Victorian Ports Corporation (Melbourne) Street address · 2020. 12. 9. · Victorian Ports Corporation (Melbourne) Street address Level 5, 530 Collins Street Melbourne Victoria 3000

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Department of Transport

Victorian Ports Corporation (Melbourne)

Street addressLevel 5, 530 Collins StreetMelbourne Victoria 3000

Australia

Postal addressGPO Box 261

Melbourne VIC 3001Australia

Tel: +61 3 8347 8300 Fax: +61 3 8347 8301

www.vicports.vic.gov.au Victorian Ports C

orporation (Melbourne) 2019-20 A

nnual Report

ANNUAL REPORT2019-20

1Victorian Ports Corporation (Melbourne) 2019-20 Annual Report

The Hon. Melissa Horne MPMinister for Ports and Freight1 Spring StreetMelbourne Victoria 3000

The Hon. Tim Pallas MPTreasurer1 Treasury PlaceEast Melbourne Victoria 3002

Dear Ministers,

I have much pleasure in submitting to you the Annual Report of Victorian Ports Corporation (Melbourne) forthe period 1 July 2019 to 30 June 2020, in accordance with the provisions of the Transport Integration Act2010 (Vic) and the Financial Management Act 1994 (Vic).

Yours sincerely,

James CainChairman

19 November 2020

Responsible Body’s declaration

2 Victorian Ports Corporation (Melbourne) 2019-20 Annual Report


Responsible Body’s declaration 1Section 1: Year in review 5

From the Chairman 6From the Chief Executive Officer 7Mission, vision and values 8An overview of VPCM 9

Manner of establishment 9Purpose and responsibilities 9Functions, objects and powers 10Ministerial Directions 11

Operations review 12Financial information summary 17

Section 2: Governance and organisational structure 21Corporate governance 22Directors 23Board and Committee meetings 25Organisational structure 26Executive Management Team 27OH&S and employment principles 28

Section 3: Workforce data 31Our people 32

Public sector values and employment principles 32Comparative workforce data 32

Section 4: Other disclosures 35Local Jobs First 36Disclosure of government advertising expenditure 36Consultancy expenditure 37Information and Communication Technology expenditure 37Disclosure of major contracts 38Freedom of Information 38Compliance with the Building Act 1993 (Vic) 39Competitive neutrality policy 39Compliance with the Public Interest Disclosures Act 2012 (Vic) 40Social Procurement 41Statement of availability of other information 41Attestation for financial management compliance with Ministerial Standing Direction 5.1.4 42

Section 5: Financial statements 43Appendix 109

Disclosure index 110

Contents

4 Victorian Ports Corporation (Melbourne) 2019-20 Annual Report4 Victorian Ports Corporation (Melbourne) 2019-20 Annual Report

5Victorian Ports Corporation (Melbourne) 2019-20 Annual Report 5Victorian Ports Corporation (Melbourne) 2019-20 Annual Report

Section 1:

Year in review


From the Chairman

For Victorian Ports Corporation (Melbourne)(VPCM) the 2019-20 year has seen a number ofpleasing results and achievements as well as arange of severe challenges resulting from thecoronavirus (COVID-19) pandemic.

The year has delivered the best commercialperformance since the formation of VPCM andreflects prudent financial management over the lastfour years.

VPCM plays a critical role in getting freight to andfrom Melbourne and Geelong by ensuring the safenavigation of international and coastal shipping tothe ports of Melbourne and Geelong.

We continue to invest in infrastructure to meet thechanging needs of our customers and to make bestuse of digital technologies to enhance service,reliability and safety. This includes investment in thevessel traffic services system in the form of newradar and radio communication equipment to furtherimprove safety and efficiency of shipping in PortPhillip Bay. This investment combined with lastyear’s upgrade of the Dynamic Under KeelClearance (DUKC) systems has enabled theoperation of the larger trading vessels to the port ofMelbourne and increased the efficient movement offreight onto the Victorian transport network. Thisincreased efficiency of freight movement benefitsboth our customers and the Victorian economy.

VPCM has continued to invest in the ongoingmaintenance and preservation of Station Pier.Cruise ship visitation is a critical economic driver.Our cruise customers rely on the availability ofStation Pier to meet their needs. In managing thepier, we will continue to work with our customers,service providers and neighbours to ensure safe,efficient and high-quality port operations sitcomfortably within the local community.

VPCM, like so many Victorian businesses andhouseholds, has also felt the effects of coronavirus(COVID-19). Before the pandemic, cruise tourismwas the fastest growing sector of the tourismindustry. While we are confident cruise shipping willreturn, gradually, to full strength, the impact of theeffective closure of the industry has affected our2020 financial year results and will continue to haveimpact in the period ahead. Station Pier is wellplaced to play its part in Melbourne and Victoria’seconomic recovery as the cruise industry and cruiseshipping returns.

In April 2020, TT-Line Company Pty Ltd, theoperators of the Spirit of Tasmania ferries,announced that it will be relocating its operationsfrom Station Pier at the end of 2022. VPCM isproud to have been part of the success story ofTT-Line during their tenure at Station Pier.

TT-Line’s departure provides the opportunity to planfor the next phase of Station Pier’s operations.VPCM will work with the Department of Transport inthe coming months in planning the future of StationPier and the surrounding precinct.

The changing use of Station Pier and the impactsof the coronavirus (COVID-19) pandemic this yearhave coincided with a scheduled revaluation ofVPCM’s property and infrastructure portfolio. TheBoard has taken a conservative view and soughtindependent valuation support from Valuer-GeneralVictoria (VGV) in arriving at the carrying valuesreflected in the accounts.

I want to thank my fellow Board members for theircontributions during the year. On behalf of theBoard, I thank the Chief Executive Officer, RachelJohnson, and the management and staff of VPCMfor their work over the twelve months.

James CainChairman


From the Chief Executive Officer

This year has been the most challenging in theshort history of the corporation.

The coronavirus (COVID-19) pandemic hasdisrupted worldwide supply chains and portoperations here in the port of Melbourne have notescaped unscathed. Despite these challenges, thecorporation performed its essential role ofmanaging safe navigation in port of Melbournewaters without interruption. We have ensured thatthe marine gateway to the ports of Melbourne andGeelong was open for trading vessels every day ofthe year.

Maintaining our maritime gateway for internationaland domestic trade has supported the Victorianeconomy to continue albeit at a reduced level ofactivity. The efficient and unimpeded flow of criticalcommodities including fuel, chemicals, constructionmaterial, containers and breakbulk cargo will drivethe recovery and growth of the State’s economy.

During the year, VPCM managed 7760 tradingvessel movements including 593 Dynamic UnderKeel Clearance (DUKC) transits and 1060 vesselmovements to and from Geelong. These vesselmovements were managed through the PortOperations Control Centre (POCC) at FishermansBend operating around the clock. Supporting thePOCC are the Melbourne and Point LonsdaleVessel Traffic Services (VTS), the DUKC systemsand, importantly, the PortVIEW port managementsystem.

The VPCM personnel, systems and controls haveworked together with vessel crews, marine pilots,tugs, agents, terminal operators and the portoperators and have achieved another year ofoperations without a significant marine safety orenvironmental incident. Achieving this result hascome from a professional and focused team effort,an outcome that we can all be proud of.

Over the year our planned enhancement projects toour operational and support systems werecompleted on time and within budget. Theseprojects included the replacement of the VTS with aworld leading next generation system, vesselhandling simulations to enable larger vessels to useport of Melbourne waters as well as maintenanceand improvements to the Station Pier heritageinfrastructure.

New projects have been initiated to enhance andstrengthen both our administration and ouroperations. These include reviews of our riskmanagement framework, People and Cultureoperations and a new long-term strategy forinformation technology services.

The year saw two changes to our ExecutiveManagement Team. In July, we welcomedMs Jacinta Mackey to the Executive GeneralManager Finance and Corporate Support role andin January, Captain Kell Dillon as ExecutiveGeneral Manager Marine and Navigation followingthe retirement of Captain Roy Stanbrook.

From March 2020, the coronavirus (COVID-19)pandemic affected shipping worldwide. For VPCM itresulted in several cancellations of cruise ship visitsat Station Pier. Prior to the impact of the pandemicon the cruise sector we were on track for a recordyear of visits, nonetheless we had a strong seasonwith 104 visits.

Our commercial performance has, for the third yearrunning, exceeded our budget. The focus onservice delivery and efficiencies has ensured thatVPCM is well positioned to weather the uncertaintyahead.

I thank the Chairman and Board of Directors fortheir work in providing direction and support duringthe year and setting the course for VPCM.

I also want to thank every member of the VPCMteam for their focused and tireless commitmentduring what has been a busy year, a year that haspresented uncertainty at work and at home. Theirprofessional and dedicated approach ensuredcontinuity of VPCM’s operations. I express myadmiration and personal appreciation for everythingwe achieved together during this memorable year. Iam confident that we are well prepared and readyto adapt to the challenges that are ahead of us.

Rachel JohnsonChief Executive Officer


Mission, vision and values

Our missionWe contribute to the enhancement of the economic and social prosperity for the people of Victoria byproviding vital infrastructure and services for trade and tourism.

We do this by:• ensuring safe and efficient navigation of vessels• providing essential connectivity to Tasmania• realising Victorian trade and tourism opportunities for seaborne passengers and freight.

Our visionWe will be recognised for providing Victoria’s premier gateways for trade and tourism.

Our values

• Safety - we lead the way in the provision of safe navigation and services.• Innovation - we deliver excellence in sustainable and practical solutions.• People - we support, respect, and challenge each other – we value diversity.• Customers and communities - we put our customers and communities at the centre of everything we do.• Integrity - always.


An overview of VPCM

Victorian Ports Corporation (Melbourne) (VPCM) ispart of Victoria’s integrated transport portfolio, ledby the Department of Transport (DoT). The vision ofthe transport portfolio is to deliver an integrated andsustainable transport system that promotes:

• social and economic inclusion• economic prosperity• environmental sustainability• integration of transport and land use• efficiency, coordination and reliability• safety and health and wellbeing.

VPCM works with DoT to drive the shared purposeof delivering simple, connected journeys. This willbe achieved by focussing on where people andgoods need to go, rather than what mode they use.This enables being better equipped to respond tothe changing demands on the transport network sopeople can stay connected to jobs and each other,whichever way they travel.

While VPCM remains an independent statutoryauthority, it forms part of the transport portfolio andis a key contributor and supporter of DoT initiatives.

Manner of establishmentVictorian Ports Corporation (Melbourne) (VPCM) isa Victorian Government statutory authority.Established on 1 November 2016, VPCM’sstatutory objectives, powers and functions arecarried out under the Transport Integration Act2010 (Vic).

Purpose and responsibilitiesVPCM is responsible for:

• channel management and safe navigation inMelbourne’s port waters

• waterside emergency and marine pollutionresponse

• the management of Station Pier as Victoria’spremier cruise shipping and interstatepassenger ferry facility.

Shipping and navigationThe VPCM Executive General Manager Marine andNavigation holds a Harbour Master licence and isengaged by VPCM as the Harbour Master for theport of Melbourne waters in accordance withChapter 6 of the Marine Safety Act 2010 (Vic).VPCM is also empowered to authorise persons toact as Assistant Harbour Masters, in accordancewith section 229 of the Marine Safety Act.

VPCM operates modern vessel traffic services(VTS) at the Port Operations Control Centre in PortMelbourne (Melbourne VTS) and at the PointLonsdale Lighthouse (Lonsdale VTS). To ensuresafe navigation and protect the marine environmentthe VTS coverage of the port of Melbourne watersoperates 24 hours a day, seven days a week.

Tourism gatewayVPCM manages Station Pier as Victoria’s premiercruise shipping gateway. The pier alsoaccommodates TT-Line’s Spirit of Tasmaniapassenger ferries and other visiting ships includingAustralian and international navy vessels.

InfrastructureVPCM is responsible for maintaining the heritage-listed Station Pier and the historic Point LonsdaleLighthouse building at the Heads.

TradeStation Pier provides a vital trade link withTasmania with the Spirit of Tasmania ferriescarrying cargo between Devonport and Melbourne.


Functions, objects and powersTransport Integration Act 2010 (Vic)The Transport Integration Act 2010 (Vic) (TIA)commenced on 1 July 2010. Its purpose was tocreate a new framework for the provision of anintegrated and sustainable transport system inVictoria consistent with the vision statementcontained in section 6 which reads:

‘The Parliament recognises the aspirations ofVictorians for an integrated and sustainabletransport system that contributes to an inclusive,prosperous and environmentally responsible State.’

VPCM is defined as a ‘transport body’ under theTIA.

Under section 24 of the TIA, VPCM is required tohave regard to the ‘transport system objectives’,‘decision making principles’ and any applicable‘specified policy principles’ when performing itsfunctions or exercising its powers under any‘transport legislation’. Transport legislationapplicable to VPCM includes the Port ManagementAct 1995 (Vic) and the Marine Safety Act 2010(Vic).

The transport system objectives provide for:• Social and economic inclusion• Economic prosperity• Environmental sustainability• Integration of transport and land use• Efficiency, coordination and reliability• Safety, health and wellbeing

The decision making principles provide for:• Integrated decision making• Triple bottom line assessment• Equity• Transport system user perspective• The precautionary principle• Stakeholder engagement and communityparticipation

• Transparency

Section 141D: ObjectThe main objects of VPCM are:

a. to ensure that port of Melbourne waters andchannels in port of Melbourne waters aremanaged for use on a fair and reasonablebasis consistent with the vision statement andthe transport system objectives; and

b. to manage and develop Station Pier and WestFinger Pier consistent with the visionstatement and the transport systemobjectives.

c. if VPCM is a designated State port entity (asdefined in section 74AA of the PortManagement Act 1995), to manage a site inthe port of Melbourne at which stevedoringoperations are carried out consistent with thevision statement and the transport systemobjectives.

Section 141E: FunctionsThe functions of VPCM are:

a. to promote and market the port of Melbourne;b. to establish and manage and to dredge and

maintain channels in port of Melbournewaters;

c. to provide and maintain navigation aids inconnection with navigation in port ofMelbourne waters;

d. to publish information about the depths andconfigurations of channels and berths in portof Melbourne waters;

e. to provide or maintain systems related tonavigation in port of Melbourne watersincluding systems for managing vessel trafficand vessel communications and schedulingand allocating vessels to berths in thosewaters;

f. to generally direct and control, in accordancewith the Marine Safety Act 2010, themovement of vessels in port of Melbournewaters;

g. to regulate towage services in accordancewith the Port Management Act 1995;

h. in relation to Station Pier and West FingerPier:• to plan for the development and operationof the piers;

• to provide land, waters and infrastructurenecessary for the development andoperation of the piers;

• to develop, or enable and control thedevelopment by others of, the whole or anypart of the piers;

• to manage, or enable and control themanagement by others of, the whole or anypart of the piers;

• to provide, or enable and control theprovision by others of, services for theoperation of the piers;

• to facilitate the integration of infrastructureand logistics systems in the piers with the


transport system and other relevantsystems outside the piers;

i. to perform functions in accordance with adirection given by the Minister under section141H of the Act;

j. to perform any other functions or dutiesconferred on VPCM under a TransportRestructuring Order or by or under the TIA anyother Act or any regulations under the TIA orany other Act.

In performing its functions, VPCM must:a. carry out its functions consistently with State

policies and strategies for the development ofthe Victorian port and freight networks; and

b. to the extent that it is possible to do soconsistently with paragraph (a) above,operate in a commercially sound mannerhaving regard to:i. the benefits of increased competition

between persons and bodies that provideservices related to the operation of theport of Melbourne;

ii. the persons living or working in theimmediate neighbourhood of the port ofMelbourne;

iii. the need to conduct research and collectinformation relating to the performance ofthe functions and the operation of the portof Melbourne so as to enable VPCM tomeet its primary object;

iv. the need to deal efficiently with anycomplaints relating to the performance ofits functions.

Section 152: PowersAs a ‘transport corporation’ under the TIA, VPCMhas power to do all things that are necessary orconvenient to be done for or in connection with, oras incidental to, the achievement of its object andthe performance of its functions.

Ministerial DirectionsVPCM did not receive any Ministerial Directionsduring 2019-20.


Operations review

Key achievementsDuring 2019-20, VPCM:

• facilitated 3431 ship visits to Port Phillip Bay• managed 7760 trading vessel movementsincluding 593 Dynamic Under Keel Clearancetransits and 1060 vessel movements to andfrom Geelong

• ensured Victoria’s premier gateway for tradeand tourism remained open for business everyday of the year

• successfully managed ongoing trials of largercontainer ships berthing in Melbourne.

Marine and navigationVessel traffic services system upgradeThe vessel traffic services (VTS) system providesnavigational safety services to vessels calling atMelbourne.

In June 2020, VPCM began works to install newtechnology to replace and upgrade the currentsystem.

The innovative new system will provide enhancednavigational safety. It also has provision forexpansion, the ability to interface with futureinnovations and can take advantage of features ofthe current advanced radar system.

Larger container shipsIn an ongoing program, VPCM worked with Port ofMelbourne to assess opportunities for berthinglarger container vessels in the port.

Throughout the year, successful, incrementalstaged trials were conducted with vessels atSwanson and Webb docks.

SafetySafety is a key organisational value and health andsafety is a priority in everything we do.

We maintain a high level of maritime and workplacehealth and safety through continuously reviewingrisks and risk mitigation strategies. This process isenhanced through good communication and liaisonwith our stakeholders.

Any changes to the risk profile are addressed byconsidering the relevant activity from a whole ofport perspective, revising operational proceduresand providing appropriate additional treatments tomitigate the identified risks.

The ongoing ‘Steer Clear’ boating safety programaddresses the risk of a vessel interaction betweencommercial shipping and small recreationalvessels. Details of this program are given onpage 15.

Naval visitsStation Pier hosted two visits by Royal AustralianNavy (RAN) ships during the year.

HMAS Melbourne, a guided missile frigate (FFG),arrived at Station Pier on 13 September 2019 for afinal visit before her decommissioning after 27years’ service. She was alongside for five days.

The vessel was the last of the Adelaide Class FFGto be decommissioned. She was built atWilliamstown and launched in May 1989 andcommissioned in February 1992.

HMAS Choules, an amphibious Landing Ship Dock,berthed on 10 October 2019 for a four-day visit toparticipate in Navy Week activities.

The RAN’s public open days on each ship attractedlarge crowds to Station Pier.

Cruise shippingThe 2019-20 cruise season at Station Pier ran from13 October 2019 to 19 March 2020.

The cruise season was scheduled to end on24 May 2020 with 119 cruise vessel calls booked.The coronavirus (COVID-19) pandemic resulted inchanges to cruise vessel itineraries and cancelledport calls. As a result, 15 cruise vessel calls toStation Pier were cancelled.

During the cruise season there were 104 cruisevessel calls that saw a total of 262,318 passengersand crew welcomed to the facility.


In addition, two vessels, the Golden Princess andViking Orion were laid up by their owners followingthe season and three other cruise vessels madeport calls for provisions and stores as part of theirrepositioning voyages.

Four cruise ships used Station Pier as a homeportduring the season. They were:

• Golden Princess - 14 visits• Carnival Spirit - 10 visits• Queen Elizabeth - 8 visits• Pacific Aria - 8 visits

There were 42 turnaround visits, 17 overnight staysand five ships made their first visit to Melbourne.(Turnarounds are when all, or most, of thepassengers disembark and a new complementembarks.)

The vessel with the largest number of passengerson arrival during the cruise season was the MajesticPrincess with 4052 passengers embarked.

Melbourne Cup Day, 5 November 2019, saw twoships berthed at Station Pier. A third ship, thePacific Dawn, with 5084 passengers and crew,was berthed within the port of Melbourne for theMelbourne Cup Carnival.

During March and April VPCM worked closely withthe Australian and Victorian government authoritiesin the planning and execution of the port callswhere there was a risk of coronavirus (COVID-19).

Passenger ferriesThe TT-Line ferry service between Station Pier andDevonport in Tasmania provided a daily servicethroughout the year with its Spirit of Tasmaniavessels. Double sailings during summer and schoolholidays added capacity to meet the extra demandduring those periods. There were 436 sailings fromStation Pier - a total of 872 vessel movements,i.e. arrivals and departures.

In April 2020, the Tasmanian Governmentannounced that TT-Line would shift its Victorianterminal operations from Station Pier to Corio Quayin the port of Geelong.

AnchorageThe port of Melbourne anchorages managed byVPCM were used during the year by 521 vesselstransiting to and from the ports of Melbourne andGeelong and other vessels seeking safe harbour.

In addition to these vessels, in April the Blue Marlinsemi-submersible heavy transport ship floated offthe Ocean Onyx exploration drilling rig vessel. Oncompletion of the channel maintenance dredgingprogram, the Blue Marlin reloaded the Magnorbackhoe dredge.

The Ocean Onyx has subsequently been coldstaked at an anchorage in Port Phillip Bay awaitingan upturn in the offshore exploration sector.

Capital works at Station PierThe Victorian Government allocated $5.8 million inthe 2018-19 Budget for VPCM to undertake bothplanning and cruise vessel-related capital works togrow marine tourism in Victoria.

As part of the funding agreement, $3.15 million ofthe $5.8 million was allocated for capital works toupgrade existing infrastructure at Station Pier. Thefinal works in this program were delivered duringthe 2019-20 financial year.

Employee relations

Learning and developmentVPCM has embarked on a program to enhanceleadership skills throughout the organisation.

Groups of employees and managers participated ina series of workshops on Systems Leadership. Thesessions teach principles of human behaviour tocreate models of good leadership, organisationalstrategy, systems design and social process.


InfrastructurePier maintenanceVPCM has an ongoing maintenance programcovering the whole of Station Pier and West FingerPier. This maintains the structural safety of the piersand buildings and ensures the facilities meetcustomers’ needs.

Improvement and maintenance works are carriedout between cruise seasons, from autumn to spring.

The program completed before the cruise seasonstarted in 2019 included the ongoing pilerehabilitation project and works to preserve thestructure and enhance the appearance of the twoterminal buildings.

The next phase of the pile rehabilitation project forStation Pier started in May 2020. With around 7000piles supporting the Station Pier structure, theirmaintenance is an ongoing project.

All maintenance works on the heritage-listedStation Pier structures are carried out in closeconsultation with Heritage Victoria and, wherenecessary, with approval under the Marine andCoastal Act 2018 (Vic).

Lighthouse maintenanceThe heritage-listed Point Lonsdale Lighthousebuilding undergoes programmed maintenanceworks to preserve the structure and ensure itcontinues to play its vital role in the safety ofcommercial shipping in Port Phillip Bay.

In May 2020, work began on painting the exterior ofthe structure and carrying out some generalimprovements. All works were approved byHeritage Victoria.

Asset managementVPCM is responsible for a diverse set of assets inmany different and challenging locations on landand water.

The assets range from the heritage-listed StationPier to the advanced systems used to ensure safenavigation in Port Phillip Bay. They are located inand around the bay, along the southern Victoriancoast and in the waters of Bass Strait.

The reporting period was the third year of a four-year asset management improvement plan and thefocus was on consolidating our systems andprocesses. An employee communication programunderpins the plan, to instil an asset managementculture throughout the organisation.

The aim is to achieve full compliance with theVictorian Government’s Asset ManagementAccountability Framework consistent with the AssetManagement ISO 55000 standard.

PricingAs a designated State Port Entity under section74AB of the Port Management Act 1995 (Vic),VPCM may set fees and charges for its services.These are set out in the Reference Tariff Schedule.

Commercial termsVPCM introduced revised Standard Terms andConditions (STC) for the hire of common userwharves and terminals at Station Pier. Theseclarified the performance obligations of VPCM andthe hirer and also expanded the category ofAncillary Service Providers (ASP) engaged by thehirers to encompass all contractors that use StationPier as a workplace.

The STC were complemented by ASP licences thatincorporated security, health and safety, andenvironmental management performanceobligations on the licence holders.


Reference Tariff ScheduleVPCM operated under its Reference TariffSchedule 2019, effective from 1 July 2019. Duringthe reporting period, this was available on theVPCM website, www.vicports.vic.gov.au.

CommunityMelbourne is a port city with urban communitiesbordering VPCM’s operations areas and landsidelinks. Recognising the amenity expectations ofneighbouring communities, we liaise and regularlymeet with residents, businesses and localgovernment in the Port Melbourne area.

Community Advisory GroupVPCM’s Community Advisory Group (CAG) metthroughout the year. VPCM uses the forum to shareinformation about its operations and responsibilitiesand receive feedback from the communitymembers.

An outcome of community consultation in late 2018,the CAG consists of members representing a widerange of local interests. These include residents,traders, schools, special interest groups andrepresentatives from the City of Port Phillip.

‘Steer Clear’ boating safety campaignVPCM’s successful ‘Steer Clear’ boating safetycampaign aims to reduce the risk of vesselinteractions between commercial shipping andsmall recreational vessels.

During the year, our Transport Safety Officers(TSOs) conducted on-water patrols in the portwaters of the port of Melbourne. While out onpatrol, the TSOs speak directly with boat operatorswho are not complying with marine safetylegislation or local waterway rules. Our preferredmethod is education but when necessaryenforcement penalties are issued.

We also worked closely with our marine safetypartners to conduct joint, risk-based operations totarget specific areas. Those partner organisationsare the Victorian Water Police Squad, MaritimeSafety Victoria, Parks Victoria and VictorianFisheries Authority.

Queenscliffe Maritime MuseumThe Queenscliffe Maritime Museum in WharfStreet, Queenscliff offers the public an insight intoPort Phillip’s maritime history. VPCM supports themuseum’s work by enabling its knowledgeablevolunteers to conduct paid tours of the PointLonsdale Lighthouse.

Due to the coronavirus (COVID-19) pandemic thetours were suspended on 13 March 2020.Previously, they were available from 9.30 am to 1pm on Sundays and by appointment on other daysfor groups.

Waterfront WelcomersThe Station Pier meet and greet service providedby City of Port Phillip community volunteersensured a warm welcome for cruise passengersand crew.

City of Melbourne volunteersCity of Melbourne volunteers provided tourisminformation and advice covering events andlocations in the greater Melbourne area. It is thelongest running such service for cruise passengersin Australasia having started in 1997.

EnvironmentLow sulphur fuelFrom 1 January 2020 it became mandatory forall ships to use low sulphur fuel (a maximum of0.50% m/m sulphur) in accordance with theInternational Maritime Organization’s (IMO)regulation.

The IMO is the regulatory authority for internationalshipping. Australia is a member of the IMO and asignatory to its International Convention for thePrevention of Pollution from ships (MARPOL).

VPCM worked with the Australian Maritime SafetyAuthority (AMSA), the Australian Government’sagency in this matter, to ensure a smooth transition.VPCM continues to comply with AMSA’s directionsin this regard.


Caustic sodaDuring April 2020 VPCM trialled the bunkering of60 tonnes of caustic coda onboard the Viking Orionat Station Pier. Caustic soda is a requirement of themodern exhaust scrubbing system onboard thevessel.

Emergency responseVPCM is a control agency for marine casualtywithin the port waters of the port of Melbourne andfor marine pollution from Cape Schanck in the eastto Cape Otway in the west, including Port PhillipBay.

Staff continued to participate in state and nationalemergency response exercises and workshops formarine pollution and casualty response.

VPCM staff who are members of the state responseteam attended an exercise held by the Departmentof Transport for the State Maritime Emergencies(non-search and rescue) Plan.

Safety and EnvironmentManagement PlanVPCM operates under its Safety and EnvironmentManagement Plan (SEMP).

The SEMP is prepared in accordance withMinisterial Guidelines Port Safety and EnvironmentManagement Plans (November 2012), as requiredby section 91G of the Port Management Act 1995(Vic). The plan is subject to independent auditevery three years and internal audit annually.

The last independent audit was in April 2019.

The 2019-20 internal audit found that VPCM’sSEMP was in full conformance with all therequirements of the Port Management Act andMinisterial Guidelines.

As required, the annual report including the findingsand safety metrics from this internal audit waspresented to the Minister for Ports and Freight.


Financial information summary

OverviewThe financial statements presented in this reportare prepared in accordance with the FinancialManagement Act 1994 (Vic) and applicableAustralian accounting standards.

Highlights from the financial year included a$2.4 million increase in revenue, an investment inupgrading the Vessel Traffic Services and facilitiesfor our customers at Station Pier, retention of astrong cash position of $28.2 million and at theoperating level and prior to taking account of thenon-cash revaluation impairment, positive netearnings of $6.5 million.

An independent revaluation of fixed assets wasundertaken as at 30 June 2020 by the ValuerGeneral of Victoria’s office (VGV). The revaluationoccurs on a five-year cycle and this is the first timethat a third-party asset revaluation has taken placesince the Port Lease Transaction and VPCM’sinception in November 2016.

In preparing the valuation this year, the approachhas departed from that used previously. This is thefirst time the VGV has requested a DiscountedCash Flow (DCF) model as part of the valuation.

Five-year financial summaryThe table below shows VPCM’s five-year financial summary.

(i) Expenses and other losses and Operating loss after tax includes an impairment loss of $23.3 million as a result of independentrevaluation of fixed assets.

(ii) Net result for the period includes a gross reduction in asset revaluation reserve of $42.3 million ($31 million tax effected) as aresult of the revaluation of fixed assets.

(iii) Total assets figure includes an impairment of fixed assets of $65.6 million and $2.5 million capital works in progress write off, dueto the revaluation of fixed assets.

(iv) A minor change to the 2018 total assets and total liabilities in 2019 related to the reclassification of the Goods and Services Tax(GST). GST was previously disclosed as a statutory receivable and a statutory payable. GST was netted off in 2019 with arestatement of the balance sheet for 2018.

(v) The 2017-18 Annual Report includes VPCM’s first full year financial statements as an individual reporting entity. The 2018 financialsummary was restated to correct the understatement of the provision for income tax and overstatement of employee benefitreserve.

(vi) In accordance with directions given by the Premier to the Port Corporation pursuant to section 20(2) of the Delivering VictorianInfrastructure (Port of Melbourne Lease Transaction) Act 2016 (Vic), the financial summary for 2017 represents consolidatedfinancial information for: Port of Melbourne Operations Pty Ltd (Port Manager) for the period 1 July 2016 - 31 October 2016,Melbourne Port Lessor Pty Ltd (Port Lessor) for the period 1 July 2016 - 31 October 2016, Port of Melbourne Corporation(renamed Victorian Ports Corporation (Melbourne) on 1 November 2016) for the period 1 July 2016 - 30 June 2017.

(vii) The financial summary for 2016 represents consolidated financial information for Port of Melbourne Corporation.

2020$m

2019$m

2018$m

2017$m

2016$m

Income 39.2 36.9 34.1 146.9 394.2

Expenses and other losses 60.3 36.1 31.6 101.0 266.8

Operating profit (loss) after tax - 16.8 0.6 1.7 30.4 95.8

Net result for the period - 51.1 - 4.8 4.1 106.8 4,225.5

Net cash flow from operating activities 9.1 7.2 16.5 21.8 258.6

Total assets 101.0 159.0 150.9 145.7 10,225.0

Total liabilities 42.2 51.0 39.5 42.6 110.9

(iv)

(vii)(vi)(v)

(i)

(ii)

(iii)

(i)

(iv)


While VPCM’s business activities were consistentwith the year immediately prior, the DCF modelutilised in the revaluation of fixed assets has beenaffected by the coronavirus (COVID-19) pandemicimpact on the cruise ship season and restrictedpassenger travel between Tasmania and Victoria,as well as the end of the current Inner East berthlease in November 2022.

The information provided to the VGV by VPCM hasbeen prepared on an appropriately conservativebasis reflecting the current level of uncertaintyacross the tourism economy.

Planning for the recovery of cruise shipping and thenext stage of Station Pier’s operations is underwayand VPCM is continuing to work closely with theDepartment of Transport and other agencies ofgovernment on these matters.

Financial performance –Comprehensive operatingstatement

VPCM’s operating loss after tax for 2019-20 was-$16.8 million, including the impairment loss of$23.3 million. The operating loss result for the yearrepresents a decrease of $17.3 million against the2018-19 year total of $0.6 million.

The net result for the period is -$51.1 millioncompared to -$4.8 million in the prior year. Thisincludes the reduction in asset revaluation reserveof $42.3 million, relating to impairment of assetswhich had been revalued in prior years and aremeasurement of the net liability in respect of thedefined benefits superannuation fund similar to lastyear.

The results for the year included an income taxbenefit of $4.3 million due to the loss before incometax, compared to a tax expense of $0.1 million inthe prior year.

Operating revenue for 2019-20 totalled $39.2million compared to $36.9 million in the previousyear. The increase of $2.4 million is due primarily toincreased revenue from accompanied passengervehicles on TT-Line and an increase in cruiserevenue.

Operating expenses for 2019-20 totalled$36.0 million compared to $35.4 million in theprevious year. The impairment loss for the yearwas $23.3 million.

Finance costsThere were no borrowings during the year. Cashreserves were $28.2 million as at the end of theyear compared to $23.9 million for the previousyear.

Capital expenditureVPCM’s capital expenditure was $9.0 million andincluded the annual Station Pier piles rehabilitationproject, the Vessel Traffic Services equipmentupgrade and other capital works.

Cash flowNet cash inflows from operating activities were$9.1 million compared with $7.2 million in 2018-19.The increase of $1.9 million was primarily due to anincrease in receipts from customers and a decreasein payments to suppliers and employees, offset byhigher income tax paid.

Cash outflows from investing activities were$6.4 million compared to $4.6 million in 2018-19,reflecting an increase in investment in plant andequipment.

Cash inflows from financing activities were$1.5 million compared to $1.3 million in 2018-19and reflected a capital contribution from theDepartment of Transport.


Balance sheetThe balance sheet of VPCM as at 30 June 2020reports net assets of $58.7 million compared to$108.0 million for 2018-19, a decrease of$49.3 million.

Total assets decreased by $58.0 million primarilydue to the asset revaluation ($65.6 millionimpairment) and $2.5 million capital works inprogress write off, offset by additional investment inother assets, capitalisation of works in progress andan increase in deferred tax asset.

Total liabilities decreased by $8.8 million over theyear to $42.2 million. This is primarily due to areduction in deferred tax liability of $15.2 millionand an increase in defined benefits fund net liabilityof $6.7 million.

Statements of Changes inEquityThe statement of changes in equity records adecrease of $49.3 million, from $108.0 million in theprior year to $58.7 million. The movement in thisstatement reflects the following:

• A loss for the year of $16.8 million including theimpairment loss of $23.3 million.

• The reduction in the asset revaluation reserveof $29.9 million.

• The re-measurement of the net defined benefitliability for the Port of MelbourneSuperannuation Fund of $4.6 million.

• An increase in capital due to the capitalcontribution from Department of Transport forthe Station Pier Project of $1.8 million.

Capital projectsIn 2019-20 VPCM did not have any capital projectswith a total estimated investment of $10 million ormore.



Section 2:

Governance andorganisationalstructure


Corporate governance

Board of ManagementThe VPCM Board of Management is established under the Transport Integration Act 2010 (Vic). The Boardconsists of not less than three and not more than nine members, each of whom is appointed by the Governorin Council. It is the duty of the Board to act consistently with the functions and objectives of VPCM, act as asounding base for good corporate governance and to act honestly, fairly and diligently in accordance with theapplicable legislation. Management of the operations and administration is delegated by the Board to theChief Executive Officer.

VPCM reported to the following Ministers during the reporting period:• The Hon. Melissa Horne MP, Minister for Ports and Freight• The Hon. Tim Pallas MP, Treasurer

The primary responsibility of the VPCM Board is to ensure that the port of Melbourne waters and channels inport of Melbourne waters are managed for use on a fair and reasonable basis and to manage and developStation Pier and West Finger Pier consistent with the vision statement and transport system objectives as setout in the Transport Integration Act 2010 (Vic) (TIA).

With the aim of achieving best practice, the Board has developed and endorsed a set of governanceprinciples which are in line with its responsibilities under the TIA. As a result, the primary focus of the Boardis on:

• setting the strategic direction of VPCM in accordance with the interests of the Government as its owner,giving immediate notice to the Minister and the Treasurer of significant events which may affect orprevent VPCM from achieving its business objectives or plan targets

• providing to the Minister or Treasurer in writing, such information as the Minister or Treasurer requires• ensuring accountabilities under the legislation to the Minister and the Treasurer are understood by theBoard and VPCM

• monitoring compliance with legislative and regulatory requirements, ethical standards and externalcommitments, including, but not limited to the Financial Management Act 1994 (Vic) and Australian RiskManagement Standard ISO AS/NZS31000 (or its equivalent)

• having regard to the transport system objectives, the decision making principles and any relevantstatement of policy principles in carrying out its functions and exercising its powers.

Conflict of interestThe Directors are governed in respect of conflicts of interest by the relevant provisions of the PublicAdministration Act 2004 (Vic) and binding codes issued by the Victorian Public Sector Commission. They arerequired to declare any pecuniary interest in any matter being considered by the Board or in any other matterin which VPCM is concerned. The Board is provided at each of its meetings a consolidated list of registeredinterests disclosed by Directors.

Directors are also required to complete a declaration of private interests upon appointment and annuallythereafter, as well as a declaration of related party transactions on an annual basis


Directors

James Cain, Chairman

James Cain was appointed Chairman of VictorianPorts Corporation (Melbourne) on 2 November2016 and reappointed on 1 August 2019.

James was Deputy Chair of Port of MelbourneCorporation from July 2010 until the medium-termlease of the port of Melbourne became effective inNovember 2016.

He has an extensive background in projectdevelopment management in property andinfrastructure, in both the public and private sectors.

James’ professional experience includes 12 yearswith property and construction company LendLease in various roles including General Managerfor Victoria, Tasmania and South Australia, and fiveyears with the Victorian Government as ExecutiveDirector of Major Projects Victoria, the VictorianGovernment’s major capital works agency.

Since 2006, James has developed his interests incommercial, infrastructure and property areasthrough his own consulting business.

James was Chair of the Industry SuperannuationProperty Trust (ISPT) between 2009 and April 2018.He was also Chair of Port of Hastings Corporationuntil September 2010 and was a Director ofVictorian Rail Track (VicTrack) between April 2008and July 2010.

Board Committee membership:• Chair, Remuneration and People Committee• Risk Committee• Audit and Finance Committee

Janice van Reyk, Deputy Chair

Janice van Reyk was appointed Deputy Chair ofVictorian Ports Corporation (Melbourne) on2 November 2016 and reappointed on1 August 2019.

Janice was a Director of Port of MelbourneCorporation from 2011 until the medium-term leaseof the port of Melbourne became effective inNovember 2016.

She is an experienced non-executive Director withbroad-based business skills gained as a seniorexecutive in listed industrial companies.

She is a non-executive Director of LochardEnergy Group, Chair of its Audit Committee; anon-executive Director of Australian NavalInfrastructure, Chair of its Audit & Risk Committee;a non-executive Director of Citywide, Chair of itsSafety Risk and Environment Committee and amember of its Audit and Finance Committee; anon-executive Director of Tennis Australia, Chair ofits Audit & Risk Committee; a trustee of Melbourne& Olympic Parks Trust and a member of theNorthern Territory Environment Protection Authority.

Janice has an extensive professional background inmajor capital projects, infrastructure, finance andcapital markets, mergers and acquisitions,commercial negotiations, risk management,environmental management and stakeholderengagement.

Janice also holds a Master of Commerce, a Masterof Environment (Hons), Bachelor of Laws (Hons)and a Bachelor of Arts (Economics). Janice is aFellow of the Australian Institute of CompanyDirectors, a CPA and a Leadership Victoria Fellow.

Board Committee membership:• Chair, Audit and Finance Committee• Risk Committee


Deb Beale

Deb Beale was appointed a Director of VictorianPorts Corporation (Melbourne) on 2 November2016 and reappointed on 1 February 2020.

Deb’s broad experience includes the areas offinance, corporate governance, public relations andrisk management.

She has served, and continues to serve, on anumber of government, public, private andnot-for-profit boards.

She began her working career in the financeindustry where she was employed by Merrill Lynchfor over a decade. She then moved to Ernst &Young where she specialised in risk management,government relations and governance.

Deb has a Bachelor of Commerce from theUniversity of Melbourne, a Graduate Diploma fromthe Securities Institute of Australia and a Masters ofBusiness Administration from Melbourne BusinessSchool.

Board Committee membership:• Chair, Risk Committee• Remuneration and People Committee

Peter Tuohey

Peter Tuohey was appointed a Director of VictorianPorts Corporation (Melbourne) on 2 November2016 and reappointed on 1 February 2020.

Peter is a fifth generation grain, wool and primelamb producer whose experience in freight andlogistics has seen him appointed to a number ofadvisory roles.

Peter is Chair of the Victorian Government’s RailFreight Working Group, Chairman of MelbourneMarket Authority, Rural Assistance Commissioner, amember of the Ministerial Freight Advisory Counciland a member of the Victorian Water BoardSelection Panel.

At the Victorian Farmers Federation (VFF) heserved as President from 2012 to 2016 and VicePresident from 2009 to 2012. He was also Chair ofthe VFF’s Farm Business and RegionalDevelopment Committee from 2010 to 2013. At thenational level, Peter was a Board Director of theNational Farmers Federation from 2012 to 2016and served on its Economics Committee.

Peter was also a member of the Victorian Freightand Logistics Council from 2009 to 2012.

Board Committee membership:• Audit and Finance Committee• Remuneration and People Committee


Chairman / Director Board CommitteeAudit and Finance Remuneration and

PeopleRisk

J Cain (Chairman) 8/8 3/3 2/2 4/4

J van Reyk (Deputy Chair) 8/8 3/3 2/2 (guest) 4/4

D Beale 8/8 NA 2/2 4/4

P Tuohey 8/8 3/3 2/2 NA

Board and Committee meetings

Audit and Finance Committee membership and rolesThe Audit and Finance Committee consisted of the following members in 2019-20:

Ms Janice van Reyk, Chairperson (independent)Mr Peter Tuohey (independent)Mr James Cain (ex officio member)

The responsibilities of the Audit and Finance Committee are set out in Standing Direction 3.2.1.1. The keyresponsibilities of the committee are to:

• review and report independently to the board on the annual report and all other financial informationpublished by VPCM

• determine the scope of the internal audit function and ensure its resources are adequate and usedeffectively, including coordination with the external auditors

• maintain effective communication with external auditors• consider recommendations made by internal and external auditors and review the implementation ofactions to resolve issues raised

• assist the board in reviewing the effectiveness of VPCM’s internal control environment covering:– effectiveness and efficiency of operations– reliability of financial reporting– compliance with applicable laws and regulations.

Remuneration and People CommitteeThe Remuneration and People Committee assists the Board to fulfil its governance responsibilities byensuring that VPCM has executive remuneration policies, guidelines and practices that are consistent withgovernment policy and by reviewing policies and processes relating to the development of VPCM’s peopleand its culture.

Risk CommitteeThe primary role of the Risk Committee is to oversee the effective operation of the risk managementframework to assist the Board in fulfilling its governance responsibilities. The committee also evaluates theeffectiveness of risk identification and management and ensures compliance with internal guidelines andexternal requirements.

Attendance at Board and Board Committee meetingsNumber attended/eligible to attend


Organisational structure

Assets and Infrastructure

Board Secretariat

Major Projects

Strategy and Risk

Contract Management

Security

Infrastructure

Finance

Legal

People and Culture

Corporate Affairs

Business Support

Finance and CorporateSupport

Station Pier /Cruise Shipping

Information Technology

Property Management

Business, Informationand Strategy

Marine and Navigation

Crisis and EmergencyManagement

Health and Safety

Marine and Navigation

Chief Executive Officer

Remuneration andPeople Committee Risk CommitteeAudit and Finance

Committee

Board


Executive Management Team

Rachel Johnson, Chief Executive OfficerRachel Johnson took up the role of inaugural Chief Executive Officer of VPCM in November 2016.

Rachel has wide ranging experience of Australian freight and logistics businesses and the development andoperation of transport infrastructure in both the public and private sectors. She has held senior positions inNew South Wales government bodies as well as in a number of high profile private sector companies.

Captain Kell Dillon, Harbour Master/Executive General Manager – Marine and NavigationKell is the Harbour Master of the port of Melbourne and leads the Marine and Navigation Division. Hisdivision is responsible for safe navigation in the port waters of the port of Melbourne through vessel trafficservices as well as emergency management, health and safety, and security.

Jeff Bazelmans, Executive General Manager – Business,Information and StrategyJeff leads a diverse division that includes the management of Victoria’s premier cruise shipping facility atStation Pier, cruise tourism, tenant management, environment, information technology services, businessstrategy and risk.

Jacinta Mackey, Executive General Manager – Financeand Corporate SupportJacinta leads the division responsible for finance and the diverse corporate support areas of legal counsel,communications, human resources and business support.

Executive General Manager – InfrastructureThe Assets and Infrastructure department and the Major Projects department reported directly to the ChiefExecutive Officer during the reporting period.


OH&S and employment principles

Occupational health and safetyVPCM is committed to a safety culture that ensures the health, welfare and safety of its workers. Thiscommitment extends to ensuring that VPCM operations do not place the wider port community atunnecessary risk of injury or illness.

As an integral part of advancing the safety culture, VPCM takes a proactive approach to managing itsoccupational health and safety responsibilities and delivers initiatives and programs designed to preventsafety incidents and injuries.

Key activities:• Continued support of the Whole of Port Safety Health and Environment Consultative Forum whichbrings together the safety teams from all organisations working in the port.

• Monitored hazardous port activities across the port with 230 audits conducted by Port AuthorisedOfficers from the Port Safety Team.

• Reviewed work practices on VPCM-operated sites.• Supported staff working from home due to the COVID-19 pandemic through strong guidelines for remoteworking, help with supply of appropriate workstation equipment and set up, and ergonomic assessmentsin accordance with all government guidelines.

Workplace Health and Safety RepresentativesWorkplace Health and Safety Representatives give staff a voice through the organisation’s OccupationalHealth, Safety and Environment Committee which meets throughout the year.

Management of hazards and incidentsVPCM is working to enhance its positive safety culture. To help achieve this, it has a key strategic objectiveto increase the reporting of hazards, near misses and incidents.

From the 2018-19 reporting period, employees and contractors have been encouraged to be vigilant andreport every hazard or incident no matter how insignificant it may appear. As a result, there has been amarked increase in the number of reports compared with previous years. However, the number of reportedincidents and hazards in 2019-20 was lower than the previous year.

There were no notifiable injuries nor lost time injuries to VPCM staff during 2019-20. (Notifiable incidents arethose which require the OHS Regulator to be notified if they occur.)

FTE = Full-time equivalent staff

Measure KPI 2019-20 2018-19 2017-18

Incidents andhazards

Number of incidents 1 2 0

Number of hazards 15 30 0

Rate per 100 FTE 0 0 0

Claims

Number of lost time standard claims 0 0 0

Rate per 100 FTE 0 0 0

Average cost per standard claim 0 0 0

Fatalities Fatality claims 0 0 0


Employment and conduct principlesVPCM is committed to applying merit and equity principles when appointing staff. The selection processesensure that applicants are assessed and evaluated fairly and equitably on the basis of the key selectioncriteria and other accountabilities without discrimination. Employees have been correctly classified inworkforce data collections.



Section 3:

Workforce data


Public sector values and employment principlesWe aspire to be an effective, sustainable, diverse and fair organisation, with a culture that creates high levelsof employee engagement and performance.

Our strategic intent is to:• develop and maintain a contemporary organisation design and fit-for-purpose people policies,procedures and enabling systems

• drive engaged leadership that motivates and inspires employees• develop a strong employee value proposition that attracts and retains people with the right capabilities• create and sustain market-leading capabilities in the workforce through workforce planning, professionaldevelopment and succession planning

• build a culture of innovation, growth, engagement, high performance, inclusivity and wellbeing.

These objectives align with our corporate plan objectives which are to provide an effective workplace andport community organisation and to deliver value to customers and stakeholders through efficient internalsystems, processes and innovation.

Comparative workforce dataAnnualised total salary, by $20,000 bands, for executives

Our people

Income band (salary) Executives$160,000 - $179,999 3$180,000 - $199,999 0$200,000 - $219,999 4$220,000 - $239,999 2$240,000 - $259,999 1$260,000 - $279,999 1$280,000 - $299,999 0$300,000 - $319,999 0$320,000 - $339,999 1Total 12


Details of employment levels in 2019 and 2020The following table discloses the headcount and full-time staff equivalent (FTE) of all VPCMemployees, employed in the last full pay period in June of the current reporting period, and in the lastfull pay period in the previous reporting period.

Dem

ographic

data

Dem

ographic

data

Classification

data

Classification

data

June 2020All employees Ongoing Fixed term and

casualNumber

(headcount)FTE Full-time

(headcount)Part-time(headcount)

FTE Number(headcount)

FTE

GenderMale 51 50.2 46 0 46 5 4.2Female 13 12.8 12 1 12.8 0 0Age15-24 0 0 0 0 0 0 025-34 4 3.6 2 0 2 2 1.635-44 18 17.4 15 1 15.8 2 1.645-54 16 16 16 0 16 0 055-64 23 23 22 0 23 1 165+ 2 2 2 0 2 0 0

EBA employees 52 51.2 47 0 47 5 4.2Senior employeesExecutives 12 11.8 11 1 11.8 0 0Total employees 64 63 58 1 58.8 5 4.2

June 2019All employees Ongoing Fixed term and

casualNumber

(headcount)FTE Full-time

(headcount)Part-time(headcount)

FTE Number(headcount)

FTE

GenderMale 48 47.2 28 0 28.0 20 19.2Female 18 16.6 3 1 3.8 14 12.8Age15-24 0 0.0 0 0 0.0 0 0.025-34 3 2.0 0 0 0.0 3 2.035-44 21 20.2 8 1 8.8 12 11.445-54 12 12.0 8 0 8.0 4 4.055-64 28 27.6 14 0 14.0 14 13.665+ 2 2.0 1 0 1.0 1 1.0

EBA employees 53 51.4 31 1 31.8 21 19.6Senior employeesExecutives 13 12.4 0 0 0.0 13 12.4Total employees 66 63.8 31 1 31.8 34 32.0



Section 4:

Other disclosures


Local Jobs FirstThe Local Jobs First Act 2003 (Vic) introduced in August 2018 brings together the Victorian IndustryParticipation Policy (VIPP) and Major Project Skills Guarantee (MPSG) policy which were previouslyadministered separately.

Public sector bodies are required to apply the Local Jobs First policy in all projects valued at $3 million ormore in metropolitan Melbourne or for statewide projects, or $1 million or more for projects in regionalVictoria.

Project commenced – Local Jobs First StandardDuring 2019-20, VPCM commenced one Local Jobs First Standard project for $1.54 million, in metropolitanMelbourne. The outcomes expected from the implementation of the Local Jobs First policy to this projectwhere information was provided, are as follows:

• A commitment for 85 per cent local content.• Five new jobs (AEE*) were committed, but there were no existing jobs to be retained.• No positions were committed for apprentices, trainees and cadets.• There were no existing apprenticeships, traineeships and cadets to be retained.

Project completed – Local Jobs First StandardDuring 2019-20, VPCM completed one Local Jobs First Standard project for $3.1 million, in metropolitanMelbourne. The outcomes expected from the implementation of the Local Jobs First policy to this projectwhere information was provided, were as follows:

• A commitment of 94 per cent local content.• A total of 10 jobs (AEE*) were committed, including the creation of two new jobs and the retention ofeight existing jobs (AEE*).

• Two new positions for apprentices, trainees and cadets were committed.• There were no existing apprenticeships, traineeships and cadets to be retained.

Reporting requirements – all projectsDuring 2019-20, there was one small to medium-sized business that prepared a VIPP Plan or Local IndustryDevelopment Plan (LIDP) for a contract, successfully appointed as Principal Contractor.

During 2019-20, one small to medium-sized business was engaged through the supply chain on this project.

VPCM did not start any contracts before 15 August 2019 for which a VIPP Plan or LIDP was not requiredbecause the procurement activity was local by nature.

* AAE = annualised employee equivalent

Disclosure of government advertising expenditureIn 2019-20 VPCM did not undertake any advertising campaigns with a total media spend of $100,000 orgreater (exclusive of GST).


Consultancy expenditureDetails of consultancies under $10,000During the period 1 July 2019 to 30 June 2020, two consultants were engaged where the value of theconsultancy was less than $10,000. The total expenditure on these two consultancies was $14,000excluding GST.

Details of consultancies over $10,000During the period 1 July 2019 to 30 June 2020, 27 consultants were engaged where the value of theconsultancy was greater than $10,000.

The total value of consultancies for the 12 months ended 30 June 2020 was $1.3 million excluding GST.

Details of individual consultancies can be found on VPCM’s website at www.vicports.vic.gov.au.

Information and Communication Technology (ICT) expenditureFor the 2019-20 reporting period, VPCM had a total ICT expenditure of $3.3 million, with the details shownbelow.

Note:• ICT expenditure refers to VPCM’s costs in providing business enabling ICT services within the currentreporting period. It comprises Business As Usual (BAU) ICT expenditure and Non-Business As Usual(Non-BAU) ICT expenditure.

• Non-BAU ICT expenditure relates to extending or enhancing VPCM’s current ICT capabilities.• BAU ICT expenditure is all remaining ICT expenditure that primarily relates to ongoing activities tooperate and maintain the current ICT capability.

All operational ICTexpenditure

ICT expenditure related to projects to create or enhance ICT capabilities

Business As Usual(BAU) ICT expenditure

Non-Business as Usual (non-BAU)ICT expenditure(Total = OPEX + CAPEX)

Operationalexpenditure(OPEX)

Capitalexpenditure(CAPEX)

$3.3 million Nil Nil Nil


Disclosure of major contractsVPCM did not award any major contracts (valued at $10 million or more) during 2019-20.

Freedom of informationThe Freedom of Information Act 1982 (Vic) (FOI Act) enables members of the public to obtain informationheld by VPCM. The object of the FOI Act is to create a general right of access to information, limited only byexceptions and exemptions necessary to protect essential public interests, privacy, and business affairs.

An applicant has a right to apply for access to documents held by VPCM. This comprises documents bothcreated by VPCM or supplied to VPCM by an external organisation or individual, and may also include maps,films, microfiche, photographs, computer printouts, computer discs, tape recordings and videotapes.Information about the type of material produced by VPCM is available on VPCM’s website under its Part IIInformation Statement.

The FOI Act allows VPCM to refuse access, either fully or partially, to certain documents or information.Examples of documents that may not be accessed include: Cabinet documents; some internal workingdocuments; law enforcement documents; documents covered by legal professional privilege, such as legaladvice; personal information about other people; documents that disclose VPCM’s business, commercial orfinancial information; and information provided to VPCM in-confidence.

Once VPCM has received a valid request, a decision on whether to grant access to the documents will beprovided within the time limit stipulated in the FOI Act. This is normally 30 days, but longer time limits arepermitted in certain circumstances (for example, where consultation with third parties is required by certainprovisions of the FOI Act the time limit will be extended to 45 days). The time limit for processing a requestcan also be extended by agreement with the applicant.

If an applicant is not satisfied by a decision made by VPCM, under section 49A of the FOI Act, they have theright to seek a review by the Office of the Victorian Information Commissioner (OVIC) within 28 days ofreceiving a decision letter.

Making a requestFOI requests to VPCM should be addressed to:

Freedom of Information OfficerVictorian Ports Corporation (Melbourne)GPO Box 261Melbourne VIC 3001

FOI requests can also be lodged electronically to [email protected].

An application fee of $29.60 applies. Access charges may also be payable if the document pool is large andthe search for material is time consuming.

When making an FOI request, applicants should ensure requests are in writing and clearly identify whattypes of material/documents are being sought.

FOI statistics/timelinesDuring 2019-20, VPCM received three FOI requests. One request was from a Member of Parliament, onewas from the media and one was from a private entity.

VPCM made two FOI decisions during the 12 months ending 30 June 2020. Both requests requiredclarification and consultation with the applicants regarding the scope of the request and the decisions were


therefore made outside of the statutory 30-day time period. Both requests were refused under section 25A(1)of the FOI Act as the work involved in processing the requests would have substantially and unreasonablydiverted the resources of VPCM from its other operations.

The average time taken to finalise decisions during the 12 months ending 30 June 2020 was 160 days(though the small number of requests should be noted).

During 2019-20, one request was subject to an independent review by OVIC.

More informationMore information regarding the operation and scope of FOI can be found in the FOI Act, the regulationsmade under the FOI Act and from the OVIC: www.ovic.vic.gov.au.

More information regarding the process for making an FOI request to VPCM can be found on VPCM’swebsite: www.vicports.vic.gov.au.

Compliance with the Building Act 1993 (Vic)Buildings were maintained in accordance with relevant building and maintenance provisions in the BuildingAct 1993 (Vic) and Building Regulations 2018.

To ensure buildings conform with building standards, VPCM retains experienced building maintenancecontractors who are required to be up to date with all relevant standards.

VPCM uses an asset management system for recording maintenance requests, essential serviceinspections, reporting, scheduling, and rectification and maintenance works on existing buildings.

During the 2019-20 reporting period the following applied to buildings owned by VPCM:• There were five major works projects (greater than $50,000). Four were completed during the year andone was still under way at 30 June 2020.

• Three building permits and three certificates of final inspection were issued.• No emergency orders or building orders were issued.• No buildings were brought into conformity with building standards.

Competitive Neutrality PolicyCompetitive neutrality requires government businesses to ensure where services compete, or potentiallycompete with the private sector, any advantage arising solely from their government ownership be removedif it is not in the public interest. Government businesses are required to cost and price these services as ifthey were privately owned. Competitive neutrality policy supports fair competition between public and privatebusinesses and provides government businesses with a tool to enhance decisions on resource allocation.This policy does not override other policy objectives of government and focuses on efficiency in the provisionof service.

VPCM continues to comply with the requirement of the Competitive Neutrality Policy and conform with theinstructions for public construction procurement.


Compliance with the Public Interest Disclosures Act 2012 (Vic)The purpose of the Public Interest Disclosures Act 2012 (Vic) (PIDA) is to encourage and facilitate disclosureof improper conduct by public officers and public bodies and to provide protection for persons who makethose disclosures. The PIDA also aims to ensure that disclosures are properly assessed and investigatedand that the confidentiality of a disclosure and the identity of the person making the disclosure is maintained.

The PIDA was amended with effect from 1 January 2020 to improve access for those making public interestdisclosures and to provide greater flexibility for investigating entities. The title of the legislation, and theterminology used under the legislation, was also changed from “protected disclosures” to “public interestdisclosures”.

VPCM is a public body and disclosures under the PIDA can therefore be made about VPCM or VPCM’smembers, officers or employees. A public interest disclosure can be made about “improper conduct” whichincludes corrupt conduct, the dishonest performance of public functions, a breach of public trust, substantialmismanagement of public resources or conduct that constitutes a substantial risk to health, safety or theenvironment.

VPCM does not tolerate improper conduct by employees nor the taking of detrimental action in reprisal forthe disclosure of such conduct. VPCM is supportive of public interest disclosures being made andrecognises that the protection of persons in connection with public interest disclosures is essential for theeffective implementation of the PIDA. VPCM will take all reasonable steps to protect VPCM employees andothers from any detrimental action as a result of a public interest disclosure being made.

Reporting proceduresDisclosures of improper conduct or detrimental action by VPCM or any of its members, officers or employeesmust be made directly to one of the following bodies:

Independent Broad-based Anti-Corruption Commission (IBAC):Postal: GPO Box 24234, Melbourne, Victoria, 3001Telephone: +61 1300 735 135Email: [email protected]: www.ibac.vic.gov.au

Ombudsman:Postal: Level 2, 570 Bourke Street, Melbourne, Victoria, 3000Telephone: +61 3 9613 6222Email: [email protected]: www.ombudsman.vic.gov.au

Victorian Inspectorate:Postal: PO Box 617 Collins Street West, Melbourne, Victoria, 8007Telephone: +61 3 8614 3225Email: [email protected]: www.vic.gov.au/vicinspectorate.html

More informationVPCM’s Public Interest Disclosures Procedures which outline the system for reporting disclosures ofimproper conduct or detrimental action by VPCM or any of its members, employees or officers are availableon VPCM’s website: www.vicports.vic.gov.au.


Social ProcurementSocial procurement is when organisations use their buying power to generate social value above andbeyond the value of the goods, services, or construction being procured.

The Victorian Government has developed a Social Procurement Framework to support the expansion andstandardisation of social procurement practice across all government procurement activities to benefit allVictorians.

In order to align with the Victorian Government’s framework, VPCM drafted an initial Social ProcurementStrategy in 2019-20 and submitted it to the Department of Treasury and Finance for review.

Statement of availability of other informationAdditional information available on requestIn compliance with the requirements of the Standing Directions 2018 under the Financial Management Act1994 (Vic), details in respect of the items listed below have been retained by VPCM and are available onrequest, subject to the provisions of the Freedom of Information Act 1982 (Vic):

• A statement that declarations of pecuniary interests have been duly completed by all relevant officers.• Details of publications produced by VPCM about VPCM and how these can be obtained.• Details of changes in prices, fees, charges, rates and levies charged by VPCM.• Details of any major external reviews carried out on VPCM.• Details of major research and development activities undertaken by VPCM.• Details of overseas visits undertaken including a summary of the objectives and outcomes of each visit.• Details of major promotional, public relations and marketing activities undertaken by VPCM to developcommunity awareness of the organisation and its services.

• A general statement on industrial relations within VPCM and details of time lost through industrialaccidents and disputes.

• A list of major committees sponsored by VPCM, the purposes of each committee and the extent to whichthe purposes have been achieved.

• Details of all consultancies and contractors including consultants/contractors engaged, servicesprovided; and expenditure committed to for each engagement.

Additional information included in the reportThe following details are included in the Annual Report on the pages indicated:

• Details of assessments and measures undertaken to improve the occupational health and safety ofemployees. See page 28.

Information that is not applicable to VPCMThe following information is not applicable to VPCM:

• Details of shares held by a senior officer as nominee or held beneficially in a statutory authority orsubsidiary.


Attestation for financial management compliance withMinisterial Standing Direction 5.1.4Victorian Ports Corporation (Melbourne) Financial Management Compliance Attestation StatementI James Cain, on behalf of the Responsible Body, certify that Victorian Ports Corporation (Melbourne) has noMaterial Compliance Deficiency with respect to the applicable Standing Directions under the FinancialManagement Act 1994 (Vic) and Instructions.

James CainChairman


Section 5:

FinancialStatements


Victorian Ports Corpora�on (Melbourne)Table of contentsFor the year ended 30 June 2020

How this report is structured

Comprehensive operating statement 49Balance sheet 50Statement of changes in equity 51Cash flow statement 52

1. About this report 53

2. Funding delivery of our services

2.1 Revenue 572.2 Finance income 582.3 Other income 582.4 Operating leases 59

3. The cost of delivering services

3.1 Summary of expenses incurred in delivery of services 603.2 Employee benefits 603.3 Other operating expenses 703.4 Other economic flows included in net results 70

4. Key assets available to support output delivery

4.1 Property, plant and equipment 71

5. Other assets and liabili�es

5.1 Receivables 775.2 Payables 785.3 Other non-financial assets 795.4 Other liabilities 79

6. How we financed our opera�ons

6.1 Leases 806.2 Cash flow information and balances 836.3 Commitments for expenditure 84

Operating expenses of the entity

Victorian Ports Corporation (Melbourne) (VPCM) has presented its audited general purpose financialstatements for the financial year ended 30 June 2020 in the following structure to provide users with theinformation about VPCM's stewardship of resources entrusted to it.

Financialstatements

The basis on which the financial statements have been prepared andcompliance with reporting regulations

Notes to thefinancialstatements

Revenue recognised from taxes, grants, sales of goods and services and othersources

Land, property, infrastructure, plant and equipment, intangible assetsand joint operations

Working capital balances and other key assets and liabilities

Borrowings, cash flow information, leases, trusts and commitments


Victorian Ports Corpora�on (Melbourne)Table of contentsFor the year ended 30 June 2020

7. Taxa�on and transac�ons with the State

7.1 Income tax 857.2 Deferred tax 877.3 Dividends 88

8. Risks, con�ngencies and valua�on judgements

8.1 Financial instruments specific disclosures 898.2 Contingent assets and contingent liabilities 958.3 Fair value determination 96

9. Other disclosures9.1 Ex-gratia expenses 999.2 Equity disclosure 1009.3 Responsible persons 1029.4 Remuneration of executives 1039.5 Related parties 1049.6 Remuneration of auditors 1069.7 Subsequent events 1069.8 Australian Accounting Standards issued that are not yet effective 107

Notes to thefinancialstatements(con�nued)

Items subject to taxation and transactions with the State

Financial risk management, contingent assets and liabilitiesas well as fair value determination

2


Victorian Ports Corpora�on (Melbourne)Cer�fica�on of Financial Statements30 June 2020

Mr J Cain Ms R Johnson Ms J MackeyChairman Chief Executive Officer Chief Financial and

Accounting Officer

19 November 2020 19 November 2020 19 November 2020

We certify that the a�ached financial statements for Victorian Ports Corporation (Melbourne) have been preparedin accordance with the Direction 5.2 of the Standing Directions of the Assistant Treasurer under the FinancialManagement Act 1994 , applicable Financial Reporting Directions, Australian Accounting Standards, includingInterpretations and other mandatory professional reporting requirements.

We further state that, in our opinion, the information set out in the Comprehensive Operating Statement, BalanceSheet, Statement of Changes in Equity, Cash Flow Statement and notes to and forming part of the financialstatements, presents fairly the financial transactions during the year ended 30 June 2020 and financial position ofVictorian Ports Corporation (Melbourne) as at 30 June 2020.

At the time of signing, we are not aware of any circumstances which would render any particulars included in thefinancial statements to be misleading or inaccurate.

We authorise the a�ached financial statements for issue on 19 November 2020.

3




Victorian Ports Corpora�on (Melbourne)Comprehensive Opera�ng StatementFor the year ended 30 June 2020

2020 2019Notes $'000 $'000

Revenue 2.1 37,685 33,041Finance income 2.2 158 307Other income 2.3 1,370 3,499Total 39,213 36,847

Expenses from transactions 3.1 (36,047) (35,387)Finance costs 8.1.2 (49) (5)Total expenses from transac�ons (36,096) (35,392)

Net result from transac�ons 3,117 1,455

Other economic flows included in net resultsNet gain/(loss) on non-financial assets 3.4 (23,267) 103Other gain/(loss) from other economic flow 3.4 (930) (825)Total other economic flows included in net results (24,197) (722)

Net result before income tax (21,080) 733Income tax benefit /(expense) 7.1 4,313 (147)

Net result after income tax (16,767) 586

Other comprehensive income / (loss)Items that will not be reclassified to profit after income taxAsset revaluation reserve movement 9.2.2 (29,672) 1,319Employee benefits reserve movement 9.2.2 (4,633) (6,673)Other comprehensive (loss) for the year, net of tax (34,305) (5,354)

Total comprehensive (loss) for the year (51,072) (4,768)

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

VPCM has adopted AASB16 Leases from 1 July 2019 using themodified retrospective approach and has notrestated comparatives.

4


Victorian Ports Corpora�on (Melbourne)Balance SheetAs at 30 June 2020

2020 2019Notes $'000 $'000

Current assetsCash and cash equivalents 6.2 28,173 23,928Receivables 5.1 5,332 6,580Other non-financial assets 5.3 980 783

34,485 31,291

Non-current assetsProperty, plant and equipment 4.1 51,888 118,345Deferred tax asset 7.2 14,425 9,101Intangible assets 145 214

66,458 127,660

Total assets 100,943 158,951

Current liabili�esPayables 5.2 4,126 4,465Provisions - employee benefits 3.2.2 35,825 29,413Interest bearing liabilities 6.1.2 348 -Other provisions 83 78Other liabilities 5.4 183 385Current tax liabilities 7.1 (c) 70 1,097

40,635 35,438Non-current liabili�esDeferred tax liabilities - 15,271Provisions - employee benefits 3.2.2 348 269Interest bearing liabilities 6.1.2 1,244 -

1,592 15,540

Total liabili�es 42,227 50,978

NET ASSETS 58,716 107,973

EquityContributed capital 9.2.1 9,150 7,335Reserves 9.2.2 2,961 37,483Retained profits 46,605 63,155TOTAL EQUITY 58,716 107,973

The above Balance Sheet should be read in conjunction with the accompanying notes.VPCM has adopted AASB16 Leases from 1 July 2019 using themodified retrospective approach and has notrestated comparatives.

5


Victorian Ports Corpora�on (Melbourne)Statement of Changes in EquityFor the year ended 30 June 2020

Contributedcapital

$'000

Assetrevalua�on

reserve$'000

Employeebenefitsreserve$'000

Retainedprofits

$'000

Totalequity

$'000

Balance at 1 July 2019 7,335 41,777 (4,294) 63,155 107,973

Profit / (loss) for the year - - - (16,767) (16,767)Other comprehensive income - (29,672) (4,633) - (34,305)Total comprehensive incomefor the year

- (29,672) (4,633) (16,767) (51,072)

Transfer to retained profits - (217) - 217 -

Transac�ons with ownersin their capacity as owners:Contributions/(distributions) ofequity, net of transaction costs

1,815 - - - 1,815

1,815 - - - 1,815

Balance at 30 June 2020 9,150 11,888 (8,927) 46,605 58,716

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

Contributedcapital

$'000

Assetrevalua�on

reserve$'000

Employeebenefitsreserve$'000

Retainedprofits

$'000

Totalequity

$'000

Balance at 1 July 2018 6,000 40,458 2,379 62,569 111,406

Profit for the year - - - 586 586Other comprehensive income - 1,319 (6,673) - (5,354)Total comprehensive incomefor the year

- 1,319 (6,673) 586 (4,768)

Transac�ons with ownersin their capacity as owners:Contributions/(distributions) ofequity, net of transaction costs

1,335 - - - 1,335

1,335 - - - 1,335

Balance at 30 June 2019 7,335 41,777 (4,294) 63,155 107,973

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

VPCM has adopted AASB16 Leases from 1 July 2019 using themodified retrospective approach and has not restatedcomparatives.

VPCM has adopted AASB16 Leases from 1 July 2019 using themodified retrospective approach and has not restatedcomparatives.

6


Victorian Ports Corpora�on (Melbourne)Cash flow StatementFor the year ended 30 June 2020

2020 2019Notes $'000 $'000

Cash flows from opera�ng ac�vi�esReceipts from customers 43,949 37,938Payments to suppliers and employees (29,847) (26,900)Interest received 158 307Interest paid (5) (6)Interest paid on lease payments (44) -Income tax instalments (paid)/refund 7.1 (c) (3,364) (2,200)Goods and Services Tax (paid)/refund (1,706) (1,906)Net cash inflow/(outflow) from opera�ng ac�vi�es 6.2.1 9,141 7,233

Cash flows from inves�ng ac�vi�esPayments for property, plant and equipment (6,525) (4,717)Proceeds from sale of property, plant and equipment 90 163Net cash (outflow) from inves�ng ac�vi�es (6,435) (4,554)

Cash flows from financing ac�vi�esPrincipal elements of lease payments (276) -Capital contribution from Owner 9.2.1 1,815 1,335Net cash inflow/(outflow) from financing ac�vi�es 1,539 1,335

Net increase/(decrease) in cash and cash equivalents 4,245 4,014

Cash and cash equivalents at the beginningof the financial year

6.2 23,928 19,914

Cash and cash equivalents at end of the financial year 6.2 28,173 23,928

The above Cash flow Statement should be read in conjunction with the accompanying notes.VPCM has adopted AASB16 Leases from 1 July 2019 using themodified retrospective approach and has notrestated comparatives.

7


Victorian Ports Corporation (Melbourne)Notes to the Financial StatementsFor the year ended 30 June 2020

1 ABOUT THIS REPORT

Corporate information

a) Basis of preparation

(i) Recovery of deferred tax assets

(ii) Defined benefit superannuation plan

Judgements, estimates and assumptions are required to be made about financial information beingpresented. The significant judgements made in the preparation of these financial statements are disclosed inthe notes where amounts affected by those judgements are disclosed. Estimates and associated assumptionsare based on professional judgements derived from historical experience and various other factors that arebelieved to be reasonable under the circumstances. Actual results may differ from these estimates.

Critical judgements that management has made in the process of applying VPCM’s accounting policies andthat have the most significant effect on the amounts recognised in the financial statements are:

Deferred tax assets are recognised for deductible temporary differences as management considers that it isprobable that future taxable profits will be available to utilise these temporary differences.

The value of the defined benefit superannuation plan has been calculated using the Projected Unit Creditmethod, as required by AASB 119. The objective under this method is to expense each member's benefits inthe Fund as they would accrue, taking into consideration future salary increases and the benefit allocationformula. Thus the total benefit to which each member is expected to become entitled is broken down intounits, each associated with a year of past or future credited service.

Victorian Ports Corporation (Melbourne) (VPCM) is a Government Business Enterprise established by theVictorian Government under the Transport Integration Act 2010 (Vic) (TIA). The Board of VPCM is directlyaccountable to the Victorian Government through the Minister for Ports and the Treasurer.

VPCM is responsible for navigation of commercial shipping in Port Phillip Channels, waterside emergency andmarine pollution response and the management of Station Pier and West Finger Pier as Victoria's premiercruise shipping and Tasmanian passenger ferry facility.

These financial statements incorporate all activities of VPCM.

The financial statements have been prepared on an accruals and a historical cost basis, except for property,plant and equipment which, subsequent to acquisition, are measured at a revalued amount being their fairvalue at the date of revaluation less any subsequent accumulated depreciation and subsequent impairmentlosses. Cost is based on the fair values of the consideration given in exchange for assets. Revisions toaccounting estimates are recognised in the period in which the estimate is revised if the revision affects onlythat period, or in the period of the revision and future periods if the revision affects both current and futureperiods.

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

8



(iii) Fair value of property, plant and equipment

Refer further to Note 8.3.1 regarding estimation uncertainties in the above approach.b) Adoption of new and revised Accounting Standard

$'000Total operating lease commitments disclosed at 30 Jun 2019 2,179less GST impact (198)terminate lease / adjusted lease commitments (211)add lease extension 383un-discounted amount 2,153impact of discounting (291)Lease liabilities recognised at 1 Jul 2019 1,862

The Valuer-General of Victoria (VGV) undertakes an independent revaluation every five years and thisvaluation has been conducted at the effective valuation date of 30 June 2020.

In discounting the forecast cash flows, post-tax discount rates of 9.5% - 10.0 % (depending on the specificStation Pier assets) have been used to reflect the current market assessment of interest rates adjusted forrisks specific to the Station Pier asset that are relevant from the perspective of a market participant. Aterminal value growth rate of 2.5% has been assumed.

All non-current physical assets are measured initially at cost and subsequently revalued at fair value inaccordance with FRD 103H.

In determining the fair value, key assumptions have been included from a market participant’s perspective inaccordance with AASB 13, i.e. assuming an arm's length transaction to exchange the asset. As the entity is afor profit entity, a discounted cash flow (DCF) for Station Pier was requested and provided to the VGV, toenable the VGV to undertake an adequate profitability check for economic obsolescence against the marketcomparison price (for land) and depreciated replacement cost (for all other assets). The values assigned to thekey assumptions in the DCF represented management’s assessment of future industry trends and historicaldata from both external and internal sources. Refer Note 4 for further details regarding the consequentimpairment of assets.

In the current year VPCM have adopted the following new Australian Accounting Standards, Interpretationsand Amendments issued by the AASB which were mandatorily effective for accounting periods on or after 1January 2019.

(i) Impact of application of AASB 16 LeasesVPCM has applied the modified retrospective approach and all of the exemptions and expedients available inAASB16.AASB16 has been adopted retrospectively from 1 July 2019 and comparatives for the 2019 reporting periodhave not been restated, as permi�ed under the specific transition provisions in the standard. Thereclassifications and the adjustments arising from the new leasing rules are therefore recognised in theopening balance sheet on 1 July 2019.On adoption of AASB 16, VPCM recognised lease liabilities in relation to leases which had previously beenclassified as ‘operating leases’ under the principles of AASB 117 Leases. These liabilities were measured at thepresent value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate asof 1 July 2019. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on 1July 2019 was 4.0%.

9



b) Adoption of new and revised Accounting Standard (Cont)(i) Impact of application of AASB 16 Leases (Cont)

c) Statement of compliance

(i) Compliance with International Financial Reporting Standards (IFRS)

(ii) Rounding of amounts

The Board of VPCM is of the view that the 2019-20 financial statements of VPCM also comply with IFRS asissued by the International Accounting Standards Board (IASB).

Amounts in the financial statements have been rounded to the nearest $1,000, unless otherwise stated.Discrepancies in tables between totals and sums of components reflect rounding. Percentage variations in alltables are based on the underlying unrounded amounts.

The annual financial statements were authorised for issue by the Board of VPCM on 19 November 2020.

In applying AASB 16 for the first time, VPCM has used the following practical expedients permi�ed by thestandard:

- using hindsight in determining the lease term where the contract contains options to extend or terminatethe lease;- applying a single discount rate to a portfolio of leases with reasonably similar characteristics;- relying on previous assessments on whether leases are onerous as an alternative to performing animpairment review – there were no onerous contracts as at 1 July 2019;

- accounting for leases with a remaining lease term of less than 12 months as at 1 July 2019 as short-termleases;

- excluding initial direct costs from the measurement of the right-of-use asset at the date of initial application;and- accounting for low value leases.

VPCM has also elected not to reassess whether a contract is, or contains a lease at the date of initialapplication. Instead, for contracts entered into before the transition date VPCM relied on its assessmentmade applying AASB 117 and Interpretation 4 Determining whether an Arrangement contains a Lease.

The financial statements of VPCM are general purpose financial statements in accordance with the FinancialManagement Act 1994 (Vic) and applicable Australian Accounting Standards and Interpretations (AAS). VPCMhas been designated a "for profit" entity.

10



d) COVID-19 Pandemic

VPCM's revenue has been impacted negatively given the temporary halt to the cruise industryand the restriction on TT Line passengers travelling between Victoria and Tasmania,notwithstanding that overall, VPCM's revenue was higher for the 2020 year in total comparedto the prior year.

- events occurring after the balance date (Note 9.7)

A state of emergency was declared in Victoria on 16 March 2020 as a result of the ongoing worldwidepandemic of the coronavirus disease 2019 (“COVID-19”) caused by severe acute respiratory syndromecoronavirus 2 (SARS-CoV-2). In response to the challenge faced by the pandemic, the state government hasput in place measures including staged restrictions within communities to support social distancing andspread of the diseases.

- impairment of non-financial assets (Note 4.1.1)

- payment of suppliers within 10 days;

- a COVID-safe plan has been developed to preserve the safety of personnel;- personnel working outside their homes under authorised worker permits follow strict physical distancingand hygiene protocols and as per government directions, including wearing a mask at all times unless anexemption applies

- personnel working from home are required to comply with the Remote Working Safety Assessment &Checklist and have access to virtual ergonomic assessments conducted by a registered third party ergonomist;

The following account balances have been deemed affected by COVID-19 due to management's judgementsand assumptions about the future and a source of estimate uncertainty:

- fair value of non-financial assets (Note 4.1.1)

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

In response to the impacts on its customers, VPCM have put in place the following measures to identify andsupport those facing financial hardship as directed by the Victorian Government:

- rent relief for Victorian tenant experiencing financial hardship.

VPCM's staff have also been impacted by the COVID-19 pandemic resulting in changes in working conditions:

- approximately 66% of personnel working from home full time;

11


Victorian Ports Corpora�on (Melbourne)Notes to the Financial StatementsFor the year ended 30 June 2020

2 FUNDING DELIVERY OF OUR SERVICES

Introduc�on

Structure2.1 Revenue from contracts with customers2.2 Finance income2.3 Other income2.4 Opera�ng leases

2.1 Revenue from contracts with customers 2020 2019$'000 $'000

Wharfage fees 12,707 10,981Anchorage fees 1,330 709Berth hire and Site Occupa�on charge 4,170 2,783Port Manager contribu�on 15,856 15,608Other charges for services 3,622 2,960

Total revenues 37,685 33,041

(i) Wharfage fees

(ii) Anchorage

(iii) Berth hire and Site Occupa�on Charge

This sec�on provides addi�onal informa�on about how VPCM is funded and the accoun�ng policies that arerelevant for an understanding of the items recognised in the financial statements.

Revenue is recognised for the major business ac�vi�es as follows:

Wharfage fees are charged per unit of quan�ty, volume or weight of cargo for all cargoes loaded on ordischarged from vessels or between vessels in the Port of Melbourne.Revenue is recognised after the vessel’s departure from its designated berth, at a point in �me.

Berth hire is a �me-based fee charged for the provision of berths for the purpose of loading or dischargingspecialised cargo and lay-up or other purpose approved by VPCM. Berth hire is not applicable to passengervessels to which a Site Occupa�on Charge (SOC) will be levied. The SOC is a charge levied in reference to boththe number of incoming passengers arriving on the cruise vessel and the amount of �me for which the sitewas reserved or occupied by such cruise vessel.Revenue is recognised over �me.

VPCM recognises revenue when or as performance obliga�on is sa�sfied i.e. when “control” of the goods orservices underlying the par�cular performance obliga�on is transferred to the customer. Revenue isrecognised at a point of �me or over �me depending upon the sa�sfac�on of performance obliga�ons. Pleaserefer below for further details.

Anchorage fees are charged for the provision of an area for use by vessels seeking safe anchorage in lieu ofmooring at a Port of Melbourne berth or mooring in the Port of Geelong. Fees are charged based on �mespent in Port waters with a minimum charge of 24 hours.Revenue is recognised over �me.

12




2.1 Revenue from contracts with customers (con�nued)

(iv) Port Manager contribu�on

(v) Other charges for services

(vi) Disaggrega�on of revenue from contracts with customers2020 2019$'000 $'000

Timing of revenue recogni�onAt a point in �me 12,707 10,981Over �me 24,978 22,060Total revenues 37,685 33,041

2.2 Finance Income 2020 2019$'000 $'000

Interest revenue 158 307Total Finance Income 158 307

(i) Interest revenue

2.3 Other income 2020 2019$'000 $'000

Rent and licence fees 799 894Government project funding 460 2,190Other revenue 111 415

Total other incomes 1,370 3,499Total revenues 39,213 36,847

(i) Rent and licence fees

(ii) Government project funding

(iii) Other revenue

Revenue from opera�ng leases is recognised when earned and accrued in accordance with the terms andcondi�ons implicit in the leasing contract.

Contribu�on by the Port Manager under the Port Concession Deed and Port Opera�ons Service Deed.Revenue is recognised on an annual basis over the term of the Deed.

Other charges for services is recognised at the �me the service to which the revenue relates is provided orwork is undertaken and the revenue is receivable.

All other revenue from major business ac�vi�es is recognised at the �me the service to which the revenuerelates is provided or work is undertaken and the revenue is receivable.

Interest revenue is recognised as the interest accrues to the net carrying amount of the financial asset usingthe effec�ve interest rate method.

Revenue from Government project funding is recognised when expenses have been incurred in accordancewith the terms and condi�ons implicit in the contract with the relevant Government department. When theamounts relate to the purchase of property, plant and equipment, they are deferred and are recognised on astraight line basis over the expected useful lives of the related assets.

13




2.4 Opera�ng leases 2,020 2019$'000 $'000

Non-cancellable opera�ng lease receivable- within one year 734 682- later than one year but not later than five years 1,040 1,648- later than five years - -

1,774 2,330As LessorVPCM has entered into a number of short-term leases and preferen�al berthing licences for land, buildingsand infrastructure. The leases and licences terms range from one year to five years.

Rental income from opera�ng leases is recognised on a straight-line basis over the term of the relevant leaseagreement.VPCM did not need to make any adjustments to the accoun�ng for assets held as a lessor under opera�ngleases as a result of the adop�on of AASB16.As a lessor, it classifies its leases as either opera�ng or finance leases. An asset is classified as a finance lease ifit transfers substan�ally all the risks and rewards incidental to ownership of the underlying asset andclassified as an opera�ng if it does not.

14



3 THE COST OF DELIVERING SERVICES

Introduc�on

Structure3.1 Summary of expenses incurred in delivery of services3.2 Employee benefits3.3 Other operating expenses3.4 Other economic flows included in net result

3.1 Summary of expenses incurred in delivery of services2020 2019

Notes $'000 $'000Employee benefits expense 3.2.1 11,856 11,927Depreciation and amortisation 4.1.1 8,899 8,444Other operating expenses 3.3 15,292 15,016Total expense incurred in delivery of services 36,047 35,387

3.2 Employee benefits

3.2.1 Employee benefits in the comprehensive opera�ng statement2020 2019$'000 $'000

Defined contribution superannuation expense 1,251 1,188Salaries and employee benefits expenses 10,605 10,739Total employee expenses 3.1 11,856 11,927

3.2.2 Employee benefits in the balance sheetProvision is made for benefits accruing to employees in respect of wages and salaries, annual leave and longservice leave (LSL) for services rendered to the reporting date inclusive of on-costs and recorded as an expenseduring the period the services are delivered.

The amount recognised in the comprehensive operating statement in relation to superannuation is theemployer contributions for members of both defined benefit and defined contribution superannuation plansthat are paid or payable during the reporting period.

Employee benefits expenses include all costs related to employment including wages and salaries, fringebenefits tax, leave entitlements, redundancy payments, WorkCover premiums, defined benefitssuperannuation plans, and defined contribution superannuation plans. VPCM does not recognise any definedbenefit liability in respect of the State Superannuation Scheme. Department of Treasury and Finance (DTF)recognises and discloses the defined benefit liabilities for the State Superannuation Scheme in its financialreport.

This section provides additional information about how VPCM's funding is applied and the accounting policiesthat are relevant for an understanding of the items recognised in the financial statements.

Defined Benefits under the Port of Melbourne Superannuation Fund is disclosed under Note 3.2.3

15




3.2.2 Employee benefits in the balance sheet (con�nued) 2020 2019Notes $'000 $'000

Current employee benefits:Annual leave en�tlementsUnconditional and expected to wholly se�le within 12 months 630 663Long service leave en�tlements

Unconditional and expected to wholly se�le within 12 months 447 398Unconditional and expected to wholly se�le after 12 months 871 1,171Defined benefits superannua�on fund liability 3.2.3 33,581 26,867

Provision for on-costsUnconditional and expected to wholly se�le within 12 months 162 136Unconditional and expected to wholly se�le after 12 months 134 178Total current employee benefits and on-costs 35,825 29,413

Non-current employee benefitsLong service leave entitlements 302 233On-costs 46 36Total non-current employee benefits and on-costs 348 269Total employee benefits and related on-costs 36,173 29,682

Reconcilia�on of movement in on-cost provision

Opening balance 350 313Additional provision recognised 332 137Reductions arising from payments (340) (100)Closing balance 342 350

Current 296 314Non-current 46 36

342 350

16




3.2.2 Employee benefits in the balance sheet (con�nued)

Wages, salaries and sick leave

Annual leave

Long service leave

Unconditional long service leave is disclosed as a current liability even when the liability is not expected to se�lewithin 12 months as VPCM does not have an unconditional right to defer the se�lement. Those liabilities whichare expected to be wholly se�led within 12 months of the reporting period, are measured at their undiscounted(nominal) values. Those liabilities that are not expected to be wholly se�led within 12 months are measured atpresent value.

Conditional long service leave is disclosed as a non-current liability as there is an unconditional right to defer these�lement of the entitlement until the employee has completed the requisite years of service. Conditional longservice leave is disclosed as a non-current liability measured at present value.

Liabilities for wages and salaries, expected to be se�led within 12 months of the reporting date, are measured attheir nominal amounts (including on-costs) using the remuneration rates expected to apply at the time of these�lement and are recognised as current liabilities. VPCM does not have an unconditional right to deferse�lement of these liabilities. No liability is recognised for non-vesting sick leave as the anticipated pa�ern offuture sick leave taken indicates that accumulated non-vesting leave will not be used. As sick leave is non-vesting, an expense is recognised in the Comprehensive Operating Statement as it is taken.

Long service leave entitlements are assessed at balance date having regard to expected employees’remuneration rates on se�lement, employment related on-costs and other factors including expectedaccumulated years of employment on se�lement and past experience. Commonwealth bond rates are used fordiscounting future cash flows.

Annual leave entitlements are accrued on a pro-rata basis in respect of services provided by employees up to thereporting date, having regard to rates expected to apply when the liabilities are se�led. The entire obligation hasbeen recognised as a current liability as VPCM does not have an unconditional right to defer se�lement. Thoseliabilities which are expected to be wholly se�led within 12 months of the reporting period, are measured at theirundiscounted (nominal) values.

17




3.2.3 Defined benefit superannua�on

Defined benefit superannua�on planA liability in respect of the Port of Melbourne Superannua�on Fund (Fund) is recognised in the Statement ofFinancial Posi�on, and is measured as the present value of the Defined Benefit Obliga�on at year end less the fairvalue of the superannua�on fund’s assets at that date and any unrecognised past service cost. The value of thedefined benefit superannua�on plan has been calculated using the Projected Unit Credit method, as required byAASB 119. The objec�ve under this method is to expense each member's benefits in the Fund as they would accrue,taking into considera�on future salary increases and the benefit alloca�on formula. Thus the total benefit to whicheach member is expected to become en�tled is broken down into units, each associated with a year of past or futurecredited service.

Future taxes, such as taxes on investment income and employer contribu�ons, are taken into account in theactuarial assump�ons used to determine the relevant components of VPCM’s defined benefit liability.

The Fund only has defined benefit members and is closed to new members. Members receive pension benefits onre�rement, death and disablement. On withdrawal, members have a choice of receiving a lump sum benefit and/or adeferred pension benefit.

As at 30 June 2020, the Fund has 1 ac�ve member (2019: 1), 1 deferred pension member (2019: 1) and 31 membersdrawing a pension (2019: 30). The total annual pensions was $1.8M (2019: 1.8M)

The Superannua�on Industry Supervision (SIS) legisla�on governs the superannua�on industry and provides theframework within which superannua�on plans operate. The SIS Regula�ons require an actuarial valua�on to beperformed for each defined benefit superannua�on plan every three years, or every year if the plan pays definedbenefit pensions unless an exemp�on has been obtained.

The ESSS Board, as Trustee, are responsible for the governance of the PMSF. The Trustee has the following roles:- Administra�on of the Fund including payment of benefits to beneficiaries in accordance with the governing rules;- Management and investment of the assets of the Fund, the responsibility for which is outsourced to VictorianFunds Management Corpora�on; and- Compliance with superannua�on law and other applicable regula�ons.

The fund is regulated by the Australian Pruden�al Regula�on Authority (APRA). The Pruden�al regulator, APRA,licenses and supervises regulated superannua�on plans.

Effec�ve 29 November 2019, the Port of Melbourne Superannua�on Fund (PMSF) was transferred into the StateSuperannua�on Fund with the Emergency Services Superannua�on Scheme (ESSS). VPCM remains the employerresponsible for mee�ng the accruing costs and liabili�es of the transferred members of the PMSF. There were noscheme amendments, curtailments and/or se�lements that we are aware of.

18




3.2.3 Defined benefit superannua�on (con�nued)

Contribu�on recommenda�ons

Funding method

Nature of asset/liability

There were no plan amendments affec�ng the defined benefits payable, curtailments or se�lements during the year.

The defined benefit assets are invested with the Victorian Funds Management Corpora�on, together with the assetsof the other State Superannua�on Fund schemes. The percentage contribu�on of each major category of assets isdetailed in Note 3.2.3(h)

Employer contribu�ons are based on recommenda�ons by the Plan's actuary. The objec�ve of funding is to ensurethat the benefit en�tlements of members and other beneficiaries are fully funded by the �me they become payable.VPCM has no legal obliga�on to se�le this liability with an immediate obliga�on or addi�onal one-off contribu�ons.

VPCM may, at any �me by no�ce to the Trustee, terminate its contribu�ons. VPCM has a liability to pay thecontribu�ons due before the effec�ve date of the no�ce, but there is no requirement for it to pay furthercontribu�ons, irrespec�ve of the financial condi�on of the fund. However, VPCM does have a construc�ve obliga�onfor the fund and therefore has recognised a current liability in the Statement of Financial Posi�on in respect of itsdefined benefit superannua�on arrangements.

The method used to determine the employer contribu�on recommenda�ons at the last actuarial review was theaggregate funding method. The method adopted affects the �ming of the cost to VPCM.

The Port of Melbourne Superannua�on Fund does not impose a legal liability on VPCM to cover any deficit thatexists in the fund. If the fund were wound up, there would be no legal obliga�on on VPCM to make good anyshortfall. The Trust Deed of the fund states that if the fund winds up, the remaining assets are to be distributed bythe Trustee of the fund in an equitable manner as it sees fit.

There are several risks to which the Fund exposes VPCM to. The more significant risks rela�ng to the defined benefitsare:

Pension risk - the risk is that pensioner mortality will be lighter than expected, resul�ng in pensions being paid for alonger period.Infla�on risk - the risk that infla�on is higher than an�cipated, increasing pension payments, and thereby requiringaddi�onal employer contribu�ons.

Legisla�ve risk - the risk is that legisla�ve changes could be made which increase the cost of providing the definedbenefits.

Timing of members leaving service - as the fund is a small fund (i.e. has a small number of members), if memberswith high benefits leave, this may impact on the financial posi�on of the fund at the �me they leave. The impact maybe posi�ve or nega�ve depending on the circumstances and �ming of withdrawal.

Investment risk - the risk that investment returns will be lower than assumed and VPCM will need to increasecontribu�ons to offset this shortfall.

Salary growth risk - the risk that salaries or wages (on which future benefit amounts will be based) will rise morerapidly than assumed, increasing defined benefit amounts and thereby requiring addi�onal employer contribu�ons.

19





(a)2020 2019 Change

Notes $'000 $'000 $'000Defined Benefit Obliga�on 62,874 58,824 7%Scheme Assets (29,293) (31,957) (8%)Deficit/(Surplus) 33,581 26,867 25%Adjustment for asset ceilingNet liability/(asset) 3.2.3 (b) 33,581 26,867 25%

(b)

2020 2019Notes $'000 $'000

Net defined benefit liability/(asset) at start of the year 26,867 16,878Current services cost 3.2.3 (c) 448 393Net interest 3.2.3 (c) 485 430Actual return on Fund assets less interest income 1,249 (991)Actuarial losses/(gain) arising from changes in financial assump�ons 2,620 10,897Actuarial losses /(gain) arising from changes in demographic assump�ons 1,803 -Actuarial gain arising from changes in liability experience 258 (374)

(149) (366)3.2.3 (a) 33,581 26,867

(c) Profit and Loss2020 2019$'000 $'000

3.2.3 (b) 448 3933.2.3 (b) 485 430

933 823

(d) Other Comprehensive Income 2020 2019$'000 $'000

Remeasurement in Other Comprehensive Income

1,803 -

2,620 10,897

258 (374)1,249 (991)

5,930 9,532

Reconcilia�on of the Net Defined Benefit Liability/(Asset)

Movements in the net defined benefit liability/(asset) were as follows:

Employer contribu�onsNet defined benefit liability/(asset) at end of the year

Balance sheet

Expense recognised

Defined benefit superannua�on expense

Total remeasurements recognised inother comprehensive income

Current service costNet interest cost

Actuarial (gain)/loss for year arising from changes in demographicassump�onsActuarial (gain)/loss for year arising from changes infinancial assump�onsActuarial (gain)/loss for year arising from experienceReturn on assets less interest income

20





(e) Reconcilia�on of Fair Value of Fund Assets

Movements in the fair value of the Defined Benefit Fund assets were as follows:2,020 2,019$'000 $'000

Fair value of Fund assets at beginning of the year 31,957 31,727Interest income 557 929Actual return on Fund assets less interest income (1,249) 991Employer contribu�ons 149 366Contribu�ons by Fund par�cipants 8 13Benefits paid (1,824) (1,655)Taxes, premiums and expenses paid (305) (414)Fair value of Fund assets at end of the year 3.2.3 (g) 29,293 31,957

(f)

2020 2019$'000 $'000

58,824 48,605Current service cost 448 393Interest cost 1,042 1,359Contribu�ons by Fund par�cipants 8 13Actuarial losses /(gain) arising from changes in financial assump�ons 2,620 10,897Actuarial losses /(gain) arising from changes in demographic assump�ons 1,803 -Actuarial gain arising from changes in liability experience 259 (374)Benefits paid (1,824) (1,655)Taxes, premiums and expenses paid (306) (414)Present value of Defined Benefit Obliga�on at end of the year 62,874 58,824

Reconcilia�on of Defined Benefit Obliga�on

Movements in the defined benefit obliga�on were as follows:

Present value of Defined Benefit Obliga�on at beginning of the year

21





(g)

Level 1 Level 2 Level 3Asset category Notes $'000 $'000 $'000 $'000Investment funds 29,293 - 29,293 -Total 3.2.3 (e) 29,293 - 29,293 -

(h) The percentage invested in each asset class at repor�ng date 2020 2019% %

Australian equity 22 30Interna�onal equity 33 24Fixed income - 17Domes�c and interna�onal debt assets 24 -Property 6 2Alterna�ves/Other 6 15Cash 9 12

100 100

(i) Significant actuarial assump�ons at the repor�ng date 2020 2019Assump�ons to determine Defined Benefit Cost % %Discount rate p.a. 1.5 1.8Future salary increase p.a. 3.0 3.0Indexa�on p.a. 2.5 2.5

MortalityState Pension

SchemeMercer

Standard

Expected remaining life�me at age 65Male 25.4 n/aFemale 27.0 n/a

Fair value measurement at repor�ng period

We are not aware of the Fund assets including amounts rela�ng to any of the Corpora�on's own financialinstruments and any property occupied by, or other assets used by, the Corpora�on.

As at 30 June 2020Carrying amount

Fair value of Defined Benefit Fund assets

22





(j) Sensi�vity AnalysisThe defined benefit obliga�on (not including tax provisions) is presented on following scenarios:

2021$'000

Defined Benefit Obliga�on - Base 57,837

Scenario A: 0.5% per annum lower discount rate sensi�vityScenario B: 0.5% per annum higher discount rate sensi�vityScenario C: 0.5% per annum lower salary increase rate sensi�vityScenario D: 0.5% per annum higher salary increase rate sensi�vityScenario E: 90% per annum of the State Pension Scheme Standard pensioner mortality sensi�vityScenario F: 110% per annum of the State Pension Scheme Standard pensioner mortality sensi�vityScenario G: 0.5% per annum lower pension increase rate sensi�vityScenario H: 0.5% per annum higher pension increase rate sensi�vity

NotesBaseCase

ScenarioA

ScenarioB

ScenarioC

ScenarioD

Discount rate 1.5% pa -0.5% pa +0.5% paSalary increase rate 3.0% pa -0.5% pa +0.5% paPension increase rate 2.5% pa

57,837 62,735 53,479 57,779 57,895

BaseCase

ScenarioE

ScenarioF

ScenarioG

ScenarioH

Discount rate 1.5% paSalary increase rate 3.0% paPension increase rate 2.5% pa -0.5% pa +0.5% pa

-10% pa +10% pa

57,837 56,558 59,325 53,523 62,633

Pensioner mortality assump�on

Pensioner mortality assump�on

Defined Benefit Obliga�on ($'000)3.2.3 (f )

Defined Benefit Obliga�on ($'000)3.2.3 (f )

23





(k) Funding arrangements and funding policy

(l) Expected contribu�ons 2021$'000

Expected employer contribu�ons 28

(m) Maturity profile of Defined Benefit Obliga�ons

$'00030 June 2021 1,80330 June 2022 1,84130 June 2023 1,87930 June 2024 1,91730 June 2025 1,955Following 5 years 10,754

(n) Asset-Liability matching strategies

The assets are invested as shown in the disclosures.

For the year ended 30 June 2020, based on the actuary's recommenda�on, VPCM contributed the following to theFund:- 22.5% (2019: 20.0%) of superannua�on salaries to 29 November 2019; 20% of superannua�on salaries thereafter

and- addi�onal lump sum contribu�ons of $25,000 per month (2019: $25,000) to finance expected administra�on and

insurance costs to 29 November 2019; approximately $6,500 per annum thereafter based on an annualadministra�on fee per member.

The weighted average dura�on of the defined benefit obliga�on as at 30 June 2020 is 15 years (2019:16 years).

The assets chosen are not designed to match the liabili�es exactly, although the nature of the liabili�es is consideredin set�ng the investment strategy.

24




3.3 Other opera�ng expenses2020 2019

Notes $'000 $'000Contractors and consultant expenses 11,892 10,454Operating lease expenses - minimum lease payments 303 1,351Loss of sale of asset 100 73Other expenses 2,997 3,138Total opera�ng expenses 3.1 15,292 15,016

3.4 Other economic flows included in net result2020 2019

Net gain/(loss) on non-financial assets $'000 $'000Impairment of property plant & equipment (23,267) 103Total (23,267) 103

Other gain/(loss) from other economic flowDefined benefit superannuation expense (930) (825)

Other operating expenses from transactions are recognised as they are incurred and reported in the financialyear to which they relate. Operating expenses generally represent day-to-day running costs incurred in normaloperations.

Operating lease expenses up until 30 June 2019 are recognised on a straight-line basis over the lease term,except where another systematic basis is more representative of the time pa�ern of the benefits derivedfrom the use of the leased asset.From 1 July 2019, the following lease payments are recognised on a straight-line basis:- short-term leases – leases with a term less than 12 months; and

- low value leases – leases with the underlying asset’s fair value (when new, regardless of the age of the assetleased) is no more than $10,000.

25



4. KEY ASSETS AVAILABLE TO SUPPORT OUTPUT DELIVERY

Introduction

Structure4.1 Property, plant and equipment4.1.1 Deprecia�on, amor�sa�on and impairment4.1.2 Reconcilia�on of movements in carrying amount

4.1 Property, plant and equipment

2020 2019 2020 2019 2020 2019Total$'000

Total$'000

Total$'000

Total$'000

Total$'000

Total$'000

Land 4,256 16,951 - - 4,256 16,951Buildings and Infrastructure 32,307 106,299 (229) (23,538) 32,078 82,761Plant and equipment & motorvehicles

10,329 21,654 (1,112) (7,524) 9,217 14,130

Right of Use Asset 1,719 - (308) - 1,411 -Capital works in progress 4,926 4,503 - - 4,926 4,503Net carrying amount 53,537 149,407 (1,649) (31,062) 51,888 118,345

VPCM controls non-current physical assets comprising land, buildings & infrastructure and other plant & equipmentthat are u�lised in fulfilling its objec�ves and conduc�ng its ac�vi�es. They represent the resources that have beenentrusted to VPCM for delivery of those outputs.

Netcarrying amount

The majority of VPCM's owned and leased non-current physical assets were subject to the independent valuation(except for $2.3M out of scope assets), to determine their fair value. In determining the fair value, key assump�onshave been considered in accordance with AASB 13, i.e. assuming an arm's length transac�on to exchange the asset.As the en�ty is a for profit en�ty, a discounted cash flow (DCF) for Sta�on Pier was prepared and provided to thevaluer, as a check for economic obsolescence against the market comparison cost (for land) and depreciatedreplacement cost (for all other assets). The values assigned to the key assump�ons in the DCF representedmanagement’s assessment of future industry trends and incorporated historical data from both external andinternal sources. This profitability check indicated that a significant impairment of the Sta�on Pier assets hadoccurred. Refer to the table in Note 4.1.2 for impairment details across asset classes and Note 8.3.1 regardinges�ma�on uncertain�es.

VPCM recognises a right-of-use assets and a lease liability at the lease commencement date. The right-of-use asset isini�ally measured at cost which comprises the ini�al amount of the lease liability adjusted for:- Any lease payments made at or before the commencement date less any lease incentive received; plus- Any initial direct costs incurred; and

Grosscarrying amount

Accumulateddepreciation

All non-current physical assets are measured ini�ally at cost and subsequently revalued at fair value lessaccumulated depreciation and impairment and revalued in accordance with Financial Repor�ng Direc�on (FRD)103H Non-Financial Physical Assets. Every 5 years an independent revaluation is undertaken through the ValuerGeneral of Victoria (VG) and this has been conducted as at 30 June 2020.

- An estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the siteon which it is located.

26




4.1 Property, plant and equipment (continued)

Initial recognition

4.1.1 Depreciation, amortisation and impairment2020 2019

Depreciation and impairment Notes $'000 $'000Infrastructure (6,718) (6,445)Plant and equipment & vehicles (1,805) (1,904)Right of use assets 6.1.3 (308) -Total depreciation and impairment (8,831) (8,349)

Amortisation and impairmentIntangible Assets (68) (95)Total amortisation and impairment (68) (95)Total depreciation, amortisation and impairment 3.1 (8,899) (8,444)

VPCM depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlierof the end of the useful life of the right-of-use assets or the end of the lease term. The right-of-use assets are alsosubject to revaluation. In addi�on, the right-of-use asset is periodically reduced by impairment losses, if any andadjusted for certain remeasurements of the lease liability.

The revaluation is based upon the asset’s classification under the Government Purpose Classification, but may occurmore frequently if fair value assessments indicate material changes in values. Revaluation increments or decrementsarise from differences between an asset’s carrying value and fair value.

If an asset's carrying amount is increased as a result of a revaluation, the increase is credited directly to equity underthe heading of asset revaluation reserve net of applicable tax. However, the increase is recognised in profit or loss tothe extent that it reverses a revaluation decrease previously recognised in profit or loss in respect of that asset.

If an asset's carrying amount is decreased as a result of a revaluation, the decrease is recognised in profit or loss.However, the decrease is debited directly to equity under the heading of asset revaluation reserve to the extent ofany credit balance exis�ng in the revaluation reserve in respect of that asset.

Gains and losses on disposals of assets are determined by comparing proceeds from sale with the carrying amountand selling costs. These are included in profit or loss. Upon disposal or derecogni�on, any revaluation reserverelating to the par�cular asset being sold or wri�en off is transferred to retained profits.

27




4.1.1 Depreciation, amortisation and impairment (continued)

Depreciation expense

2020 2019InfrastructurePlant and equipmentIntangible assets

Change in accounting estimates

Acquisition

4 years

2 - 85 years

Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term. WhereVPCM obtains ownership of the underlying leased asset or if the cost of the right-of-use asset reflects that the en�tywill exercise a purchase op�on, the en�ty depreciates the right-of-use asset over its useful life.

VPCM has concluded accordingly that the remaining useful life of Sta�on Pier assets is 18 years (average) from 30June 2020. The extension of the Sta�on Pier assets useful life from 13 years (average) to 18 years (average) will resultin a reduc�on of deprecia�on expense of approximately $0.6 million per annum from 2021.

2 - 85 years1 - 25 years 1 - 25 years

4 years

Land held by VPCM is not depreciated. Depreciation on other assets is calculated using the straight-line method toallocate their cost or revalued amounts, net of their residual values, over their es�mated useful lives (or, in the caseof leasehold improvements and certain leased plant and equipment, the lease term if shorter) as follows:

The es�mated useful lives, residual values and depreciation method are reviewed at the end of each financialrepor�ng period and, where revised, are accounted for as a change in an accoun�ng es�mate. Where depreciationrates or methods are changed, the net wri�en down value of the asset is depreciated from the date of the change inaccordance with the new depreciation rate or method.

The purchase method of accoun�ng is used for all acquisi�ons of assets, being the fair value of the assets providedas consideration at the date of acquisi�on plus any incidental costs a�ributable to the acquisi�on. Where assets areconstructed by VPCM, the costs at which they are ini�ally recorded include an appropriate share of labour costsincurred directly in the construc�on of the asset.

All items with a cost or value in excess of $1,000 (2019: $1000) and with a useful life greater than one year arerecognised as assets. All items within the threshold of $91 to $1,000 (2019: $91 to $1000) and with a useful lifegreater than one year are grouped and recognised as assets within the Low Value Asset Pool. All other items areexpensed as acquired.

As part of the valuation process in 2020, VPCM has performed an assessment of the useful life of Sta�on Pier,including performing detailed inspec�ons of all the components of the Pier. This assessment has taken into accountthe significant capital improvements completed during recent years, the physical condi�on of the assets, the en�ty’sasset management strategy and asset values. VPCM concluded that the asset is considered to be in good condi�onand subject to regular maintenance to retain its structural integrity.

3





Economic obsolescence assessment

Discount rate post tax 9.5-10%Terminal growth rate 2.5%Period of projection 15 YrsGrowth rate 2-2.5%

VPCM has based the value in use calculations on budgets prepared reflec�ng the following key a�ributes.

Recoverable amount and Impairment: An asset’s carrying amount is wri�en down immediately to its recoverableamount if the asset’s carrying amount is greater than its es�mated recoverable amount (impairment of assets).Where an asset’s carrying value exceeds its recoverable amount, the difference is wri�en off by a charge to profit orloss except to the extent that the write-down can be debited to an asset revaluation reserve amount applicable tothat specific asset. The recoverable amount for an asset is measured at the higher of the present value of future cashflows expected to be obtained from the asset and fair value less costs to sell.

During the year ended 30 June 2020 as part of the valuation process, impairment indicators were iden�fied as aresult of COVID-19 impac�ng the cruise ship industry and TT-Line announcing that they would depart Sta�on Pier atthe end of their current lease, expiring November 2022, and move to the port of Geelong. The issue of economicobsolescence was considered as part of the valuation of the port infrastructure assets, being Sta�on Pier and therelated plant and equipment. As a result of considering this factor, the valuer concluded that the value of Sta�onPier and its associated assets was $28.6 million, giving rise to a decrement in value of approximately $65.6 million.As a result, there was a reduc�on of $42.3 million in the asset revaluation reserve (reversing previous revaluationgains) which was recognised in Other Comprehensive Income in the Comprehensive Operating Statement; and $23.3million recognised as an impairment loss in the Comprehensive Operating Statement.

VPCM prepared a discount cash flow model (DCF) to assess the value in use value of the en�re Sta�on Pierenterprise (which included all property, goodwill, WIP, etc), using the following key assump�ons:

Budgeted cash flows were es�mated from the perspec�ve of a market par�cipant taking into account pastexperience, current condi�ons and future es�mates as at 30 June 2020, as follows:

Sensitivity analysis: The discount rate over projected revenues in all CGUS apart from Inner East have beendiscounted at 9.5% post-tax. The discount rate applying to the Inner East CGU, being the TT Line related CGU, havebeen discounted using a higher discount rate at 10% post-tax to reflect the greater level of risk and uncertaintyinherent in these cash flows . If higher discount rates of 10.5% and 11% were used, the DCF valuation for Sta�onPier would decrease by $5.7 million from $28.6 to $22.9 million.

1. Revenue generated from cruise lines is projected to recover to pre-COVID level in FY24.

2. New revenue sources are forecast after the departure of TT-Line, u�lising the assets currently used by TT Line

3. Some areas of Sta�on Pier will be used to provide associated transporta�on services, such as car parking.

4. Operating and maintenance costs are kept at the current levels given VPCM’s obligation to maintain the assetsat its current condi�on due to Sta�on Pier’s heritage status.5. Overheads have been allocated to various Cash Generating Units (CGUs) per AASB 136 purposes i.e. Sta�on Pier,Vessel Traffic Services and Anchorage propor�onal to the CGU’s revenue contribu�on

The basis of valua�on is outlined in Note 8.3

29





4.1.2 Reconciliation of movements in carrying amount

Year ended 30 June 2020 Notes

Land

$'000

Buildingand

Infrastructure$'000

Plantand

equipment$'000

Right ofuse

assets$'000

Capitalworks inprogress$'000

Total

$'000

Carrying amount 1 July 2019 16,951 82,761 14,130 - 4,503 118,345Adop�on of AASB 16 Leases 1,719 1,719Restated balance on 1 July 2019 16,951 82,761 14,130 1,719 4,503 120,064

- 5,172 893 - (6,065) -Addi�ons - - - 6,488 6,488Disposals - (10) (180) - - (190)Revaluation - Impairment (loss) (12,695) (49,127) (3,821) (65,643)Depreciation charge - (6,718) (1,805) (308) - (8,831)Carrying amount 30 June 2020 4,256 32,078 9,217 1,411 4,926 51,888

At 30 June 2020Fair value 2020 4,256 32,307 10,329 - 46,892Cost - 1,719 4,926 6,645Accumulated depreciation - (229) (1,112) (308) - (1,649)Net book amount 8.3.1(a) 4,256 32,078 9,217 1,411 4,926 51,888

Transfer of capital works in progress

Repairs and maintenance: Rou�ne maintenance, repair costs and minor renewal costs are expensed as incurred.Where the repair relates to the replacement of a component of an asset and the cost exceeds the capitalisationthreshold, the cost is capitalised and depreciated.

COVID-19 impact on revaluation results

The uncertainty of the impact of COVID-19 has been considered and reflected in the valuation performed during thecurrent year by the valuers. The valuer concluded that there was significant market uncertainty at the date of thevaluation and the valuation was current at the date of the valuation only. The valuer have included a statementwithin their valuation reports highligh�ng that COVID-19 has resulted in there being a significant market uncertainty,with the statement drawing a�en�on to the fact that the onset of COVID-19 has impacted the real estate marketbut it does not invalidate the valuation nor imply that the valuation cannot be relied upon.In light of the above, the fair value assessment of VPCM's assets as at 30 June 2020 represent a best es�mate of theimpacts of COVID-19, using information available as at the �me of preparing VPCM's financial statements regardingthe condi�ons exis�ng at the repor�ng date. In the event that the COVID-19 impact are more serve/prolonged thananticipated, this may impact the fair value of VPCM's PPE.

30




4.1.2 Reconciliation of movements in carrying amount (continued)

Year ended 30 June 2019

Land

$'000

Buildingand

Infrastructure$'000

Plantand

equipment$'000

Capitalworks inprogress$'000

Total

$'000

Carrying amount 1 July 2018 16,951 85,707 15,412 649 118,719

Transfer from capital works in progress - 1,511 787 (2,298) -Addi�ons - 6,151 6,151Disposals - - (163) - (163)Revaluations adjustments - 1,987 - - 1,987Depreciation charge - (6,444) (1,905) - (8,349)Carrying amount 30 June 2019 16,951 82,761 14,131 4,502 118,345

At 30 June 2019Fair value 2019 16,951 106,299 21,655 - 144,905Cost - 4,502 4,502Accumulated depreciation - (23,538) (7,524) - (31,062)Net book amount 16,951 82,761 14,131 4,502 118,345

There was no impairment charge or other significant non-cash item recognised in 2019.

31



5 OTHER ASSETS AND LIABILITIES

Introduc�onThis sec�on sets out any other assets and liabili�es that arose from VPCM's opera�ons.

Structure5.1 Receivables5.2 Payables5.3 Other non-financial assets5.4 Other liabili�es

5.1 Receivables2020 2019

Notes $'000 $'000CurrentContractualTrade receivables (i) 8.1.1 5,286 6,580Other accruals 46 -

5,332 6,580

(i) Ageing analysis of contractual receivables0 - 30 days 5,273 2,21531 - 60 days 4,36561 - 90 days - -91 - 120 days 59 -

5,332 6,580

Receivables consist of contractual receivables. Contractual receivables mainly include trade receivables inrela�on to goods and services and are classified as financial instruments in Note 8.Trade receivables are amounts due for services rendered to customers of VPCM in the ordinary course ofbusiness and generally due for se�lement within 30 days and therefore are all classified as current. Tradereceivables are held with the objec�ve to collect contractual cashflows and therefore measured at amor�sedcost using the effec�ve interest method, less provision for impairment.

VPCM applies the AASB 9 simplified approach to measuring expected credit losses which uses a life�meexpected loss allowance for trade receivables. Details of VPCM's Impairment Policy are set out in Note 8.1 (iii).No provision for expected credit loss has been recognised given the low level of historical impairment loss andcurrent year collec�on sta�s�cs.

VPCM has not experienced trade receivable recoverability issues as a consequence of Covid-19.

32




5.2 Payables2020 2019

Notes $'000 $'000CurrentContractual

Trade payables (i) 210 1,439Accrued expenses (i) 3,527 2,927

8.1.1 3,737 4,366Statutory

FBT (receivable)/payable 26 22GST payable 363 77

389 99

4,126 4,465

(i) Maturity analysis of contractual payablesLess than 1 month 3,734 4,3641 - 3 months 3 23 months - 1 year - -1 - 5 years - -5+ years - -

3,737 4,366

Payables consist of contractual payables and statutory payables. Contractual payables include mainly tradepayables' creditors in rela�on to goods and services. Statutory payables include GST payable, fringe benefitstax and other tax payable. Contractual payables are classified as financial instruments in Note 8. Statutorypayables are not classified as financial instruments as they do not arise from a contract.

Trade payables are carried at amor�sed cost. Due to their short-term nature they are not discounted. Theyrepresent liabili�es for goods and services provided to VPCM prior to the end of the financial year that areunpaid as at year end. The amounts are unsecured and are usually paid within 30 days of recogni�on.

In response to the challenges faced by covid-19, the policy was amended for government en��es to expeditepayment of suppliers within 10 days.

33




5.3 Other non-financial assets2020 2019$'000 $'000

CurrentPrepayments 812 755Other assets 168 28

980 783

5.4 Other liabili�es2020 2019$'000 $'000

CurrentRent received in advance 183 183Lease incen�ve - 53

183 236

Non-currentLease incen�ve - 149

- 149

183 385

Rent received in advance is recognised as a reduc�on of rental incomePrior to 30 June 2019, lease incen�ves are recognised as a reduc�on of rental expense over the lease term, ona straight-line basis.

Other non-financial assets include prepayments which represent payments in advance of receipt of goods orservices or that part of expenditure made in one accoun�ng period covering a term extending beyond thatperiod.

34



6 HOW WE FINANCED OUR OPERATIONS

Introduc�on

Structure6.1 Leases6.2 Cash flow informa�on and balances6.3 Commitments for expenditure

6.1 LeasesAs lessee

6.1.2 Amounts recognised in the Balance Sheet 2,020 2019Notes $'000 $'000

Right-of-use-assetsBuilding 1,120 0Others 291 0

4.1.2 1,411 0Lease liabili�esCurrent 348 0Non-current 1,244 0

8.1.1 1,592 0

6.1.3 Amounts recognised in the Comprehensive Opera�ng Statement 2,020 2019$'000 $'000

Deprecia�on charge of right-of-use assetsBuilding 281 0Others 27 0

4.1.1 308 0

Interest expense 8.1.2 44 0

This section provides informa�on on the sources of finance u�lised by VPCM during its opera�ons, along withinterest expenses (the cost of borrowings) and other informa�on related to financing activi�es of VPCM.

VPCM lease the office at level 5, 530 Collins Street and a number of sites for radar transmi�ers andnaviga�onal aids. Rental contracts are typically made for fixed periods of 5 years to 10 years , but may haveextension options.Contracts may contain both lease and non-lease components. VPCM allocates the considera�on in the contractto the lease and non-lease components based on their rela�ve stand-alone prices. However, for leases of realestate for which VPCM is a lessee, it has elected not to separate lease and non-lease components and insteadaccounts for these as a single lease component.Lease terms are negotiated on an individual basis and contain a wide range of different terms and condi�ons.The lease agreements do not impose any covenants other than the security interests in the leased assets thatare held by the lessor. Leased assets may not be used as security for borrowing purposes.Un�l the 2019 financial year, leases of property, plant and equipment were classified as either finance leases oropera�ng leases. From 1 July 2019, opera�ng leases are recognised as a right-of-use asset and a correspondingliability at the date at which the leased asset is available for use by VPCM.

Addi�ons to the right-of use assets during the 2020 financial year were $Nil.

The total cash outflow for leases in 2020 was $315 thousand.

35




6.1.4 Accoun�ng for leases

VPCM is exposed to poten�al future increases in variable lease payments based on an index or rate, which arenot included in the lease liability un�l they take effect. When adjustments to lease payments based on an indexor rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.

Lease payments to be made under reasonably certain extension options are also included in the measurementof the liability.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readilydetermined, which is generally the case for leases in VPCM, the lessee’s incremental borrowing rate is used,being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset ofsimilar value to the right-of-use asset in a similar economic environment with similar terms, security andcondi�ons.

VPCM has adopted the Department of Treasury and Finance's weighted average incremental borrowing ratesfor discounting depending on the lease term and the nature of the underlying asset:

- Non specialised building 2.75%

- Plant, equipment and vehicles 2.79%

Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on astraight-line basis. If VPCM is reasonably certain to exercise a purchase option, the right-of-use asset isdepreciated over the underlying asset’s useful life.

Lease payments are allocated between principal and finance cost at ini�al recogni�on. The finance cost ischarged to the Comprehensive Opera�ng Statement over the lease period so as to produce a constant periodicrate of interest on the remaining balance of the liability for each period.

Right-of-use assets are measured at ini�al recogni�on at cost comprising the following:(i) the amount of the ini�al measurement of lease liability;

(ii) any lease payments made at or before the commencement date less any lease incen�ves received;

(iii) any ini�al direct costs; and(iv) restora�on costs.

Subsequent to ini�al measurement, the liability will be reduced for payments made and increased for interest.It is remeasured to reflect any reassessment or modifica�on, or if there are changes in-substance fixedpayments.

- Non specialised land 3.48%

Assets and liabili�es arising from a lease are ini�ally measured on a present value basis. Lease liabili�es includethe net present value of the following lease payments:(i) fixed payments (including in-substance fixed payments), less any lease incen�ves receivable(ii) variable lease payment that are based on an index or a rate, ini�ally measured using the index or rate as atthe commencement date.

36




Short-term leases and leases of low-value assets

Recogni�on and measurement of leases (under AASB 117 un�l 30 June 2019)

Assets held under other leases were classified as opera�ng leases and were not recognised in VPCM's balancesheet. Opera�ng lease payments were recognised as an opera�ng expense in the Statement of ComprehensiveIncome on a straight-line basis over the lease term.

VPCM has elected to account for short-term leases and leases of low-value assets using the practicalexpedients. Instead of recognising a right-of-use asset and lease liability, the payments in rela�on to these arerecognised as an expense in profit or loss on a straight-line basis over the lease term.

In the compara�ve period, leases of property, plant and equipment were classified as either finance lease oropera�ng leases.

VPCM determined whether an arrangement was or contained a lease based on the substance of thearrangement and required an assessment of whether fulfilment of the arrangement is dependent on the use ofthe specific asset(s); and the arrangement conveyed a right to use the asset(s).

Leases of property, plant and equipment where VPCM as a lessee had substan�ally all of the risks and rewardsof ownership were classified as finance leases. Finance leases were ini�ally recognised as assets and liabili�esat amounts equal to the fair value of the leased property or, if lower, the present value of the minimum leasepayment, each determined at the incep�on of the lease. The leased asset is accounted for as a non-financialphysical asset and depreciated over the shorter of the es�mated useful life of the asset or the term of thelease. Minimum finance lease payments were appor�oned between the reduc�on of the outstanding leaseliability and the periodic finance expense, which is calculated using the interest rate implicit in the lease andcharged directly to the comprehensive opera�ng statement.

Contingent rentals associated with finance leases were recognised as an expense in the period in which theyare incurred.

37



6 HOWWE FINANCED OUR OPERATIONS

6.2 Cash flow informa�on and balances

2020 2019Notes $'000 $'000

Cash and cash equivalentsCash at bank and in hand (i) 9,773 1,428Deposits (ii) 18,400 22,500

8.1.1 28,173 23,928

(i) Cash at bank earns a weighted average interest rate of 0.31% at 30 June 2020 (2019: 0.98%).(ii) Deposits earn a weighted average interest rate of 0.61% at 30 June 2020 (2019: 1.43%).

6.2.12020 2019

Notes $'000 $'000Profit / (loss) for the period (16,767) 586

Non-cash movements in income and expenseDepreciation, amortisation and impairment 4.1.1 8,899 8,444Defined Benefit Superannuation Scheme adjustment 2,080 457Revaluation of non financial assets 23,267 (103)Other non-cash items 217 -

Change in opera�ng assets and liabili�esDecrease/(Increase) in receivables 1,249 (2,800)(Increase) in deferred tax assets (823) (327)(Increase)/decrease in other operating assets (197) 60Increase in payables 1,550 2,261(Decrease) in provision for income taxes payable (1,027) (275)(Decrease) in deferred tax liabilities (8,887) (1,450)(Decrease)/increase in current provisions (223) 607Increase/(decrease) in non current provisions 5 (45)(Decrease) in other liabilities (202) (182)

Net cash from opera�ng ac�vi�es 9,141 7,233

Cash and deposits, including cash equivalents, comprise cash on hand and cash at bank, deposits at call andthose highly liquid investments with an original maturity of three months or less, which are held for thepurpose of meeting short-term cash commitments rather than for investment purposes, and are readilyconvertible to known amounts of cash and are subject to an insignificant risk of changes in value.

Reconciliation of profit / (loss) after income tax to net cash inflow from operating activities

38



6 HOWWE FINANCED OUR OPERATIONS

6.3 Commitments for expenditure

(a) Commitments for expenditure2020 2019$'000 $'000

Capital expenditure commitmentsCommitments for the construction and acquisition of property,plant and equipment, contracted for at balance date but notincurred or recognised as liabilities

8,391 10,254

Total capital expenditure commitments (net of GST) 8,391 10,254

Opera�ng expenditure commitmentsCommitments for the payments of operating expenditureexcluding lease commitments contracted for at balance datebut not incurred or recognised as liabilities

11,633 13,518Total opera�ng expenditure commitments (net of GST) 11,633 13,518

Total commitments for expenditure (net of GST) 20,024 23,772

(b) Commitments for expenditure payable

Capital expenditure commitments payable- within one year 8,391 10,254- later than one year but not later than five years - -- later than five years - -Total capital expenditure commitments (net of GST) 8,391 10,254

Opera�ng expenditure commitments payable (excludinglease commitments)

- within one year 9,298 5,302- later than one year but not later than five years 2,335 8,216- later than five years - -

11,633 13,518

Total commitments for expenditure payable (net of GST) 20,024 23,772

Commitments for future expenditure include operating and capital commitments arising from contracts. Thesecommitments are recorded below at their nominal value and inclusive of GST. These future expenditures ceaseto be disclosed as commitments once the related liabilities are recognised in the balance sheet.

Total opera�ng expenditure commitments(excluding lease commitments)

39



7 Taxa�on and transac�ons with the State

Structure7.1 Income tax7.2 Deferred tax7.3 Dividends

7.1 Income tax2020 2019

$'000 $'000(a) Income tax expense

Current tax/(benefit) 7.1(c) 2,601 1,956Tax effect of change of tax rate 1,647Movement in deferred tax (8,398) (1,734)Under/(over) (163) (75)

Income tax expense/(benefit) recognised in the statement ofcomprehensive income

(4,313) 147

Deferred income tax (benefit)/expense included in income taxexpense comprises:(Increase)/decrease in deferred tax assets 7.2(a) (524) (251)(Decrease) in deferred tax liabilities 7.2 (b) (7,874) (1,483)

(8,398) (1,734)

VPCM is subject to the National Tax Equivalent Regime (NTER). In accordance with this legislation, VPCM isrequired to pay to the State Government Consolidated Fund, amounts determined to be equivalent to theamounts that would be payable by VPCM if it was subject to the Income Tax Assessment Act 1936 (Cwlth) andIncome Tax Assessment Act 1997 (Cwlth).

The tax expenses or income represents the tax payable on the current year's taxable income or tax loss basedon the prevailing income tax rate, adjusted for changes in deferred tax assets and liabilities. For 2019-20, theincome tax rate is 27.5% (2019: 30.0%).

40




7.1 Income tax expense (con�nued)2020 2019

Notes $'000 $'000(b) Numerical reconcilia�on of income tax expense

to prima facie tax payable

Profit/(loss) before income tax expense (21,080) 733Tax at the Australian tax rate of 27.5% (2019 - 30%) (5,797) 220Under/(over) (163) (75)Tax effect of change of tax rate 1,647 -Tax effect of sundry amounts which are not deductible/(taxable) - 2Income tax (benefit)/expense (4,313) 147

(c) Tax expense/(income) rela�ng to items of other comprehensive incomeAsset revaluation reserve (12,647) 565Employee benefits reserve (1,297) (2,860)

(13,944) (2,295)

Income tax liabilities 70 1,09770 1,097

Movement in current tax (assets)/liabili�es:Carrying amount 1 July 1,096 1,373Charged to income tax expense 7.1(a) 2,601 1,956Under/(over) provision in prior year (263) (32)Income tax instalment (paid)/refund 9.5 (3,364) (2,200)Carrying amount 30 June 70 1,097

41




2020 2019$'000 $'000

7.2 Deferred tax

(a) The balance comprises temporary differences a�ributable to:Employee benefits 9,405 8,905Provision (11) (13)Income received in advance 48 55Lease Incentive Liability 60Right of Use Liability 414Accrued expenses 68 94

9,924 9,101

Movement in deferred tax assets:Carrying amount 1 July 9,101 5,914Credited/(charged) to Comprehensive Operating Statement 7.1(a) 524 251Tax effect of change of tax rate (1,332)Under/(over) 76(Credited)/charged to Statement of Equity 1,631 2,860Carrying amount 30 June 9,924 9,101

(b) Deferred tax liabili�es

The balance comprises temporary differences a�ributable to:Depreciation 4,813 13,792Right of Use Assets 367Capital Works (659)Revalued land - 914Revalued buildings 110 565Revalued Other infrastructure (9,574)Revalued Plant and Equipment 442

(4,501) 15,271

Movement in deferred tax liabili�es:Carrying amount 1 July 15,271 16,156(Credited)/charged to Comprehensive Operating Statement 7.1 (a) (7,874) (1,483)Tax effect of change of tax rate (1,013)Under/(over) 14 33(Credited)/charged to Statement of Equity (10,899) 565Carrying amount 30 June (4,501) 15,271

Ne� Deferred tax (asset) / liability 7.2 (14,425) 6,170

42




7.2 Deferred tax (con�nued)

7.3 Dividends

Deferred income tax liabilities are recognised for all taxable temporary differences.

VPCM pays dividends in accordance with a determination of the Treasurer of Victoria under the TransportIntegration Act 2010 (Vic). The obligation to pay a dividend arises after consultation between VPCM’s Board,the Minister for Ports and Freight and the Treasurer of Victoria. Following this consultation process, theTreasurer makes a formal determination. Only dividends declared on or before reporting date are recognisedas a liability.

For the current reporting period, the dividends declared was nil (2019: Nil).

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxationauthority and VPCM intends to se�le its current tax assets and liabilities on a net basis.

No deferred tax assets and liabilities will be recognised from the initial recognition of an asset or liability,excluding a business combination where there is no effect on accounting or taxable profit or loss.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unusedtax credits and unused tax losses, to the extent that it is probable that taxable profit will be available againstwhich the deductible temporary differences and the carry-forward of unused tax credits and unused tax lossescan be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s)when the asset and liability giving rise to them are realised or se�led, based on tax rates (and tax laws) thathave been enacted or substantively enacted by the reporting date.

Deferred income tax is provided on all temporary differences at the reporting date between the tax bases ofassets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax assets are recognised for deductible temporary differences as management considersthat it is probable that future taxable profits will be available to utilise these temporary differences.

43



8 RISKS, CONTINGENCIES AND VALUATION JUDGEMENTS

Introduc�on

Structure8.1 Financial instruments specific disclosures8.2 Contingent assets and contingent liabilities8.3 Fair value determination

8.1 Financial instruments specific disclosures

Introduc�on

Categories of financial instruments

(i) Financial assets at amor�sed cost

VPCM is exposed to risk from its activities and outside factors. In addition, it is often necessary to makejudgements and estimates associated with recognition and measurement of items in the financialstatements. This section sets out financial instrument specific information, (including exposures to financialrisks) as well as those items that are contingent in nature or require a higher level of judgement to beapplied, which for VPCM related mainly to fair value determination.

Financial instruments arise out of contractual agreements that give rise to a financial asset of one entity anda financial liability or equity instrument of another entity. Due to the nature of the VPCM’s activities, certainfinancial assets and financial liabilities arise under statute rather than a contract (for example taxes, fines andpenalties). Such assets and liabilities do not meet the definition of financial instruments in AASB 132Financial Instruments: Presentation.

Financial assets measured at amortised cost are financial instruments which meet both of the followingcriteria and are not designated at fair value through profit or loss:- it is held within a business model whose objective is to hold assets to collect contractual cashflows; and- its contractual terms give rise on specified dates to cash flows that are solely payments of principal andinterest on the principal amount outstanding.

VPCM recognises the following financial assets in this category:- cash and deposits- receivables (excluding statutory receivables); and- term deposits.

44




8.1 Financial instruments specific disclosures (con�nued)

(ii) Financial liabili�es at amor�sed costFinancial instrument liabilities are initially recognised on the date they are originated. They are initiallyrecognised at fair value plus any directly a�ributable transaction costs. Subsequent to initial recognition,these financial instruments are measured at amortised cost with any difference between the initialrecognised amount and the redemption value being recognised in profit and loss over the period of theinterest-bearing liability, using the weighted average interest rate method.

Financial instrument liabilities measured at amortised cost include VPCM's leased liabilities, contractualpayables, deposits held and advances received, and interest-bearing arrangements other than thosedesignated at fair value through profit or loss. The financial assets at mortised costs consist of tradereceivables, cash and cash equivalents and term deposits.

(iii) Impairment of financial assetsUnder AASB 9, loss allowances are measured on either of the following bases:

• 12-month ECLs: these are ECLs that result from possible default events within the 12 months after thereporting date; and• lifetime ECLs: these are ECLs that result from all possible default events over the expected life of afinancial instrument.

VPCM measures loss allowances at an amount equal to lifetime ECLs, except for the following, which aremeasured as 12-month ECLs:

• debt securities that are determined to have low credit risk at the reporting date; and• other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over theexpected life of the financial instrument) has not increased significantly since initial recognition.

No provision for Expected Credit Loss has been recognised given the low level of historical impairment lossand current year collection experience.

45



8 RISKS, CONTINGENCIES AND VALUATION JUDGEMENTS2020 2019

Notes $'000 $'0008.1.1 Financial instruments: Categorisa�on

Contractual financial assetsCurrent assetsCash and cash equivalents 6.2 28,173 23,928Receivables - Trade receivables 5.1 5,286 6,580Total contractual financial assets 33,459 30,508

Contractual financial liabili�esLiabili�es at amor�sed costCurrent liabili�esLease liabilities 6.1.2 1,592 -Payables 5.2 3,737 4,366Total contractual financial liabili�es 5,329 4,366

8.1.2 Financial instruments: Net holding gain/(loss)on financial instruments by categoryInterest income on contractual financial assets (i) 2.2 158 307

Interest expense on contractual financial liabilities (ii) (5) (5)Interest expense on lease liabilities 6.1.3 (44) -

(49) (5)

Total 109 302

(i) The net holding gain/(loss) on contractual financial assets equates to the interest income on cashand cash equivalents.

(ii) The net holding gain/(loss) on contractual financial liabilities equates to the interest expense oninterest bearing liabilities.

Interest expense includes costs incurred in connection with the borrowing of funds and includes interest onbank overdrafts and short-term and long-term borrowings, amortisation of discounts or premiums relating toborrowings, interest component of lease repayments, service concession financial liabilities and the increase infinancial liabilities and non-employee provisions due to the unwinding of discounts to reflect the passage oftime.

Interest expense is recognised in the period in which it is incurred.VPCM recognises borrowing costs immediately as an expense, unless they are directly a�ributable to theacquisition, construction or production of a qualifying asset.

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8.1.3 Financial risk management objec�ves and policies (con�nued)

8.1.3 Financial risk management objec�ves and policies

Financial risk management

Financial instruments: Liquidity risk

VPCM's maximum exposure to liquidity risk is the carrying amount of financial liabilities as disclosed in Note5.2.

The main purpose in holding financial instruments is to prudentially manage VPCM's financial risks within theState Government's policy parameters. VPCM's main financial risks include liquidity risk and interest rate risk.VPCM manages these financial risks in accordance with its Treasury Management Policy.

Details of the significant accounting policies and methods adopted, including the criteria for recognition, thebasis of measurement, and the basis on which income and expenses are recognised, with respect to each classof financial asset, financial liability and equity instrument above are disclosed in the relevant notes.

Liquidity risk is the risk that VPCM will be unable to meet its financial obligations as and when they fall due.VPCM, cognisant of the seasonal nature of the cruise industry, manages its liquidity risk to ensure thatadequate cash funds are available at all times to meet its commitments as they arise. This objective is metthrough:- sound cash management practices;- regular identification and monitoring of the maturity profile of liquid assets and liabilities together withregular cash flow forecasting;- having sufficient temporary purpose financial accommodation from Treasury Corporation of Victoria; and- investments that are limited to highly liquid and secure assets.

VPCM maintains a comprehensive Risk Management System which is integrated with its business planningprocesses. There is a formally documented Risk Management Policy, Risk Management Procedures and aframework which are consistently applied across all levels of the business. A Financial Risk ManagementAssessment is presented to the Audit and Finance Commi�ee of the Board on an annual basis in line with therequirements of the Standing Directions of the Minister for Finance, under the Financial Management Act1994 (Vic). In addition, a quarterly risk status report is presented to the Risk Commi�ee and the Boardoutlining VPCM's significant material risks including financial risks. Each risk is reviewed regularly against therisk matrix to ensure the level of risk is appropriate and the treatment and controls are adequate.

As a whole, VPCM’s financial risk management program seeks to manage these risks and the associatedvolatility of its financial performance.

47





Going Concern

Financial instruments: Credit risk

Financial instruments: Market riskVPCM's exposures to market risk are limited to interest rate risk where VPCM holds instrument bearingvariable interest rates, which has been assessed to limited to cash & cash equivalents.

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in afinancial loss to VPCM. The carrying amount of VPCM's financial assets recognised in the Statement ofFinancial Position, net of any provisions for doubtful debts, represents VPCM's maximum exposure to creditrisk from financial assets.VPCM actively manages its credit risk using a range of processes and procedures. These include performingcredit checks for new and existing customers as required, obtaining bank guarantees where consideredappropriate and monitoring the performance of significant trading partners on an ongoing basis.VPCM does not engage in hedging for its contractual assets and only deals with banks with high credit ratings.No provision for impairment of financial assets has been recognised based on past experience and current andexpected changes in client's credit ratings. VPCM's exposure to credit risk is low as detailed in the ageinganalysis provided in Note 5.1.

The impact of COVID-19 on VPCM's ability to continue as a going concern has been factored intomanagement’s assessment. This assessment has considered VPCM's current and forecasted financialperformance. Management are of the opinion that it is appropriate for the financial report to be preparedusing the going concern assumption.

48





Interest rate risk and financial liability and financial asset maturity analysis

2020 Floa�nginterest

Notes $'000Financial assetsCash and cash equivalents 28,173Weighted average interest rate 0.21%

Financial liabili�es 0

Net financial assets/(liabili�es) 8.1.1 28,173

2019 Floa�nginterest

$'000Financial assetsCash and cash equivalents 23,928Weighted average interest rate 1.21%

Financial liabili�es 0

Net financial assets/(liabili�es) 8.1.1 23,928

The exposure to variable interest rate risks, the effective weighted average interest rates for financial assetsand financial liabilities and their maturity profiles at the reporting date are as follows:

49




8.2 Con�ngent assets and con�ngent liabili�esContingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed byway of a note and, if quantifiable, are measured at nominal value. Contingent assets and liabilities arepresented inclusive of GST receivable or payable respectively.

Con�ngent assetsContingent assets are possible assets that arise from past events, whose existence will be confirmed only bythe occurrence or non-occurrence of one or more uncertain future events not wholly within the control ofthe entity.These are classified as either quantifiable, where the potential economic benefit is known, ornon-quantifiable.

VPCM has no contingent assets as at the reporting date (2019: $Nil).

Con�ngent liabili�esContingent liabilities are:- possible obligations that arise from past events, whose existence will be confirmed only by the

occurrence or non-occurrence of one or more uncertain future events not wholly within thecontrol of the entity; or

- present obligations that arise from past events but are not recognised because:

- it is not probable that an outflow of resources embodying economic benefits will be required to se�lethe obligations; or- the amount of the obligations cannot be measured with sufficient reliability.

VPCM has one contingent liability relating to a personal injury claim as at the reporting date. This ma�er hasbeen se�led with the payment of the insurance policy deductible in November 2020. (2019: $Nil, albeit itwas noted that there was an exposure not reliably quantifiable in relation to a payroll review, this wassubsequently resolved with no outstanding obligations.)

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8.3 Fair value determina�on

8.3.1 Net fair value of non-financial physical assets

Level 1 Level 2 Level 3Asset class $'000 $'000 $'000 $'000Land 4,256 - 1,410 2,846Buildings and Infrastructure 32,078 - - 32,078Plant and equipment 9,217 - - 9,217Total 45,551 - 1,410 44,141

Sta�on pier assets

VPCM's property, plant and equipment assets are measured and disclosed at fair value for financial repor�ng purposes asper Note 4.1. None of VPCM's financial assets and liabili�es are disclosed at fair value for financial repor�ng purposes a�erini�al recogni�on. In order to determine fair value of an asset or a liability, VPCM uses market-observable data to theextent it is available. The carrying value of all of VPCM's financial assets and liabili�es approximate their fair value.

In accordance with FRD103H: Non-Financial Physical Assets requirements , as at each balance date, management assessesthe fair value of non-financial physical assets and undertakes a scheduled revalua�on of all such assets every 5 years.VPCM engages external, independent and qualified valuers in consulta�on with the Valuer General of Victoria's office toundertake this valua�on, which has occurred in respect of the year ended 30 June 2020.

(a) Fair value measurement hierarchy for assets as at 30 June 2020

Fair value measurement atrepor�ng period using

Carryingamount

Land: The fair value has been ini�ally determined on the basis of comparable land sales / market-based evidence (Level 2 innature), prior to the considera�on of economic obsolescence for the Sta�on Pier specific parcel of land. The check foreconomic obsolescence noted above has resulted in an impairment of all of Sta�on Pier assets including land, adop�ng aconsistent rate for economic obsolescence across Sta�on Pier assets. This approach is based on the assump�on thatu�lisa�on of one component (e.g. land) without the ongoing opera�on and maintenance of the balance components ofSta�on Pier is not possible, due to the heritage nature of the asset and an interpreta�on of the legisla�ve requirementsunder the Transport Integra�on Act. Non Sta�on Pier related land and building was valued using comparable land sale data.

Buildings & Infrastructure and Plant & Equipment: Consistent with the prior year, the assets have been measured at fairvalue based ini�ally on the depreciated replacement cost approach (DRC) in accordance with government guidelines, priorto the considera�on of economic obsolescence pursuant to the independent asset revalua�on. Classifica�on with respectto the fair value hierarchy has been determined as being Level 3 in nature. A discounted cash flow (DCF) model has beenused to cross-check for poten�al economic obsolescence and impairment of the DRC carrying value. The assets havesubsequently been impaired.

Es�ma�on uncertain�es:

The key inputs used to value the Sta�on Pier assets are as follows:Land - evidence of comparable land sales as at 30 June 2020 adjusted for the impact of economic obsolescence as outlinednote 4.1.1 Economic obsolescence assessment.Buildings & infrastructure - replacement costs and useful lives of assets as at 30 June 2020 adjusted for the impact ofeconomic obsolescence as outlined note 4.1.1 Economic obsolescence assessment.

The inputs used to undertake the economic obsolescence are outlined in note 4.1.1 Economic obsolescence assessment,represent management's best es�mates and judgement as at 30 June 2020. Should the inputs used vary, this will in turnimpact the value of these assets.

51




8.3.1 Net fair value of non-financial physical assets (con�nued)

Non Sta�on pier assets

Land

$'000

Buildings andInfrastructure

$'000

Plant andequipment

$'000

Opening balance - 1 July 2019 - 82,761 14,130Transfer in cost of level 3 2,846 - -Transfer from Capital Work-In-Progress (CWIP) - 5,172 893Disposals - (10) (180)Revalua�on - (49,127) (3,821)Deprecia�on - (6,718) (1,805)Closing balance - 30 June 2020 2,846 32,078 9,217

Carryingamount

Level 1 Level 2 Level 3Asset class $'000 $'000 $'000 $'000Land 16,951 - 16,951 -Buildings and Infrastructure 82,761 - - 82,761Plant and equipment 14,131 - - 14,131Total 113,843 - 16,951 96,892

Buildings andInfrastructure

$'000

Plant andequipment

$'000

Opening balance - 1 July 2018 85,707 15,412Transfer from Capital Work-In-Progress (CWIP) 1,511 787Disposals (163)Revalua�on 1,988Deprecia�on (6,445) (1,905)Closing balance - 30 June 2019 82,761 14,131

The key inputs used to value the non Sta�on Pier assets are as follows:Land - evidence of comparable land sales as at 30 June 2020.Buildings & infrastructure - replacement costs and useful lives of assets as at 30 June 2020.

For both of the Sta�on Pier and non Sta�on Pier assets, as outlined in note 4.1.1 COVID 19 impact on revalua�on results,the fair value assessment of these assets as at 30 June 2020 represent a best es�mate of the impacts of COVID-19, usinginforma�on available as at the �me of preparing VPCM's financial statements regarding the condi�ons exis�ng at therepor�ng date. In the event that the COVID-19 impact are more serve/prolonged than an�cipated, this may impact the fairvalue of these assets.

Es�ma�on uncertain�es:

Reconcilia�on of Level 3 fair value as at 30 June 2019:

(b) Fair value measurement hierarchy for assets as at 30 June 2019

Fair value measurementat repor�ng period using

Reconcilia�on of Level 3 fair value as at 30 June 2020:

52



8.3.2 Descrip�on of significant unobservable inputs to level 3 valua�ons

2019 & 2020 Valua�ontechnique

Significantunobservable

inputs

Range

Land - Sta�on Pier Marketapproachadjusted foreconomicobsolescence

assump�onsused to prepareDCF modeloutlined innote 4.1.1

Refer to note4.1.1sensi�vityanalysis

Land - non Sta�on Pier Directcomparisonapproach

Communityserviceobliga�on(CSO)

$450 -$550/squaremetre

Buildings & infrastructure -Sta�on Pier

Currentreplacementcost adjustedfor economicobsolescence

assump�onsused to prepareDCF modeloutlined innote 4.1.1

Refer to note4.1.1sensi�vityanalysis

Buildings & infrastructure -non Sta�on Pier

Currentreplacementcost

Direct cost persquare metre &useful life

Refer to (iv)

Plant & equipment Currentreplacementcost

Direct cost persquare metre &useful life

Refer to (vi)

(vi) Plant & equipment - the average cost for P&E pre revalua�on is $42 k. The average cost for P&E post revalua�on is $20k. The average useful life for P&E is 9 years.

(vii) Plant & equipment -a significant increase or decrease in direct costs/square metre adjustment would result in asignificantly lower/higher fair value. A significant increase or decrease in the es�mated useful life of the asset would resultin a significantly lower/higher fair value

(i) Land Sta�on Pier - refer to note 4.1.1 sensi�vity analysis

(ii)Land - non Sta�on Pier - A significant increase or decrease in the CSO impact would result in a significantly lower/higherfair value

(iii) Building & infrastructure - Sta�on Pier - refer to note 4.1.1 sensi�vity analysis

(iv) Building & infrastructure - non Sta�on Pier - the applied rates include:- base replacement rate which includes Builder's head office overheads and profit comprising 2.5% for electrical andmechanical services, and 5.0% for all other trade and services;- cost infla�on of 3.5% over a period of 12 months allowing for general infla�on and currency fluctua�ons for importedgoods; and- professional fees of 10.0%.Further allowances have been made on an individual basis for heritage affected assets generally comprising a 50%construc�on premium which is in-line with industry prac�ce.Where it was not possible to inspect hidden works such as structures, services and finishes, the use of reasonable materialsand methods of construc�on have been assumed with regard to the age, nature and use of the building.

(v) Building & infrastructure - non Sta�on Pier - a significant increase or decrease in direct costs/square metre adjustmentwould result in a significantly lower/higher fair value. A significant increase or decrease in the es�mated useful life of theasset would result in a significantly lower/higher fair value

Refer to (i)

Refer to (ii)

Refer to (iii)

Refer to (v)

Refer to (vii)

Sensi�vity of fair valuemeasurements to change insignificant unobservable inputs

53



9 OTHER DISCLOSURES

Introduc�on

Structure9.1 Ex-gratia expenses9.2 Equity disclosure9.3 Responsible persons9.4 Remuneration of executives9.5 Related parties9.6 Remuneration of auditors9.7 Subsequent events9.8 Australian Accounting Standards issued that are not yet effective

9.1 Ex-gra�a expenses

This section includes additional material disclosures required by accounting standards or otherwise, for theunderstanding of this financial report.

In accordance with FRD 11A Disclosure of Ex-Gratia Expenses VPCM must disclose in aggregate the totalamount of material (greater than $5,000) expenses.

For 2019-20, VPCM incurred no ex-gratia expenses (2019: $0).

54



9 OTHER DISCLOSURES

9.2 Equity disclosure

9.2.1 Contributed capital

2020 2019Notes $'000 $'000

Carrying amount 1 July 7,335 6,000

Capital contribution from the Department of Transport 9.5 1,815 1,335

Carrying amount 30 June 9,150 7,335

Capital managementVPCM manages capital risk through the monitoring and reporting of key ratios to the Board on a monthlybasis.The key ratios monitored are based on DTF's Treasury Management Guidelines and that future decisionsregarding capital investment and funding requirements ensure that VPCM does not breach these key ratios.Target maximum gearing is between 0% - 35%.

There have been no changes to the general processes and procedures that are applied by VPCM in managingcapital risk since 2019.VPCM does not have any externally imposed debt-related covenants, financial ratios or any other capitalrequirements.

Consistent with applicable Australian reporting requirements and the Financial Management Act 1994 (Vic) ,transfers and appropriation for additions of net assets between VPCM and State Government Departmentsdesignated as contributed capital, are recognised as capital transactions.

Transfers of net assets arising from administrative restructures and/or from all other arrangements which aredeemed to be contributions by owners, where there is insufficient contributed capital for distribution, arerecognised as an expense by the transferor and income by the transferee in accordance with FRD 119A -Transfers through Contributed Capital. Alternatively, if the transferor has approval to reclassify sufficientaccumulated funds to contributed capital prior to, or at, the time of the asset transfer date then a distributionfrom contributed capital can occur.

VPCM’s Treasury Management Policy and procedures are in compliance with the Borrowing and InvestmentPowers Act 1987 (Vic), the DTF's Treasury Management Guidelines and Standing Direction 4.5.6 Treasury RiskManagement.

In accordance with the Borrowings and Investment Powers Act 1987 (Vic), the Treasurer granted a temporarypurpose financial accommodation of $20 million to VPCM for the reporting period 1 July 2019 to 30 June 2020(2019: $20 million), which has also been extended for the year ending 30 June 2021.

55



9 OTHER DISCLOSURES

9.2.2 Reserves2020 2019

Notes $'000 $'000ReservesAsset revaluation reserve 11,888 41,777Employee benefits reserve (8,927) (4,294)

2,961 37,483

Movement in asset revalua�on reserve:Carrying amount 1 July 41,777 40,458

Gain / (loss) from asset revaluation (42,319) 1,884Tax effect from asset revaluation 11,638 (565)Tax effect from de-recognition of DTA on land revaluation (739)Tax effect from tax rate change 1,748 -

(29,672) 1,319ARR on disposals transferred to retained earnings (217) -Total movement (29,889) 1,319Carrying amount 30 June 11,888 41,777

Movement in employee benefits reserve:Carrying amount 1 July (4,294) 2,379

Movements in actuarial gains/(losses) (5,930) (9,533)Tax effect from movements in actuarial gains/(losses) 1,631 2,860Tax effect from tax rate change (334) -Total movement in employee benefits reserve (4,633) (6,673)Carrying amount 30 June (8,927) (4,294)

This reserve has been set up in accordance with the revised AASB 119 Employee Benefits to capture themovements in the actuarial gains and losses in respect of the Port of Melbourne Superannuation Fund. Referto Note 3.2.3 for further details.

VPCM has a separate asset revaluation reserve for Land, Building & Infrastructure and Plant & Equipment. Thereserves record the increments and decrements in the fair value of the assets net of the tax effect.

Total movement in asset revaluation reserve before transfer

56



OTHER DISCLOSURES

9.3 Responsible persons

(a) Names

Responsible Ministers:The Hon. Melissa Horne MP Minister for Ports and Freight since December 2018The Hon. Tim Pallas MP Treasurer of Victoria since December 2014

DirectorsMr J CainMs J van ReykMs D BealeMr P Tuohey

Accountable Officer:Ms R Johnson Chief Executive Officer

(b) Remunera�on

2020 2019Income band$50,000 to $59,999 3 3$80,000 to $89,999 1 1$380,000 to $389,999 1 -$400,000 to $409,999 1Total number of responsible persons 5 5Total remunera�on ($ 000s) $ 628 $ 656

In accordance with the Ministerial Directions issued by the Assistant Treasurer under the FinancialManagement Act 1994 , the following disclosures are made regarding responsible persons for the reportingperiod.

The names of persons who held the positions of Ministers and Accountable Officers in VPCM at any timeduring the financial year were:

ChairmanDeputy Chair

Remuneration received or receivable by responsible persons in connection with the management of VPCMduring the reporting period was:

57



9 OTHER DISCLOSURES

9.4 Remunera�on of execu�ves

2020$'000

2019$'000

Short-term employee benefits 1,987 2,354Post-employment benefits 183 206Other long-term benefits 17 67Termination 45 -Total remunera�on 2,232 2,627Total number of execu�ves (i) 12 14Total annualised employee equivalents (ii) 10.1 11.1

(i) The total number of executive officers includes persons who meet the definition of Key ManagementPersonnel (KMP) of the entity under AASB 124 Related Party Disclosures and are also reported within therelated parties note disclosure.

(ii) Annualised employee equivalent is based on paid working hours of 38 ordinary hours per week over the 52weeks for a reporting period.

The number of executive officers, other than ministers and accountable officers, and their total remunerationduring the reporting period are shown in the table below. Total annualised employee equivalents provides ameasure of full-time equivalent executive officers over the reporting period. Remuneration comprisesemployee benefits in all forms of consideration paid, payable or provided by the entity, or on behalf of theentity, in exchange for services rendered, and is disclosed in the following categories.

Other long-term benefits include long service leave, other long service benefits or deferred compensation.

Termina�on benefits include termination of employment payments, such as severance packages.

Remunera�on of execu�ve officers(Including Key Management Personnel - see related par�es note)

Post-employment benefits include pensions and other retirement benefits paid or payable on a discrete basiswhen employment has ceased.

Short-term employee benefits include amounts such as wages, salaries, annual leave or sick leave that areusually paid or payable on a regular basis, as well as non-monetary benefits such as allowances and free orsubsidised goods or services.

58



9 OTHER DISCLOSURES

9.5 Related par�es

2020 2019Notes $'000 $'000

Opera�ng revenue and expensesWorkers' Compensa�on Victoria (68) (58)

- (61)Department of Transport 460 2,190State Revenue Office (536) (522)South East Water (132) (63)Victorian Auditor General's Office (54) (54)

(8) (8)Other revenue and expenses (19) (87)Income tax instalmentsDepartment of Treasury and Finance 7.1(c) (3,364) (2,200)Capital contribu�onDepartment Of Transport 9.2.1 1,815 1,335

The Victorian State Government prepares consolidated financial statements rela�ng to itscontrolled en��es. For the purpose of preparing the State Government's Annual FinancialReport (AFR), transac�ons which VPCM has undertaken with other State Governmentcontrolled en��es will be eliminated in the State Government's AFR.

The aggregate amounts of VPCM's transac�ons conducted during the year and its assets andliabili�es at the end of the year which relate to State Government controlled en��es are asfollows:

Department of Health and Human Services

Department of Transport / Vic Roads (2019)

VPCM is a wholly owned and controlled en�ty of the State of Victoria.Related par�es of VPCM include:- all key management personnel and their close family members and personal businessinterests (controlled en��es, joint ventures and en��es they have significant influence over);- all Cabinet Ministers and their close family members; and- all departments and public sector en��es that are controlled and consolidated into thewhole of state consolidated financial statements.

All related party transac�ons have been entered into on an arm’s length basis.

Significant transac�ons with government-related en��es

59



9 OTHER DISCLOSURES

9.5 Related par�es (con�nued)

Mr J Cain - ChairmanMs J van Reyk - Deputy ChairMs D Beale - DirectorMr P Tuohey - DirectorMs R Johnson - Chief Execu�ve OfficerMr J Bazelmans - EGM Business Informa�on and StrategyCaptain R Stanbrook - EGM Marine and Naviga�on (un�l 13 February 2020)Captain K Dillon (from 6 January 2020)Ms J Mackey - EGM Finance and Corporate Support

2020 2019$'000 $'000

Short-term employee benefits 1,407 1,344Post-employment benefits 90 75Other long-term benefits - 30Termina�ons 1 -Total 1,498 1,449

Key management personnel (KMP) are those who, directly or indirectly, have authority andresponsibility for planning, direc�ng and controlling the ac�vi�es of VPCM. This includesresponsible Ministers, Directors, Chief Execu�ve Officer and Execu�ve General Managers.KMP for 2020 are detailed as follows:

The compensa�on detailed below excludes the salaries and benefits the Portfolio andShareholder Ministers receive. The Ministers' remunera�on and allowances are set by theParliamentary Salaries and Superannua�on Act 1968 (Vic) and are reported within theDepartment of Parliamentary Services' Financial Report.

Compensa�on of KMP (i)

(i) Note that KMPs are also reported in the disclosure of remunera�on of responsible persons(Note 9.3) and execu�ve officers (Note 9.4).

Given the breadth and depth of State government ac�vi�es, related par�es transact with theVictorian public sector in a manner consistent with other members of the public e.g. stampduty and other government fees and charges. Further employment processes within theVictorian public sector occur on terms and condi�ons consistent with the PublicAdministra�on Act 2004 (Vic) and Codes of Conduct and Standards issued by the VictorianPublic Sector Commission. Procurement processes occur on terms and condi�ons consistentwith the Victorian Government Procurement Board requirements.

Transac�ons and balances with key management personnel and other related par�es

60



9 OTHER DISCLOSURES

9.5 Related par�es (con�nued)

9.6 Remunera�on of auditors

Victorian Auditor-General's Office 2020 2019$'000 $'000

Audit of financial reports 59 58

9.7 Subsequent events

The terms and condi�ons of transac�ons entered into with responsible persons’ relateden��es occurred within a normal customer and supplier rela�onship on terms and condi�onsno more favourable than those available, or which might reasonably be expected to beavailable, on similar transac�ons to other en��es on an arm’s length basis.

During the year the following fees were paid or payable for services provided by the auditorsof VPCM:

Since 30 June 2020 to the date of this report, other than what has been disclosed in theAnnual Report, no ma�er or circumstance has arisen that, in the opinion of the Directors, hassignificantly affected or may significantly affect the opera�ons of VPCM, the results of thoseopera�ons, or the state of affairs of VPCM in future financial years.

Since 30 June 2020, there have been further developments rela�ng to COVID-19 that haveimpacted the opera�ons of VPCM to the date of this report. These developments include themove to stage 4 restric�ons in Melbourne and stage 3 restric�ons in regional Victoria, thesignificant increase in ac�ve cases reflec�ng a second wave in Victoria and the more recenteasing of restric�ons.

The COVID-19 pandemic has created unprecedented economic uncertainty. Actual economicevents and condi�ons in the future may be materially different from those es�mated byVPCM at the repor�ng date. As responses by government con�nue to evolve, managementrecognises that it is difficult to reliably es�mate with any degree of certainty the poten�alimpact of the pandemic after the repor�ng date on VPCM, its opera�ons, its future resultsand financial posi�on. The state of emergency and state of disaster in Victoria was extendedon 16 August 2020 un�l 8 November 2020. The state of emergency has subsequently beenextended un�l 6 December 2020.

Planning for the next stage of Sta�on Pier’s opera�ons is underway with the Department ofTransport and other agencies of Government.

No transac�ons have occurred with KMP and their related par�es. There are no outstandingbalances, including commitments, with such par�es.

61



9 OTHER DISCLOSURES

9.8 Australian Accoun�ng Standards issued that are not yet effec�ve

Reference SummaryApplica�ondate

Impact on VPCM’s financialstatements

AASB 2018-7Amendmentsto AustralianAccountingStandards –Definition ofMaterial

This Standard principally amends AASB 101Presentation of Financial Statements andAASB 108 Accounting Policies, Changes inAccounting Estimates and Errors . Theamendments refine and clarify thedefinition of material in AASB 101 and itsapplication by improving the wording andaligning the definition across AASBStandards and other publications. Theamendments also include some supportingrequirements in AASB 101 in the definitionto give it more prominence and clarify theexplanation accompanying the definition ofmaterial.

1 Jan 2020 The standard is not expected tohave a significant impact on thepublic sector.

- AASB 2020-2 Amendments to Australian Accounting Standards – Removal of Special Purpose FinancialStatements for Certain For-Profit Private Sector Entities.

Assessment of the impact of those new standards and interpretations which affect VPCM is set out below:

Certain new accounting standards and interpretations that are deemed relevant to VPCM have beenpublished, but are not mandatory for the 30 June 2020 reporting period. VPCM has not adopted thesestandards early in accordance with DTF stating that entities must not early adopt.

- AASB 2019-5 Amendments to Australian Accounting Standards – Disclosure of the Effect of New IFRSStandards Not Yet Issued in Australia.

- AASB 2018-6 Amendments to Australian Accounting Standards – Definition of a Business.

- AASB 2019-1 Amendments to Australian Accounting Standards – References to the Conceptual Framework.

- ASB 2019-3 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform.

In addition to the new standards and amendments above, the AASB has issued a list of other amendingstandards that are not effective for the 2019-20 reporting period (as listed below). In general, these amendingstandards include editorial and references changes that are expected to have insignificant impacts on publicsector reporting.

- AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-Current.

62



Appendix


Disclosure index

Legislation Requirement Page

Standing Directions (SD) and Financial Reporting Directions (FRD)

Report of operations

Charter and purposeFRD 22H Manner of establishment and the relevant Ministers 1, 9, 22

FRD 22H Purpose, functions, powers and duties 9-11

FRD 22H Nature and range of services provided 9

Management and structureFRD 22H Organisational structure 26

Financial and other informationFRD 10A Disclosure index 110-111FRD 12B Disclosure of major contracts 19, 38

FRD 15E Executive officer disclosures 103FRD 22H Occupational health and safety policy 28FRD 22H Employment and conduct principles 29FRD 22H Summary of the financial results for the year 17

FRD 22H Significant changes in financial position during the year 17-19FRD 22H Major changes or factors affecting performance 17-19FRD 22H Subsequent events 106FRD 22H Application and operation of Freedom of Information Act 1982 (Vic) 38-39FRD 22H Compliance with building and maintenance provisions of Building Act 1993 (Vic) 39FRD 22H Statement on National Competition Policy 39FRD 22H Application and operation of the Public Interest Disclosures Act 2012 (Vic) 40

FRD 22H Details of consultancies over $10,000 37FRD 22H Details of consultancies under $10,000 37FRD 22H Disclosure of government advertising expenditure 36FRD 22H Disclosure of ICT expenditure 37FRD 22H Statement of availability of other information 41FRD 25D Local Jobs First 36FRD 29C Workforce data disclosures 32-33FRD 30D Standard Requirements for the design and print of annual reports 1-111

Compliance attestation and declarationSD 5.1.4 Attestation for compliance with Ministerial Standing Direction 42SD 5.2.3 Declaration in report of operations 1

Financial statementsSD 5.2.2 Declaration in financial statements 46

The annual report of VPCM is prepared in accordance with all relevant Victorian legislations andpronouncements. This index has been prepared to facilitate identification of VPCM’s compliance withstatutory disclosure requirements.


Legislation Requirement Page

Standing Directions and Financial Reporting Directions (FRD)

Other requirements under Standing Direction 5.2SD 5.2.1 (a) Compliance with Ministerial Directions 102SD 5.2.1 (a) Compliance with Australian accounting standards and other authoritative pronouncements 55

Other disclosures as required by FRDs in the notes to the financial statementsFRD 03A Accounting for Dividends 88FRD 17B Long Service Leave, Wage Inflation and Discount Rates 62FRD 21C Responsible persons and Executive officers in the Financial Report 102-103

FRD 103G Non-Financial Physical Assets 71-76

FRD 100A Financial Reporting Directions - Framework 46FRD 105B Borrowing Costs N/AFRD 106B Impairment of Assets 72-76FRD 108C Classification of Entities as For-Profit 55FRD 109A Intangible Assets 72-73FRD 110A Statement of Cash Flows 52, 83

FRD 112D Defined Benefit Superannuation Obligations 63-69

FRD 114B Financial Instruments 89-94

FRD 119A Contributions by Owners 100

FRD 120L Accounting and Reporting Pronouncements applicable to the 2019-20 Reporting Period 107

LegislationBorrowing and Investment Powers Act 1987 (Vic) 100

Building Act 1993 (Vic) 39

Financial Management Act 1994 (Vic) Various

Freedom of Information Act 1982 (Vic) 38, 41

Marine Safety Act 2010 (Vic) 9, 10

Parliamentary Salaries and Superannuation Act 1968 (Vic) 105

Port Management Act 1995 (Vic) 10, 14, 16

Public Interest Disclosures Act 2012 (Vic) 40

Public Administration Act 2004 (Vic) 22, 105

Transport Integration Act 2010 (Vic) Various

Victorian Industry Participation Policy Act 2003 (Vic) 36

Income Tax Assessment Act 1936 (Cwlth) 85Income Tax Assessment Act 1997 (Cwlth) 85

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Postal addressGPO Box 261

Melbourne VIC 3001Australia

Tel: +61 3 8347 8300 Fax: +61 3 8347 8301

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Victorian Ports Corporation (Melbourne) Street address · 2020. 12. 9. · Victorian Ports Corporation (Melbourne) Street address Level 5, 530 Collins Street Melbourne Victoria 3000