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Moorebank Intermodal Company—Report for 2013-14


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Annual Report Suite 2, Level 27 - 1 O’Connell Street - Sydney NSW 2000 2014

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014

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pg 5 About Moorebank Intermodal Company

pg 6 MIC’s objectives

pg 7 Vision

pg 9 Message from the Chair and CEO

pg 15 Operational Report

pg 24 Organisational structure

pg 25 Values

pg 27 Directors’ Report

pg 33 Auditor’s independence declaration

pg 35 Corporate Governance Statement

pg 43 Financial Statements

pg 47 Notes to the Financial Statements

pg 65 Directors’ Declaration

pg 66 Independent Auditor’s Report

pg 68 Regulatory Reporting Requirements Index

pg 70 Approval by Directors

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 3 › 3 ›

Contents

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 3 › 5 › 4 ‹

Moorebank Intermodal Company

About

contributions to the Northern Sydney Freight Corridor Project and the Port Botany Freight Line Ύ the NSW Government’s target of doubling

the proportion of containers moved by rail through NSW ports by 2020 Ύ the NSW Freight and Ports strategy, which recognises the role of the Moorebank

terminal in the overall freight network and the importance of Moorebank as a broader freight precinct Ύ Infrastructure Australia’s National Land

Freight Strategy and its National Ports Strategy, which both emphasise the importance of intermodal terminals and improved rail logistics to make port-related activities in the freight network more internationally competitive.

The Australian Government established Moorebank Intermodal Company (MIC) on 13 December 2012. Its purpose is to oversee the development and future operation of the Moorebank Intermodal Terminal (the Moorebank terminal) in Sydney’s south-west, a nationally significant infrastructure project that will boost Australia’s productivity. A Board was appointed in December 2012 and MIC started operating in February 2013.

MIC is a Government Business Enterprise, incorporated under the Corporations Act 2001 and operating under the Commonwealth Authorities and Companies Act 1997 (from 1 July 2014, the Public Governance, Performance and Accountability Act 2013). The organisation is a wholly owned Australian Government Company

represented by two Shareholder Ministers: the Minister for Infrastructure and Regional Development (being the Responsible Minister) and the Minister for Finance. MIC operates at arm’s-length from Government and with a commercial focus. This gives MIC the flexibility to work with potential operators, builders and other partners to maximise the opportunities for private sector involvement and innovation at the terminal.

The decision to deliver the Moorebank terminal followed a feasibility study into urban freight solutions, combining the expertise of three Australian Government Departments and leading industry experts, as well as a cost-benefit analysis and market soundings that showed strong support for the project.

The Moorebank terminal is an important part of the Australian Government’s commitment to work with the New South Wales Government to increase national and state productivity by improving efficiency and freight throughput at Port Botany and across Australia. It will enable more freight to be moved by rail, instead of road, both locally and nationally. The terminal will have an import-export (IMEX) facility with a direct rail link to Port Botany, bypassing Sydney’s constrained road network. It will also have an interstate freight terminal, connecting with the national freight rail network.

The project complements Australian and State Government infrastructure plans, including: Ύ the Australian Government’s investment in the Australian Rail Track Corporation’s

North-South Strategy, as well as its

Moorebank Intermodal Terminal

(ACN 161 635 105)

Message from the Chair and CEO

Ύ to do all things that are necessary, convenient or incidental to carrying out or for the attainment of these objectives.

In achieving these objectives, MIC will deliver a value-for-money solution to the Australian Government and act in an environmentally and socially responsible manner with due regard to local communities’ views. This means the terminal will be designed, developed and operated in a way that will minimise impacts on nearby residents and businesses, while at the same time operating commercially and efficiently.

Ύ to facilitate the development of an intermodal freight terminal at Moorebank, including an IMEX facility, an interstate freight terminal capable of catering for 1,800 metre trains and ancillary facilities, by optimising private sector investment and innovation in the development, construction and operation of the intermodal terminal

Ύ to facilitate the operation of a flexible and commercially viable common user facility which shall be available on reasonably comparable terms to all rail operators and other terminal users

Ύ to ensure the intermodal terminal operates with the aim of improving national productivity through an efficient supply chain, increased freight capacity and better rail utilisation Ύ to operate on commercially sound

principles, having regard to the Australian Government’s long-term intention to sell its interest in the company Ύ upon notification by the Commonwealth

shareholder, provide assistance as required to facilitate a sale of the Commonwealth’s interest in the company

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MIC’s objectives MIC’s constitutional objectives are:

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Vision MIC has a clear vision for 2020:

MIC’s goal is to create a world-class intermodal terminal that will facilitate a significant mode shift to rail transport of containerised freight.

Through partnerships MIC is creating a successful and sustainable terminal. The terminal will be efficient and effective, and will be valued by multiple users. It will make the most of opportunities presented by the precinct.

MIC will be a game changer in container freight logistics. The model delivery of this business will be widely acknowledged.

As a good neighbour MIC listens to, respects and contributes positively to the community.

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 3 › 9 ›

Message from the Chair and CEO

capacity to handle this additional container traffic. The current terminals for interstate freight are small and out-dated - and do not connect easily with the rail freight network the Australian Government has been investing in.

The Board and executive remain strongly convinced of the suitability of the Moorebank site to provide a large part of the extra intermodal capacity that Sydney needs. The intended site, which is owned by the Australian Government, is large enough to support interstate freight trains and handle a significant proportion of the expected growth in container numbers. It is extraordinarily well located: connected to major rail and road freight corridors, next to existing industrial areas, and close to the major and growing freight markets in western and south-western Sydney - where two-thirds of Port Botany’s containerised freight is headed.

In terms of community impact, the site is cushioned on three sides by a broad swathe of Crown land to the east and south, and an industrial estate to the north. More proximate residential land to the west will be separated from the terminal by a broad green belt between the Georges River and the terminal, which will be rehabilitated in the very first stage of work onsite.

In 2013-14 MIC made good progress in executing its procurement strategy. By the end of the year MIC was in direct negotiation with a potential candidate to deliver and operate the Moorebank terminal. MIC also made headway in collaborating with government agencies to identify the terminal’s external infrastructure requirements, continued its engagement with the local community and industry, and strengthened its internal capabilities.

A further 12 months of industry consultation has only served to underscore the clear need for a new intermodal terminal. The terminal will allow some of the forecast container growth at Port Botany to move by rail, and keep interstate freight moving.

Moving freight effectively is extremely important in a city the size of Sydney. Currently, Port Botany receives around a third of Australia’s IMEX container freight. The vast majority of the two million containers moving through the port each year arrives or leaves by truck. With this container trade forecast to more than triple by 2030, it will not be practical to move all these extra containers on Sydney’s already congested road network.

At the same time, interstate freight is expected to grow by more than 3% per year over the next 20 years. Sydney does not have the intermodal

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MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 10 ‹ 3 › 11 ›

Getting negotiations under way

The year’s main achievement came in May 2014; MIC began direct negotiations with Qube and Aurizon - together the Sydney Intermodal Terminal Alliance (SIMTA).

In February 2014, MIC’s Request for Expression of Interest received an enthusiastic response from industry. Submissions confirmed that the project can result in a value-for-money outcome for the Australian Government. After a robust evaluation, MIC determined the response from SIMTA was so strong compared to the other respondents that it warranted a limited period of direct negotiation.

This negotiation is currently under way, with two other respondents asked to remain on standby. Industry has welcomed the decision to begin direct negotiations. The move is seen as a sensible outcome, which tailors the procurement process to the responses received and prevents unsuccessful participants from incurring substantial unnecessary costs.

In undertaking these negotiations, the Board and executive are very clear about several non-negotiable policy objectives, particularly the terminal’s open access regime. This Commonwealth requirement, to provide an open access facility that encourages competition and helps to boost national productivity, has been a major focus of the last year. MIC has put considerable time and energy into determining how best to deliver a common user terminal, with access provided on a strictly non-discriminatory basis.

Devising a workable access model requires balancing the needs of many different users, with the Commonwealth’s productivity goals and the operator’s commercial requirement for a financial return. Early negotiations indicate the Commonwealth’s open access policy objective aligns with SIMTA’s commercial objective to get as much throughput through the terminal. Increasing throughput to the terminal spreads its costs over multiple users.

Preparing for delivery

Importantly the Moorebank terminal will not be an isolated facility, but a central hub in a complex logistics and transport network, including a dedicated freight rail line. A critical part of its development is understanding the impact it will have on surrounding transport infrastructure - and vice versa.

To this end, during the year, MIC further tested demand volume assumptions and forecast the terminal’s likely impost on current road congestion. MIC also worked closely with NSW Roads and Maritime Services, Transport for NSW, Australian Rail Track Corporation (ARTC) and NSW Ports to determine the capacity constraints of external road and rail infrastructure and develop potential solutions. MIC now has a clear view on required improvements to the local road and rail infrastructure, and is already working cooperatively with key stakeholders.

In 2013-14, MIC also reached an in-principle agreement with the Commonwealth on key land lease arrangements, essential to the terminal’s delivery.

Finalising the Environmental Impact Statement

During the year, MIC spent considerable time evaluating the planning approval requirements. This was because the eventual terminal concept design may differ substantially from the original concept used to develop the business case and an initial draft Environmental Impact Statement (EIS). MIC therefore withheld the draft EIS and adopted a new planning approval strategy. This strategy will better satisfy the Commonwealth approval requirements, under the Environment Protection and Biodiversity Conservation Act 1999. It also better satisfies the NSW approval requirements for a State significant development under the Environmental Planning and Assessment Act 1979.

The revised planning approvals strategy uses a generic EIS to accommodate different site layouts. It includes three options for the rail connection to the site, an increased warehousing area and an early works package. The generic EIS will be used to seek approval of the terminal concept under NSW planning laws. If the concept approval is granted, further planning approvals will be required before construction can commence. Another EIS, containing a detailed assessment of the impacts of Stage 1 of the actual terminal development, will be prepared to seek these approvals.

Listening to the community

Although the terminal will benefit the broader community through billions of dollars in productivity gains and lower traffic growth, this comes at some cost to the immediate community. Part of the issue for MIC’s neighbours is uncertainty around the likely impact of traffic, air and noise pollution. This cannot be resolved until the EIS is finalised, at which time a raft of measures will be determined to reduce impacts. Until then, MIC is unable to offer residents detailed and specific mitigation measures. There is nevertheless a firm and general commitment to meet all government environmental guidelines and build the facilities using a staged approach.

To address community concern, MIC will continue to engage with local residents, councils, chambers of commerce and industry groups, including by conducting open forums and topic-specific consultation sessions with interested parties. These sessions informed the preparation of the EIS and started MIC’s process of working with the community to address local issues.

Building the MIC team

By year end, MIC had built an excellent team with increased technical skills, developed all corporate systems, and established an internal audit function and a risk management framework. The company has a strong view of its direction, values and behavioural expectations. It came in below budget for 2013-14. It also received an unqualified year-end audit report.

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Kerry Schott Ian Hunt

Chair Chief Executive Officer

The year ahead - MIC has four main areas of focus in the coming year:

1. PROCUREMENT By the end of 2014, MIC hopes to be in a position to confirm the preferred proponent to build and operate the terminal and negotiate contractual close. Early next year, MIC plans to reach financial close. This will be done in accordance with the commercial principles, including developing an open access regime that is appropriate for the operator, the Australian Government and prospective terminal users. It will also develop a warehouse strategy to attract businesses that bring a significant portion of terminal container throughput. Other goals include finalising the lease between MIC and the Commonwealth.

4. INDUSTRY ENGAGEMENT MIC will continue to work closely with government and industry stakeholders to drive associated improvements in port, rail and road access to create more efficient freight supply chains.

3. COMMUNITY MIC will continue engaging with its local community through regular consultation, particularly during the exhibition of the EIS. MIC is committed to being available to answer community questions and concerns with candour and empathy - and ensure community needs are taken into account during all planning for delivery and operation. Building trust requires MIC to be ethical, open and honest in all its interactions with the community. By making data publically available and consistently delivering on commitments, MIC will build trust and be a

good neighbour.

2. DELIVERY MIC will continue to work closely with the Australian and NSW Governments to ensure the terminal’s requirements are incorporated into the general and specific planning for major infrastructure in the south west Sydney area. MIC plans to exhibit an EIS for the terminal in October 2014 or soon after, and aims to gain: Commonwealth Department of the Environment Project Approval by the first quarter of 2015; and NSW Department of Planning & Environment early works and terminal concept approvals by the second quarter of 2015.

Acknowledgements

Many of MIC’s achievements over the last year can be attributed to the Board’s close involvement in implementation and decisions. We would like to thank the directors for their considerable, hands-on efforts, especially Stephen Williams, Chair of the Audit and Risk Committee, and Ray Wilson, Chair of the Implementation Committee.

We also acknowledge the continued support of our shareholder ministers and their departments, the collaborative approach of the NSW Government and the willingness of industry participants to share their expertise, ideas and experience.

Finally, we pay tribute to the professionalism and dedication of the MIC team. We look forward to continuing to make steady progress in delivering this important infrastructure project.

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 3 › 13 ›

Procurement strategy

MIC’s procurement strategy has been designed to facilitate the delivery of a terminal, providing both IMEX and interstate terminal services on an open access basis and maximising private sector participation in its development, operation and funding. By year end, MIC had completed the third phase of its four-phase procurement process.

The Expression of Interest (EOI) phase commenced in December 2013, with MIC issuing a Request for EOI for the terminal development. This process gave industry respondents the opportunity to demonstrate their capacity and capability to deliver and operate the Moorebank terminal, as well as their willingness to invest in and take on part of the risk involved in the project. After robust analysis of the submissions, in May 2014, MIC announced its intention to enter into a limited period of direct negotiation with the top-ranked respondent, SIMTA.

This step was taken because SIMTA’s response to the criteria in the EOI was superior, relative to other respondents. SIMTA’s proposal included developing both IMEX and interstate terminals as soon as possible, significant capital investment

by SIMTA, and a willingness to take risk on the freight volumes that would use the terminal.

The negotiation, which has commenced, is an interactive and structured process to determine whether suitable terms for the development and operation of the terminal can be agreed. MIC is working closely with SIMTA as it produces its detailed proposal to develop and operate the terminal. Ample opportunity is being provided to test commercial and technical concepts.

MIC is well aware of the risks of negotiating directly with one proponent; however, these can be managed. To mitigate these risks and sustain some competitive tension, MIC has retained the right to consider other options, should direct negotiations with SIMTA fail to meet approval hurdles during the negotiation period. Two respondents to the EOI are on standby for this purpose.

Following contractual agreement, MIC’s aim is to move to financial close as soon as possible, subject to obtaining final planning and environmental approvals.

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Operational Report

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014

Timeframe and milestones

COMMENCE EARLY WORKS ON SITE

FINAL PLANNING APPROVALS AND FINANCIAL CLOSE

COMMENCE MAIN CONSTRUCTION WORKS

DIRECT NEGOTIATION PHASE INITIATED

CONTRACTUAL CLOSE

May December June-December May-June June-January

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2014 2014 2015 2015 2016

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014

Site rehabilitation works

To mitigate potential approval delays, MIC extracted a package of site rehabilitation works from the existing Environment Protection and Biodiversity Conservation Act 1999 referral and obtained a separate approval for these works from the Commonwealth Minister. These works are likely to be common to any proponent’s proposal and, indeed, would be required regardless of the type of development on the site. Because of this, these works were able to be subjected to environmental assessment before selecting the terminal operator. Given the nature of the works, they are not regarded as a ‘controlled action’, so no further approval is required.

The works include removing hazardous material, stabilising an area that Department of Defence (Defence) previously used for plant and equipment operation training and some of the remediation, including removing an underground storage tank. By undertaking these works before receiving project approvals, MIC can reduce the environmental, and health and safety risks associated with decommissioning the site by the Defence, which is scheduled to vacate in mid-2015. It also allows MIC to progress construction of the terminal as soon as possible after the project approvals are granted, and enables some work - in particular rehabilitating the greenbelt between the Georges River and the terminal - to be carried out on site immediately after the site is available.

NSW approval strategy

Under the NSW planning approval process, MIC is lodging a staged development application for the terminal as a State significant development. The EIS has been prepared to obtain a concept approval for the terminal, as well as an early works package. This package includes a number of activities, such as: establishing construction facilities, remediating some contaminated land, replanting native vegetation to establish a conservation area within Defence’s operational training area (known as the ‘dust bowl’), and conducting heritage impact mitigation works, including archaeological salvage of potential Aboriginal and European archaeological deposit sites.

MIC has completed the EIS and lodged the initial staged development application for the terminal concept approval, and final approval of the early works package. This provides the opportunity for a staged development approval by mid-2015, facilitating a commencement of the early works as soon as the site is available.

Environmental approvals process

During the year, MIC investigated alternative environmental and planning approval strategies to mitigate potential delays to delivering the terminal. This was driven by a concern that the terminal concept design and layout - in particular the rail connection point - may differ substantially from the concept design and layout used for the original draft EIS. As a result, MIC withheld submitting the draft EIS. Instead, the draft EIS has been updated to adopt a new planning approval process that includes a generic EIS to accommodate different site layouts, rail connection options and warehousing capacity.

Commonwealth approval strategy

MIC has amended the current Environment Protection and Biodiversity Conservation Act 1999 referral to include southern and central rail access connection options (in addition to the northern option contemplated in the original referral) and increase the warehousing area on the terminal site to about 300,000 square metres. MIC has revised the EIS to reflect these changes and recommenced the approval process. MIC anticipates Commonwealth approval could be obtained by early 2015.

Open access strategy

MIC is developing an open access regime for the Moorebank terminal to maximise its productivity benefits by facilitating competition among rail operators and terminal users. During the year, MIC developed proposed access requirements for negotiation with the operator. These include requirements for operating the terminal as a whole, as well as requirements for the operator’s interactions with access holders, to ensure current and prospective terminal users can obtain access to the terminal’s services on a non-discriminatory basis. MIC’s proposed requirements include terms to ensure:

Ύ terminal capacity is allocated fairly between access seekers and access holders Ύ negotiations between the operator and access seekers are efficient and

non-discriminatory Ύ operating protocols at the terminal do not discriminate between access holders Ύ prices are non-discriminatory

Ύ there are material consequences for non-compliance with the access regime.

MIC is liaising closely with Shareholder Departments and the ACCC regarding the Commonwealth’s objectives for open access and other competition issues.

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MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 18 ‹ 3 › 19 ›

External infrastructure

The Moorebank site is ideally located for ready connection to key road and rail freight transport corridors. However, these corridors suffer existing congestion and capacity constraints. These constraints will need to be addressed in the future to meet the needs of all road and rail users. During the year, MIC worked with Roads and Maritime Services, Transport for NSW, ARTC and NSW Ports to investigate the constraints and issues with the external infrastructure supporting the Moorebank terminal and to identify potential solutions to problems.

Road access

The primary road access to and from the terminal is via Moorebank Avenue to the M5 Motorway and from there to the Hume Highway, M7 Motorway and elsewhere. Development of the terminal will include an upgrade of Moorebank Avenue to four lanes to accommodate terminal traffic. The Moorebank Avenue/Anzac Road intersection will also be upgraded and new intersections developed for terminal access points along Moorebank Avenue.

The M5 Motorway already suffers from peak hour congestion, and this will worsen with the development expected in western Sydney and the south-west Sydney growth corridor. Of particular concern is the weave movement on the M5 Motorway between Moorebank Avenue and the Hume Highway, where traffic entering the motorway from Moorebank Avenue crosses paths with traffic exiting the motorway to the Hume Highway.

The congestion and weave constraints on the M5 Motorway are a significant issue for existing road users, and they are also likely to hamper efficient access to and from the terminal for trucks during the peak periods. To help understand how the issue could be alleviated, in 2013-14, MIC investigated and prepared strategic level concept designs and construction cost estimates for a:

Ύ possible solution to the M5 Motorway weave problem Ύ an upgrade and extension to Cambridge Avenue, to the south-west of the terminal,

which would provide a new road link to accommodate residential and economic growth in the area, and an additional access route to the terminal.

These two possible solutions to existing road issues are subject to further discussions with the NSW and Commonwealth Governments. They are separate from measures likely to be required through the planning approval process to address traffic impacts caused by the terminal.

Rail capacity

The capacity of the rail network will play a critical role in the level of throughput that can be achieved at the Moorebank terminal. The rail freight network between Port Botany and Moorebank consists of the Metropolitan Freight Network (MFN) and the Southern Sydney Freight Line (SSFL).

Preliminary analysis by MIC indicates that the SSFL will likely need to be upgraded in the future to secure the estimated 1.05 million ‘twenty-foot equivalent units’ (TEU) throughput

South Western Motorway (M5)

Main South Railway Line

Hume Highway

East Hills Railway Line

Casula

Glenfield

Wattle Grove

Liverpool

Moorebank

Offset areas 1- Casula offset area (hourglass land) 2- Moorebank offset area 3- Wattle Grove offset area

Moorbank Intermodal Terminal Site

SIMTA Site

1 2

3

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 20 ‹ 3 › 21 ›

the NSW and Commonwealth regulators. The consultation will include open information sessions, a series of stakeholder briefings, a letter box drop, displays of the EIS and explanatory material in public locations (e.g. libraries and council offices) and information on MIC’s website.

In June 2014, MIC also launched a citizens’ jury to develop a program to deliver a direct benefit to people living near the terminal. This program is in addition to measures that MIC will be required to implement as conditions of environmental and planning approvals. The program recognises that, while the terminal has broad benefits, its impacts are experienced locally. newDemocracy, an independent, non-partisan research foundation, is overseeing the jury, which was randomly selected from suburbs near the terminal. The jury, which met between late July and September 2014, is being asked to weigh up information about the terminal and potential community projects - including the advice of any ‘witnesses’ they call and the views of other community members - before deciding what the program will include. The program would be delivered in parallel with the terminal’s construction.

Stakeholder engagement

During the year, MIC continued to meet with key stakeholders to progress or resolve project development issues. This included meetings and briefings with: Shareholder Ministers, the office of the NSW Minister for Roads and Ports, Liverpool City Council, Campbelltown City Council, Transport for NSW, NSW Department of Planning & Environment, Roads and Maritime Service, NSW Ports, Commonwealth Department of the Environment, Infrastructure Australia and Infrastructure NSW. MIC also provided project briefings and presented to a range of

other stakeholders. These included the Georges River Combined Councils Committee and the Australian Logistics Council Forum.

Business risks

MIC manages risk responsibly and incorporates risk management principles into decision making at all levels. MIC has prepared a Risk Management Plan to provide a framework for identifying and managing the risks associated with the procurement, implementation and operational delivery phases of the Moorebank terminal.

Work Health and Safety

Safety is MIC’s highest priority. During the year, MIC implemented a risk management approach to workplace health and safety, which includes processes to identify, assess and control risks to a level as low as reasonably practical. In 2013-14, MIC’s work health safety policies and procedures reflected the fact that it operated solely within a standard office environment.

Before construction activities begin, MIC will review and update its policies and procedures to cover the added hazards and risk associated with MIC’s surveillance of and exposure to construction activities. MIC will also develop reporting and due diligence procedures to enable MIC to satisfy itself that the operator and its contractors fulfil their workplace health and safety responsibilities.

at Moorebank. However, the MFN will reach capacity much later and is therefore not a constraint for Moorebank. During the

year, MIC commissioned a rail capacity assessment study, which confirmed the SSFL would need upgrading and recommended that ‘passing loops’ be added near Leightonfield and Warwick Farm. The study also explored potential operational solutions, including port rail operations, longer trains, short term ‘train campaigning’ and access pricing. MIC will work with ARTC to explore the scope and timing of future SSFL upgrades.

Rail interface at Port Botany

Although Port Botany is already connected directly to the MFN via the Port Botany Freight Line, the poor configuration of the rail sidings at the port, stevedore operational practices and pricing of rail services impair the cost effectiveness and reliability of rail freight at the port. During the year, MIC participated in the Port Botany rail industry working group, convened by NSW Ports, to provide informed input towards a strategy to achieve a rail capacity at Port Botany for transporting up to 3 million TEUs by rail to and from Port Botany by 2030.

MIC will continue to work with NSW Ports and the working group, emphasising: the importance of the intermodal terminal to the growth of container trade through Port Botany; the importance of port-rail interface improvements to the success of the intermodal terminal; and the need for early commitment from the port community to address the port-rail connection issues.

Community engagement

In October and November 2013, MIC undertook open forum community consultations. These sessions were followed up in early 2014 with smaller, invitation-only discussions with community members who showed specific concerns and specialist knowledge in areas, such as traffic impacts and air quality. MIC also regularly briefed local councils and other community representatives.

The most notable concern raised consistently across all consultation forums was traffic impacts, followed by human health, air quality and noise. As a consequence, additional work was undertaken as part of preparing the EIS to assess these issues more comprehensively. Particular attention was given to robust forecasting of traffic generation rates, and peer reviews of the technical studies that support the EIS.

Community feedback has also raised the issue of trust; trust that the impacts of the terminal will be managed to meet government guidelines, and trust that any conditions on the approval to develop the terminal will be implemented. MIC is working to address these concerns by sharing detailed information with community members, including the results of technical studies and information on how the approval and enforcement processes work. MIC also genuinely seeks and responds to feedback. This has informed MIC’s approach to community consultation and engagement.

In the next year, MIC intends to conduct a significant program of community consultation to coincide with exhibition of the EIS. This consultation will aim to explain the contents of the EIS and provide information on how to make a submission on the EIS to

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Ecologically sustainable development

MIC is committed to the principles of ecologically sustainable development, as demonstrated by:

Ύ The business case for the terminal, which balances long-term and short-term economic, environmental, social and equitable considerations (the ‘integration principle’). This was achieved through a cost benefit analysis that considered and valued the various economic and non-economic costs and benefits of the terminal.

Ύ The preliminary concept design for the terminal, which includes measures that may improve some environmental outcomes. For example, the inclusion of water sensitive urban design features will prevent degradation and may improve the water quality of the Georges River.

Ύ MIC’s commitment to establish a conservation zone at the terminal. Vegetation along the Georges River will be restored and a package of biodiversity offsets protected to compensate for onsite clearing.

Ύ The EIS, which shows how the terminal could be developed to minimise impacts on air quality, human health, traffic congestion, biodiversity, water quality, noise and visual amenity.

Performance measures

During the year, MIC made good progress against the performance indicators set out in its 2013-14 Corporate Plan. The business achieved the majority of its targets, with the remainder either requiring revised planning approval or being determined as part of ongoing procurement activities.

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MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014

MIC’s behavioural aspirations are:

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Organisational structure Values

During the year, MIC created a compact and practical organisational structure.

we work as a team and promote team success, act in a spirit of cooperation, and foster good relations with all our colleagues (internal and external).

we believe in our vision and inspire others, influence others to achieve the best results, and take responsibility for solving problems.

we are ethical, open and honest in all we do, we are dependable and reliable, and we do the right things.

we treat everyone fairly and with respect and appreciate the same in return. We support and consider others, and value diversity and unique contributions.

we demonstrate commitment to high standards, and expect and support excellence in others. We are solution orientated and results driven, and are dedicated and tenacious.

Collaboration

Leadership

Integrity and trust

Mutual respect

Achievement

BOARD

CEO

PROCUREMENT DIRECTOR DELIVERY DIRECTOR

FINANCE DIRECTOR

GENERAL COUNSEL

POLICY AND CORPORATE AFFAIRS MANAGER

PROJECT MANAGER

PROJECT ENGINEER

OPERATIONS COORDINATOR GOVERNANCE COORDINATOR

COMMUNICATIONS COORDINATOR

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 3 › 27 › 26 ‹

Directors’ Report

Board of Directors

The following persons served as directors of Moorebank Intermodal Company Limited during the financial year ended 30 June 2014.

All Directors were appointed on three year terms.

Dr Schott is Chairman of the Moorebank Intermodal Company Ltd, a Director of NBN Co, a Director of the TCorp Board in NSW, a member of the Infrastructure Australia Board, Patron and Board member of Infrastructure Partnerships Australia, a member of the Macquarie University Council, and a member of the Whitlam Institute Board.

Dr Schott is the Project Director for the NSW Treasury managing the current sales of the government owned electricity generating plants. Dr Shott was previously the Project Director

Kerry Schott, Chair BA (Hons), MA, DPhil

Appointed: 13 December 2012

of the successful sale and lease of the Sydney desalination plant. She completed her role as CEO of the Commission of Audit for the NSW Government early in 2012. Previously she was Managing Director and CEO of Sydney Water from 2006 to 2011.

Dr Schott spent 15 years as an investment banker, including as Managing Director of Deutsche Bank and Executive Vice President of Bankers Trust Australia. During this time she specialised in privatisation, restructuring, and infrastructure provision.

Dr Schott holds a doctorate from Oxford University, a Masters of Arts from the University of British Columbia, Vancouver and a Bachelor of Arts (first class Honours) from the University of New England.

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 28 ‹ 3 › 29 ›

Ms Filson has experience in construction law and financial services in both regulatory and private sector settings. She has previously worked with PPPs. Ms Filson has strong commercial, financial and governance skills, with extensive experience working with audit and risk committees. Ms Filson’s current affiliations include Director of Port of Hastings Development Authority and Director of Linking Melbourne Authority.

Mr Binsted is presently Chairman of Ariadne Capital Pty Ltd, a Director of the Clean Energy Finance Corporation, a Member of the Council of the Australian National Maritime Museum and a Member of the Investment Advisory Committee for Ellemby Pty Ltd.

Mr Binsted has over thirty years’ investment banking experience. During that time, he held senior positions at Lloyds Corporate Advisory Services, Schroders and Salomon Smith Barney (now Citigroup), as well as being Managing Director and Joint CEO of Lazard. Mr Binsted was Chairman of Sydney Ports Corporation from 2006 to December 2009 and the State Rail Authority of NSW from 1998 to 2002. He was previously a Director of Donaldson Coal and, until 30 June 2014, was Chairman of the Financial Sector Advisory Council. He was also a Member of the Australian Financial Centre Forum (Johnson Report) and the Shipping Reform Task Force.

Ms Thurgood has over 20 years’ experience in dynamic, complex, fast-growing global companies in the banking, finance, investment and infrastructure sectors. Her extensive risk-skill experience extends across a wide range of industries, including infrastructure, agriculture, construction, renewable energy, mining and consumables. Ms Thurgood is currently a Non-Executive Director of Clearview Life Nominees. Mr Brown has a strong infrastructure background and an active public policy role in western Sydney. Between 1992 and 2011, Mr Brown was Managing Director and Deputy Chair of the peak industry groups, Infrastructure Partnerships Australia and Tourism & Transport Forum. He was recently a member of the expert panel for the Joint Federal/State Study on Aviation Capacity in the Sydney Region and was a member of the NSW Government’s Transport Blueprint Panel. Mr Brown was a founding director of the Greater Sydney Partnership, The Parramatta Economic Development Forum, a strategic adviser to the Committee for Sydney and an Adjunct Professor in the UTS Business School. He is currently the Executive Chair of a strategic engagement firm, Taylor Street Advisory. Mr Brown also sits on the boards of University of Western Sydney and ANZ Stadium, and chairs the Western Sydney Leadership Initiative.

Mr Williams has a strong project finance background and has led deal teams from a borrower and lender perspective. He has skills and experience in investment appraisal, strong commercial and risk sharing appreciation and a thorough understanding of private sector finance and investment, gained from both an industry and finance sector perspective. Mr Williams’ experience includes CEO, Country Executive and Head of Banking, Royal Bank of Scotland (RBS) Australia (1999 - 2012).

Ms Bull has a strong background in construction, engineering and transport, leading transformational projects to drive business performance turnaround. She has managed complex expectations and inter-relationships between public and private sector and advised on major public private partnerships (PPPs), alliances and joint ventures dealing with infrastructure investment opportunities. An engineer by training, Ms Bull is currently a Non-Executive Director of AirRoad Pty Ltd, Fancy Engineering Ltd and Guide Dogs NSW/ACT. She is Managing Director of boutique strategy consultancy Altura Partners Pty Ltd.

Mr Wilson has a strong background in accounting, investment banking and large scale infrastructure development. Mr Wilson is a Founding Principal and Director of Plenary Group - an international infrastructure business. Mr Wilson’s experience also includes Head of Infrastructure and Head of Debt Markets and Securitisation at Barclays Bank/ABN AMRO. Prior to his investment banking career, Mr Wilson was a chartered accountant at Price Waterhouse and KPMG.

Stephen Williams MBA

Appointed: 13 December 2012

Zorana Bull BA, MA, GAICD

Appointed: 8 May 2013

Ray Wilson ACA

Appointed: 13 December 2012

Claire Filson LLB, MBA

Appointed: 13 December 2012

Paul Binsted BEc, LLB

Appointed: 8 May 2013

Louise Thurgood BA, MBA, GAICD

Appointed: 8 May 2013

Christopher Brown AM, FAICD

Appointed: 8 May 2013

‘Andrew Fraser resigned as Director of MIC on 5 May 2014.’

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 30 ‹ 3 › 31 ›

Significant changes in the state of affairs

During the year, the company received equity injections totalling $18m.

There were no other significant changes in the state of affairs of the Company during the year.

Significant events after the balance sheet date

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operations of the Company, the results of those operations, or the state of affairs of the Company, in future financial years.

Likely developments and expected results of operation

Likely developments and the expected results of operations of the Company are contained in the Chair and Chief Executive Officer’s report.

Dividends

There was no dividend provided for or paid in the current year by the Company.

Rounding of amounts

The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars ($’000), unless otherwise stated under the option available to the company under ASIC Class order 98/100.

Company secretary

Mr Ian Hunt held the position of Company Secretary at the end of the financial year. Mr Hunt was appointed as Company Secretary of MIC on an interim basis, while MIC conducted a search for General Counsel/ Company Secretary following the resignation of Mr Andrew Lonsdale on 27 June 2014.

Subsequent to the end of the financial year, the Company appointed Ms Jane Webster as General Counsel and Company Secretary, effective from 11 August 2014. Ms Webster has 18 years’ experience as a construction and infrastructure lawyer and company secretary, having worked in an ASX listed company and in private practice. She most recently worked at Asciano Limited and, prior to that, at Minter Ellison, a national law firm. Ms Webster has a Bachelor of Laws from the University of NSW and is an Associate of the Governance Institute of Australia and Institute of Chartered Secretaries and Administrators (ICSA).

Principal activities

The principal activity of the company is to facilitate the development of an intermodal freight terminal at Moorebank, Sydney, NSW.

Operating results

The loss of the company after income tax was $7,728k.

Review of operations

The review of operations of the Group is contained in the Chair and Chief Executive Officer’s report.

AUDIT AND RISK COMMITTEE The Audit and Risk Committee comprises the following directors:

Ύ Dr Kerry Schott (ceased as member effective from 1 July 2014) Ύ Ms Claire Filson Ύ Ms Louise Thurgood

Ύ Mr Stephen Williams (chair)

IMPLEMENTATION COMMITTEE The Implementation Committee was established on the 21 June 2013 and held it first meeting on 17 July 2013. The Implementation Committee comprises the following directors:

Ύ Dr Kerry Schott Ύ Mr Paul Binsted Ύ Ms Zorana Bull Ύ Mr Ray Wilson (chair)

Meetings of Directors

The number of meetings of the Company’s Board of Directors and of each Board Committee held during the year ended 30 June 2014, and the numbers of meetings attended by each Director were:

FULL MEETINGS OF DIRECTORS AUDIT AND RISK COMMITTEE

IMPLEMENTATION COMMITTEE

Director A B A B A B

K Schott 14 14 3 5 5 5

P Binsted 14 14 4 5

C Brown 13 14

Z Bull 12 14 4 5

C Filson 13 14 4 5

* A Fraser 11 12

L Thurgood 13 14 5 5

S Williams 13 14 5 5

R Wilson 13 14 5 5

A = Number of meetings attended

B = Number of meetings held during the time the Director held office or was a member of the committee during the year

* Andrew Fraser resigned as a Director of MIC on 5 May 2014.

Directors acting on the Committees of the Board during the year were:

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 3 › 33 › 32 ‹

Auditor’s independence declaration

directors as to indemnities, insurance and access to Board records. Under each Director’s Deed, the Company indemnifies the director to the full extent permitted by law against all losses or liabilities incurred as an officer of the Company.

Insurance

During the reporting period, the company has paid or agreed to pay premiums for contracts insuring directors and officers of the Company against liabilities incurred in that capacity. The directors have not included the details of the nature of the liabilities covered or the amount of the premiums paid in respect of these insurance contracts, as such disclosure is prohibited under the terms of the contract.

Under the Director’s Deeds the Company has undertaken to insure the director against certain liabilities incurred as a director and officer of the Company.

Options

No options over issued shares or interests in the Company were granted during or since the end of the financial year, and there were no options outstanding as at the date of this report. No shares were issued during or since the end of the year as a result of the exercise of an option over unissued shares or interests.

Indemnification of Officers

The Company’s Constitution includes indemnities in favour of persons who are or have been a director or secretary of the Company. To the maximum extent permitted by law, the Company will indemnify every current or former director or secretary against:

Ύ any liability incurred by the person in that capacity (except a liability for legal costs) Ύ legal costs incurred by the person in connection with legal proceedings in

which the person becomes involved in that capacity or in obtaining certain legal advice relevant to the performance of their functions and discharge of their duties as an officer of the Company.

In accordance with the Company’s Constitution, the Company has entered into a deed with Directors of the Company (Director’s Deed). These Director’s Deeds formalise the arrangements between the Company and

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 3 › 35 ›

Corporate Governance Statement

Our Shareholder

OWNERSHIP Moorebank Intermodal Company Limited (MIC) is wholly owned by the Commonwealth of Australia.

SHAREHOLDER MINISTERS The Shareholder Ministers are the Minister for Finance and the Minister for Infrastructure and Regional Development.

SHAREHOLDER COMMUNICATION In compliance with the Commonwealth Authorities and Companies Act 1997, (and from 1 July 2014, under the Public Governance, Performance and Accountability Act 2013) and the Commonwealth Government Business Enterprise Governance and Oversight Guidelines, MIC regularly reports to its Shareholder Ministers.

Under the GBE Guidelines, MIC submitted its FY 2014-17 Corporate Plan to its Shareholder Ministers in July 2014. MIC intends to continue to provide an updated Corporate Plan to its Shareholder Ministers on an annual basis.

MIC’s Annual Report is submitted to the responsible Minister in accordance with section 97 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act).

The Auditor-General is required by the PGPA Act to audit the financial report of MIC. The

Australian National Audit Office (ANAO) assists the Auditor-General in performing those functions.

Board of Directors

ROLE AND RESPONSIBILITIES The Board has ultimate responsibility for the performance of MIC and is fully accountable for this to the Shareholder Ministers.

The Board is responsible for the company meeting its accountability obligations to the Australian Government by submitting corporate plans and annual reports, monitoring compliance with Australian Government policies and for developing, implementing and monitoring an effective governance and risk management framework.

MIC is committed to the principles and practice of good governance that ensure MIC achieves its intended purpose, complies with all relevant laws, codes and directions and meets expectations of probity, accountability and transparency.

BOARD COMPOSITION Under rule 3.1 of the MIC constitution, the Board is to consist of no less than three and no more than nine directors. The Chair is appointed by the Minister in accordance with rule 5.5 of the MIC constitution.

34 ‹

The Board of Directors of the Company is responsible for the governance practices of the Company. A description of the Company’s main corporate governance practices is set out below.

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 36 ‹ 3 › 37 ›

Board committees

To assist in the performance of its responsibilities, the Board has established three Board committees, the: 1. Audit and Risk Committee, established on

15 March 2013 2. Implementation Committee, established on 21 June 2013 3. External Affairs Committee, established on

18 July 2014

Each Committee is required to review its charter annually. Any proposed changes to a Committee charter must be approved by the Board.

AUDIT AND RISK COMMITTEE The role of the Committee is to assist the Board in satisfying itself that MIC is complying with its financial management and reporting obligations imposed by the Commonwealth Authorities and Companies Act 1997, (and from 1 July 2014, the Public Governance, Performance and Accountability Act 2013, and the Public Governance, Performance and Accountability Rule 2014) and the Corporations Act 2001 and provides a forum for communication between the Board, the MIC senior managers, and the MIC internal and external auditors.

The Committee supervises the preparation of periodic financial statements of MIC to ensure compliance with its financial reporting requirements. It also monitors and reviews the effective management of financial risks, the application of up-to-date accounting policies, development and maintenance of effective and efficient internal and external audit processes, maintenance of auditor independence and performance and compliance with applicable laws and regulations.

The Committee itself must comply with the GBE Guidelines.

The Committee consists of at least three members, all being independent non-executive directors. The Chair of the Committee must be an independent non-executive director and is to be appointed by the Board, but is not to be Chair of the Board.

The membership of the committee, the number of meetings during the period 1 July 2013 to 30 June 2014 and the number of meetings attended is set out in the Directors’ Report.

IMPLEMENTATION COMMITTEE The Committee assists the Board in fulfilling its governance responsibilities by monitoring and supporting management of MIC in the areas of procurement, construction, activation, maintenance and all matters relating to health, safety and environmental risks or issues.

Consistent with the Implementation Committee Charter, the Committee consists of at least three members, all of whom are non-executive directors and one with major construction, engineering and/or procurement experience.

The membership of the committee, the number of meetings during the period 1 July 2013 to 30 June 2014 and the number of meetings attended is set out in the Directors’ Report.

EXTERNAL AFFAIRS COMMITTEE The Committee has been established to ensure MIC’s communication and stakeholder engagement strategy is effectively and appropriately implemented.

Consistent with the External Affairs Committee Charter, each Committee meeting must consist of at least three members including the Chair

Directors are appointed by the Minister under rule 3.3 of the MIC constitution. The term of office of a director is determined by the Commonwealth at the time of appointment, but normally for a term of three years.

The current Board comprises eight non-executive directors as at signing date. Details of the current directors, including names and appointment dates, are included in the Directors’ Report.

The composition of the Board will be assessed by the Board and recommendations made to the Shareholder Ministers at least once a year.

CHAIR The Chair of the Board is responsible for its leadership and efficient and proper functioning.

BOARD PERFORMANCE The Board has agreed to annually review: the performance of the Board as a whole, each committee, and Board processes.

The Chair will provide the Shareholder Ministers with written confirmation that this review process has been followed and raise any areas of concern.

During the reporting period, the Board undertook a self-assessment review process in relation to the functioning of the Board, its Committees and the Chair. A report on all recommendations has been discussed with the Board, with an agreed action plan implemented.

BOARD DIVERSITY In accordance with its obligations under the Commonwealth Government Business Enterprise Governance and Oversight Guidelines, the Board has regard to government policy on fostering a governance culture that embraces diversity in

the composition of Boards, with the objective of achieving the Government’s target of 40% representation of women on Government Boards by 2015.

As at 30 June 2014, 50% of MIC Board Directors were women.

DIRECTOR INDUCTION AND EDUCATION MIC has an induction program for new directors, which is reviewed periodically by the Company Secretary.

Ongoing education for directors was provided through workshops, presentations, individual briefings and directors visiting MIC’s proposed operational site and related facilities.

CONFLICT OF INTEREST Where a Director: Ύ has a declared material personal interest and / or

Ύ may be presented with a potential material conflict of interest

the Director will not participate in the Board or Committee meeting at the time the matter is being considered. All disclosures made by a Director at a meeting are minuted.

Directors have an obligation to disclose, in a timely manner, any material personal interests that may conflict with MIC or their role as a Director of MIC.

INDEPENDENT PROFESSIONAL ADVICE Directors may seek independent professional advice, at MIC’s expense, in carrying out their duties.

Each Director has the right to access all MIC information they consider necessary to fulfil their responsibilities.

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 38 ‹ 3 › 39 ›

A number of internal controls have been implemented to provide for the accuracy of the financial statements and integrity of business systems.

These internal controls include the form of appropriate financial delegations, a risk management framework, financial planning and reporting, strategic planning and, operational policies and practices.

RISK MANAGEMENT MIC continues to build a Risk Management Framework and has developed a comprehensive risk register that captures the material business risks facing the company.

It is the role of the Audit and Risk Committee to oversee the Risk Management Framework. In particular, the Committee oversees: Ύ the adequacy of policies and procedures for

the oversight and management of material business risks Ύ the design and implementation of effective risk management and internal

control systems for identifying, assessing, monitoring and managing MIC’s material business risk Ύ reporting to the Board on whether those

risks are being managed effectively.

INTERNAL AUDIT In August 2013, the Audit and Risk Committee approved the appointment of Ernst & Young as internal auditor of MIC for a period of three years. The Committee also adopted an Internal Audit Charter.

An internal audit plan is presented to and endorsed annually by the Audit and Risk Committee. Outcomes of the internal audit reviews are provided to the Committee for its review.

Ethical standards

MIC is committed to a culture of high ethical standards and accountable conduct. This includes creating and maintaining an open working environment in which its employees, directors and contracted service providers (and their employees and officers) are able to raise concerns regarding suspected unethical, unlawful or undesirable conduct or wrongdoing without fear of reprisal.

PUBLIC INTEREST DISCLOSURE ACT MIC is subject to the Public Interest Disclosure Act 2013 and has adopted procedures to ensure the Company supports and complies with the requirements of the Act. The purpose of the Act is to promote the integrity and accountability of the Commonwealth public sector by:

Ύ encouraging and facilitating the making of public interest disclosures of wrongdoing by current and former public officials (being employees and directors of MIC, contracted service providers and officers/employees of contracted service providers)

Ύ ensuring that disclosers are supported and protected from adverse consequences related to the making of a disclosure

Ύ ensuring that disclosures are properly investigated and dealt with.

MIC supports the reporting by staff at all levels. MIC supports protection for those who make those reports from victimisation and discrimination as a result of making the report. MIC recognises the value of transparency and accountability in its administrative and management practices. A summary of MIC’s procedures, the appointed MIC ‘authorised officers’ and how a disclosure under the Act can be made has been included on MIC’s website - http://www.micl.com.au/public-interest-disclosure-act.aspx

of the Committee, any other non-executive director who attends a Committee meeting, and relevant members of MIC management including MIC’s Chief Executive Officer, Policy and Corporate Affairs Manager, and Communications Coordinator.

The committee held its first meeting on 14 August 2014.

Accountability and audit

EXTERNAL AUDIT Under section 35 of the Commonwealth Authorities and Companies Act 1997 (and from 1 July 2014, under the Public Governance, Performance and Accountability Act 2013), the Auditor-General is responsible for auditing the financial statements of MIC.

As permitted by section 27 of the Auditor General’s Act, the ANAO has contracted KPMG in Sydney to assist with the conduct of part of the audit on behalf of the Auditor-General.

The Audit and Risk Committee meets with the external auditor during the year to: Ύ discuss the external audit plans, identify any significant changes in operations, internal

controls or accounting policies likely to impact the financial statements Ύ review the results and findings of the auditor, the adequacy of internal controls

and monitor the implementation of any recommendations made Ύ finalise annual reporting, review the preliminary financial statements prior to

sign-off and any significant adjustments required as a result of the external auditor’s findings.

MIC applied audit independence principles in relation to the External Auditor.

ANAO has the opportunity to meet with Committee members to discuss matters in camera.

Certification by CEO and Finance Director Prior to the approval of the annual financial statements by the Board of Directors, the CEO and the Finance Director provide confirmation in writing that the statements represent a true and fair view of MIC’s operations and its financial position. The letter also includes representation to the Board in respect of the adequacy and effectiveness of MIC’s risk management, internal compliance and control systems.

Based on the evaluation performed as at 30 June 2014, the CEO and Finance Director concluded that, as of the evaluation date, such risk management, internal compliance and control systems were reasonably designed that the Financial Statements and notes of MIC are in accordance with the Commonwealth Authorities and Companies Act 1997 and the Corporations Act 2001 and there are reasonable grounds to believe MIC will be able to pay its debts as and when they fall due.

INTERNAL CONTROL FRAMEWORK The Board is responsible for the overall internal control framework and for reviewing its effectiveness.

MIC’s internal control framework is intended to meet the objectives of: Ύ ensuring the completeness of financial reporting

Ύ safeguarding the company’s assets Ύ complying with applicable laws and regulations Ύ ensuring effectiveness and efficiency of

operations Ύ maintaining proper accounting records Ύ preventing, detecting and correcting irregularities

Ύ identifying and mitigating business risks.

40 ‹ 3 › 41 › MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014

CODE OF CONDUCT MIC is committed to and promotes the highest standards of integrity and ethical behaviour. MIC aims to carry out its business in an open and honest manner, while complying with all applicable legislation and laws.

MIC has put in place a Code of Conduct, which outlines expected standards of workplace behaviour.

FRAUD AND CORRUPTION REPORTING As a Government Business Enterprise, MIC is committed to applying and adhering to the standards outlined in the Commonwealth Fraud Control Guidelines 2011.

 

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 3 › 43 ›

(ACN 161 635 105)

42 ‹

Moorebank Intermodal Company Ltd

Financial Statements

Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 June 2014

2014 2013

Notes $’000 $’000

REVENUE

Interest income 88 21

Other income 1 -

Total revenue 3 89 21

EXPENDITURE

Employee benefits expense 4 2,788 733

Occupancy costs 301 42

Advisor costs 4 6,471 814

Contractor costs 541 505

Recruitment 108 220

Insurance 206 77

IT expenses 211 41

Travel costs 80 45

Depreciation and amortisation 4 55 6

Other expenses 368 166

Total expenditure 11,129 2,649

(Loss) before income tax (11,040) (2,628)

Income tax benefit 5 3,312 788

(Loss) for the year (7,728) (1,840)

Other comprehensive income - -

Total comprehensive income (7,728) (1,840)

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

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 44 ‹ 3 › 45 ›

(ACN 161 635 105) MOOREBANK INTERMODAL COMPANY LTD MOOREBANK INTERMODAL COMPANY LTD (ACN 161 635 105)

Statement of Financial Position As at 30 June 2014

Statement of Changes in Equity For the year ended 30 June 2014

2014 2013

Notes $’000 $’000

ASSETS

Current assets

Cash and cash equivalents 6 9,980 3,145

Trade and other receivables 7 343 171

Other current assets 8 189 142

Total current assets 10,512 3,458

NON-CURRENT ASSETS

Property, plant and equipment 9 103 141

Intangible assets 10 12 13

Deferred tax assets 11 4,100 788

Total non-current assets 4,215 942

Total assets 14,727 4,400

LIABILITIES

Current liabilities

Trade and other payables 12 1,265 1,222

Provisions 15 30 8

Total current liabilities 1,295 1,230

NON-CURRENT LIABILITIES

Provisions 15 - 10

Total non-current liabilities - 10

Total liabilities 1,295 1,240

Net assets 13,432 3,160

EQUITY

Contributed equity 16 23,000 5,000

Retained earnings (9,568) (1,840)

Total equity 13,432 3,160

Retained Contributed

Earnings equity Total

Notes $’000 $’000

Balance at 30 June 2012 - - -

COMPREHENSIVE INCOME

Loss for the year (1,840) - (1,840)

Other comprehensive income - - -

Total comprehensive income (1,840) - (1,840)

TRANSACTIONS WITH OWNERS, IN THEIR CAPACITY AS OWNERS

Contributions of equity - 5,000 5,000

Balance at 30 June 2013 (1,840) 5,000 3,160

COMPREHENSIVE INCOME

Loss for the year (7,728) - (7,728)

Other comprehensive income - - -

Total comprehensive income (7,728) - (7,728)

TRANSACTIONS WITH OWNERS, IN THEIR CAPACITY AS OWNERS

Contributions of equity - 18,000 18,000

Balance at 30 June 2014 (9,568) 23,000 13,432

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

46 ‹

(ACN 161 635 105) MOOREBANK INTERMODAL COMPANY LTD MOOREBANK INTERMODAL COMPANY LTD (ACN 161 635 105)

Statement of Cash Flows For the year ended 30 June 2014

2014 2013

Notes $’000 $’000

CASH FLOWS FROM OPERATING ACTIVITIES

Payments to suppliers and employees (11,845) (1,750)

Net GST received 659 34

Interest received 88 21

Net cash inflow (outflow) from operating activities 17 (11,098) (1,695)

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for property, plant and equipment (63) (146)

Payments for intangible assets (4) (14)

Net cash (outflow) inflow from investing activities (67) (160)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from equity funding 18,000 5,000

Net cash (outflow) inflow from financing activities 18,000 5,000

Net (decrease) / increase in cash and cash equivalents 6,835 3,145

Cash and cash equivalents at beginning of year 3,145

Cash and cash equivalents at end of year 6 9,980 3,145

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

Notes to the Financial Statements

1. Summary of significant accounting policies pg 48

2. Significant accounting judgements, estimates and assumptions pg 52

3. Revenue pg 52

4. Expenses pg 53

5. Income tax expense/ (benefit) pg 54

6. Current assets - Cash and cash equivalents pg 54

7. Current assets - Trade and other receivables pg 54

8. Current assets - Other current assets pg 55

9. Non-current assets - Property, plant and equipment pg 55

10. Non-current assets - Intangible assets pg 56

11. Non-current assets - Deferred tax assets pg 57

12. Current liabilities - Trade and other payables pg 58

13. Operating leases pg 58

14. Contingent assets and liabilities pg 59

15. Provisions pg 59

16. Contributed equity pg 59

17. Reconciliation of profit after income tax to net cash pg 60

inflow from operating activities

18. Financial risk management pg 61

19. Related party transactions pg 62

20. Directors and Key Management Personnel disclosures pg 62

21. Remuneration of auditors pg 63

22. Events after reporting period pg 63

3 › 47 › MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 48 ‹ 3 › 49 ›

(ACN 161 635 105) MOOREBANK INTERMODAL COMPANY LTD MOOREBANK INTERMODAL COMPANY LTD (ACN 161 635 105)

(iii) New accounting standards and interpretations Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2014 reporting periods and have not been early adopted by the Company.

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

b) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable, to the extent it is probable the economic benefit will flow to the Company and the revenue can be reliably measured.

c) Cash and cash equivalents

Cash and cash equivalents includes: cash on hand; deposits held at call with financial institutions; and other short-term, highly liquid investments with original maturities of three months or less, which are readily convertible to known amounts of cash and subject to an insignificant risk of changes in value.

d) Trade and other receivables

Trade and other receivables are initially recorded at fair value and subsequently measured at amortised cost using the effective interest method.

Receivables expected to be collected within 12 months of the end of the reporting period are classified as current assets. All other receivables are classified as non-current assets.

Any impairment allowance for doubtful debts raised to reduce the carrying amount of receivables is based on a review of outstanding balances at balance sheet date.

e) Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation.

Depreciation on assets is calculated using the straight-line method to allocate their cost, net of their residual value, over their estimated useful lives as follows:

Useful Life Ύ Computer equipment 3 years Ύ Leasehold Improvements 3 years

f ) Intangible assets

The Company’s intangible assets comprise purchased software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses. Software is amortised on a straight-line basis over its anticipated useful life. The useful life of the Company’s software is three years.

g) Impairment of assets

All tangible and intangible assets (excluding assets arising from current and deferred tax assets and financial assets) are measured using the cost basis and are written down to recoverable amounts where their carrying amount exceeds recoverable amount.

Assets that are subject to depreciation and amortisation are reviewed for impairment wherever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Moorebank Intermodal Company Limited (MIC) is an unlisted public company incorporated and domiciled in Australia. It is a company limited by shares and is wholly owned by the Government of the Commonwealth of Australia. MIC is a Government Business Enterprise, incorporated under the Corporations Act 2001 and operating under the Commonwealth Authorities and Companies Act 1997 (from 1 July 2014, the Public Governance, Performance and Accountability Act 2013). MIC was incorporated on 13 December 2012.

a) Basis of preparation of financial report for the year ended 30 June 2014

The financial report has been prepared in accordance with Australian Accounting Standards as issued by the Australian Accounting Standards Board, the requirements of the Corporations Act 2001 and other authoritative pronouncements of the Australian Accounting Standards Board.

MIC is a for profit entity for the purpose of preparing the financial report.

The financial report is presented in Australian dollars. Values are rounded to the nearest thousand dollars unless otherwise stated.

The financial report has been prepared on a going concern basis and in accordance with the historical cost convention, except for certain classes of non-current assets, financial assets and financial liabilities.

The Company has consistently applied the accounting policies set out below to all periods presented in these financial statements.

(i) Compliance with IFRS The financial report complies with International Financial Report Standards (IFRS) as issued by the International Accounting Standards Board.

(ii) New and amended standards adopted by the Company The Company has adopted the following new standards and amendments to standards that are relevant to the Company, including and consequential amendments to other standards, with a date of initial application of 1 July 2013.

Ύ AASB 119 Employee Benefits (2011)

The nature and effect of the change is as follows.

Annual leave provisions As a result of AASB 119 (2011), the Company has changed its accounting policy with respect to the basis for determining the measurement of annual leave where it is expected the leave will be taken beyond 12 months from balance date. The change in accounting policy had an immaterial effect for the year ended 30 June 2014.

Ύ AASB 13 Fair Value Measurement

AASB 13 establishes a single framework for measuring fair value and making disclosures about fair value measurements when such measurements are required or permitted by other AASBs. It unifies the definition of fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It replaces and expands the disclosure requirements about fair value measurements in other AASBs, including AASB 7. The impact of AASB 13 was immaterial to these financial statements.

1. Summary of significant accounting policies

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 50 ‹ 3 › 51 ›

(ACN 161 635 105) MOOREBANK INTERMODAL COMPANY LTD MOOREBANK INTERMODAL COMPANY LTD (ACN 161 635 105)

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred, or it neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control over the transferred asset. Any interest in such derecognised financial assets that is created or retained by the Company is recognised as a separate asset or liability.

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

n) Financial instruments

The Company classifies non-derivative financial assets into the following categories: financial assets at fair value through profit or loss, held-to-maturity financial assets, loans and receivables and available-for-sale financial assets.

The Company classifies non-derivative financial liabilities into the other financial liabilities category.

(i) Non-derivative financial assets and financial liabilities - recognition and de-recognition

The Company initially recognises loans and receivables and debt securities issued on the date when they are originated. All other financial assets and financial liabilities are initially recognised on the trade date.

The recoverable amount of an asset is the higher of its fair value less costs to sell or its value in use.

h) Leases

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases (note 13). Payments made under operating leases (net of any incentives received from the lessor) are charged to the Statement of Profit or Loss and Other Comprehensive Income on a straight-line basis over the period of the lease.

i) Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid and measured at cost. The amounts are unsecured and are usually paid within 30 days of recognition.

j) Provisions

Provisions for legal claims and make good obligations are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated.

k) Employee benefits

Short-term obligations Liabilities for wages and salaries, including annual leave expected to be settled within 12 months of the reporting date are recognised in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.

l) Share capital

Issued and paid up capital is recognised at the fair value of the consideration received by the Company.

m) Taxation

(i) Income tax The income tax expense or benefit for the period is the tax payable or receivable on the current period’s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary difference and to unused tax losses.

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

(ii) Goods and Services (Tax) Revenues, 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.

Receivable 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 receivable and 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 flows.

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 52 ‹ 3 › 53 ›

(ACN 161 635 105) MOOREBANK INTERMODAL COMPANY LTD MOOREBANK INTERMODAL COMPANY LTD (ACN 161 635 105)

2014 2013

$’000 $’000

Interest income 88 21

Other income 1 0

Total revenue 89 21

2014 2013

$’000 $’000

DEPRECIATION

IT Equipment 35 3

Leasehold improvements 15 2

Total Depreciation 50 5

AMORTISATION

Computer software 5 1

Total amortisation 5 1

EMPLOYEE BENEFITS

Wages and salaries 2,606 686

Defined contribution superannuation expense 182 47

Total employee benefits expense 2,788 733

MINIMUM LEASE PAYMENTS

Minimum payments under operating leases 208 33

Total 208 33

ADVISOR COSTS

Technical consultant fees 3,479 204

Commercial fees 1,200 63

Legal fees 611 215

Demand analysis 555 189

Stakeholder management 317 66

Financial / Governance 162 77

Other 147 -

Total adviser costs 6,471 814

3. Revenue

4. Expenses 2. Significant accounting judgements, estimates and assumptions

a) Annual leave provision

Assumptions have been made on timing, likelihood and future pay increases in calculating the employee annual leave provision as at 30 June 2014.

b) Deferred tax

The recognition of the deferred tax asset of $4,100k is considered appropriate following an assessment of the overall forecast profit and taxation position over the next five years.

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 54 ‹ 3 › 55 ›

(ACN 161 635 105) MOOREBANK INTERMODAL COMPANY LTD MOOREBANK INTERMODAL COMPANY LTD (ACN 161 635 105)

2014 2013

$’000 $’000

(A) INCOME TAX EXPENSE / (BENEFIT)

Current tax - in respect of the current year (1,437) (786)

Deferred tax - in respect of the current year (1,875) (2)

Total income (3,312) (788)

(B) NUMERICAL RECONCILIATION OF INCOME TAX EXPENSE TO PRIMA FACIE TAX PAYABLE

Loss from continuing operations before income tax benefit (11,040) (2,628)

Tax at the Australian tax rate of 30% (3,312) (788)

Income tax expense / (benefit) (3,312) (788)

2014 2013

$’000 $’000

Cash at bank 9,980 3,145

Total 9,980 3,145

The Company’s exposure to interest rate risk is discussed in note 19. Cash at bank earns interest at floating rates based on daily bank deposit rates.

2014 2013

$’000 $’000

GST receivable 343 171

Total 343 171

2014 2013

$’000 $’000

Prepayments 189 142

Total 189 142

Leasehold IT

improvements equipment Total

$’000 $’000 $’000

AS AT 1 JULY 2012

Cost - - -

Accumulated depreciation - - -

Net book value - - -

YEAR ENDED 30 JUNE 2013

Opening net book value - - -

Additions 57 89 146

Depreciation charge (2) (3) (5)

Net book value 55 86 141

AS AT 30 JUNE 2013

Cost 57 89 146

Accumulated depreciation (2) (3) (5)

Net book value 55 86 141

YEAR ENDED 30 JUNE 2014

Opening net book value 55 86 141

Additions 45 18 63

Disposals (51) - (51)

Depreciation charge (15) (35) (50)

Net book value 34 69 103

AS AT 30 JUNE 2014

Cost 45 107 152

Accumulated depreciation (11) (38) (49)

Net book value 34 69 103

5. Income tax (benefit)

6. Current assets - Cash and cash equivalents

7. Current assets - Trade and other receivables

8. Current assets - Other current assets

9. Non-current assets - Property, plant and equipment

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 56 ‹ 3 › 57 ›

(ACN 161 635 105) MOOREBANK INTERMODAL COMPANY LTD MOOREBANK INTERMODAL COMPANY LTD (ACN 161 635 105)

Computer

software

$’000

AS AT 1 JULY 2012 Cost -

Accumulated amortisation -

Net book value -

YEAR ENDED 30 JUNE 2013 Opening net book value -

Additions 14

Amortisation charge (1)

Net book value 13

AS AT 30 JUNE 2013 Cost 14

Accumulated amortisation (1)

Net book value 13

YEAR ENDED 30 JUNE 2014 Opening net book value 13

Additions 4

Amortisation charge (5)

Net book value 12

AS AT 30 JUNE 2014 Cost 18

Accumulated amortisation (6)

Net book value 12

The Company does not anticipate any significant disposals of property, plant and equipment or intangibles in the next 12 months. There were no indicators of impairment of property, plant and equipment or intangibles as at 30 June 2014.

 

2014 2013

$’000 $’000

TEMPORARY DIFFERENCES

Opening balance 2 -

Provisions (12) 2

Project costs 1,887 -

Prior year adjustments - return to provision 218 -

2,095 2

UNUSED TAX LOSSES AND CREDITS

OPENING BALANCE OF UNUSED TAX LOSSES 786 -

Prior year adjustments - return to provision (218) -

Current year losses / (Recoupment) 1,437 786

2,005 786

Total 4,100 788

MOVEMENTS:

Opening balance at 1 July 788 -

Credited to the Income Statement related to tax losses 3,312 788

Closing balance at 30 June 2014 4,100 788

Temporary differences for $1,887k refer to non-deductible expenses primarily relating to legal and consulting project costs, which are of a capital nature.

10. Non-current assets - Intangible assets 11. Non-current assets - Deferred tax assets

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 58 ‹ 3 › 59 ›

(ACN 161 635 105) MOOREBANK INTERMODAL COMPANY LTD MOOREBANK INTERMODAL COMPANY LTD (ACN 161 635 105)

2014 2013

$’000 $’000

Trade payables 939 1,080

Accruals 246 49

Other payables 80 93

Total 1,265 1,222

Due to the short-term nature of these payable, their carrying value is assumed to approximate their fair value. Trade payables are settled within 30 days.

Information about the Company’s exposure to interest rates and liquidity risk is set out in note 19.

2014 2013

$’000 $’000

COMMITMENTS FOR MINIMUM LEASE PAYMENTS IN RELATION TO NON-CANCELLABLE OPERATING LEASES ARE PAYABLE AS FOLLOWS: Within one year 286 99

Later than one year but not later than five years 374 169

Later than five years - -

Total 660 268

The Company has entered into a non-cancellable property lease with a term of three years. Fixed rental provisions within the lease agreement require that the minimum lease payments shall be increased by 4.25% per annum.

The Company has entered into a non-cancellable parking lease with a term of three years, which is subject to market review increases.

As at 30 June 2014, the Company does not have any outstanding contingent assets and liabilities.

Employee Make good

benefits provision Total

$’000 $’000 $’000

BALANCE AT 1 JULY 2013 8 10 18

Provisions made during the year 22 - 22

Provisions reversed during the year - (10) (10)

Balance at 30 June 2014 30 - 30

Non-current - - -

Current 30 - 30

Total 30 - 30

Provision for employee benefits represents amounts accrued for annual leave.

30 June 2014

a) Share capital $’000

Fully paid 23,000

23,000

Number of ordinary shares 23,000,000

b) Movements in ordinary share capital Date Details Number of shares $’000

30 June 2013 Balance 5,000,000 5,000

7 October 2013 Equity injection 5,000,000 5,000

21 March 2014 Equity injection 5,000,000 5,000

13 June 2014 Equity injection 8,000,000 8,000

30 June 2014 Balance 23,000,000 23,000

12. Current liabilities - Trade and other payable

13. Operating leases

14. Contingent assets and liabilities

15. Provisions

16. Contributed equity

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 60 ‹ 3 › 61 ›

(ACN 161 635 105) MOOREBANK INTERMODAL COMPANY LTD MOOREBANK INTERMODAL COMPANY LTD (ACN 161 635 105)

2014 2013

$’000 $’000

(Loss) for the year (7,728) (1,840)

ADJUSTMENTS FOR:

Depreciation and amortisation 55 6

Loss on disposal of fixed asset 51 -

Non cash taxation benefit (3,312) (788)

Operating profit before changes in working capital and provisions (10,934) (2,622)

Changes in trade debtors and other receivables (172) (171)

Changes in other current assets (47) (142)

Changes in trade and other payables 43 1,222

Changes in provisions 12 18

Net cash inflow (outflow) from operating activities (11,098) (1,695)

17. Reconciliation of loss for the period to net cash outflow from operating activities

Ordinary shares The Company does not have authorised capital or par value in respect of its issued shares. All issued shares are fully paid. On a show of hands, every holder of ordinary shares present at a meeting in person, or by proxy, is entitled to one vote, and upon a poll each fully paid share is entitled to one vote.

The holders of these shares are entitled to receive dividends as declared from time to time.

The Company’s principal financial instruments comprise cash and payables. The carrying amount equates to the fair value of the financial instruments. These activities expose the Company to interest rate risk, credit risk and liquidity risk.

As at 30 June 2014, the Company held the following financial instruments:

2014 2013

$’000 $’000

FINANCIAL ASSETS

Cash and cash equivalents 9,980 3,145

Total 9,980 3,145

FINANCIAL LIABILITIES

Trade and other payables 1,265 1,222

Total 1,265 1,222

FINANCIAL RISK MANAGEMENT POLICIES The Board’s overall risk management strategy seeks to assist the Company in meeting its financial targets. Risk management policies are approved and reviewed by the Board.

a. Credit risk All cash and cash equivalents are held with AA rated financial institutions within Australia and therefore credit risk is considered minimal.

b. Liquidity risk Liquidity risk arises from the possibility that the Company might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Company is not currently exposed to any significant liquidity risk on the basis that the realisable value of financial assets is significantly greater than the financial liabilities due for settlement.

c. Market risk Exposure to interest rate risks arises on interest-bearing financial assets and financial liabilities recognised at the end of the reporting period whereby a future change in interest rates will affect either the future cash flows or the fair value financial instruments.

At 30 June 2014, the Company had no interest-bearing financial liabilities.

FAIR VALUES The carrying amount equates to the fair value of the financial instruments.

18. Financial risk management

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 62 ‹ 3 › 63 ›

(ACN 161 635 105) MOOREBANK INTERMODAL COMPANY LTD MOOREBANK INTERMODAL COMPANY LTD (ACN 161 635 105)

19. Related party transactions

The Company’s main related parties are as follows:

A. DIRECTORS A Director related entity includes any legal, administrative or fiduciary arrangement, organisational structure or other party, including a person, having the capacity to deploy equity instruments in order to achieve objectives. The entity must be under joint or overall control or significant influence of a Director or his/her related parties. There were no related party transactions with directors during the year. There were no loans to directors during the year.

20. Directors and Key Management Personnel disclosures

A. DIRECTORS The following persons were directors of Moorebank Intermodal Company Limited during the financial year:

i. Chair K Schott

ii. Non-Executive Director P Binsted

C Brown

Z Bull

C Filson

A Fraser (resigned as Director effective from 5 May 2014) L Thurgood

S Williams

R Wilson

B. KEY MANAGEMENT PERSONNEL Chief Executive Officer I Hunt (commenced 2 September 2013)

Chief Operating Officer A Lowe (resigned effective from 6 May 2014)

General Counsel/Company Secretary A Lonsdale (resigned effective 27 June 2014) I Hunt (was co-secretary from 27 June to 22 August 2014) J Webster (commenced 11 August 2014)

Finance Director J Tarrant

Delivery Director A Vaccaro

 

C. REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL

2014 2013

$ $

Short-term employee benefits 1,992,168 544,163

Post-employment benefits 143,621 37,361

Total 2,135,789 581,524

21. Remuneration of auditors

2014 2013

$’000 $’000

AUSTRALIAN NATIONAL AUDIT OFFICE

Audit of financial statements 49 45

Total auditor’s remuneration 49 45

The financial statement audit services are provided to MIC by the Auditor-General. No other services were provided by the Auditor-General during the reporting period.

22. Events after reporting period

The directors are not aware of any significant events since the end of the reporting period.

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 3 › 65 ›

(ACN 161 635 105) MOOREBANK INTERMODAL COMPANY LTD

64 ‹

Directors’ Declaration 19 September 2014

In the opinion of the Directors of Moorebank Intermodal Company Limited (the Company):

(a) the financial statements and notes set out on pages 43 to 63 are in accordance with the Corporations Act 2001, including:

(i) complying with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements

(ii) giving a true and fair view of the Company’s financial position as at 30 June 2014 and of its performance, as represented by the results of its operations, changes in equity and its cash flows, for the financial year ended on that date

(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

The Directors draw attention to note 1(a) to the financial statements, which includes a statement of compliance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

This declaration is made on 19 September 2014 in accordance with a resolution of the Directors.

Kerry Schott

Chair

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 66 ‹ 3 › 67 ›

MOOREBANK INTERMODAL COMPANY LTD MOOREBANK INTERMODAL COMPANY LTD

Independent Auditor’s Report

MOOREBANK INTERMODAL COMPANY › ANNUAL REPORT 2014 68 ‹ 3 › 69 ›

MOOREBANK INTERMODAL COMPANY LTD MOOREBANK INTERMODAL COMPANY LTD

Section Subject Location Pages

Commonwealth Government Business Enterprise Governance and Oversight Guidelines

2.2 Effective governance frameworks Corporate Governance

Statement

2.17 Board performance Directors’ Report

3.13 Annual report

Performance against financial and non-financial expectations

Annual Report Operational Report

All

3.14 Statement on Governance Corporate Governance

Statement

Corporations Act 2001

295(2) & 296(1)

Statement of financial position as at end of the year Statement of comprehensive income for the year Statement of cash flows for the year Statement of changes in equity

Financial Report

295(3) Notes to financial statements Financial Report

295(4) Directors’ declaration Directors’ Declaration

298-300A Directors’ report, including the auditor’s independence declaration Directors’ Report

301 & 308 Auditor’s report Financial Report

Work Health and Safety Act 2011

Schedule 2, Part 4 - Annual reporting requirement for Commonwealth companies Operational Report

Environment Protection and Biodiversity Conservation Act 1999

Section 516A - Annual reporting requirements for Commonwealth companies Operational Report

Regulatory Reporting Requirements Index For the year ended 30 June 2014

Section Subject Location Pages

Commonwealth Companies (Annual Reporting) Orders 2011

6 Approval by directors Directors’ Report

8

9

Parliamentary standards of presentation Plain English and clear design Annual Report All

10 Enabling legislation About MIC

MIC objectives

11 Responsible Minister About MIC

12 Ministerial directions and other statutory requirements Operational Report

13 Information about directors

Directors’ Report

14 Outline of organisational structure and

statement on governance

About MIC Corporate Governance Statement Back cover

15 Related entity transactions Notes to the accounts

16 Key activities and changes affecting the authority Directors’ Report

Message from the Chair Message from the CEO Operational Report Financial Report

19 Indemnities and insurance premiums for officers Directors’ Report

20 Disclosure requirements for GBEs Directors’ report

21 Index of annual report requirements Regulatory reporting

requirements index

Commonwealth Authorities and Companies Act 1997

s36 Annual Report Financial Report

Directors’ report Auditor’s report

From 1 July 2014, the Public Governance, Performance and Accountability Act 2013 was effective.

70 ‹

MOOREBANK INTERMODAL COMPANY LTD

Approval by Directors

This Annual Report was approved by a resolution of the Directors of Moorebank Intermodal Company Limited, made on Friday 19 September 2014.

Kerry Schott Chair