 157,311,518


2.4. Transfer of residual assets to PTV

On 30 June 2013 TTA transferred to PTV all residual property, rights, assets and liabilities in existence prior to dissolution of TTA.

This transfer was designated as a capital contribution by owners and included the following net assets:

($)

Assets

Bank account 405,790

GST recoverable 45,057

Account with PTV 303,974

Liabilities

Payables (297,695)

Provision for annual leave (16,415)

Provision for retention incentive payments (10,281)

Provision for long service leave (7,950)

Net assets transferred to PTV 422,480


3. Income from transactions

($ thousand)

2013 2012

(a) Fair value of services received free of charge

Fair value of services of asset maintenance of the new ticketing system received free of charge from Public Transport Victoria(i) 6,200 –

(b) Interest

Interest on bank deposits 607 1,052

Total interest 607 1,052

(c) Fair value of net liabilities transferred free of charge

Leave entitlements and equipment transferred to PTV – 954

(d) Other Revenue

Card issuance revenue 7,466 4,676

Cost recovery from DTPLI on ticketing services and revenue audit function – 1,002

Cost recovery from PTV on project management – 381

Cost recovery from DTPLI on staff secondment – 126

Cost recovery from V/Line Pty Ltd on accounting services 22 126

Other cost recovery 209 331

Total other income 7,697 6,642

Notes:

(i) From 1 January 2013 to 30 June 2013, TTA received services of maintenance of assets of the new ticketing system free of charge from Public Transport Victoria. Fair value of the asset maintenance services is determined at $6.2 million. Fair value of services of asset maintenance of the new ticketing system received free of charge is recognised as services received free of charge and expense (Refer to Note 4(d)).


4. Expenses from transactions

($ thousand)

2013 2012

(a) Employee expenses

Post-employment benefits:

Defined contribution superannuation expense 221 613

Salaries, wages and long service leave expense 2,375 9,639

Total employee expenses 2,596 10,252

(b) Depreciation and amortisation

Depreciation of plant and equipment (Table 9.3) 15,816 19,184

Amortisation of intangible assets with finite useful lives (Note 10) 3,404 6,809

Total depreciation and amortisation 19,220 25,993

(c) Fair value of resources provided free of charge

Fair value of use of assets of the new ticketing system provided free of charge to Public Transport Victoria(i)

Plant and equipment (Table 9.2) 8,412 –

Software (Note 10) 3,404 –

Total fair value of resources provided free of charge 11,816

(d) Fair value of services of asset maintenance

Fair value of services of asset maintenance received free of charge from Public Transport Victoria(ii) 6,200 –

Notes:

(i) From 1 January 2013 to 30 June 2013, TTA provided the use of assets of the new ticketing system free of charge to Public Transport Victoria. Fair value of the use of assets from 1 January 2013 to 30 June 2013 is determined as the amount of depreciation charge of the assets of $11,816 thousand. Use of assets provided free of charge to PTV is recognised as resources provided free of charge.

(ii) From 1 January 2013 to 30 June 2013, TTA received services of maintenance of assets of the new ticketing system free of charge from Public Transport Victoria (Refer to Note 3(a)).

5. Other economic flows included in net result

($ thousand)

2013 2012

(a) Net gain/(loss) on non-financial assets

Net gain/(loss) on disposal of plant and equipment (48) 169

(b) Other gains/(losses) from other economic flows

Gain/(loss) on revaluation of long service leave provision

Change in provision due to changes in bond rates – (13)

Total other gains/(losses) from other economic flows – (13)

Total other economic flows included in net result (48) 156


6. Cash and deposits

($ thousand)

2013 2012

Cash at bank and on hand – 5,220

Total – 5,220

Cash at the end of the year as shown in the Cash Flow Statement is reconciled to the cash assets above. Cash at bank and on hand does not include farebox funds held as agent for distribution to transport operators.

7. Receivables

($ thousand)

2013 2012

Current receivables

Contractual

Receivables(i) – 6,371

Statutory

Amounts owing from DTPLI for grant and recoverable expenses – 22,297

GST input tax credit recoverable – 2,637

– 24,934

Total receivables – 31,305

Note (i) The average credit period for other receivables is 30 days. No interest is charged on other receivables.

Ageing analysis of contractual receivables

Please refer to Note 18 for the ageing analysis of contractual receivables.

8. Inventories

($ thousand)

2013 2012

Current inventories

Card inventories

At cost – 20,223

Write-down (Note 23) – (15,702)

Total inventories – 4,521


9. Plant and equipment

Table 9.1 Classification by ‘Purpose Group’ – Carrying amounts

($ thousand)

2013 2012

Nature-based classification Transportation and Communications

Computer equipment

At cost – 344

Less: accumulated depreciation – 278

– 66

Furniture and equipment

At cost – 235


– 63

Leasehold improvement

At cost – 1,406


– 463

Work In Progress – NTS plant and equipment

At cost – 73,813

– 73,813

Devices

At cost – 115,118

Less: accumulated depreciation – 23,722

Less: impairment – 10,134

– 81,262

Network assets

At cost – 2,789


– 652

Civil works

At cost – 88,251


Less: impairment – 664

– 69,726

myki ticketing system – make good

At fair value – 4,581


– 3,671

Net carrying amount of plant and equipment – 229,716


Tabl

e 9.

2 Cl

assi

ficat

ion

by ‘T

rans

port

atio

n an

d Co

mm

unic

atio

ns’ P

urpo

se G

roup

– M

ovem

ents

in c

arry

ing

amou

nts

($ th

ousa

nd)

Com

pute

r eq

uipm

ent

Furn

iture

&

equi

pmen

tLe

aseh

old

impr

ovem

ent

WIP

NTS

pla

nt

& e

quip

men

tLe

ased

ve

hicl

esD

evic

esN

etw

ork

asse

tsC

ivil

wor

ksN

TS

mak

e go

odTo

tal

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

Ope

ning

bal

ance

6625

6389

463

511

73,8

1363

,604

–21

81,2

6274

,326

652

1,09

669

,726

68,9

813,

671

4,08

722

9,71

621

2,74

0

Add

ition

s–

84–

––

–25

,508

33,2

41–

–75

03,

069

––

––

––

26,2

5836

,394

Tran

sfer

––

––

––

(7,8

69)

(32,

968)

––

7,86

924

,215

–37

3–

8,38

0–

––

–

Dis

posa

ls(2

)(1

3)(4

8)(4

)–

––

––

(19)

––

––

––

––

(50)

(36)

Dep

reci

atio

n/am

ortis

atio

n ex

pens

es(1

8)(3

0)(1

5)(2

2)(1

71)

(48)

––

–(2

)(6

,960

)(1

0,21

4)(3

60)

(817

)(8

,084

)(7

,635

)(2

08)

(416

)(1

5,81

6)(1

9,18

4)

Fair

val

ue o

f re

sour

ces

prov

ided

free

of

cha

rge

(N

ote

4(c)

)–

––

––

––

––

–(8

,167

)–

(37)

––

–(2

08)

–(8

,412

)–

Tran

sfer

of

impa

irm

ent

prov

isio

n–

––

––

––

9,93

6–

–(6

64)

(9,9

36)

––

664

––

––

–

Impa

irm

ent

(Not

e 23

)–

––

––

––

––

–(9

98)

(198

)–

––

––

–(9

98)

(198

)

Tran

sfer

s th

roug

h ad

min

istr

ativ

e re

stru

ctur

e(4

6)–

––

(292

)–

(91,

452)

––

–(7

3,09

2)–

(255

)–

(62,

306)

–(3

,255

)–

(230

,698

)–

Clos

ing

bala

nce

–66

–63

–46

3–

73,8

13–

––

81,2

62–

652

–69

,726

–3,

671

–22

9,71

6

Fair

val

ue a

sses

smen

ts h

ave

been

per

form

ed fo

r al

l cla

sses

of a

sset

s w

ithin

this

pur

pose

gro

up a

nd th

e de

cisi

on w

as m

ade

that

mov

emen

ts w

ere

not m

ater

ial

(less

than

or

equa

l to

10 p

er c

ent f

or a

full

reva

luat

ion)

.


Table 9.3 Aggregate depreciation/amortisation recognised as an expense during the year

($ thousand)

2013 2012

Computer equipment 18 30

Furniture and equipment 15 22

Leasehold improvements 171 48

Motor vehicles under lease - 2

Devices 6,960 10,214

Network assets 360 817

Civil works 8,084 7,635

NTS make good 208 416

Total 15,816 19,184

10. Intangible assets

($ thousand)

Capitalised software development –

Work in progressCapitalised software

development Software/Licences Total

2013 2012 2013 2012 2013 2012 2013 2012

Gross carrying amount

Opening balance 14,940 7,840 109,194 109,194 227 287 124,361 117,321

Additions 4,784 7,100 – – – – 4,784 7,100

Disposal – – – – (227) (60) (227) (60)

Transfer through administrative restructure (19,724) – (109,194) – – – (128,918) –

Closing balance – 14,940 – 109,194 – 227 – 124,361

Accumulated amortisation and impairment

Opening balance – – 16,434 9,625 227 287 16,661 9,912

Amortisation expense – – 3,405 6,809 – – 3,405 6,809

Fair value of resources provided free of charge (Note 4(c))

– – 3,404 – – – 3,404 –

Disposal – – – – (227) (60) (227) (60)

Transfer through administrative restructure – – (23,243) – – – (23,243) –

Closing balance – – – 16,434 – 227 – 16,661

Net book value at the end of the financial year – 14,940 – 92,760 – – – 107,700

TTA has capitalised costs for the development of the myki ticketing system. Amortisation of the carrying amount of the capitalised development costs starts at regional bus ‘go live’ date of 8 December 2008, metropolitan train ‘go live’ date of 29 December 2009 and metropolitan tram and bus ‘go live’ date of 25 July 2010.


11. Payables

($ thousand)

2013 2012

Current payables

Contractual

Amounts payable to DTPLI – 1,383

Other payables – 41,904

Total – 43,287

Note: The average credit period is less than 30 days. No interest is charged on creditors or amounts payable to other government entities/agencies.

(a) Maturity analysis of payables

Please refer to Note 18 for the ageing analysis of payables.


12. Provisions

($ thousand)

2013 2012

Current

Employee benefits (i) – annual leave:

Unconditional and expected to be settled within 12 months (ii) – 253

Unconditional and expected to be settled after 12 months (iii) – 206

Employee benefits (i) – long service leave:



Staff retention scheme – 1,000

Performance incentive payments – –

– 1,650

Provisions related to employee benefit on-costs:



– 101

Provision for removal of the existing ticketing system – 22,002

Total current provisions – 23,753

Non-current provisions

Employee benefits

Conditional long service entitlements (iv) – 196

Employee benefits on-costs

Provisions related to employee benefit on-costs – 28

Other provisions

Provision for decommissioning of the new ticketing system – 4,581

Total non-current provisions – 4,805

Total provisions – 28,558

Notes:

(i) Provisions for employee benefits consist of amounts for annual leave and long service leave accrued by employees, not including on-costs.

(ii) The amounts disclosed are nominal amounts.

(iii) The amounts disclosed are discounted to present values.

(iv) The amounts disclosed represent less than seven years of continuous service measured at present value.


12.1. Employee benefits and related on-costs

($ thousand)

Comprising of: 2013 2012

Current employee benefits

Annual leave entitlements – 459

Staff retention scheme – 1,000

Performance incentive payments – –

Long service leave entitlements – 191

Non-current employees benefits

Long service leave entitlements – 196

Total employee benefits – 1,846

Current on-costs – 101

Non-current on-costs – 28

Total on-costs – 129

Total employee benefits and related costs – 1,975

12.2. Movement in provisions

($ thousand)

On-costs

Provision for decommissioning

of new ticketing system

Provision for removal of existing

ticketing system Total

Opening balance as at 1 July 2012 129 4,581 22,002 26,712

(Write-back) Additional provisions recognised (126) – (495) (621)

Transfer through administrative restructure (3) (4,581) (21,507) (26,091)

Closing balance as at 30 June 2013 – – – –


13. Lease

Operating leasing arrangement

Operating lease relates to office premises which expired on 31 July 2013 with rent paid in June 2013 to cover the period to the end of lease. TTA does not have an option to purchase the lease assets at the expiry of the lease period.

($ thousand)

2013 2012

Non-cancellable operating lease payable

Not longer than one year – 196

Total – 196

14. Reconciliation of net result for the year to net cash flows from operating activities

($ thousand)

2013 2012

Net result for the year (31,577) (27,218)

Non-cash movements:

Depreciation, amortisation and impairment 32,700 26,191

Inventory write-down (49) 1,029

(Gain)/loss from disposal of non-current assets 48 (169)

Net liabilities transferred free of charge – (954)

Movements in assets and liabilities:

(Increase)/decrease in assets:

Receivables (8,047) (17,346)

Other non-current assets (497) (1,401)

Increase/(decrease) in liabilities:

Payables 4,102 1,202

Other liabilities (1,646) 18,522

Net cash from/(used in) operating activities (4,966) (144)


15. Responsible persons’ and executive officers’ disclosuresIn accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994, the following disclosures are made regarding responsible persons for the reporting period.

Names

The persons who held the positions of Ministers, Board Members and Accountable Officer in TTA are:

Responsible Minister

Minister for Public Transport The Hon. Terry Mulder MP 1 July 2012 to 30 June 2013

Board members

Mr John McMillan Chairperson 1 July 2012 to 31 December 2012

Mr Peter Matthey 1 July 2012 to 31 December 2012

Mr John Peoples 1 July 2012 to 31 December 2012

Mr John Wilson 1 July 2012 to 31 December 2012

Accountable Officer

Mr Bernie Carolan(i) 1 July 2012 to 30 June 2013

Mr Dean Yates(ii) post 30 June 2013 until certification of the financial statements for year ended 30 June 2013

Notes:

(i) Mr Bernie Carolan was the Accountable Officer for TTA for the full financial year, whilst occupying positions being:

• Chief Executive Officer for period 1 July 2012 to 31 December 2012.

• TTA Administrator for period 1 January 2013 to 30 June 2013.

(ii) Mr Dean Yates became the Accountable Office for TTA post 30 June 2013 for the purpose of finalising the financial statements for the year ending 30 June 2013, and received no remuneration from TTA.


Remuneration received or receivable by Board Members and the Accountable Officer in connection with the management of TTA during the reporting period was in the ranges:

‘Other economic flows’ are changes arising from market re-measurements. They include:

Board and Accountable Officer

Remuneration received or receivable by Board Members and the Accountable Officer in connection with the management of TTA during the reporting period was in the ranges:

Total remuneration Base remuneration

2013 2012 2013 2012

Income Band No. No. No. No.

$10,000 – $19,999 3 – 3 –

$20,000 – $29,999 – 1 – 1

$30,000 – $39,999 1 3 1 3

$50,000 – $59,999 – 1 – 1

$190,000 – $199,999 – – 1 –

$360,000 – $369,999 1 – – –

$370,000 – $379,999 – 1 – 1

Total numbers 5 6 5 6

Total amount $ 450,440 $ 558,305 $ 280,356 $ 558,305

(a) The TTA Board and Chief Executive Officer (as Accountable Officer) ceased on 31 December 2012. Administrator (as Accountable Officer) was contracted from 1 January 2013 to 30 June 2013 to dissolve TTA.

(b) The total includes TTA Board and CEO as Accountable Officer until 31 December 2012, and Administrator as Accountable Officer on part time basis until 30 June 2013.

Amounts relating to Ministers are reported in the financial report of the Department of Premier and Cabinet.

Related party transactions

Mr John McMillian, Chair of TTA, was Chair of Metlink Victoria Pty Ltd (Metlink) until its transition into PTV on 2 April 2012, at which time Mr McMillian’s Chair of Metlink ceased.

Mr John Wilson, Director of TTA, is a Board Member of V/Line.

($ thousand)

2013 2012

Metlink Victoria Pty Ltd

Costs of staff secondment – 485

myki project costs – –

Costs of travel passes – –

Total – 485

V/Line passenger

myki project costs 9 –

Total related party transactions 9 485


16. Executives Remuneration and payments to other personnel (i.e. Contractors with significant management responsibilities).

16.1. Remuneration of executives

The number of executive officers, other than Ministers, Board Members and the Accountable Officer, and their total remuneration during the reporting period are shown in the first two columns in the table below in their relevant income bands. The base remuneration of executive officers is shown in the third and fourth columns. Base remuneration is exclusive of bonus payments, long service leave payments, redundancy payments and retirement benefits. The total annualised employee equivalent provides a measure of full time equivalent executive officers over the reporting period.

Total remuneration Base remuneration

2013 2012 2013 2012

Income band No. No. No. No.

$90,000 – $99,999 – – 2 –

$100,000 – $109,999 2 – 1 –

$110,000 – $119,999 1 1 – 1

$120,000 – $129,999 – – – 1

$130,000 – $139,999 – 2 – 1

$170,000 – $179,999 – – – 1

$180,000 – $189,999 – 1 – –

$200,000 – $209,999 – – 1 1

$210,000 – $219,999 1 1 – –

Total numbers (b) (c) 4 5 4 5

Total annualised employee equivalent (AEE) (a) (b) (c)

2.54 4.08 2.54 4.08

Total amount (b) $ 538,332 $ 787,520 $ 497,380 $ 743,219

(a) Annualised employee equivalent is based on working 38 ordinary hours per week over the reporting period

(b) The above table includes six month salary and AEE of an executive officer who was transferred to PTV in April 2012 and seconded back to TTA until 31 December 2012.

(c) The above totals included 2 employed and 1 seconded executives who all ceased at TTA 31 December 2012


16.2. Payments to other personnel (i.e. Contractors with significant management responsibilities)

The following disclosures are made in relation to other personnel of the Transport Ticketing Authority, i.e. contractors charged with significant management responsibilities.

Payments have been made to a number of contractors with significant management responsibilities, which are disclosed in $10,000 expense bands. These contractors have been responsible for myki project build and commercial contractual obligations, directly or indirectly, for TTA.

Contractors were engaged by TTA for the full year for 2011–12, but only six months for 2012–13 owing to their engagements being transferred to PTV on 1 January 2013.

Total expense (exclusive of GST)

2013 2012

Expense band No. No.

$210,000 – $219,999 1 –

$280,000 – $289,999 1 –

$480,000 – $489,999 – 1

$540,000 – $549,999 – 1

Total numbers 2 2

Total expenses (exclusive of GST) $ 504,538 $ 1,022,481


17. Superannuation scheme contributions and liabilitiesEmployees of TTA are entitled to receive superannuation benefits and TTA contributes to both defined benefit and defined contribution plans. The defined benefit plan(s) provides benefits based on years of service and final average salary.

TTA does not recognise any defined benefit liability in respect of the plan(s) because the entity has no legal or constructive obligation to pay future benefits relating to its staff; its only obligation is to pay superannuation contributions as they fall due. The Department of Treasury and Finance recognises and discloses the state’s defined benefit liabilities in its financial statements.

However, superannuation contributions paid or payable for the reporting period are included as part of employee benefits in the comprehensive operating statement of TTA.

The names of the major employee superannuation funds and employer contributions made by TTA are as follows:

($ thousand)

Paid contribution for the year

2013 2012

Defined benefits plan

ESS Super 2 29

Defined contribution plans

VicSuper Scheme 34 135

Australian Retirement Fund 171 414

Other Superannuation schemes 122 279

Total 329 857

No employer contributions were outstanding at year end. Apart from ESS Super, all superannuation payments were made to defined contribution plans.

18. Financial instruments

(a) Financial risk management objectives and policies

TTA’s principal financial instruments comprise:

• cash assets;

• receivables (excluding statutory receivables) and

• payables (excluding statutory payables)

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement, and the basis on which income and expenses are recognised, with respect to each class of financial assets, financial liability and equity instrument are disclosed in Note 1 to the financial statements.

TTA’s main financial risks include credit risk, liquidity risk and interest rate risk. TTA manages these financial risks in accordance with its financial risk management policy.

Primary responsibility for the identification and management of financial risks rested with the Board of Directors of TTA, supported by the Audit Committee until 31 December 2012, and thereafter with the TTA Administrator.


(b) Categorisation of financial instruments

($ thousand)

Note

Contractual financial assets – loans

and receivables

Contractual financial liabilities at amortised cost Total

2013

Contractual financial assets

Cash and deposits 6 – – –

Receivables (a) 7 – – –

Total contractual financial assets – – –

Contractual financial liabilities

Payables 11 – – –

Total contractual financial liabilities – – –

($ thousand)

Note

Contractual financial assets – loans

and receivables

Contractual financial liabilities at amortised cost Total

2012


Cash and deposits 6 5,220 – 5,220

Receivables (a) 7 6,371 – 6,371

Total contractual financial assets 11,591 – 11,591


Payables 11 – 43,287 43,287

Total contractual financial liabilities – 43,287 43,287

Note: (a) The amount of receivables disclosed here excludes statutory receivables (i.e. amounts owing from the Victorian Government and GST input tax credit recoverable).


(c) Credit risk exposures

Credit risk arises from the contractual financial assets of TTA, which comprise cash and deposits and non-statutory receivables. TTA’s exposure to credit risk arises from the potential default of counter-party on their contractual obligations resulting in financial loss to TTA. Credit risk is measured at fair value and is monitored on a regular basis.

Credit risk associated with TTA’s financial assets is minimal because the main debtor is the Victorian Government. In addition, TTA does not engage in hedging for its contractual financial assets and mainly obtains contractual financial assets that are on fixed interest, except for cash assets, which are mainly cash at bank.

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

($ thousand)

Financial institutions (AA

credit rating)

Government agencies (AAA

credit rating)Others (without

credit rating) Total

2013

Cash and deposits (Note 6) – – – –

Receivables(a) (Note 7) – – – –

Total contractual financial assets – – – –

2012

Cash and deposits (Note 6) 5,220 – – 5,220

Receivables(a) (Note 7) – – 6,371 6,371

Total contractual financial assets 5,220 – 6,371 11,591

Note: (a) The amount of receivables disclosed here excludes statutory receivables (i.e. amounts owing from the Victorian Government and GST input tax credit recoverable).

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


Ageing analysis of contractual financial assets

($ thousand)

Past due but not impaired

NoteCarrying amount

Not past due and not

impairedLess than

1 month 1–3 months3 months

– 1 year 1–5 years

2013

Financial assets

Cash and deposits 6 – – – – – –

Receivables 7 – – – – – –

Total – – – – – –

2012

Financial assets

Cash and deposits 6 5,220 5,220 – – – –

Receivables 7 6,371 6,371 – – – –

Total 11,591 11,591 – – – –

(d) Liquidity risk

Liquidity risk arises when TTA is unable to meet its financial obligations as and when they fall due. TTA operates under the Government fair payments policy of settling financial obligations within 30 days and in the event of a dispute, makes payments within 30 days from the date of resolution. It also continuously manages risk through monitoring future cash flows.

TTA’s exposure to liquidity risk is deemed insignificant based on prior periods’ data and current assessment of risk.

The following table discloses the contractual maturity analysis for TTA’s contractual financial liabilities.


Maturity analysis of contractual financial liabilities

($ thousand)

Maturity dates

NoteCarrying amount

Nominal amount

Less than 1 month 1-3 months

3 months- 1 year 1-5 years

2013

Financial liabilities

Payables

Other payables 11 – – – – – –

Amounts payable to other government entities/agencies 11 – – – – – –

Total – – – – – –

2012


Payables

Other payables 11 41,904 41,904 41,874 29 – 1

Amounts payable to other government entities/agencies 11 1,383 1,383 1,383 – – –

Total 43,287 43,287 43,257 29 – 1

(e) Interest rates exposure

Exposure to interest rate risk is insignificant and might arise primarily through TTA’s interest bearing liabilities. Minimisation of risk is achieved by mainly undertaking fixed rate or non-interest bearing financial instruments. For financial liabilities, TTA mainly undertakes financial liabilities with relatively even maturity profiles. TTA’s interest bearing liabilities are managed by DTPLI.

The following table shows TTA’s exposure to interest rate risk and the effective weighted average interest rate for each class of financial assets and liabilities.

Exposures arise primarily from assets and liabilities bearing variable interest rates.


Interest rate exposure of financial instruments

($ thousand)

Interest rate exposure

Note

Weighted average

interest rate

Carrying/nominal amount

Fixed interest rate

Variable interest rate

Non-interest bearing

2013

Financial assets

Cash and deposits 6 – – – –

Receivables 7 – – – –

– – – –


Payables

Other payables 11 – – – –

Amounts payable to other government entities/agencies 11 – – – –

– – – –

Net financial assets (liabilities) – – – –

($ thousand)

Interest rate exposure

Note

Weighted average

interest rate

Carrying/nominal amount

Fixed interest rate

Variable interest rate

Non-interest bearing

2012

Financial assets

Cash and deposits 6 4.25% 5,220 – 5,220 –

Receivables 7 6,371 – – 6,371

11,591 – 5,220 6,371


Payables

Other payables 11 41,904 – – 41,904

Amounts payable to other government entities/agencies 11 1,383 – – 1,383

43,287 – – 43,287

Net financial assets (liabilities) (31,696) – 5,220 (36,916)


Sensitivity disclosure analysis

Taking into account past performance, future expectations, economic forecasts and management’s knowledge and experience of the financial markets, TTA believes that interest rate movements, either way, will have a minimal impact on its financial instruments. The movement considered is a parallel shift of +1% and -1% on interest rate. TTA’s management cannot be expected to predict movements in market rates and prices; sensitivity analysis shown is for illustrative purposes only.

The following table discloses the impact on TTA’s net result and equity for each category of financial instrument held by TTA at year end as presented to key management personnel, if the above movement were to occur.

Interest rate risk sensitivity

($ thousand)

Interest rate

-100 basis points +100 basis points

Carrying amount Net result Equity Net result Equity

2013


Cash and deposits (i) – – – – –

Total impact – – – – –

2012


Cash and deposits (i) 5,220 (52) (52) 52 52

Total impact – (52) (52) 52 52

(i) Cash and deposits includes a deposit of $0 thousand (2012: $5,200 thousand) that is exposed to floating rates movements. Sensitivities to these movements are calculated as follows:

• 2012: $5,200 thousand x -0.01 = -$52 thousand; and $5,220 thousand x 0.01 = $52 thousand.

(f) Comparison between carrying amount and fair value

The fair values of financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.

($ thousand)

Carrying amount 2013

Fair value 2013

Carrying amount 2012

Fair value 2012


Cash and deposits – – 5,220 5,220

Receivables – – 6,371 6,371

Total contractual financial assets – – 11,591 11,591


Payables – – 43,287 43,287

Total contractual financial liabilities – – 43,287 43,287


19. Commitments for expenditureThe following commitments have not been recognised as liabilities in the financial statements.

($ thousand)

2013 2012

OLT Transition Amendment Deed – operations (Note a)

Payable:

Not longer than one year – 47,946

Longer than one year and not longer than five years – –

Longer than five years – –

– 47,946

NTS Contract – plant and equipment (Note b)

Payable:


Longer than one year and not longer than five years – 12,631


– 61,567

NTS Contract – intangible assets (Note b)

Payable:




– 47,323

NTS Contract – operations (Note b)

Payable:



Longer than five years – 45,288

– 182,767

Total commitments for expenditure (inclusive of GST) – 339,603

Less GST recoverable from the Australian Taxation Office – 30,873

Total commitments for expenditure (exclusive of GST) – 308,730

Note (a): The OneLink Transit Systems (OLT) Transition Amendment Deed provides for full assistance and cooperation from the incumbent ticketing services provider throughout the new ticketing system transition and implementation phases. This agreement was transferred to PTV on 1 January 2013 and expired on 31 July 2013.

Note (b): The NTS contract was awarded in July 2005 for the design, build and 10-year operation of the myki public transport ticketing system using smartcard technology. The operation phase of the NTS contract began on 8 May 2009 for initially 10 years with an option for a further two years. However the contract was renegotiated in March 2013 with a shorter contract operation term ceasing 30 June 2016. The contract was transferred to PTV on 1 January 2013.


20. Remuneration of auditors

($ thousand)

2013 2012

Victorian Auditor-General’s Office

Audit of the TTA’s financial statements 213 219

The Victorian Auditor-General’s Office has not provided TTA with any other services.

21. myki system integrity auditKamco operated the myki ticketing system, including management of the myki financial system general ledger under contract to TTA until 31 December 2012, being the date responsibility was transferred to PTV. The PTV Revenue Audit Team acting on behalf of TTA conducted its own assurance function on these activities. In addition, TTA annually commissioned an independent system audit on the myki ticketing system. The independent audit report was commissioned for 2012/13 with no significant issues being noted as at 31 December 2012.

22. Fare and cardholder funds administration

Until 31 December 2012 TTA was responsible for administering the collection and distribution of fare receipts captured by both the existing Metcard and new myki ticketing systems as specified in the Revenue Sharing and Ticketing Services Agreements with the DTPLI. TTA’s obligations were limited to fare receipts from ticket sales, and as such had no obligations with regards to fare evasion and therefore was not responsible for the completeness of public transport revenues.

TTA received fare receipts in its capacity as agent for PTV and transport operators to be distributed to them in accordance with their respective entitlements under the Agreements referred to above. The cash flows, bank balances and payables associated with these activities were therefore excluded from TTA’s accounts as they did not meet economic benefit or control criteria of Australian accounting standards. Similarly myki cardholders funds (‘myki money’) held in trust were not reported in TTA’s financial statements.

The following table shows the amounts of farebox distribution to DTPLI/PTV and V/Line.

For six months from 1 July 2012 to 31 December 2012

For the year ended 30 June 2012

Metcard $ 35,462,749 $ 425,688,336

myki $ 280,255,945 $ 265,857,213

Until 31 December 2012 TTA also received and managed myki customer money balances. These balances came from various channels including ticketing machines, railway stations, retail outlets, the internet and the PTV Hub (formerly MetShop). TTA performed the accounts receivable function for both ticketing systems and administered the agreements with OLT and Kamco to ensure cash collection services and payments via the banking system were managed effectively.

As at 30 June 2012, the following amounts were held in TTA managed bank accounts:

• For distribution to DTPLI/PTV and V/Line:

Metcard $2,068,827

myki $4,724,856

myki cardholders funds $17,049,645

Metcard bank accounts were closed after completion of distribution of fare receipts captured by the Metcard ticketing system. Management of myki bank accounts was transferred to PTV on 1 January 2013.

From 2 April 2012 PTV manages the revenue audit function which focuses on reviewing and reporting on controls around farebox revenue collection and distribution processes within public transport operators. Formal planned revenue audits are undertaken by TTA at metropolitan and V/Line train stations, as well as metropolitan and regional bus depots.


23. Asset impairmentOn 21 June 2011, the Premier announced that the Government would continue with the implementation and operation of myki, but with some changes to the project scope as follows:

• Removing V/Line intercity trains and long distance V/Line coaches from the initial scope until at least steady state operations are achieved in metropolitan Melbourne and major regional centres

• Eliminating to the extent possible the introduction of short term cards, which are currently only in use on certain regional bus services; and

• Operating trams without smartcard ticket vending machines (after Metcard equipment is removed).

Costs already incurred in regard to the second and third changes are accordingly subject to impairment.

The deferral of V/Line intercity trains and long distance V/Line coaches is not seen as an impairment event.

TTA has made the following impairment assessments:

• Short-term cards

In line with the Government policy announcement, all short-term cards in stock as at 30 June 2012 were written off with the exception of stocks required to support sales on regional buses for a reasonable period. Total amount of write-down as at 30 June 2012 was $15,702,136.

Myki deployment on Regional buses has now been completed with all remaining short-term card stock written off and physically destroyed in 2012 – 13.

• No myki CVMs on trams

As at 30 June 2012 all hardware and software costs attributable to tram CVMs were written off except for any reasonably expected recovery of hardware costs as spare parts for compatible network devices. The amount of impairment charge for 2011 – 12 was $197,095, resulting in total impairment charge of $13,078,028 as at 30 June 2012.

As at 30 June 2013 the remaining costs of tram CVMs of $1,661,268 were written off and tram CVMs were physically destroyed after usable parts were extracted. Refer to Note 9 (Table 9.2) and Note 10.


24. Glossary of financial terms and style convention

AAS

Australian Accounting Standard

AASB

Australian Accounting Standards Board

Actuarial gains or losses on superannuation defined benefit plans

Actuarial gains or losses reflect movements in the superannuation liability resulting from differences between the assumptions used to calculate the superannuation expense from transactions and actual experience.

ATO

Australian Taxation Office

Commitments

Commitments include those operating, capital and other outsourcing commitments arising from non cancellable contractual or statutory sources.

Comprehensive result

Total comprehensive result is the change in equity for the period other than changes arising from transactions with owners. It is the aggregate of net result and other non-owner changes in equity.

CPI

Consumer price index

Customer defined availability

A private company under contract to the state government operates and maintains the Metcard ticketing system for Melbourne’s public transport. The current contract was awarded in May 1994 to the consortium OneLink Transit Systems Pty Ltd.

Customer defined availability targets represent minimum levels of acceptable availability and performance, and allow for specified levels of non-availability due to maintenance, servicing and breakdowns.

The targets are included in the OneLink contract and determine whether OneLink incurs a penalty or receives an incentive payment for its performance.

Employee benefits expenses

Employee benefits expenses include all costs related to employment including wages and salaries, leave entitlements, redundancy payments and superannuation contributions.

Financial asset

A financial asset is any asset that is:

(a) cash

(b) an equity instrument of another entity

(c) a contractual right:

• to receive cash or another financial asset from another entity

• to exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable to the entity

(d) a contract that will or may be settled in the entity’s own equity instruments and is:

• a non derivative for which the entity is or may be obliged to receive a variable number of the entity’s own equity instruments

• a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own equity instruments.


Financial statements

Depending on the context of the sentence where the term ‘financial statements’ is used, it may include only the main financial statements (i.e. comprehensive operating statement, balance sheet, cash flow statements, and statement of changes in equity); or it may also be used to replace the old term ‘financial report’ under the revised AASB 101 (Sept 2011), which means it may include the main financial statements and the notes.

FRD

Financial Reporting Direction issued by the Department of Treasury and Finance.

GFS

Government Finance Statistics

GG

General government

Grants and other transfers

Transactions in which one unit provides goods, services, assets (or extinguishes a liability) or labour to another unit without receiving approximately equal value in return. Grants can either be operating or capital in nature. While grants to governments may result in the provision of some goods or services to the transferor, they do not give the transferor a claim to receive directly benefits of approximately equal value. Receipt and sacrifice of approximately equal value may occur, but only by coincidence. For example, governments are not obliged to provide commensurate benefits, in the form of goods or services, to particular taxpayers in return for their taxes. For this reason, grants are referred to by the AASB as involuntary transfers and are termed non reciprocal transfers.

Grants can be paid as general purpose grants which refer to grants that are not subject to conditions regarding their use. Alternatively, they may be paid as specific purpose grants which are paid for a particular purpose and/or have conditions attached regarding their use.

GST

Goods and services tax

IASB

International Accounting Standards Board

Intangible assets

Intangible assets represent identifiable non monetary assets without physical substance.

Interest expense

Costs incurred in connection with the borrowing of funds. Interest expenses include interest on bank overdrafts and short term and long term borrowings, amortisation of discounts or premiums relating to borrowings, interest component of finance leases repayments, and the increase in financial liabilities and non employee provisions due to the unwinding of discounts to reflect the passage of time.

Interest revenue

Interest revenue includes interest received on bank term deposits, interest from investments, and other interest received.

LSL

Long service leave

Net acquisition of non financial assets (from transactions)

Purchases (and other acquisitions) of non financial assets less sales (or disposals) of non financial assets less depreciation plus changes in inventories and other movements in non financial assets. Includes only those increases or decreases in non financial assets resulting from transactions and therefore excludes write offs, impairment write downs and revaluations.


Net result

Net result is a measure of financial performance of the operations for the period. It is the net result of items of revenue, gains and expenses (including losses) recognised for the period, excluding those that are classified as ‘other non owner changes in equity’.

Net result from transactions/net operating balance

Net result from transactions or net operating balance is a key fiscal aggregate and is revenue from transactions minus expenses from transactions. It is a summary measure of the ongoing sustainability of operations. It excludes gains and losses resulting from changes in price levels and other changes in the volume of assets. It is the component of the change in net worth that is due to transactions and can be attributed directly to government policies.

Non financial assets

Non financial assets are all assets that are not ‘financial assets’.

Other economic flows

Other economic flows are changes in the volume or value of an asset or liability that do not result from transactions. These include gains and losses from disposals, revaluations and impairments of non current physical and intangible assets; actuarial gains and losses arising from defined benefit superannuation plans; fair value changes of financial instruments and agricultural assets; and depletion of natural assets (non produced) from their use or removal. In simple terms, other economic flows are changes arising from market re measurements.

Payables

Includes short and long term trade debt and accounts payable, grants and interest payable.

PNFC

Public non-financial corporation

Receivables

Includes short and long term trade credit and accounts receivable, grants, taxes and interest receivable.

Sales of goods and services

Refers to revenue from the direct provision of goods and services and includes fees and charges for services rendered, sales of goods and services, fees from regulatory services, work done as an agent for private enterprises. It also includes rental income under operating leases and on produced assets such as buildings and entertainment, but excludes rent income from the use of non produced assets such as land. User charges includes sale of goods and services revenue.

SD

Standing Direction issued by the Department of Treasury and Finance.

Supplies and services

Supplies and services generally represent cost of goods sold and the day to day running costs, including maintenance costs, incurred in the normal operations of TTA.


Transactions

Transactions are those economic flows that are considered to arise as a result of policy decisions, usually an interaction between two entities by mutual agreement. They also include flows within an entity such as depreciation where the owner is simultaneously acting as the owner of the depreciating asset and as the consumer of the service provided by the asset. Taxation is regarded as mutually agreed interactions between the Government and taxpayers. Transactions can be in kind (e.g. assets provided/given free of charge or for nominal consideration) or where the final consideration is cash. In simple terms, transactions arise from the policy decisions of the Government.

WIP

Work in progress relates to part of the myki system that is still being developed.

Style conventions

Figures in the tables and in the text have been rounded. Discrepancies in tables between totals and sums of components reflect rounding. Percentage variations in all tables are based on the underlying unrounded amounts.

The notation used in the tables is as follows:

.. zero, or rounded to zero

(xxx.x) negative numbers

200x year period

200x-0x financial year period

The financial statements and notes are presented based on the illustration for a government department in the 2012-13 Model Report for Victorian Government Departments.


Accountable Officer The Financial Management Act 1994 part 7 section 42 (2) defines the accountable officer for a public body as the chief executive officer of that body.

DTPLI Department of Transport Planning and Local Infrastructure (Formerly Department of Transport)

DPC Department of Premier and Cabinet

ESS Employee Shares Schemes

FRD Financial Reporting Directions

FTE Full-time employees

Kamco Keane Australia Micropayment Consortium Pty Ltd, the contractor for the new myki ticketing system.

LPG Liquefied petroleum gas

Metcard Melbourne’s former ticketing system, operating on train, tram and bus services (being replaced by myki).

Metro Trains Melbourne

Metro Trains Melbourne (MTM) operates Melbourne’s metropolitan train network including all customer service activities as well as engineering and maintenance of rail infrastructure and rolling stock. MTM is a fully integrated Joint Venture between Hong Kong’s MTR Corporation, John Holland Melbourne Rail Franchise Pty Ltd and UGL Rail, division of United Group Limited.

MJ Megajoule

myki Victoria's new ticketing system. It is replacing the Metcard and V/Line ticketing systems, as well as paper tickets used on regional buses in Geelong, Seymour, Ballarat, Bendigo, Warragul and the Latrobe Valley. It is also extending to V/Line interurban trains and possibly longer distance V/Line services at a later stage.

NTS New Ticketing System (myki)

OLT OneLink Transit Systems Pty Ltd. Supplier of current Metcard system. OneLink consortium consists of: Ingot Capital Management Pty Ltd and the R Noble, JF & LJ Carroll Family Trust.

PTV Public Transport Victoria

SD Standing Direction

TTA Transport Ticketing Authority – the operating name of the Public Transport Ticketing Body.

V/Line V/Line Pty Ltd operates a network of passenger trains in Victoria and maintains and operates the regional below rail network, including being a network access provider for freight operators.

V/Line is fully owned by the State of Victoria, through its parent entity, V/Line Corporation, a statutory corporation.

Coach services throughout regional Victoria are run under the V/Line brand but operated by the private sector under contract to DTPLI.

VicTrack Victorian Rail Track

Acronyms and terms

Authorised and produced by the Transport Ticketing Authority

© Transport Ticketing Authority 2013

This document is available in an accessible format at ptv.vic.gov.au

Print managed by Finsbury Green

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